Court File and Parties

CITATION: Law Society of Ontario v. McLellan, 2024 ONSC 7204

DIVISIONAL COURT FILE NO.: 388/24

DATE: 2024-12-30

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: LAW SOCIETY OF ONTARIO, Applicant

AND:

MYLES FREDERICK MCLELLAN, Respondent

BEFORE: Backhouse, Matheson and Myers JJ.

COUNSEL: Benjamin Kates and Amy Block, for the Law Society of Ontario

Self-represented Respondent

HEARD: December 19, 2024 in Toronto

Endorsement

[1] The applicant Law Society of Ontario (“LSO”) seeks an order quashing the decision of the Appeal Division of the Law Society Tribunal dated June 6, 2024 (“the Appeal Decision”) and restoring the decision of the Tribunal’s Hearing Division dated July 25, 2023 (the “Hearing Decision”). The Hearing Division panel had dismissed the respondent’s application for licensing as a lawyer because he failed to meet his onus to establish that he was of good character, after a history that included several complaints, two criminal fraud convictions and other difficulties. The Appeal Decision set this aside and ordered a new hearing.

[2] The LSO submits that the Appeal Decision is unreasonable because, instead of applying the appellate standard of review, the appeal panel re-weighed the evidence to reach a different conclusion. The respondent submits that this application is premature, there are no exceptional circumstances to justify hearing this application, and in any event the Appeal Decision is reasonable.

[3] On the issue of prematurity, the LSO relies on the statutory regime that applies to good character hearings and related statutory appeal rights, as set out in the Law Society Act, R.S.O. 1990, s. L.8 (the “Act”). The LSO submits that within that context, the Appeal Decision is final, even though a new hearing has been ordered and administrative proceedings are therefore ongoing. We do not need to decide that issue because, in the particular circumstances of this application summarized below, we are of the view that this is one of the rare cases where we exercise our discretion to hear it even if premature.

[4] Moving to the application itself, and by way of brief background, the respondent was a practicing lawyer between 1980 and 2006, when his law practice ended at the request of the LSO. The respondent’s licence to practice was revoked in 2009, after findings of misappropriation, failing to ensure his clients’ interests were protected, and misleading the LSO.

[5] The respondent applied to be reinstated in December 2018 at age 68. As set out in s. 27(2) of the Act, an applicant must be of good character to be licensed to practice. This requirement serves the LSO’s duty to protect the public, mandated under s. 4.2 of the Act. There is no issue that in this case the respondent bore the onus to prove that he was of good character.

[6] The hearing panel conducted a hearing that included not only admissions of fact, but also written and oral testimony including the respondent’s lengthy testimony. The Hearing Decision recounts that evidence in significant detail and it need not be entirely repeated here. The evidence recounted a history that included the following:

(i) a 1988 discipline finding that the respondent had misapplied a client’s monies, misled fellow solicitors, and made a false statement to the LSO’s auditor;

(ii) a 2008 discipline finding that the respondent failed to co-operate with the LSO in connection with nine different complaints, including his failure to produce the requested books and records, for which he received a six-month suspension that would become indefinite if he did not produce the books and records;

(iii) in connection with his bankruptcy proceedings, the 2008 decision of the Trustee that the respondent had failed his duties to assist the Trustee in numerous respects, which was not remedied until 2013;

(iv) a 2009 discipline finding in connection with which the respondent admitted to six particulars of misconduct including the misappropriation of trust funds totaling more than $400,000, involving different clients, between 2002 and 2004, and misleading the LSO;

(v) the penalty of revocation of the respondent’s licence to practice in 2009, despite the panel’s acceptance that he suffered from depression, which was the primary reason for the misappropriation, because the respondent’s non-compliance with his medication posed a risk to the public;

(vi) the finding that, in connection with the above revocation, there was no evidence of remorse;

(vii) the respondent’s criminal conviction for fraud over $5,000, forgery and two counts of uttering forged documents, after a criminal trial in 2009, with a jail sentence;

(viii) in the appeal from the criminal conviction, the Court of Appeal’s ruling that despite the respondent’s reputation and past good works, he used his professional capacity to facilitate the crimes for which he had been convicted and the trial judge did not err in finding a lack of remorse;

(ix) the Court of Appeal finding, commending the respondent for providing restitution to a particular victim and reduced the sentence to 16 months, however, the respondent ultimately failed to repay the more than $100,000 that he had borrowed under false pretences and had agreed to repay;

(x) the respondent’s conviction for breach of recognizance in 2010; and,

(xi) the respondent’s conviction for fraud over $5,000 in 2012, in connection with funds that he was receiving from Ontario Works.

