Cusack v. Law Society of Ontario, 2019 ONSC 5015
CITATION: Cusack v. Law Society of Ontario, 2019 ONSC 5015
DIVISIONAL COURT FILE NO.: DC-18-444-00
DATE: 20190904
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BACKHOUSE, M.L. EDWARDS, FAVREAU JJ.
BETWEEN:
Patrick Leo Wayne Cusack
Appellant
– and –
Law Society of Ontario
Respondent
Self-Represented, Appellant
Leslie Maunder, for the Respondent
HEARD at TORONTO: February 13, 2019
REASONS FOR JUDGMENT
EDWARDS J.:
Overview
[1] The Appellant, Patrick Leo Wayne Cusack (“Mr. Cusack”), is a sole practitioner who moved his law practice from Ottawa in 2009. Mr. Cusack worked with a paralegal (the “Paralegal”), who filed a complaint (the “Complaint”) with the Law Society of Ontario (the “LSO”) in December 2012. The complaint resulted in David Cass, Intake Counsel with the LSO, preparing a Request for the Power to Investigate (a “RPI”). Mr. Cass had a reasonable suspicion that Mr. Cusack had engaged in professional misconduct, in that he had:
a) an improper relationship with a non-licensee;
b) failed to assist in the prevention of the unauthorized practice of law;
c) improperly delegated tasks to a non-licensee; and
d) failed to assume complete professional responsibility for his law practice.
[2] On January 25, 2013, Helena Jankovic (“Ms. Jankovic”), Senior Counsel for Professional Relations at the LSO, signed “Instructions for Power to Investigate” (the “Instructions”), which confirmed that any person assigned to conduct an investigation into Mr. Cusack’s conduct could “exercise the powers set out in clauses 49.3(2)(a), (b) and (c) of the Law Society Act, R.S.O. 1990 c. L. 8 (the “Act”).
[3] Between February 12, 2013 and August 2014, Mr. Cusack and investigation counsel at the LSO exchanged correspondence concerning documents that the investigator required Mr. Cusack to produce to the LSO. Mr. Cusack refused to produce the requested documents and questioned the authority of the LSO to make such demands for production.
[4] A second unrelated investigation was commenced by the LSO in late 2014. Further documents were requested by the LSO. Mr. Cusack again refused to produce what was requested of him.
[5] The essence of Mr. Cusack’s position throughout his course of dealing with the LSO and before this court, amounts to a strongly held conviction on his part that the LSO’s requests of him for documentation was, and remains, nothing more than a fishing expedition. He also argues that before the LSO can engage the investigative powers set forth in s. 49.3 of the Act, the LSO must first give the lawyer under investigation the opportunity to provide a response to a complaint before authorizing the use of the powers provided for in s. 49.3 of the Act.
The Complaints/Authorization of Investigation Process at the LSO
[6] Before embarking on an analysis of the facts and the law, it is important to understand how the LSO deals with complaints, and thereafter authorizes the conduct of an investigation arising out of a complaint.
[7] The LSO receives approximately 7,000 complaints each year, which are initially processed through the Complaints Service Department. Of those complaints, approximately 5,000 fall within the LSO’s regulatory jurisdiction and are then referred to the Intake Department within the Professional Regulation Division (the “PRD”). The intake staff within the PRD then assess whether there is information to suggest that a licensee may have engaged in professional misconduct, or conduct unbecoming.
[8] Having assessed a file, intake staff then have a number of options, one of which is to close the complaint. The other possible options involve resolving the complaint; seeking further information from the complainant; and also to refer the matter on by initiating an RPI.
[9] An RPI is made through the use of a template generated within an electronic case management system used by the PRD. The template includes a standard statement that the author has:
…received information pursuant to subsection 49.3(1) of the LSA suggesting that…the lawyer may have engaged in professional misconduct. I request that, pursuant to subsection 49.3(2) of the Act, you confirm that any persons assigned to conduct an investigation into the lawyer’s conduct may exercise the powers set out in clauses 49.3(2)(a), (b) and (c) of the Act.
[10] The staff member then provides a summary of the information and the template continues as follows:
Based on the above information, there is a reasonable suspicion that the lawyer may have engaged in professional misconduct in that…
[11] An RPI, having been drafted by intake staff, is then approved by the Manager of the Intake Department before it is then electronically submitted for approval by senior counsel or the executive director of PRD. Accompanying an RPI are draft instructions for Power to Investigate, which can only be signed by senior counsel or the executive director. These instructions are also based on a template and they include a statement that either senior counsel or the executive director, whichever one is approving the instructions, is “satisfied that there is a reasonable suspicion that the lawyer may have engaged in professional misconduct”. The instructions confirm that pursuant to s. 49.3(2) of the Act, the investigator may exercise the powers that are set forth in s. 49.3(2)(a), (b) and (c) of the Act.
