Law Society Tribunal
(Appeal Division)
BETWEEN:
The Law Society of Upper Canada
Applicant / Respondent in appeal
- and -
John Paul Abbott
Respondent / Appellant
Before: Raj Anand (Chair), Constance Backhouse, Marion Boyd, Christopher D. Bredt and Roger D. Yachetti, Q.C.
Heard: March 24, 2015, in
Toronto, Ontario
Appearances: James C. Morton and
Robert H. Karrass
for
the Appellant Christopher Donovan and Jonathan
Schachter, for the Respondent in appeal
Summary:
ABBOTT – Appeal – Mortgage
Fraud – Penalty – Revocation – Exceptional Circumstances – Delay – Appeal
by the Lawyer from the Hearing Division’s finding that
he knowingly participated in mortgage fraud and
from the penalty of revocation
allowed,
in part – The Hearing
Division’s finding that
the Lawyer knowingly participated
in mortgage fraud was reasonable and was not disturbed – The Hearing Division’s decision
to deny the Lawyer’s request for a stay of proceedings on the basis of delay was reasonable under the established
jurisprudence – However, the Hearing
Division failed to give proper effect to relevant mitigating considerations in applying the doctrine of “exceptional circumstances”
to the
presumptive penalty of revocation – From 2007 onward, the Lawyer co-operated
fully with the Law
Society’s investigation, and he bore no responsibility for the Law
Society’s delays – The time from authorization of the
investigation to the issuance
of the Notice of Application
was
over six years – Even thereafter,
the Law Society missed deadlines for
interlocutory steps that it
had agreed upon and/or that the Tribunal had ordered, causing further delay –
The delay in this case was inordinate, and
in the context of determining the appropriate penalty, the Hearing
Division erred in law by failing to engage in a full assessment of the extent, justification and multi-faceted impact of the delay on
the public interest – The panel should have considered broader factors
beyond prejudice to the Lawyer
in weighing the appropriate penalty, and accordingly it should have given significant weight to the extraordinary delay that took place – If the Hearing
Division had done so, regardless of whether it specifically decided whether the
delay was
inordinate and unacceptable, the panel’s conclusion on
delay as a mitigating factor
and the
overall circumstances as
“exceptional” would not have been
the
same – The combination of mitigating circumstances identified in the panel’s decision
constituted exceptional circumstances
that merited the mitigation of the presumptive penalty of revocation
– The underlying facts concerning
the Lawyer, in tandem
with the institutional, stakeholder and personal interests
concerning excessive delay, required the
imposition of a remedy that would provide reassurance to the public of
the integrity of
the profession and its processes
– Accordingly, the
appeal from penalty was
allowed, the revocation of the Lawyer’s licence
was set
aside, and the Lawyer was suspended
for two years – Dissent: Delay is a
relevant mitigating consideration on penalty regardless of whether the delay
is inordinate and
unacceptable – Accordingly, the hearing panel did not err
in failing to make that finding – Further, the hearing panel properly considered the relevant law in making
its determination on penalty, and its decision to impose the penalty of
revocation was reasonable.
REASONS
FOR DECISION ON APPEAL
[1] Raj Anand
(Constance Backhouse and Roger
D. Yachetti concurring):– On October 10, 2014, the
Hearing Division dismissed Mr. Abbott’s motion to stay the conduct application due to
the Law Society’s delay since March 2007 in bringing it forward (See Law Society of Upper
Canada v. Abbott, 2014 ONLSTH 194).
[2] In the
same decision, the panel found
that the Lawyer had engaged in professional misconduct by knowingly participating or assisting in mortgage
fraud in seven transactions over a
four month period in late 2006
and early 2007. The
panel also found that
Mr.
Abbott failed
to disclose material facts to
his lender clients, and he did not serve his clients to the standard of a competent lawyer in these
transactions.
[3] On January 22,
2015, the
Hearing Division ordered that Mr.
Abbott’s licence be revoked
30 days later (See Law Society
of Upper
Canada v. Abbott, 2015 ONLSTH 12).
[4] Within those 30
days, Mr. Abbott
appealed the
decisions summarized above, and brought
a motion to stay the revocation
of his licence pending the disposition of his appeal. The
parties agreed on a March
24, 2015 hearing date, and on February
20, 2015, I granted an
order staying the penalty
from February 22 until the
appeal hearing
(See Law Society of Upper Canada v.
Abbott, 2015 ONLSTA 9).
[5] On March 24,
2015, this panel reserved its
decision on the appeal
and extended the stay
of penalty pending
release of this decision.
[6] For the reasons that
follow, the panel concludes as follows:
a)
The Hearing Division’s
finding of knowing participation
in mortgage fraud was reasonable
and should not
be disturbed;
b)
The Law Society was responsible for inordinate and unacceptable delay in
this case, but the
Hearing Division’s decision to deny the
requested stay of proceedings
was reasonable under
the
established jurisprudence;
c)
The Hearing Division
failed to give proper effect to relevant mitigating
considerations in applying the doctrine of “exceptional circumstances” to
the presumptive penalty of
revocation, and accordingly its penalty decision should be set
aside and a suspension of 24 months
substituted.
STANDARD OF REVIEW
[7] The Appeal Division
reviews questions of law on
a standard of correctness, and owes
the Hearing Division little
or no deference in this area. On questions of fact, credibility,
and mixed fact and law,
the Hearing Division is entitled to deference, and the standard of
review is reasonableness.1
1 The Appellant did not challenge the adequacy of the Hearing
Division’s reasons under the
principles set out in Newfoundland
and Labrador Nurses’ Union v.
Newfoundland and Labrador (Treasury Board) [2011] 3 S.C.R. 708, 2011 SCC
62.
FINDINGS OF PROFESSIONAL MISCONDUCT
[8] The Appellant submits that
the Hearing Division’s most serious finding of professional misconduct – that he had knowingly assisted
in mortgage fraud – should be set aside. He asserts that “we are not dealing with findings of fact”,
which are subject to very
limited review by
this panel, but rather “inferences of fact that are not supported by
any
direct evidence”, for which the standard of review is
correctness. In particular, Mr. Abbott argues
that the panel’s conclusions were based on findings
of wilful blindness, which in turn relied
on the presence of “red flags”
that
fraud might be occurring, “and not direct evidence.”
[9] In our view, this
submission cannot succeed.
The Hearing Division accepted
that the Lawyer was familiar with the “red flags”
of mortgage fraud, and therefore the panel
“easily conclude[d]” that he
should have been aware of the many red flags that appeared
in the eight transactions
that were the subject matter of the particulars. Several of
these red flags were listed at para. 187 of the reasons on findings.
The panel thoroughly reviewed the
evidence, and at para. 196 found
that Mr. Abbott “knew of the risk that his conduct could bring
about fraud by completing fraudulent transactions yet persisted in completing the transactions despite that risk.”
[10] Subject to review by the Appeal Division for reasonableness, the Hearing Division was entitled to reach its factual conclusions by relying on all of
the usual techniques that were
available to it as a fact finder. These
evidently included evaluating credibility, weighing competing evidence, and reviewing
expert evidence. The panel
was also entitled to draw inferences
from circumstantial evidence, and was not
restricted to direct evidence of fraud.
As the Divisional Court recently stated in Law Society of Upper Canada v. Talarico, 2014 ONSC 3423:
[45] … The hearing panel clearly believed that inferences of dishonesty or inferences that the economic interests of the lenders were imperilled
required direct evidence and could not
be drawn from circumstantial evidence. The two conclusions reached by the appeal panel are inescapable:
(1) the hearing panel erroneously
believed that mortgage
fraud of this nature could not
be proved in the absence
of evidence
from the participants in the transactions or the institutional
lenders, and
(2) the hearing
panel erroneously believed that
it was not open to it
to infer the elements of
fraud from circumstantial evidence.
…
[49] This error goes to the
heart of the matter. If the hearing
panel had properly understood the elements of fraud,
and the role of circumstantial
evidence in proving it, the panel
could, and no doubt would
have found that there
was a fraud in this case. Once satisfied that there
was a fraud, it could
have
appropriately determined whether or not the
appellant participated in it. But having misunderstood the nature
of fraud, the panel’s conclusion that it is “impossible to draw inferences
of fraud or dishonest conduct
or intent” on the part of the appellant is fatally flawed.
[11] There is no
basis on which to conclude that
the Hearing Division’s reliance
on circumstantial evidence was unreasonable. Accordingly, we
uphold the panel’s findings of professional misconduct.