[7] The Law Society Compensation Fund paid out more than $200,000 to the victims of the respondent’s dishonesty. Although the respondent had said he had a moral obligation to repay the Fund, and made some payments, he stopped doing so when he applied to be reinstated.

[8] In support of his application to be licensed in 2018, the respondent put forward activities that he relied on, as set out in the Agreed Statement of Fact (ASF), as well as twelve letters of reference. The respondent was represented by counsel. Three of the people who provided letters were also called as witnesses, and the respondent testified for a full day.

[9] The Hearing Decision set out the evidence before the panel in detail and noted the activities that the respondent relied on in the ASF on to show his rehabilitation, as follows:

• Volunteering for the John Howard Society;

• Working as a Board member for Ken Brown Home;

• Working as president of the faculty union;

• Publishing a number of articles and anticipate on publishing a book regarding wrongful convictions;

• Attending for treatment and counselling with psychiatrists [doctors named];

• Reading Law Society Tribunal decisions that touch on the misconduct issues.

[10] The Hearing Panel addressed the above and the evidence before it. Among other evidence, the respondent and the witnesses referred to the respondent’s academic work. Since his criminal conviction in 2009, the respondent had completed an LLM and PhD in legal studies, focused on compensation for wrongful conviction, and taught as a part-time sessional instructor at the university level.

[11] The Hearing Panel set out and applied the correct considerations, as set out in Armstrong v. Law Society of Upper Canada, 2009 ONLSHP 29 and other cases put forward by the parties. All the relevant factors were considered in the lengthy decision, in view of the evidence. Among other findings, the Hearing Panel found as follows:

(i) that serious misconduct led to the revocation of the respondent’s licence and was followed by further misconduct;

(ii) that the respondent chose his own interests over the public interest;

(iii) that the respondent’s words of remorse were not supported by his actions;

(iv) that the respondent was to be highly commended for his academic achievements, which were a relevant but not strong factor in the circumstances;

(v) that the letters and evidence from the other witnesses were largely based on the respondent’s academic accomplishments and, although the panel gave them weight, it was limited;

(vi) that the respondent had neither demonstrated nor provided any explanation as to how or why he was remorseful, if at all, what he had learned or how he had changed;

(vii) that the panel recognized the respondent’s significant work in the community but, since the respondent had done so previously, it did not represent a change;

(viii) that the respondent did not put forward any medical witness but himself testified that he had continued to be under the care of a family physician since 2005, was compliant with his medication, and was not raising health issues as a factor; and,

(ix) that the list of accomplishments put forward by the respondent was impressive but provided little evidence of his having any insight or any understanding of the effect of his misconduct on his victims.

[12] Following Law Society of Upper Canada v. Davidovic, 2017 ONLSTH 155, the Hearing Panel found that the Armstrong factors were not required to be given equal weight, and, in the circumstances of this case, greater weight should be given to the factors of remorse and rehabilitation. The Hearing Panel found that the respondent has made impressive, concerted efforts at rehabilitation in the area of academia, but those efforts were not directly related to the moral fiber inherent in a good character analysis. The Hearing Panel found that the respondent failed to show genuine remorse and the evidence showed that he preferred his self-interest over the public interest.

[13] The Hearing Panel concluded that the respondent had not satisfied them, on a balance of probabilities, that he had extricated and distanced himself from the conduct and circumstances that led to his revocation.

[14] The Hearing Decision was overturned. Despite expressly acknowledging that the appeal standard of review applied, and using some of that terminology, the Appeal Panel itself engaged in an Armstrong analysis, re-weighed the evidence, and misstated the Hearing Decision and the evidence in doing so.

[15] The Appeal Panel agreed with the respondent that the Hearing Panel had attached “inordinate weight” to the respondent’s failure to make full restitution and to apologize to one victim. The Appeal Panel said that the Hearing Panel did so to the exclusion of every other consideration even though the Hearing Decision shows that is plainly not the case. The Appeal Panel further said, referring to the Hearing Decision, that the failure to make restitution or the failure to apologize is not a “prerequisite” to a finding of present good character, even though the Hearing Panel had not said either was a prerequisite.