[12] Before intake staff advance an RPI, they must be satisfied that a reasonable suspicion exists. Similarly, prior to an investigation, either senior counsel or the executive director of the PRD must be satisfied that the threshold has been met.
[13] The evidence which was called before the Law Society Tribunal Hearing Division established that not all RPI’s are approved. However, once an investigation has been instructed and assigned to LSO staff, an investigator may exercise the authority to require production of information and documents relating to the matters which are under investigation.
The Facts
[14] On January 25, 2013, Ms. Jankovic, Senior Counsel for the Professional Regulation Division at the LSO, had approved an RPI that involved the complaint by electronically signing the instructions for Power to Investigate. In doing so, Ms. Jankovic confirmed that she had reviewed the RPI from intake counsel and was satisfied that there was a reasonable suspicion of professional misconduct.
[15] Mr. Cusack’s file as it relates to the complaint was then assigned to Pamela Pereira, Investigation Counsel. On February 12, 2013, Ms. Pereira wrote to Mr. Cusack enclosing a copy of the complaint, and requested written representations from Mr. Cusack that would address all of the regulatory issues identified for investigation. A request was also made for a list of files that the paralegal had worked on, and any additional supporting documentation that would assist in the investigation.
[16] Further correspondence took place in mid-March between Mr. Cusack and Ms. Pereira, and on March 31, 2013 Mr. Cusack provided the requested written representations, together with a list of approximately 175 files that the paralegal had worked on.
[17] On June 26, 2014, Ms. Pereira asked Mr. Cusack to produce client trust ledgers and original client files relating to 37 client files, of which 36 were listed on the paralegal file list. The remaining file had come to Ms. Pereira’s attention when she was reviewing the client trust ledgers which had been provided in the context of another investigation in 2012, as a result of which she noticed two cheques payable from trust to a non-licensee (“the wife of Mr. Cusack”). This triggered a second investigation.
[18] Between July and August 2014, Ms. Pereira and Mr. Cusack exchanged a series of letters, the net result of which establishes that Mr. Cusack failed in his obligation to produce the requested materials as a result of his fundamental questioning of the LSO’s authority to make such a request. Mr. Cusack has never provided the requested files.
Law Society Tribunal Decision
[19] In his Reasons for Decision dated January 13, 2016, David Wright, Chair of the Law Society Tribunal (the “Chair”), rejected Mr. Cusack’s primary argument that the Law Society must give a licensee the opportunity to make submissions before making a decision to require the production of a file, or a response to specific questions. Mr. Wright further held that the statute and procedural fairness did not require that the licensee have the opportunity to make submissions before a decision was made to authorize the s. 49.3(2) powers, and as such there was no violation of the statute or procedural fairness when the use of the s. 49.3(2) powers was authorized.
[20] After hearing submissions with respect to the appropriate penalty, the Chair imposed a one month suspension followed by an indefinite suspension until Mr. Cusack had completed his response.
The Appeal Panel’s Decision
[21] Mr. Cusack, as was his right, appealed the finding of professional misconduct to the Appeal Division. The Appeal Division rejected Mr. Cusack’s interpretation of s. 49.3 of the Act, and concluded that the Chair had arrived at the correct interpretation of s. 49.3 of the Act. The Appeal Division further concluded that the Chair’s factual findings were reasonable, and that they were supported by the evidence. There was no procedural unfairness. As for the issue of penalty and costs, the Appeal Division saw no basis to interfere with the decision of the Chair. The Appeal Division awarded the Law Society $18,000 in costs to be paid within 12 months.
Issues Raised
[22] Mr. Cusack submitted that the appeal raises the following four issues:
Did the Appeal Division err in interpreting s. 49.3(2) of the Law Society Act?
Did the Appeal Division err in finding that the decision to require production of client files was properly made by the correct person and on proper grounds?
Did the Appeal Division err in not finding that the Law Society acted arbitrarily or fettered its discretion?; and
Did the Appeal Division err in not making a decision consistent with the evidence?
The Court’s Jurisdiction and Standard of Review
[23] Pursuant to s. 49.38 of the Act, Mr. Cusack has a full right of appeal to the Divisional Court from a final decision of the Appeal Panel.