STAY OF
PROCEEDINGS DUE TO DELAY
[12] The Appeal Division has recently considered the question of when delay in the investigation and prosecution of a complaint
will constitute an abuse of process that justifies the imposition of a stay. In
Totera2, the panel applied Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44
to the Law Society discipline context, stating at
para. 23:
[23] A stay of proceedings in an administrative process is
not justified based on length of
delay alone. Blencoe provides that for a stay of
proceedings to be justified at common law, there must first be an inordinate
delay, considered in light of all the circumstances, and second, either an effect on the fairness of the hearing
as a result of the delay,
or significant psychological harm to
the subject of the hearing as a direct result of the delay. The delay must also be such that the
Law Society’s system of professional regulation
would be
brought into disrepute.
[13] The panel expanded on these prerequisites
at paras. 46 to 48, quoting
from
the Supreme Court’s reasoning in Blencoe:
[46] Under the common law,
the Court held that there
are two stages to the analysis: whether the delay is unacceptable
or inordinate, and, if so,
whether there is significant prejudice flowing
from the delay. The
analysis of whether
delay is inordinate was explained as
follows at para. 122:
The determination of whether a delay
has become inordinate depends on the nature of
the case and its complexity,
the facts and issues,
the purpose and nature of the
proceedings, whether the respondent contributed to the delay
or waived the delay, and
other circumstances of the case. As previously mentioned, the determination
of whether a delay is inordinate
is not based on the length of
the delay alone, but on contextual factors, including the nature of
the various rights
at stake in the proceedings, in the attempt to determine whether the community's sense of
fairness would be offended by the delay.
2 Law Society
of Upper Canada v. Totera, 2014 ONLSTA
45.
[47] Significant prejudice can be shown
either by the effect on the hearing (such as lost witness testimony)
or where delay has caused a significant psychological effect on
a person or a stigma to the person’s reputation, such that the justice system would be brought into
disrepute. Such a delay must have directly caused a significant prejudice to psychological health. The analysis
was explained as
follows at para. 115:
I would be prepared
to recognize that unacceptable delay may
amount to an abuse of process in certain circumstances even where
the fairness of the hearing has not been
compromised. Where inordinate
delay has directly caused significant psychological harm to
a person, or attached a stigma to a person’s reputation,
such that the human rights system would be
brought into disrepute, such prejudice may be sufficient to constitute an
abuse of process. The doctrine of abuse of process is not limited to acts giving rise to an unfair
hearing; there may be cases of abuse of
process for other than
evidentiary reasons brought
about by delay. It must however
be emphasized that few lengthy delays will
meet this threshold. I caution that in cases where
there is no prejudice to hearing fairness,
the delay must be clearly unacceptable and have directly caused
a significant prejudice to amount to an abuse of process. It must
be a delay that would, in the circumstances of the case, bring the human rights system
into
disrepute.
[Emphasis added]
[48]
The Court explained the need for the person
relying
upon unreasonable delay to show a direct causal connection between the delay and
the prejudicial effects. At para. 59
it stated, in a point reiterated at para. 133 under
the
common law analysis:
Stress, anxiety and stigma may arise from any criminal trial, human rights allegation,
or even a civil action, regardless
of whether the trial
or process occurs within a
reasonable time. We are therefore
not concerned in this case with all such prejudice but only
that
impairment which can be said to flow from the delay in
the human rights process. It would
be inappropriate to hold government accountable for harms that are brought about by third parties
who are not in any sense
acting as agents of the state.
[14] In Mr. Abbott’s case, the Hearing Division did
not decide whether
there was inordinate delay by the Law Society, but dismissed his motion
because it held
that
no significant prejudice was caused directly by the delay. The
Lawyer did not argue that
the fairness of the hearing below
was compromised by the passage
of
time.
On the alternate branch of “prejudice”, the panel
found that Mr. Abbott
had not demonstrated significant psychological
harm or stigma to his
reputation, caused by the length of
the investigation.
[15] The panel’s ruling about the impact on the Lawyer and
his reputation was largely factual.
Based on the Lawyer’s affidavit,
and the report filed by his social worker, together with the examinations of both
witnesses, the Hearing Division
at paras . 32 to 63 carefully analyzed the Appellant’s claim that he had suffered
psychological and economic prejudice due to the delay.
The panel acknowledged at para. 60
that “the length of the investigation
was stressful and difficult
for Mr. Abbott.” Its
factual finding that no significant prejudice was proven is
reasonable. In this
context, its finding of
mixed fact and law, characterizing the damage to the public interest should the hearing proceed as falling short of the harm to the public interest
in professional regulation if the proceeding
were halted, was also reasonable and should not be disturbed on appeal.
[16] Therefore, the Hearing Division’s refusal to dismiss the application for delay was reasonable, and we cannot give effect to
this ground of appeal.
[17] In our
view, however, the delay in this case was indeed inordinate. In our respectful view, for reasons set out below and in
the context of penalty,
the Hearing Division erred in law by failing to engage in a full assessment of the extent, justification
and
impact of the
delay.
[18] The Appellant set out the
detailed time line
of
the investigation and Application in affidavit
material and in his factum before the Hearing Division and on appeal. In
its factum on appeal,
the Law Society did not contradict
the time line, but simply
set out
these bare facts: the Law
Society commenced its investigation around March 2007, contacted
the Appellant the next month,
finalized its investigation
report on November 6, 2012
and arranged for the issuance of the Notice of
Application on April 9, 2013.
[19] In
somewhat more detail, the
chronology can be
summarized as follows.
[20] In late February 2007, Mr.
Abbott learned from his
lender client, Bridgewater Bank, that there was a concern about possible mortgage fraud. The following
month, a Law Society
investigation was authorized, and on April 19, 2007,
investigator Stephen McClyment requested
the Lawyer’s files and trust ledgers relating to two Bridgewater transactions as well as any other files on which the Appellant
had retained the services of H & S Conveyancing since
January 1, 2006. The Lawyer
replied in
three letters over the next week, and provided the
requested information.
[21] Around June 13, 2007, the investigation was transferred to investigator
Massimo
Panicali. Almost two years later, on May 27, 2009,
Mr. Panicali wrote to the Appellant, requesting two client files that Mr. Abbott had
provided to Mr.
McClyment in April 2007. On June 16,
2009, Mr. Panicali
requested certain financial
documentation, and the Appellant provided it on June 28,
2009. A further
two years
later, on June 29,
2011, Mr. Panicali requested five trust ledgers that Mr. Abbott
had provided to Mr. McClyment in
April
2007. After another two-year hiatus,
on July 13,
2011, Mr. Panicali
sent Mr. Abbott two boxes of the materials the Lawyer had
provided to Mr. McClyment
in 2007.
[22] On
July 18 and August 9, 2011, a third
investigator, Wendy Hutchinson, wrote two letters to the Lawyer, each of which requested
two trust ledgers that Mr.
Abbott had provided
to Mr. McClyment in April 2007.
In both cases, the Lawyer re-sent these documents immediately.
[23] In July or August 2012, Glenn
Stuart was retained by the Law Society to take over the file.
On November 3, 2012,
he sent an email to the Lawyer, requesting
further documentation. Mr. Abbott responded on
November 6, 2012
with the requested information,
and the Investigation
Report was completed that day. Mr. Stuart testified that he did not receive any transfer memos
from prior investigators, and he took
about three
or at most four months
to review the
documentation and provide his report.
[24] As noted earlier, the Notice of Application was issued on April 9, 2013. The Lawyer’s counsel immediately made known his intention to move for a stay due to delay, and
requested disclosure of information
relevant to that motion.
Stay and disclosure motions ensued.
The matter went before
the Proceedings Management Conference (PMC) on several occasions
before the disclosure motion was
settled and the stay motion was joined with the hearing of
the merits. On May 6, June
12 and December 2, 2013, the
PMC issued procedural timetables for the filing of
materials, and on these three
occasions, the Law Society did not meet the deadlines.
Timetables accordingly had to be revised. The
Appellant also alleged that
the Law Society had not co-operated in scheduling cross-examinations
at the interlocutory stage, but there
is insufficient evidence before us to reach that conclusion.
[25] In Blencoe, the Supreme Court held
that
inordinate or unacceptable delay depends not only on the length of the delay, but on “contextual factors, including the nature of the various rights at stake in the proceedings, in the
attempt to determine whether the community’s sense of fairness would be offended by
the delay.” It “depends
on the nature of
the case and its complexity,
the facts and issues, the purpose
and nature of the proceedings, whether the respondent contributed to the delay
or waived the delay, and other circumstances of the case.”3
3 Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44,
at para. 122.
