CITATION: Barnwell v. LSO, 2024 ONSC 5826

DIVISIONAL COURT FILE NO.: 533/24

DATE: 20241021

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Osborne G. Barnwell

(Moving Party) Appellant

AND:

Law Society of Ontario

(Responding Party) Respondent

BEFORE: Justice O’Brien

COUNSEL: P. Slansky, for the Moving Party

R. Cookhorn, for the Responding Party

HEARD: Via Videoconference on October 10, 2024

ENDORSEMENT

Overview

[1] This is a stay motion brought by Mr. Barnewll. The Hearing Division of the Law Society Tribunal found that Mr. Barnwell engaged in professional misconduct in relation to two transactions that occurred in 2012 and 2013. In both transactions, a borrower who was unable to access financing through conventional lending sources paid advance fees to Mr. Barnwell to be deposited into his trust account as part of a proposed transaction that would have provided financing to the borrower. In both cases, even though no money was raised, Mr. Barnwell never returned the advanced fees to the borrower. He instead disbursed the funds as directed by another party.

[2] The Hearing Division found the two transactions were dishonest. It concluded Mr. Barnwell ought to have known the first transaction was dishonest and that he knew the second transaction was dishonest because of his recklessness or willful blindness. It also found Mr. Barnwell to have engaged in misconduct by overdrawing his trust account in 2013.

[3] According to the Hearing Division, the presumptive penalty was revocation of Mr. Barnwell’s licence. However, it considered Mr. Barnwell’s value to the Black community and his longstanding commitment to improving the circumstances of people in the community to be mitigating factors that justified lessening the penalty from immediate revocation to permission to surrender his licence. The Hearing Division also found in the alternative, if the presumption of revocation did not apply, the standard penalty factors would have led to the same result.

[4] The Tribunal’s Appeal Division upheld all the findings and penalty on appeal.

[5] Mr. Barnwell now seeks a stay of the revocation of his licence pending his appeal of the Appeal Division’s decision to this court.

Test for a Stay

[6] To obtain a stay pending appeal, Mr. Barnwell must satisfy the three-part test set out in RJR MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311, at p. 334, that: (1) there is a serious issue to be tried; (2) Mr. Barnwell will suffer irreparable harm if the stay is not granted; and (3) the balance of convenience favours granting a stay.

[7] The factors are not “watertight compartments” independent of one another. They are interrelated and the strength of one factor may compensate for the weakness in another. The overriding question is whether the moving party has shown that it is in the interests of justice to grant a stay: Louis v. Poitras, 2020 ONCA 815, at para. 16.

Serious Issue to be Tried

[8] The test to establish a serious issue is not high. The appeal simply must not be frivolous or vexatious. Whether this aspect of the test has been met should be determined based on “common sense and an extremely limited review of the case on the merits”: RJR MacDonald.

[9] Mr. Barnwell has raised numerous grounds of appeal in his Notice of Appeal and factum. I am not persuaded any of the grounds are strong. In oral argument, counsel for Mr. Barnwell emphasized his submissions related to the finding of willful blindness. He submitted, for example that the Hearing Division wrongfully applied a case dealing with recklessness, Law Society of Upper Canada v. Yungwirth, 2013 ONLSAP 24, to establish willful blindness. He stated the two concepts are distinct and this was an error. Mr. Barnwell also submitted the Hearing Division erred in concluding criminal jurisprudence did not apply to a finding of willful blindness in the Law Society context.

[10] Many of the alleged errors relating to willful blindness pertained to the decision of the Hearing Division. Mr. Barnwell repeated the same submissions in this court. Indeed, in argument in this court, Mr. Barnwell relied repeatedly on his factum to the Appeal Division. This does not make his arguments incorrect, but the Appeal Division dismissed the arguments in a careful and detailed fashion.

[11] Mr. Barnwell also relies on an alleged error in the Hearing Division’s understanding of systemic racism. He submits the Hearing Division erred by requiring a causal connection in the test for discrimination. In his submission, the Appeal Division recognized this error when reviewing the Hearing Division’s analysis of exceptional circumstances for determining penalty. He says because the Appeal Division was concerned the Hearing Division’s penalty analysis “verge[d] on” the proscribed causal analysis, it should have recognized the same Hearing Division panel erred when analyzing systemic racism allegations in various pre-hearing motions.

[12] But the Appeal Division addressed the other alleged errors by carefully examining the reasons in the motion decisions, including by canvassing the Hearing Division’s review of the record. It concluded after this review that the Hearing Division in each case had understood race only needed to be a factor in the relevant decision for discrimination to be established.