[24] As it relates to the decision in Groia v. The Law Society of Upper Canada, 2018 SCC 27, the presumption of reasonableness applies to decisions of the Appeal Panel on questions of law, unless the question is both of central importance to the legal system and outside the tribunal’s area of expertise. This matter involves an interpretation of its home statute as it relates to investigations, an issue that the Appeal Panel deals with on a regular basis and does not fall outside its expertise. As such, the standard of review that I must apply to the Appeal Panel’s decision is one of reasonableness.
Issue 1: Did the Appeal Division err in interpreting [s. 49.3(2)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-l8/latest/rso-1990-c-l8.html) of the [Law Society Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-l8/latest/rso-1990-c-l8.html)?
[25] Mr. Cusack argues that s. 49.3, properly understood, requires the Law Society to conduct an investigation under s. 49.3(1), including asking for a response from the licensee prior to exercising its powers under s. 49.3(2) of the Act. Mr. Cusack relies heavily on a decision of the Supreme Court of the Northwest Territories in Tanaka v. Certified General Accounts’ Assn. (Northwest Territories), 1996 3653, for the proposition that “reasonable suspicion” is more than “mere suspicion”, and in the context of the investigatory process of a self-governing profession, “reasonable suspicion” requires at least the response of the person being investigated. Mr. Cusack argues that because he was not asked for a response to the complaint before it was instructed for investigation, he was therefore not obligated to cooperate with the investigation.
[26] The Law Society fundamentally argues that the Hearing Division reasonably concluded that s. 49.3 of the Act does not require the Law Society to seek a response to a complaint before authorizing the use of the powers mandated by s. 49.3(2), and as such Mr. Cusack was obliged to cooperate with the investigation.
[27] In support of its position, the Law Society argues that both the Hearing Division and Appeal Division gave reasons for their interpretation of s. 49.3, and in particular the reliance by Mr. Cusack on Tanaka could be distinguished from the facts before this court.
Issue 1: Analysis
[28] The Law Society is one of many self-governing professions in the Province of Ontario. It is fundamental to the ability of a self-governing profession to properly regulate itself. Part of self-governance is the ability to discipline its members where professional misconduct occurs. The ability to discipline can only occur where the professional body has the ability to investigate its members when confronted with a complaint. A full and complete investigation provides confidence to the general public that it can rely on a self-governing profession.
[29] Mr. Cusack argues that he should have a chance to respond to the complaint before the LSO demands any documentation from his files. Mr. Cusack, in my view, conflates the disclosure obligations of the Law Society that are engaged when a licensee is the subject of an actual discipline hearing before the Law Society Tribunal. If a complaint does not reach the level of a full hearing, there is no disclosure obligation engaged.
[30] The Divisional Court in D’Mello v. The Law Society of Upper Canada, 2015 ONSC 5841, observed at para. 62 that there are very powerful public policy reasons for requiring the members of a self-governing profession to co-operate with an investigation by their regulator. In adopting the comments of Larry Banack in Law Society of Upper Canada v. Joseph Baker, 2006 L.S.D.D. No. 31 at paras. 6-7, the Divisional Court in D’Mello agreed that the failure of someone under investigation to co-operate in an investigation results in delay that can jeopardize the collection of evidence, including the obtaining of statements from witnesses. Ultimately, this can result in the backlog of investigations, which can lead to an erosion of confidence in the ability of the Law Society to self-regulate itself.
[31] The Divisional Court in D’Mello ultimately concluded at para. 73 that Mr. D’Mello “simply dug in his heels and refused to comply with the proper requests of the investigator. Quite simply, he was wrong to have done so, and that is what led to the charge against him for failing to co-operate, and the ultimate finding against him on that charge”. Mr. Cusack has represented himself throughout these proceedings. He may have had an honest belief that he had the right to disclosure of the complaint before he had any obligation to co-operate with the documentary disclosure of the Law Society’s investigator. Had he sought legal advice and/or had he read D’Mello, he should have known that he had an obligation to co-operate with the Law Society. He chose to stand on a matter of principle - a principle that had already been decided by the Law Society Tribunal (see Law Society of Upper Canada v. Munyonzwe Hamalengwa (File Number CN 64b/02) and the Divisional Court in D’Mello).