[26] The purpose of
Law Society investigations
and conduct proceedings is to regulate the activities
of a self-governing profession in
the public interest. The proceeding in this case involves
vital interests on all sides: the private professional,
reputational and
financial interests of the Lawyer; the
interest in protection of the public
from mortgage fraud and unethical lawyers more generally; and
the Law Society’s interest in
effective
self-regulation. All
of these objectives speak
strongly in favour of
prompt, fair and thorough conduct
investigations. The record shows that from 2007 onward,
the Lawyer co-operated fully with the Law Society’s investigation. He bears no
responsibility for the Law Society’s delays, and he did not waive them. He responded
promptly to every request,
even when those requests were
needlessly repeated, apparently due
to the succession of investigators
who handled the file.
The subject
matter was not complex, and
the last investigator, outside counsel Glenn Stuart,
confirmed in cross-examination
that he was able to
complete his investigation in three or four months. But his investigation,
which led to the issuance of the Notice of Application,
occurred over five years after a Law Society investigation was
authorized. The total time span
from authorization to application was over six years.
[27] Even after issuance of the Notice of Application, the
Law Society missed
deadlines for interlocutory steps that it had agreed upon and/or that the Tribunal
had ordered at PMCs.
This caused further delay, which can be measured in months,
although
it is difficult to isolate a precise number of months. In the end,
the conduct hearing commenced almost seven and
a half years after the Law Society received the complaint.
[28] The Hearing Division characterized the delay as
“lengthy”4, said “there is no doubt that there
was significant delay which is of concern to this panel”5, and recorded
that “as [Law Society counsel] said in apparent understatement,
this is not ideal.”6 The panel made general
observations about the
complexity of mortgage fraud investigations, and the
need
to triage investigations
and resource limitations, but did not reach any conclusion
on the actual explanation or justification for the protracted duration of this case.
[29] We find, based on the
record and the criteria set out in Blencoe, that the Law Society’s delay up to and somewhat beyond the issuance of the Notice
of Application was
inordinate and unacceptable, and exceeded what
the community would regard as fair in the context
of this case.
THE APPEAL AS
TO PENALTY
[30] While the
Hearing Division
took the Law Society’s delay into account, the panel did not give proper
consideration to the multi-faceted impact of this
delay on the public interest. Together with other aspects of its reasons in support of revocation of the Appellant's lecence, the Hearing Division erred in law by failing to give proper significance to the delay factor. In our view, the penalty appeal must be allowed.
4 Law Society of Upper Canada
v. Abbott, 2014 ONLSTH 194, at para. 20.
5 Ibid, at para. 62.
6 Ibid, at para. 17.
[31] Before the
Hearing Division, the Appellant argued that the presumptive penalty (absent exceptional circumstances)
of revocation
for knowing assistance or participation in mortgage fraud should be overturned.
That penalty principle, established
in Law
Society of
Upper Canada v. Mucha7, had recently been upheld
by the Divisional Court in Bishop v. Law Society of Upper
Canada8. Based on these two cases, the Hearing
Division rejected this part of the Appellant’s legal argument. While the Lawyer reiterated
his position in the Notice of
Appeal and on
the stay motion, he did not pursue
this argument on the hearing of the appeal, and
we accept that the presumptive penalty in this
case is revocation of Mr. Abbott’s
licence.
[32] The Lawyer’s
position on penalty instead focused on the submission that he had demonstrated exceptional
circumstances in this case that
justified an eight-month
suspension rather than revocation, and that the Hearing Division’s conclusion to the contrary
was unreasonable.
[33] What are “exceptional circumstances” in this context?
[34] The Appeal Panel in Mucha said this at para. 28 (emphasis
in the original):
[28] As noted earlier, we do not suggest that there can never be
exceptional circumstances justifying departure from the ordinary disposition
of revocation where
the licensee has knowingly participated in mortgage fraud. By way of illustration only, there may be compelling psychiatric or psychological evidence
that, among other things, credibly indicates not
only
that the misconduct was out of character and unlikely
to recur, but explains why it occurred: See Law Society
of Manitoba
v. MacIver, [2003] L.S.D.D. No. 29.
[35] The Divisional Court
in Bishop was faced with a Hearing Division
decision9 in which the majority stated that it
must follow the Mucha line
of cases, and it
accordingly ruled at
para. 21:
Based on these authorities, in our opinion, the
Lawyer must show that mitigating factors exist that
address directly why the Lawyer
engaged in professional misconduct, in order
to justify a penalty
other than revocation.
7 2008 ONLSAP 5.
8 2014 ONSC 5057, leave to appeal to C.A. refused Jan. 9, 2015.
9 Law Society of Upper Canada
v. Bishop, 2013 ONLSHP 98.
[36] The panel chair, dissenting, held that a lengthy suspension would better serve
the public interest, basing his ruling on mitigating circumstances that went
beyond evidence
that could explain the Lawyer’s conduct at the time.
[37] The Appeal Division10 did not accept
this broader scope for mitigating evidence to establish “exceptional circumstances”, holding at para. 30:
The majority concluded correctly that the Lawyer
must show that mitigating factors
exist that address, among other things,
why the Lawyer engaged
in professional misconduct, in order
to justify a penalty other than revocation. The majority
noted that the Lawyer’s desire to help the disadvantaged
purchase homes
was a good cause, but it did not explain
or excuse the Lawyer’s misconduct. The majority considered the extensive character evidence, and again determined
that it did not excuse or explain
the professional misconduct.
[38] The Divisional Court rejected Mr. Bishop’s challenge to revocation as a presumptive penalty
in fraud and misappropriation cases before the
Law Society Tribunal. The Court therefore had to
decide whether the Lawyer had
demonstrated exceptional circumstances to justify a lesser penalty than revocation,
and it upheld the Appeal Panel’s conclusion in this respect. The Court, however, responded
to the divided views below
on the scope of “exceptional
circumstances” at para. 31 of its
decision:11
The other observation is that the mitigating factors that will amount to exceptional
circumstances in any given case are not restricted to only certain
types
or forms. Medical reasons or financial desperation or
situations of duress serve as examples of the type
of mitigating factors that may amount
to exceptional circumstances but those situations
are not exhaustive of such factors. That said, it remains the case that any such factors will normally have to be ones that
would rise to the level where
it would be obvious to other
members of the profession, and to
the public, that the underlying circumstances of the individual clearly
obviated the
need to provide reassurance
to them of the integrity of the profession. I would add,
on that point, that factors that provide an explanation
for the conduct of the lawyer
will generally be ones that
would most likely reach that requisite level of
mitigation but they are not the
only ones that may achieve
that result.
[39] In this passage, the Divisional Court clarified the concept of “exceptional circumstances” in Law Society Tribunal fraud and misappropriation
cases. Evidence led
in mitigation of penalty need not fit within prescribed categories to
10 Law Society of Upper Canada
v. Bishop, 2014 ONLSTA 19.
11 Bishop v. Law Society
of Upper Canada, 2014 ONSC 5057.
constitute exceptional circumstances. In particular,
the “exceptional circumstances”
that justify reduction of the ultimate penalty of revocation will generally explain the licensee’s misconduct at the time, although evidence that does not provide this causal link may still qualify as “exceptional circumstances”.
[40] At the same time, the Divisional Court was careful to limit “exceptional circumstances” by means of an objective standard. The term only encompasses situations in which it would be
obvious that revocation is not required, given the
underlying individual circumstances, to provide the
necessary reassurance of the continuing
integrity of the
profession.
[41] In argument before us, both sides
acknowledged that Bishop widened the concept of “exceptional
circumstances”, but only in situations where the underlying circumstances of the individual case provide
assurance to the public that
the integrity of the profession will be maintained.
[42] We accept and adopt the
conclusion reached by the Tribunal in
several decisions within
the last year, that Bishop has
had this effect: Hamalengwa12; Savone13; Durno14; Osborne15; Molson16. Indeed, as
we discuss below, the panel
in this case also accepted this
proposition in its penalty decision.
Application to this Appeal
[43] The Hearing Division considered the large number of mitigating circumstances that were
put forward by Mr. Abbott, in
asking itself whether the accumulation of factors justified a reduction of the presumptive penalty
of revocation. For convenience, we set out
that list, which is found at
para. 22 of the panel’s penalty reasons17:
[22] On a
careful examination of the circumstances of this
case, we do not find exceptional
circumstances justifying a penalty
other than revocation. The circumstances that were
proposed as being exceptional were the following:
a. There was substantial
delay in the investigation as was discussed in our prior reasons.
While we did not order a stay of proceedings
as asked, it is now submitted that the delay in
this case and the
attendant prejudice suffered by Mr. Abbott
justifies a lesser penalty than revocation;
12 Law Society of Upper Canada
v. Hamalengwa, 2015 ONLSTH
57.