[16] The Appeal Panel further found that the respondent’s area of study – wrongful convictions – was “arguably” tied to the public interest and there was therefore a misapprehension of the evidence. Yet, under the appellate standard of review, the question was not whether another view was “arguable”. The Appeal Panel further found that the Hearing Panel “effectively penalized” the respondent for his community service when it did not do so. The Hearing Panel found it commendable but it was not evidence of a change. That finding was open to it on the evidence.

[17] The Appeal Panel conducted its own Armstrong analysis, criticizing the Hearing Panel for considering evidence under the wrong factors, or more than one factor, as if they are rigid and separate factors. The Appeal Panel did so even though it acknowledged that the same evidence could be relevant to more than one factor. The Armstrong factors are not a code to be applied mechanically: Polanski v. Law Society of Upper Canada, 2020 ONLSTH 115, at para. 172.

[18] The Appeal Panel held that the Hearing Panel “misapprehended the evidence with respect to remorse, rehabilitation, the passage of time and conduct since the proven misconduct” by “emphasizing evidence” about restitution and apology while “rejecting or minimizing other evidence”.

[19] The standard of review on this application for judicial review is reasonableness. We conclude that the Appeal Decision is unreasonable. The Appeal Decision does not show the required justification, transparency and intelligibility for the appellate review of the Hearing Decision. The Appeal Decision must be justified in relation to the facts and the legal constraints on it, including its standard of review.

[20] Although the Appeal Panel correctly set out the standard of review that it was required to apply – the appellate standard – it failed to apply it. Instead, it misstated the Hearing Decision and the evidence, impermissibly reweighed the evidence, expressed its own view about the weight that should have been given to the evidence, and then characterized that group of issues as giving rise to palpable and overriding error.

[21] It was the Hearing Panel that heard the evidence, including lengthy testimony from the respondent, and was in the best position to weigh the evidence and make findings of credibility. The Hearing Panel’s findings of fact were rooted in the evidence. The resolving of conflicting facts or contradictory evidence in favour of one party or the other does not constitute a palpable or overriding error, nor does the fact that an alternative finding could have been reached based on the assignment of a different weight to the evidence.

[22] A number of the Appeal Panel’s missteps are discussed above. Others include the following. The Appeal Panel wrongly concluded that the Hearing Panel had misapprehended the evidence about the respondent’s failure to produce books and records. It was agreed that the respondent had failed to cooperate with the LSO investigations by failing to produce his books and records regarding nine complaints against him. A term of his resulting suspension was that the suspension would not be lifted until he complied. It was not lifted. It was open to the Hearing Panel to consider the consequences. It was also open to the respondent, who bore the onus, to provide evidence of compliance. He did not do so.

[23] The Appeal Panel mischaracterized the Hearing Decision to be focused only on a failure to make full restitution and to apologize to one victim. On the contrary, the Hearing Decision shows numerous concerns, both as regards the respondent’s victims but also his actions in response to his obligations to the LSO, to the Trustee in his bankruptcy, to the Compensation Fund (saying initially that he had a moral obligation and then ceasing the payments), among other events.

[24] The Appeal Panel found that the Hearing Panel gave “inordinate weight” to restitution and apology and held that the Hearing Decision must be set aside because the Hearing Panel failed to consider all of the evidence on each factor and make appropriate findings of fact based on that evidence. In doing so, the Appeal Decision failed to justify its decision under the legal regime imposed by its standard of review.

[25] This departure from the required standard of review is underscored in the related costs decision, when the Appeal Panel highlighted the main problems it had with the Hearing Decision, as follows: that it had “misapprehended the evidence” and “attached inordinate weight” to the evidence; that it had found that the respondent chose self interest over the public interest when his academics were “arguably” tied to the public interest; that the respondent was “penalized” for his community service; and, that the decision was the subject of unsupported factual findings including the failure to produce books and records. As discussed above, none of these conclusions were justified on an appellate standard of review. We conclude that the Appeal Panel significantly departed from the required appellate standard of review, rendering its decision unreasonable.

[26] The application is therefore granted. Nothing is served by sending this back to the Appeal Panel to be redone. The Appeal Decision and related costs decision are set aside and the Hearing Decision and related costs decision are restored. Costs of this application shall be to applicant in the agreed upon amount of $15,000.

Backhouse J.

Matheson J.

Myers J.

Date: December 30, 2024