[32] I agree with the decision of the Hearing Panel, that s. 49.3 of the Act does not require the Law Society to seek a response to a complaint before authorizing the use of the powers available under s. 49.3(2) of the Act. The Appeal Panel’s decision in this regard was reasonable. Mr. Cusack was obliged, as he should have well known, to co-operate with the investigation. As for Mr. Cusack’s reliance on Tanaka, I agree with the submissions of counsel for the Law Society that Tanaka is distinguishable. Tanaka engages a legislative scheme which is significantly different from the legislative scheme mandated by the Act. In any case, D’Mello has already determined there is no right of disclosure until the matter progresses to a hearing. I also fully endorse that part of the Reasons of the Hearing Panel that rejected Mr. Cusack’s argument that he was entitled to disclosure prior to engaging his obligation to co-operate and disclose requested documentation. I entirely agree with the Hearing Panel when it wrote that “…Mr. Cusack’s interpretation would impair the timeliness of investigations, cause delay and harm the ability to protect the public interest. It would eliminate the ability to take investigative steps without warning the subject of the investigation”.
Issue 2: Did the Appeal Division Err in Finding that the Decision to Require Production of Client Files was Properly Made by the Correct Person and on Proper Grounds?
[33] As it relates to this issue, Mr. Cusack argues that he was not obligated to cooperate with the two investigations, because each was not properly authorized by the person with the authority to do so.
[34] In order for an investigation to be properly authorized under s. 49.3(2) of the Act, it must be approved by either the executive director, professional regulation or senior counsel professional regulation. In this case, Mr. Cusack acknowledges that in both instances the instructions were signed by an individual holding the proper office. He argues, however, that Ms. Jankovic simply “rubber-stamped” the instructions, and in practice the decision was improperly delegated to unauthorized persons. As such, Mr. Cusack alleges that the Law Society “routinely” goes beyond the bounds of the subject matter of an investigation and engages in an improper investigation.
[35] In response to Mr. Cusack’s submissions in this regard, the Law Society argues that the powers under s. 49.3 were in fact properly exercised, and that the evidence in no way supports Mr. Cusack’s assertion that Ms. Jankovic rubber-stamped the instructions to investigate and that the authority was improperly delegated to Mr. Cass. The Law Society argues, based on the evidence, that Ms. Jankovic signed the instructions to investigate both investigations, and that each document on its face indicates that she reviewed the “attached request” for Power to Investigate received from Mr. Cass, and that she was satisfied that there was “a reasonable suspicion that the lawyer may have engaged in professional misconduct”.
[36] The Law Society points to the fact that in her evidence, Ms. Jankovic confirmed that in each instance she formed her own reasonable suspicion prior to signing the instructions.
[37] Counsel for the Law Society argues that the Hearing Division reasonably concluded that there was no delegation of decision-making power, and that the Appeal Division did not err in concluding that the Hearing Division’s findings were reasonable.
Issue 2: Analysis
[38] The essence of Mr. Cusack’s argument is that Ms. Jankovic “rubber-stamped” the Instructions to Investigate, and by doing so she improperly delegated her authority to Cass. This argument, in my view, can be summarily dismissed. The Hearing Panel, having heard the evidence of Ms. Jankovic, rejected the assertion she simply rubber-stamped the Instructions to Investigate. This was a reasonable conclusion and fully supported by the evidence. The decision of the Appeal Panel, upholding the decision of the Hearing Panel, was also entirely reasonable.
Issue 3: Did the Appeal Division Err in not Finding that the Law Society Acted Arbitrarily or Fettered its Discretion?
[39] Mr. Cusack argues that the Law Society improperly fettered its discretion with respect to s. 49.3(2) of the Act, by demanding documentation as a matter of policy rather than based on the exigencies of the case and, as such, ignored the available relevant documentation.
[40] The Law Society argues that it did not fetter its discretion by exercising its s. 49.3(2) powers in the matters referred to in the investigations. Rather, it is argued that discretion is exercised at every step of the investigation process to ensure that only matters for which there is a reasonable suspicion of misconduct are the subject of a s. 49.3(2) authorization. Once that standard is met, it is argued that there is no reason for the Law Society not to pursue its investigation by exercising the s. 49.3(2) powers so as to ensure a complete investigation. As such, the Law Society argues that the Hearing Division was correct in its conclusion that there was no fettering of discretion, and that the Appeal Division reasonably agreed.