13 Law Society of Upper Canada
v. Savone, 2015 ONLSTH 49.
14 Law Society of Upper Canada
v. Durno, 2015 ONLSTH
122.
15 Law Society of Upper Canada
v. Osborne, 2014 ONLSTH 169. 16 Law Society of Upper
Canada v Molson, 2014 ONLSTH 144.
17 Law Society of Upper Canada
v. Abbott, 2015 ONLSTH 12.
b. Prior to the real estate transactions of 2006 and 2007 that are in
issue in this case, Mr. Abbott’s conduct
was unimpeached;
c. There were a limited
number of problematic transactions over a few months;
There were a limited
number of problematic transactions over a few months;
d. Since these real estate
transactions, Mr. Abbott’s conduct is also unimpeached and his dealings with the Law Society in this matter have been entirely appropriate;
e. The knowledge
in the profession and applicable standards and rules are
said to be different now than they were in
2006/2007. Mr. Abbott’s
conduct should be placed in its historical
context and not judged in today’s
context;
f. Mr. Abbott trusted the
other lawyers involved and had no
reason to believe that they would proceed on any basis but
to obey the Rules;
g. Mr. Abbott ceased to be
involved with these types of
transactions and the referral source prior to any
communication with the Law Society;
h. While Mr. Abbott does
not accept that he
engaged in dishonest behaviour, he does accept
responsibility for failing to monitor the propriety of the Statements of Adjustments. In his evidence, he
expressed remorse;
i. Mr. Abbott testified willingly and honestly;
j. Mr. Abbott has a reputation
for honesty and integrity in support of which a number
of letters were filed from colleagues and clients; and
k. No litigation was brought
against Mr. Abbott
in respect of the transactions at issue; and
l. Mr. Abbott was involved
in a difficult break-up of a significant
relationship at the time of the transactions in issue although Mr.
Abbott conceded in cross-examination that this did
not explain his conduct.
[44] In
the ensuing 11 paragraphs, the panel
considered each of these 12 individual
items. For the most part, the Hearing Division did not question the truth of these assertions, but
concluded that each of
them had insufficient, or in some cases no,
mitigating effect. For example, the second, third and fourth points
were uncontradicted; the eight transactions over a four month period about nine years ago stood as a notable exception to Mr. Abbott’s unblemished record over more than 25 years of practice as a lawyer. But these
factors, on their own, did not
distinguish the current mortgage fraud case from many others, in which the licensee’s professional misconduct was an unusual event, committed in unusual circumstances; this scenario
was not an exceptional circumstance
that justified displacement of the imperatives
of maintaining public confidence in the legal profession as a whole.
[45] The panel’s overall
conclusion
was that the accumulation of asserted
mitigating evidence put forward by Mr. Abbott did not meet the standard of “exceptional circumstances”, and therefore the panel ordered revocation
of his licence.
[46] While
this panel may not have
reached precisely the same
conclusions with respect to each of the listed mitigation items,
that is not the test on
appeal. Most of
the Hearing Division’s conclusions addressed questions of
fact or mixed fact and law, and were reasonable.
[47] Our focus, however,
is on the panel’s consideration of the overriding
issue of delay, and the impact of its reasoning on the ultimate conclusion that Mr. Abbott’s mitigating circumstances fell short of exceptional circumstances
that would relieve against revocation. In our
view, that question raised questions of law
that we must reconsider on a standard of
correctness. Our review
relates to four points:
a)
The Hearing Division’s
conclusions at paras. 23 and 35 of its penalty reasons regarding the absence of a causal link in the mitigating factors;
b)
The proper role of delay as a factor in
the mitigation of penalty,
as a matter of both principle and jurisprudence;
c)
The Hearing Division’s
consideration of the delay in this case, at paras. 30 to 33 of its penalty reasons; and
d)
The absence of a
finding on whether there was unacceptable and inordinate delay in this case by the Law
Society.
The Panel’s Consideration
of the Need for “Exceptional
Circumstances” to Explain the Misconduct
[48] After
ruling that the Mucha
principle of a presumptive penalty of revocation
was binding and
should be followed, the Hearing Division turned to the next question: “Are there exceptional
circumstances?” Under this
heading, the panel
quoted the portions of Mucha and Bishop that we
discussed above in delineating
the proper scope of exceptional circumstances in this
context. Adopting the widened
formulation in Bishop, the Hearing Division
at para. 21 quite properly
rejected the Law Society’s submission “that only
evidence that explained why the misconduct occurred could
be a basis for exceptional circumstances”, and went on:
As Bishop makes clear, what
is required to meet the standard of exceptional circumstances are circumstances that obviate
the need to reassure the public of
the integrity of the profession by revocation. This is not a
question to be answered in a
mechanistic way in formalistic categories.
[49] Yet later on, at two pivotal points in its reasons on “exceptional circumstances”, the Hearing Division appears to have reverted to the “causal link” requirement.
[50] After listing the 12 points of mitigating evidence that the Lawyer had
proposed in para. 22 of its reasons, the panel expressed
its overall conclusion at para. 23:
In our view, this all falls far short of circumstances justifying anything other than revocation.
Clearly, there is no “compelling psychiatric or psychological evidence that, among other things, credibly
indicates not only that the misconduct was out of character and unlikely
to recur, but explains why it occurred.”
There is no evidence that explains why the
misconduct occurred or
that it is unlikely to recur.
[51] The Hearing Division then discussed the probative value of each
of the 12 grounds, before returning to its conclusion
on “exceptional
circumstances” at para. 35:
Ultimately, we
conclude that revocation is the appropriate penalty given the gravity of
the misconduct that we have found. We find no exceptional
circumstances that would credibly explain
the misconduct let alone
credibly indicate that it is out of character
and unlikely to recur.
[52] The panel then added in the following paragraph:
Further, we do not conclude that
any or all of
the circumstances relied on by Mr.
Abbott are such that it
would be obvious to other members of the profession, and to
the public, that the need to provide
reassurance to them of the integrity
of the profession is obviated.
[53] In our view, the panel’s focus on exceptional circumstances as a “credible explanation”
was central to its “ultimate” conclusion,
and does
not appear to be entirely in accord with para. 21 of its reasons and the Divisional Court’s holding in Bishop. Given the difficult,
fact-sensitive balancing
that it undertook in
this section of its reasons,
and the
importance of its finding on
exceptional circumstances to
the resultant decision on penalty,
it appears that the panel
misdirected itself as to the litmus test in its discussion at paras.
23 and
35 in particular.
[54] We regard
this misdirection as important,
since many of the mitigating factors listed at para. 22
of its decision obviously do not have a causal link to the misconduct
committed by the Lawyer. Indeed,
this will almost always be the case in penalty decisions.
As the Appeal Division
discussed in Law Society
of Upper
Canada v.
Cunningham18
the factors that are typically taken
into account include the
extent and
duration of the misconduct, any prior record, the impact of the fraud, the
extent of remorse shown, and admissions of misconduct.
All of these issues were addressed in Mr. Abbott’s
12 points, and all of them deserved to be given consideration in assessing whether the
evidence of mitigation
qualified as “exceptional” under the Mucha/Bishop test. On reading the panel’s
reasons numerous times,
we are unfortunately unable to say whether the
full range of mitigating circumstances was given proper effect.
[55] In particular, the most prominent mitigating factor cited by the Lawyer
that obviously fell outside the realm of
“credible explanations for his conduct” was the fact and the impact of the unexplained delay
by
the Law Society in this
case. In light
of the heightened significance that we accord to the delay factor as discussed below, we cannot say for certain that the
panel’s conclusion regarding “exceptional circumstances” would have
been the same but for
its apparent reliance on a causal link in characterizing mitigating evidence
as “exceptional circumstances”.
[56] We acknowledge that the
panel then went on to express its conclusion in para. 36 by
adopting the broad
rationale of reassurance to the public
of the integrity of the profession. But
this is essentially a conclusion of
law, and indeed a conclusion of law
that must be reached to justify the penalty chosen by a
decision-maker in any Law Society conduct proceeding. It is an objective test, and one on which the Appeal Division
is entitled to reach its own conclusion after directing itself to
the proper factors and weighing them. To that end, we move to a
more detailed discussion of the impact of delay by the Law
Society in the mitigation of penalty.
Delay as a Mitigating Factor
[57] While
this issue has not been considered
in any detail in our jurisprudence, we have no
doubt that in a proper case, an inordinate and unacceptable delay by the Law
Society in investigating and/or proceeding with a conduct case can be taken
into account by the Tribunal
at the penalty stage.
We say this because in our view, the Tribunal’s authority to do so accords with principles of fairness, the objectives of professional
regulation, and relevant jurisprudence.