[13] In short, while Mr. Barnwell has pointed to numerous grounds of appeal, he has not demonstrated they are strong. That said, I also do not find his grounds to be frivolous and vexatious. He has framed his allegations as errors of law and explained why he submits the Hearing Division applied the wrong legal tests. To reach a further conclusion about the strength of the multiple grounds of appeal put forward would require an in-depth examination of extensive case law and, in some cases, the record. That is not encouraged on a motion of this type. His arguments are sufficient to demonstrate they are not frivolous and vexatious.

Irreparable Harm

[14] Mr. Barnwell submits he will suffer irreparable harm if the stay is not granted. In particular, he points to severe financial harm from the loss of his practice, reputational harm that will worsen the economic consequences, and emotional and psychological harm from being unable to pursue his goal of helping the Black community.

[15] An assertion of financial loss is not on its own sufficient. Financial loss will inevitably result from the suspension of a licence to practise but generally will not be dispositive: Sazant v. College of Physicians and Surgeons of Ontario, 2011 Carswell 15914 (Ont. C.A.), at para. 11; Kitmitto et al. v. Ontario Securities Commission, 2023 ONSC 1739, at para. 14. Similarly, emotional harm and psychological attachment to one’s work will almost always exist but “something more… must be required otherwise irreparable harm as a consequence would always weigh in favour of granting a stay”: Sazant, at para. 13.

[16] However, I am persuaded that in the circumstances of this case, Mr. Barnwell has shown he will suffer financial loss of a sort that will cause serious consequences. Mr. Barnwell is 70 years old. He has two dependent children and a home with a mortgage. He states that since the Law Society published the revocation of his licence in October 2023, he has faced a reduction of paid legal work. Because of his reduced income, he has accumulated credit card debt of over $50,000 and he has an overdraft on his bank account of almost $80,000. I am satisfied that Mr. Barnwell’s finances are sufficiently precarious that he and his family will suffer irreparable harm due to the loss of income during the period pending appeal. This factor weighs in his favour.

Balance of Convenience

[17] The outcome of this motion largely turns on the balance of convenience. While Mr. Barnwell has met the first two parts of the test, he did not establish strong grounds of appeal. Although he will suffer irreparable harm, if granted, the stay would be fairly brief. The appeal is scheduled to be heard on January 20, 2024, roughly three months from when this decision is released. This period also covers the winter holidays, when Mr. Barnwell is likely to have lower legal billings.

[18] The Law Society submits the public interest should weigh heavily in the balance, not only because of the importance of protecting the public but also to maintain public confidence in the profession’s ability to self-regulate. It emphasizes that the allegations arise in the context of some of the most serious findings of professional misconduct for a lawyer.

[19] I consider this to be a close call but have decided to grant the stay. The misconduct as found by the Tribunal occurred over ten years ago without any further allegations since that time. I agree that permitting a professional to practise for a period pending the initial hearing does not necessarily justify a stay pending appeal. As Schabas J. pointed out in Kitmitto, a case dealing with violations of the Securities Act, by the time of the appeal, circumstances have changed. The professional has been found to have committed serious misconduct.

[20] However, in granting the stay in this case, I find it important that Mr. Barnwell is not practising in the same area of law that led to the violations as found by the Tribunal. His practice currently consists of human rights, immigration, employment law, income tax law and some general litigation. He is not involved in any international transactions, which were the subject of the findings. I note that the Tribunal Appeal Division itself granted a stay pending appeal for ten months, despite the Hearing Division’s serious findings.

[21] While allowing Mr. Barnwell to practise for any period could be said to harm the reputation of the profession, a countervailing factor in this case is that Mr. Barnwell is engaged in work that may enhance the reputation’s profession. His current practice is 60% pro bono and contingency files. Almost all his clients are Black people. He has various “access” or low fee programs, for example, for Black parents who have children experiencing issues with a school board and for human rights cases. On this motion, he has listed 26 cases in which he is currently acting on a pro bono or a contingency basis. He advises that many of these cases require steps to be taken in the next few months. I accept his evidence that, because of a limited ability to pay, it will be difficult for some or many of these clients to find other lawyers to represent them.

[22] His work in assisting the community on a pro bono or reduced fee basis is valuable and lessens the harm the reputation of the profession will otherwise suffer. I also consider that because the appeal will be heard soon, the harm to the profession’s reputation will be short-lived.

[23] In all the circumstances, I find the balance of convenience weighs in favour of granting the stay.

Disposition

[24] The motion is allowed. The revocation of Mr. Barnwell’s licence is stayed pending the disposition of the appeal in this court or further order of this court. In accordance with the agreement between the parties, the LSO shall pay Mr. Barnwell costs of $6,000.

O’Brien J

Date: October 21, 2024