Issue 3: Analysis
[41] Implicit in Mr. Cusack’s argument is the suggestion that before the Law Society can engage the investigative powers made available by s 49.3(2), the Law Society had an obligation to respond to his disclosure requests so he could then determine if the Law Society had any basis to require him to co-operate and produce the requested documentation. As I have already made clear, there is no such obligation on the Law Society. As for the conduct of how an investigation unfolds, it is clear from the evidence before the Hearing Panel that not all complaints make their way to an investigation. Not all complaints reach the point where they are subject to a Request for Power to Investigate. It is also clear that only senior counsel or the executive director of the PRD have the ability to authorize the use of the s. 49.3(2) powers - and only where one or other them has formed a “reasonable suspicion”.
[42] There is no evidence that anyone involved in the investigation of Mr. Cusack ignored relevant documentation or demanded information from him as a matter of policy. Mr. Cusack may think that the process adopted by the Law Society, which is reviewed in paras. 6-13 above, amounts to nothing more than a rubber-stamping that leads to the engagement of the powers provided for in s. 49.2(2). That belief may be honestly held by Mr. Cusack, but it is not grounded in the evidence.
Issue 4: Did the Appeal Division Err in not Making a Decision Consistent with the Evidence?
[43] As it relates to this issue, Mr. Cusack argues that various factual conclusions made by the Hearing Division, which were upheld by the Appeal Division, were contrary to the evidence or were unreasonable. Specifically, Mr. Cusack refers to Ms. Jankovic’s review of available documents and the so-called “fishing expedition” that occurred.
[44] Mr. Cusack argues that the Hearing Division’s conclusion that Ms. Jankovic “must have looked” at other documents available to her when reviewing the RPI, was contrary to the evidence given that she could not recall what documentation she looked at and her statements in the request and information were intended to be accurate statements of what was done.
[45] Mr. Cusack also argues that the Law Society’s investigators engaged in a fishing expedition, which is quite contrary to the requirement that an investigator must only seek documents that pertain to the matters for which the investigation is authorized.
[46] In response to these arguments, the Law Society argues that none of these arguments have merit and that the Appeal Panel reasonably rejected the arguments.
Issue 4: Analysis
[47] Mr. Cusack’s arguments on this issue are fundamentally flawed. The Hearing Division did not conclude that Ms. Jankovic must have looked at the other documents available to her. Rather, what the Hearing Division did conclude was that “Ms. Jankovic had access to the underlying document”, which was consistent with the evidence.
[48] As for Mr. Cusack’s allegations of a “fishing expedition”, the Hearing Panel’s conclusion was that there was “nothing improper in how Ms. Pereira and Ms. Witkowski conducted themselves. Ms. Pereira was not a ‘rogue investigator’, nor was she on a fishing expedition”. The Law Society argues that the Hearing Division, having made the aforesaid factual conclusions, did so supported by the evidence, and the Appeal Panel reasonably upheld the Hearing Division’s decision. I agree.
Conclusion
[49] Much of Mr. Cusack’s appeal has been an attempt to relitigate the factual findings made by the Hearing Division - factual findings that are more than amply supported by the evidence. While I accept that Mr. Cusack had an honest belief in how s. 43.2 of the Act should be interpreted as it relates to Issue 1, the other issues he raised had been fully litigated before the Hearing Division and Appeal Panel. Litigating those issues again in this court, needlessly increased the cost of this appeal.
[50] As it relates to the issue of costs, counsel for the Law Society seeks costs fixed in the amount of $10,780. While Mr. Cusack did not dispute this figure, he has asked for time to pay. Under the circumstances I order that Mr. Cusack pay the costs of the Law Society, which I fix in the amount of $10,780. Mr. Cusack shall pay those costs in full by no later than September 1, 2020.
[51] As for when the suspension ordered by the Hearing Division takes effect, Mr. Cusack asked for some advance time to get his affairs in order prior to the implementation of the suspension. While I do not have that issue directly before me, I would encourage the Law Society to give Mr. Cusack some reasonable period of time to get his affairs in order.
[52] In the end result, Mr. Cusack’s appeal from the finding of professional misconduct is dismissed.
M.L. Edwards J.
I agree _______________________________
Backhouse J.
I agree _______________________________
Favreau J.
Released:
CITATION: Cusack v. Law Society of Ontario, 2019 ONSC 5015
DIVISIONAL COURT FILE NO.: DC-18-444-00
DATE: 20190904
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BACKHOUSE, EDWARDS M.L., FAVREAU JJ.
BETWEEN:
Patrick Leo Wayne Cusack
Appellant
– and –
Law Society of Ontario
Respondent
REASONS FOR JUDGMENT
Released: September 4, 2019