18 Law Society
of Upper Canada v. Cunningham, 2012 ONLSAP 31
at paras. 25-34.
[58] The primary objective of Law
Society regulatory processes is the protection of the public interest.
That includes the evident
interest in maintaining the integrity and reputation
of the legal and
paralegal professions by ordering in many cases
the revocation of members’ licences when they commit serious acts of misconduct. This principle was accepted by the Divisional
Court in Bishop, and the Court adopted the oft-quoted reasoning of the
English Court of Appeal
in Bolton19:
The reputation of the profession is more important
than the fortunes of any individual member. Membership of a
profession brings many benefits, but that is a part of the price.
[59] At the same time,
the public interest demands
a fair, proportional and expeditious process, and
it serves the public interest
to promote and encourage a regulatory process that
meets this standard in every case. The Tribunal’s
goals are no different. In this respect, the objectives of three of the most important stakeholders
–
the licensees, the public that
is served by them, and this Tribunal
– coincide.
[60] In regulatory proceedings, the complainant
generally has no formal role, and will not achieve
any legal remedy. In that sense, the “calculus” of relevant
interests is different here than in human rights enforcement, which was at issue in
Blencoe.
The public,
however, is clearly a crucial stakeholder in the efficiency and effectiveness of Law Society investigations and hearings. For the public,
inordinate delay becomes unacceptable because it cannot be explained or justified to
a reasonable member of the public,
even one who rightly demands
appropriate enforcement by the Law Society to protect the public.
[61] The Tribunal itself, also serving the public interest, is equally concerned, as the Hearing Division
was20 in this case. The Tribunal’s concern applies most clearly to delay that occurs during the Tribunal’s
proceedings, but it extends to the earlier stage, which can
have an impact on the hearing, even if the threshold of procedural unfairness
is not reached21.
In these respects, it is not
in the public interest
to subject Law Society members to delay that,
viewed objectively, is inordinate
and unacceptable.
[62] In addition, and perhaps more obviously,
licensees on their own
are entitled in the normal course to investigations and proceedings that take place expeditiously.
Even where the procedural fairness of the
hearing is not significantly compromised
by delay, and regardless of whether significant psychological impairment is inflicted on the licensee, lengthy delay will (as the panel
recognized in this case) exact a toll on the lawyer. Steps should be taken to avoid situations in which
years and years
19 Bolton v. The Law
Society [1994]
1 W.L.R. 512 (C.A.)
at p. 519.
20 Law Society of Upper Canada
v. Abbott, 2014 ONLSTH 194, see, for example, para. 31.
21 See, for example, the recent decision in Law Society
of Upper Canada v. Nicholas, 2015 ONLSTH
134,
where the Tribunal granted
an adjournment of an interlocutory suspension hearing,
in part because of the delay in bringing the motion.
of uncertainty
are inevitably visited on licensees whose reputations and
livelihoods as
regulated professionals are in limbo. Fundamental values of
fairness to lawyers and paralegals must be vindicated in cases of
extreme and unjustified delay by
granting appropriate remedies,
because otherwise these values will
be rendered meaningless.
[63] Where
this issue has been addressed,
senior courts and this Tribunal
have recognized that in
appropriate circumstances, significant delay by administrative bodies can be recognized in less extreme
ways than by staying
the proceedings altogether.
[64] In Blencoe, both Justice Bastarache (for the majority) and Justice LeBel (for the minority)
made the point that
administrative delay that
does not meet the high threshold
that they both imposed on a stay motion may nevertheless qualify for
a lesser remedy. As the majority stated at para. 117:
There is…no support for the notion that a
stay is the only remedy available in
administrative law proceedings. A stay accords very little
importance to the interest of implementing the Human Rights Code and giving effect to the complainants’ rights to have their cases
heard.
[65] The minority reasons at para.
155 were more explicit:
Unreasonable delay is not limited to situations
that bring the human rights system into disrepute either by
prejudicing the fairness of a hearing or by otherwise rising
above a threshold of shocking abuse. Otherwise, there would not be any remedy
for an individual suffering from unreasonable delay unless
this same individual were unlucky enough to have suffered
sufficiently to meet an additional, external test of disrepute resulting to the human rights system. Such a limitation
may arise from a fear that the main remedy available would be the blunt
instrument of the stay of proceedings. However, as we will see below,
a remedy other than a stay may be appropriate in other
cases where ongoing delay is abusive.
[66] The Court did not discuss the full
range of remedies other than a stay
that are available, but the minority gave two examples: an order to expedite the
hearing, or
a costs order against the party guilty of delay, which
in that
case (as in this one) was the
body with statutory authority to advance the public
interest. Justice LeBel wrote:
183
An order for costs… will not address
the delay directly, but some
of its consequences. If a party
must resort to the courts to
secure a timely hearing or
to speed up the process in which he
or she is engaged, some form of compensation for costs should
at least be considered by the courts in
their discretion.
184
In the present appeal, the remedy of a
pure stay of proceeding appears both
excessive and unfair. First, in spite of
the seriousness of the problems faced
by Blencoe, the delay does not seem to compromise the
fairness of the hearing. As the
trial judge found at para.
10, the respondent has not established that the
delay has deprived him
of evidence or information
important to his defence. The delay rather concerns the process leading to
the hearing. It arises from a variety of
causes that do not evince an intent from the Commission to harm him wilfully, but rather demonstrate grave negligence and important
structural problems in the processing
of the complaints. Second, a stay of proceedings in a situation
that does not compromise the fairness of the hearing and does
not amount to shocking or gross
abuse requires the consideration of
the interest of the complainants in the
choice of the proper remedy (Tobiass, supra, at para. 92). In the present matter, the judgment
of the Court of Appeal completely
omitted any consideration of this interest (see para. 39). The lifting
of the stay is thus
both justified
and necessary.
In the present appeal, the remedy of a
pure stay of proceeding appears both
excessive and unfair. First, in spite of
the seriousness of the problems faced
by Blencoe, the delay does not seem to compromise the
fairness of the hearing. As the
trial judge found at para.
10, the respondent has not established that the
delay has deprived him
of evidence or information
important to his defence. The delay rather concerns the process leading to
the hearing. It arises from a variety of
causes that do not evince an intent from the Commission to harm him wilfully, but rather demonstrate grave negligence and important
structural problems in the processing
of the complaints. Second, a stay of proceedings in a situation
that does not compromise the fairness of the hearing and does
not amount to shocking or gross
abuse requires the consideration of
the interest of the complainants in the
choice of the proper remedy (Tobiass, supra, at para. 92). In the present matter, the judgment
of the Court of Appeal completely
omitted any consideration of this interest (see para. 39). The lifting
of the stay is thus
both justified
and necessary.
185
However, rejecting the stay as a proper
remedy in the present case does not
mean that Blencoe should be deprived of any redress. On the contrary, an order for an expedited hearing should
have been considered as the remedy of choice…
186
In spite of the partial success of this appeal, as
I agree that the stay should
be lifted, Blencoe is entitled to some compensation
in the form of costs in our Court
and in the courts below…
[67] The Court in
fact unanimously ordered the
Commission to pay Mr. Blencoe’s costs.
[68] The Alberta Court of Appeal soon applied Blencoe to the Law Society disciplinary context, in upholding the staying of proceedings against a lawyer in 2002 based on findings of inordinate delay and substantial prejudice.22
[68] The Alberta Court of Appeal soon applied Blencoe to the Law Society disciplinary context, in upholding the staying of proceedings against a lawyer in 2002 based on findings of inordinate delay and substantial prejudice.22
[69] More recently, in Wachtler23, the same Court invoked unreasonable
delay in an investigation
by the Alberta College
of Physicians and Surgeons to mitigate against the
penalty that
would otherwise have been imposed. The Court took into account the
multi-faceted public interests
in expeditious investigations and prosecutions.
The Court began with fairness and
avoidance of prejudice to the professional member, but
included as well the concerns
of complainants
and the public at
large, the goals of
the discipline process, the extent and
reason for the delays, and the institutional imperatives
of an administrative process.
22 Stinchcombe v. Law Society
of Alberta, 2002 ABCA 106.
23 Wachtler v. College
of Physicians and Surgeons of Alberta, 2009 ABCA
130.
[70] Although the misconduct was less serious, the Court’s reasoning on the impact
of delay on penalty
applies in large measure
to our case, and we reproduce several
excerpts for convenience:
46.
