Saturday, October 31, 2015

Divisional Court Reverses Law Society on Penalty and Costs

   Once again an appellate court has affirmed the fundamental principle in sentencing and penalty dispositions in administrative law proceedings that a lack of remorse can not be an aggravating factor when a person testifies in their defence.  A unanimous panel of the Divisional Court led by Justice Perell overturned a decision of the Law Society of Upper Canada's Appeal Panel issuing a one month suspension and costs of $10,000 flowing from a finding that appellant, Roy D'Mello, failed to cooperate with with an investigation.

   I will delineate the relevant points from the decisions of the Law Society of Upper Canada's Hearing Panel, Appeal Panel and that of the Divisional Court below.

Law Society of Upper
Canada Hearing Panel:

[14]   Mr. D' Mello started with the proposition that his honest belief was a mitigating circumstance but then attempted to re-litigate the issue of the propriety of his refusal to co-operate our earlier findings.

[16]   Nevertheless, based on Mr. D'Mello's testimony and submissions, we conclude that Mr. D'Mello would not act differently in the future were he to be faced with the same or a similar circumstance, despite this proceeding.  Mr. D'Mello was clear that he would not provide documents and information in a future Law Society investigation if he thought that the Law Society was acting improperly.

[20]   ......It is clear that Mr. D'Mello has not learned his lesson.

[21]   As we do not think that a reprimand will deter Mr. D'Mello from similar misconduct in the future, we conclude that a one-month suspension is the appropriate penalty.

Law Society of Upper
Canada Appeal Panel:

[39]   The penalty imposed was within the range, albeit at the high end.

Divisional Court:

[85]   I have already explained above my opinion that the Hearing Panel made inconsistent, adverse, demeaning and procedurally unfair findings of fact against Mr. D'Mello on the very issues that the Hearing Panel had ruled irrelevant to the failure to co-operate proceeding.  In my opinion, these unfair findings tainted the reasonableness of the Hearing Pane's decision about penalty.

[87]   ....That said, both the Hearing Panel's and the Appeal Panel's decisions about penalty became unreasonable when they concluded that Mr. D'Mello was a likely recidivist notwithstanding that he had a genuine belief that thee was an impropriety that would have at least been relevant to the underlying investigation of possible mortgage fraud by the CIBC, which had not been closed at the time of the failure to co-operate proceeding.

[88]   Moreover, it was unfair and unreasonable of both panels to expect Mr. D'Mello to repent and show remorse for his allegations of impropriety at a time when he had provided the documents required by the Law Society without prejudice to his request for an electronic copy of the December 17, 2008 letter, which electronic copy might have given him a defence to the underlying investigation, even if it did not provide hi with a defence to the failure to co-operate proceeding.

[89]   Further, both panels erred in principle by, in effect treating Mr. D'Mello's lack of remorse as an aggravating factor justifying specific deterrence.  Remorse may be a mitigating factor, and the lack of remorse may mean that there are no mitigating factors, but lack of remorse is not an aggravating factor.  Mr. D'Mello sincerely believed that he had no obligation to comply without disclosure of the information to which he believed he was entitled.  Although the Hearing Panel found that belief to be misguided, Mr. D'Mello still had a right of appeal, which he intended to exercise.  He cannot be penalized in that situation for failing to express remorse, which would be a confession of wrongdoing.

[92]   By the time Mr. D'Mello obtained a stay of his one-month suspension, he had already served half of it.  In these circumstances, I shall allow his appeal of penalty and simply set aside the Hearing Panel's penalty order and the costs orders of both panels.

Note: Readers are encouraged to read the full decision - see 2015ONSC 5841 (Canli)  The Appellant, Roy D'Mello was self-represented on his appeal.  The Law Society was represented by L. Maunder and Nisha Dhanoa.  The Divisional Court ordered no costs on the appeal.

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