There is good reason why unexplained, lengthy delays
can sometimes be accounted for at
the penalty stage. In
any administrative proceeding where someone is at risk of sanction
for the manner in which they conducted themselves professionally,
the allegation
of misconduct has to weigh
heavily on that
person. He
or she is entitled
to have the misconduct
investigated
and a hearing held within
a reasonable time, so that he or she can carry on with the
provision of professional services to the public. Not all people
charged with professional misconduct are guilty. In
some cases, the form of proven misconduct falls far short of that
which was alleged. In those instances, it become unconscionable for a disciplinary
body to take years
to investigate and prosecute, during which time the uncertainty of the outcome weighs on the accused professional. Moreover, regardless of
attempts to keep matters confidential before results are made known, no system provides for perfect confidentiality,
meaning that a cloud of suspicion may also descend on the professional while the prosecuting body conducts
its leisurely process.
There is good reason why unexplained, lengthy delays
can sometimes be accounted for at
the penalty stage. In
any administrative proceeding where someone is at risk of sanction
for the manner in which they conducted themselves professionally,
the allegation
of misconduct has to weigh
heavily on that
person. He
or she is entitled
to have the misconduct
investigated
and a hearing held within
a reasonable time, so that he or she can carry on with the
provision of professional services to the public. Not all people
charged with professional misconduct are guilty. In
some cases, the form of proven misconduct falls far short of that
which was alleged. In those instances, it become unconscionable for a disciplinary
body to take years
to investigate and prosecute, during which time the uncertainty of the outcome weighs on the accused professional. Moreover, regardless of
attempts to keep matters confidential before results are made known, no system provides for perfect confidentiality,
meaning that a cloud of suspicion may also descend on the professional while the prosecuting body conducts
its leisurely process.
47.
From another
perspective, persons who are patients or
clients of the accused professional also
have an interest in the process moving
with dispatch, as they may be
at risk of harm. The disciplinary body must also ensure that the public’s
concerns are met on a timely basis. Some of the complaints against Dr.
Wachtler were serious and an evident goal
of the discipline process has to be
protecting the public from continued harmful
professional conduct. Generically, professional misconduct can be far more serious than that at issue here.
In those circumstances, investigative
delays can lead to serious
injury or loss of life. All this
points to the investigative process proceeding with dispatch. Unexplained delays of
21 months are intolerable.
48.
In this case, the Council stated that its penalty was essentially remedial in nature. We take that
to mean it was more concerned
with ensuring that Dr. Wachtler took steps to prevent any recurrence of the events that led to the charges for which he was
convicted. In that respect, the
requirements that he follow up
with courses geared towards prevention
of troubling patient management are features of the penalty that
evidently relate to improving
Dr. Wachtler’s practice habits. However, when
many years pass between incidents that led to the convictions and the imposition of the penalty, the passage of time operates
to disconnect the event from
the penalty. First the event will
become some vague matters arising within the
professional’s practice
from long ago. Second, the professional may well have self-remediated the problem. …
49.
It is also important to impress upon disciplinary
bodies that there
will be consequences for undue delays. Delay
becomes the norm when it has no consequence.
One alleged benefit of
administrative processes is that they avoid the
formalities of court process in the
interests of speedy justice. A 7 year process is hardly speedy. Simply
telling those responsible for professional discipline that
they must do better or, worse, turning a blind eye to delay, leads to more delay. …
It is also important to impress upon disciplinary
bodies that there
will be consequences for undue delays. Delay
becomes the norm when it has no consequence.
One alleged benefit of
administrative processes is that they avoid the
formalities of court process in the
interests of speedy justice. A 7 year process is hardly speedy. Simply
telling those responsible for professional discipline that
they must do better or, worse, turning a blind eye to delay, leads to more delay. …
[71] The Sentencing Committee of the Law Society of Saskatchewan24 applied Wachtler to reduce the penalty
against a lawyer in the face of a five-year delay, even though
the Sentencing Committee was unable to apportion responsibility for
the delay in that case. The Hearing Committee had dismissed the lawyer’s Blencoe application for a stay, holding
that a lesser remedy might be appropriate. That
Committee stated:
“The Member is free to assert the effect of delay on
any appropriate
penalty, should he be found
guilty of the charges against him.”25 The Sentencing
Committee therefore stated the issue before it as follows: “…whether any weight should be given to the delay
as a mitigating factor in favour of
the Member or whether the delay should not be
considered in any respect.” The Committee answered the question as
follows26: based on Wachtler,
delay is a live factor to be considered at the sentencing phase even though it has been determined
not to be unreasonable in the circumstances. In this case,
the Committee is considering the delay as a factor mitigating the sentence.
[72] Similar reasoning has been
accepted by our Tribunal. In Law
Society of Upper Canada v. Marler,27 the Chair held at para. 31 that in administrative proceedings, “inordinate delay is relevant to penalty even when it does not
justify a stay of proceedings.” After citing Wachtler and the Saskatchewan Law Society case, he went on at paras. 34 and 35:
…, our caselaw has recognized
this principle, although in
obiter. In Law Society of Upper Canada v. Igbinosun, 2011
ONLSHP 15 (CanLII), the
hearing panel stated at para. 56:
The appropriate remedial response to delay is
not just a stay of proceeding.
Indeed, that response is the last one that is appropriate.
Other responses include crafting a penalty which fits the
24 Law Society of Saskatchewan v. Peet, 2013 SKLSS 5, at paras. 87-93.
25 Ibid, at para. 86.
26 Ibid, at para. 88.
27 Law Society of Upper Canada
v. Marler, 2014 ONLSTH
203.
circumstances having regard to the hardship or punishment that
delay has entailed or the misconduct, if any, giving rise to the delay.
The Lawyer
explains in his statement
that for seven years he has worried about
the fall-out from the events and
that the toll on
him during this time has been
enormous. While that is evidently also because of factors other than the Law Society’s long delay, that delay, which the Law Society acknowledges should not have occurred, should result in a reduced
penalty.
[73] There is no basis, in our respectful view, to carve out revocation cases from the application
of the impact of institutional
delay. Clearly, if
the delay reaches the level of abuse of process, the public
interest will demand a stay of proceedings
as a matter of
fairness, regardless of what
the anticipated penalty would have been if the matter had been allowed to proceed. But any assessment
of penalty
must take into account the full context, encompassing
the circumstances of the “offence”, and the circumstances of the “offender”.
We do not accept that in
the Law Society statutory scheme
of self-regulation,
with its separation of discipline and adjudicative functions, a limitation of Tribunal remedies
to costs or orders to expedite proceedings is defensible, as a matter of law or logic. Indeed, in Durno, noted earlier, the Tribunal accepted
resignation
as a lesser penalty than
revocation, in part based on the delay in
that
case.
[74] In Law Society of Upper Canada v. Igbinosun28,
the Hearing Panel engaged in a thoughtful analysis of
the competing considerations before
granting a stay of proceedings in a case that involved allegations
of sexual assault. In a
section of the reasons headed “Balancing
the Interests”, the Hearing Panel confronted the Law Society’s
interest in self-regulation
and the public’s interest in prosecuting alleged misconduct vigorously. The panel
balanced these factors against the
length and reason for the delay, and
the extent of harm.
[75] It was evident, as
in the criminal law stay cases
that the panel also considered, that whatever
remedy the Hearing Panel
decided on, the lawyer would reap a benefit of sorts, regardless of whether he committed
serious misconduct, solely because of the Law Society’s actions. The
panel considered, as did the Court in Blencoe,
whether there was a
lesser remedy that would address the public interest. Again, in
our view, a
lesser remedy would have enured
to the lawyer’s benefit,
in order to satisfy the broader public interest. Ultimately, the panel imposed a stay of proceedings. In addition, costs
were later
ordered against the Law Society.29
28 2011 ONLSHP 15.
29 2012 ONLSHP 31.
The Hearing Division’s Consideration of Delay
[76] The panel addressed the impact of delay on
the penalty in this
case at paras .
30 to 33 of its reasons,
which we reproduce below for convenience:
[30] Finally,
we address the issue of delay.
We accept the submission that delay causing prejudice can be a mitigating factor
in many cases. However, we do not accept that prejudice
arising from delay in this
case is a proper basis
to turn revocation
into a lengthy
suspension.
[31] The first reason is that
we are not persuaded that much
of the prejudice described by Mr. Abbott in his
earlier evidence and
during the penalty
phase arises from investigative
delay as opposed to from the issuance of the Notice
of Application in the spring
of 2013.
The evidence of prejudice arising
from investigative delay is quite
limited as discussed in our decision on finding at
paras. 32 to 60. While there
was no doubt some prejudice, we do not find there to have been substantial prejudice arising from investigative delay. The evidence
of prejudice was vague and
general. Mr. Abbott sought
no professional assistance during the
investigation. There
is no evidence from anyone about Mr. Abbott and his circumstances during the
investigation. No medical or other expert evidence
was adduced during the penalty phase
of the hearing despite our
earlier findings. To be clear, we continue to be concerned
about the lengthy investigative
delay in this case.
However,
our assessment here relates to the
issue of prejudice arising from that delay.
[32] The second reason is that
the principal basis for the
presumptive revocation penalty is
general deterrence and maintenance of public confidence
in the legal profession. On the other hand, reducing a penalty because of prejudice
arising from delay is most relevant
where specific deterrence is the principal penalty goal. Where
a panel is concerned about the prospect of a lawyer engaging again
in professional misconduct, a
panel can reasonably conclude that the
lawyer will reflect on all of
the impacts of the prior misconduct and want to avoid all
such impact. To the extent that
a penalty in a discipline
proceeding can properly be
seen as punishment, it is fair to reflect prejudice suffered from investigative
delay in the penalty ultimately ordered. While there might be cases where prejudice was sufficiently significant that general
deterrence and maintenance
of public confidence would be
sufficiently served by a lengthy suspension rather
than revocation, this is far from
being such a case.
[33] The third (and least important) reason is that, all things
considered, Mr. Abbott has
likely benefitted
from the delay, assuming
revocation. Faced with the choice
between a much earlier revocation and a later revocation
coupled with interim anxiety/stress and, perhaps, some financial impact,
it is
far from obvious that
earlier revocation would be chosen
by many respondents.
[77] These
paragraphs
must be considered alongside
our earlier comments about the panel’s failure to make a finding
on inordinate and unacceptable delay, and
its apparent focus on the need for
a causal connection for mitigating circumstances to be
considered “exceptional”. Taken together, we must conclude that the
Hearing Division committed
errors of law in determining that Mr. Abbott had not demonstrated
exceptional circumstances that would mitigate the penalty of revocation.
Our conclusions, relying on the principles
and jurisprudence set out above, are as follows.
[78] First, the panel appears to have held at para. 30 that only “delay causing prejudice can be a
mitigating factor”, and accordingly
the ensuing three paragraphs
focus exclusively on the prejudicial effects of the delay in this case. We do not need to decide
whether prejudice to the licensee must first be
established before lengthy, unexplained delay
can be considered to mitigate penalty. It is
not apparent that there
is such a prerequisite; the jurisprudence and our discussion of first
principles and the
broader public
interest in expeditious proceedings both pointed to
additional reasons for the Tribunal to
take
steps, including the mitigation
of penalty, to curb inordinate delay. In restricting its consideration to the impact on Mr. Abbott himself, the Hearing Division
erred in law by failing
to assess whether these broader impacts,
in conjunction with the other
mitigating factors, justified a lesser penalty than revocation.
[79] Second, the panel employed an improper test in evaluating the
prejudice to the Lawyer himself. It was not difficult to conclude that he, like anyone
else who encountered such delays, suffered
harm. As we said earlier, any significant and unexplained unilateral delay by the Law Society in the investigation and hearing
stages will inevitably have a prejudicial impact on a
licensee facing these eventualities. Indeed, the panel
had acknowledged at para. 60
of its decision on the Blencoe
motion, that “the length of the investigation was stressful and difficult for Mr. Abbott.” In its
penalty decision, the panel reiterated at para. 31 that “there was no doubt some prejudice.”
[80] But
the panel went on in the same
sentence to qualify that conclusion by adding, “…we do not find there
to have been substantial
prejudice arising from investigative delay” (emphasis added). With respect, this is the legal
test to stay a proceeding under Blencoe as an abuse of process, not the
measure of prejudice caused by delay
as a mitigating factor in penalty. Assuming again that the Lawyer
had to establish
prejudice to
himself, he did not have to prove “substantial prejudice” to himself.
[81] The requirement
of prejudice as a mitigating factor on penalty is
different and much less
onerous than the Supreme Court demanded
in
Blencoe to justify a complete stay of proceedings. There30, the majority held that the moving party “will have to bear a
heavy burden” to show that the proceedings
were “oppressive or vexatious” and “unfair to the point that
they are contrary to the interests
of justice….Cases of this nature will be extremely rare”, and the “power…can be exercised only in the ‘clearest of cases’”. Accordingly, as the Appeal
Division noted in
the passage cited earlier
from Totera31, the delay must affect the fairness of the hearing, or inflict significant psychological harm on the licensee
so as
to bring the Law
Society’s system of professional regulation into
disrepute.
[82] The Hearing Division in this case had determined on the stay motion32 that the delay did not meet this onerous standard:
it “has not caused actual prejudice of such magnitude that the public’s sense of decency and fairness would be
affected [and]…did not directly cause significant prejudice such
as to amount to an abuse of process.”
The difficulty is that when
the panel came to consider delay as a
mitigating factor at para. 31 of its penalty decision, it seems to have applied the same
exacting criterion as on the stay motion.
The panel found an absence of “substantial prejudice”, and justified this finding by summarizing at para. 31 the findings
it had made earlier on the stay motion about the absence of
“significant prejudice” under
the
Blencoe and Totera tests.
[83] Third, we respectfully disagree with
the panel’s legal reasoning in
para. 32 of its penalty decision.
First, the
Hearing Division
gave
precedence to general deterrence
and maintenance of public confidence in the legal profession as the penalty objectives in
this case, and minimized the importance of specific deterrence.
In
our view, all of these objectives are important,
and mitigating evidence
and “exceptional circumstances” cannot appropriately be assessed without consideration of the Lawyer’s individual circumstances and the risk of
further misconduct by him. This
was a case in which Mr. Abbott’s
clear record as of 2014 over his entire career, other than
a four-month period in 2006-07,
was very striking, and deserved
some weight along
with other “personal”
factors.
[84] In addition, also in relation to para.
32, we do not
agree that “reducing a penalty because of prejudice is most relevant where
specific deterrence is the principal penalty
goal.” This again presupposes
that
the
only
prejudice
to be accounted for is the prejudice accruing
to the licensee. But harm to the
administration of self- regulation, concern
about repetition of delays, values
of fairness, and efficient and effective service to the public
and indeed to complainants are
all prejudicial to the public interest more widely conceived. Delay in
investigation and prosecution
may be as harmful to public confidence
in the legal profession’s ability to regulate itself as Mr. Abbott’s continued right to
practise law. As the Alberta Court
of Appeal stated in the passage quoted earlier at
para. 48 of Wachtler, the possibility of
30 Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44 at paras. 117-20.
31 Law Society of Upper Canada
v. Totera, 2014 ONLSTA 45 at para. 23.
32 Law Society of Upper Canada
v. Abbott, 2015 ONLSTH
12 at para. 61.
remedial measures
to promote rehabilitation must always be
factored into a penalty assessment. Many of the listed
circumstances proposed by Mr. Abbott as mitigation
– notably b, c, d, I, and j – spoke in his favour in this
regard.
[85] Fourth, “the…least important…reason” cited by the Hearing Division
to minimize personal prejudice to Mr. Abbott – that the delay allowed him to
suffer anxiety and stress for seven years rather than
expulsion from the legal profession for much of the same period – is not persuasive, in our respectful view. It
again focuses exclusively on the individual rather than the
institutional and public consequences of delayed proceedings.
Moreover, the Hearing
Division attempts to balance the
detriment of stress and anxiety from conduct investigations against the benefits of
professional practice. These issues are quite dissimilar, and comparing
them does not yield a “bottom line” result
that can usefully be factored into the
penalty equation.
[86] Finally, we return to the Hearing Division’s
failure to make a finding on whether there was
inordinate
and unacceptable delay by the Law Society at the investigation and hearing
stages of this case, given the context, purposes
and stakeholders of this
professional regulation regime. We have made this finding, although we
understand that for the Hearing Division, it
was not logically necessary to
the conclusion that it reached on the motion to stay the entire
proceeding as an abuse of process.
That was because the Lawyer
did not prove the conjunctive requirement of significant
prejudice to himself. In addition, it may have been less
important to quantify and characterize
the seriousness of the delay
for purposes of penalty under
an analysis that excluded the impact of the delay on
institutional actors other than the Lawyer
himself. Perhaps for this
reason, the Hearing Division did not consider
the Law Society’s delay following the issuance of the Notice of
Application, even
though there was evidence on this point that we referred
to above.
[87] We do not regard a finding of
unacceptable and inordinate
delay as necessary to justify the consideration of any delay
in the mitigation of penalty. To the contrary, the principle that underlies
our decision is that
the imposition of any penalty
must serve the many aspects of the public
interest, as demonstrated by the cases
that
have guided us. Marler, Wachtler, and Peet all involved
the mitigation of disciplinary penalties because of delay that fell short
of the Blencoe standard. Indeed, in Blencoe itself,
the Supreme Court accepted
the analogous proposition that less extreme
remedies than a stay of proceedings
must be available to vindicate the public interest where the delay falls short of an abuse of
process.
[88] The absence of a finding of
inordinate and
unacceptable delay was important because having
completed the stay ruling, the
Hearing Division did
not then make findings on the significance of the delay
for the intersecting public and
private interests that were relevant to its penalty determination. These findings would
have been necessary to a Blencoe analysis, but they were also
necessary in this case to a proper consideration
of mitigation of penalty.
The Hearing Division did not determine whether the Law Society’s delay was justified. It did not quantify,
and indeed it did not refer to, the post-application delay. As
a result, the
Hearing Division
took its limited findings on delay
into account in assessing penalty, but the panel
did not have before
it the more complete, contextual analysis of the impact
of delay
in this case that would have tipped the balance in favour
of mitigation of the penalty.
CONCLUSION
[89] We have concluded that the panel should have considered broader factors beyond prejudice to the Lawyer in
weighing the appropriate
penalty, and
it should accordingly have accorded significant weight to the
extraordinary delay that
took place here. If the
Hearing Division had
done so, regardless of whether it specifically
decided
whether the delay was “inordinate and
unacceptable”, we do not believe the
panel’s conclusion on delay as a
mitigating
factor and the overall
circumstances as “exceptional” would have been the same. In other words,
the overall weighing of the factors
listed at para. 22 of its penalty decision would not have been the same, because the delay would
have been a much more important factor.
[90] The Hearing Division therefore erred in law in its consideration and in its failure to consider mitigating issues
relating to delay that we have
outlined above.
Moreover, in our view, properly considered as a matter of
law, the combination of mitigating circumstances
listed at para. 22 of the panel’s decision constituted exceptional circumstances that
merited the mitigation of
the presumptive penalty of revocation
of the Lawyer’s licence.
[91] The appeal from penalty will
be allowed.
[92] We are faced with the choice of sending the matter back to the same or a different
panel of the Hearing Division, or
deciding the issue of penalty ourselves. We must take into account the length of time this
application has been outstanding. We also note that the factual findings of the Hearing Division
in both decisions remain largely intact; our
only intervention relates to legal considerations superimposed
on those facts. We will
therefore substitute our view
of the appropriate penalty in this case.
DETERMINATION OF PENALTY
[93] We conclude that the presumptive penalty of revocation should be reduced to a two-year
suspension, commencing on a date
to be agreed upon by the Law
Society and the Lawyer, and in the absence of agreement, then on November 2, 2015.
Our conclusion is based on the following considerations,
which we will list in summary form, because for the most
part they incorporate our conclusions on issues that we have
discussed at length in
these reasons.
[94] As we
noted,
several decisions of this Tribunal have specifically accepted the relevance
of mitigating evidence in
mortgage fraud cases even though it does
not explain the misconduct.
In Durno, for example, the Hearing Division specifically
rejected
the Law Society’s submission on this point
at para. 129 and instead relied upon the familiar case of Aguirre33 to weigh the absence of such evidence from Mr. Durno as one
factor among many in assessing the appropriate penalty. The
Lawyer requested reduction of the presumptive penalty of revocation to permission to resign; he did not argue that he should
be permitted to continue to
practise. The panel accepted that the circumstances
were sufficiently exceptional to justify this form of termination
of licence. The panel
reviewed several decisions that did not impose the
presumptive penalty of revocation,
and accepted at para. 5 that “the cumulative effect
of the various mitigating factors
make this an appropriate case to
depart from the presumptive penalty.” The panel had before
it a shorter unexplained
delay than in our case, although
it occurred within a
10-year time frame because it
included two hearings before
the Hearing Division on either side of a successful appeal. As stated, the Lawyer did not argue that the delay
(in combination with other factors)
justified
a suspension. Perhaps for this reason,
there was no need to engage
in lengthy consideration and characterization
of the delay as a mitigating
factor as we have done here. The panel in
Durno simply gave “some minimal weight to this factor”.
[95] Mr. Abbott
has squarely challenged the
appropriateness of the presumptive penalty of revocation, and he asserts that the
totality of the mitigating
evidence justifies continuation as a licensee of the Law Society.
He has shown unacceptable and inordinate delay by the Law Society, with all of the unfortunate consequences that we outlined earlier.
Such delay, as noted,
demands a remedy that will
serve the multi-faceted public interests that at are stake
here,
extending beyond “recompense” for the prejudice suffered by
the Lawyer.
[96] The Lawyer was
not responsible
in any respect for the delay, nor
did he waive reliance
on it, and indeed he
co-operated promptly with the Law Society at all points
during the investigation and before the Tribunal.
[97] Prior and subsequent to the four-month period in
2006-07 and the eight transactions
in question, Mr. Abbott
has practised law without
incident since his call to the bar in 1989,
and has carried on a real
estate and mortgage remedy practice since about 1992.
[98] The Lawyer ceased to be involved
with these types of transactions and the referral source
in question
after he received a client inquiry
about possible mortgage fraud in a transaction,
and prior to any
communication from the Law Society,
33 Law Society
of Upper Canada v. Aguirre, 2007 ONLSHP 46.
[99] Mr. Abbott has a reputation for honesty and integrity,
as indicated in
a number of letters from
colleagues
and clients.
[100] The Lawyer accepted responsibility for his failure
to monitor the propriety of the Statements of
Adjustments, and in his evidence, he expressed remorse.
[101] Overall, the circumstances
do not
point to a likelihood of
a reoccurrence of professional misconduct. We believe
that Mr. Abbott should be given an opportunity
for rehabilitation.
[102] The principles of law and corresponding
evidence relating
primarily to delay and exceptional circumstances on which we have set aside the Hearing Division penalty
decision must be taken in
conjunction with the undoubted mitigating circumstances that the Hearing
Division did not find persuasive on their own. The panel
said at para. 32 of its penalty decision:
While there might be cases
where prejudice [from delay] was sufficiently significant that general deterrence and maintenance of public confidence
would be sufficiently served by a lengthy
suspension rather than revocation, this is far from being such a case.
[103] It will be evident from our reasons that
we disagree with the legal test employed by the panel to justify
a departure from revocation. But we cite the passage here because we also conclude
that this is a sufficiently extreme and rare case that it justifies the
substitution of a suspension in
place of the presumptive penalty.
[104] Considering all of the mitigating factors together, and after
anxious and careful review, we have determined that the Lawyer has demonstrated
“exceptional circumstances” that, in the formulation adopted in Mucha,
are “more exceptional” than those that would justify an order to surrender his license. A suspension will, for the reasons we have put
forward, satisfy the onerous
standard set by the Divisional
Court in Bishop: the underlying facts concerning Mr. Abbott, in
tandem with the institutional, stakeholder and personal
interests concerning excessive delay,
require the imposition of a remedy that will
provide reassurance to the public of
the integrity of the profession and its processes.
[105] At the same time,
the imperatives of specific
deterrence, general deterrence, and the
maintenance of public confidence in the integrity and the regulation of the professions obviously point to the
need for a lengthy suspension,
in recognition of the nature and seriousness of the misconduct that occurred in this case, and the objectives
that a long line
of this Tribunal’s case law has attempted
to vindicate in cases of
fraud and misappropriation. It cannot
be a “free pass” for Mr. Abbott
of the kind that resulted in Igbinosun,
because the
unfairness, viewed in context, did not rise to an abuse of process such as to halt
the proceedings. The penalty must take account
of all of the Lawyer’s
circumstances, including the unlikelihood of recurrence, and must not harm confidence
for a member of the public who understood all of the stakeholder
interests in this case.
[106] There is no mathematical formula or chart that
elicits the proper penalty that should spring forth
from the multiplicity of circumstances
and interests. This is
especially so because the jurisprudence on the impact of process failures on the mitigation
of penalties is in its early stages. Balancing all of the relevant considerations
to the extent possible,
we impose a two-year suspension.
[107] The suspension will begin
no later than November 2,
2015, but
subject to that limitation,
the parties can determine the commencement date
jointly.
[108] If any party wishes to make
submissions on the costs of these
proceedings, they shall
be delivered within two weeks, and any responding submissions
shall be delivered within two weeks thereafter. Each submission is limited to three pages apart from a Bill of Costs.
[109] The Tribunal expresses
its appreciation to counsel for the parties for their very helpful submissions in this difficult case.
Note: The dissenting reasons of former Attorney General, Marion Boyd and Christopher D. Bredt was omitted. Marion Boyd, readers may recall is the former non-lawyer Attorney General of Ontario.
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