Thursday, February 18, 2016

Law Society Tribunal Overturns Disbarment Applying Blencoe But Upholds Liability

Law Society Tribunal 
(Appeal Division)  


 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


Text Box: 2015 ONLSTA 25 (CanLII)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.



[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).

Text Box: 2015 ONLSTA 25 (CanLII)[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.


[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.


Text Box: 2015 ONLSTA 25 (CanLII)[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.

Text Box: 2015 ONLSTA 25 (CanLII)[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.


[12]      The Appeal  Division has recently considered the question  of when delay  in the investigation  and prosecution of 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.

Text Box: 2015 ONLSTA 25 (CanLII)[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.
Text Box: 2015 ONLSTA 25 (CanLII)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.
Text Box: 2015 ONLSTA 25 (CanLII)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.

Text Box: 2015 ONLSTA 25 (CanLII)[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”4said “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.


[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.

Text Box: 2015 ONLSTA 25 (CanLII)Mucha, Bishop and  Subsequent Cases

[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.

Text Box: 2015 ONLSTA 25 (CanLII)[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”.

Text Box: 2015 ONLSTA 25 (CanLII)[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. Hamalengwa2015 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.    Text Box: 2015 ONLSTA 25 (CanLII)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
Text Box: 2015 ONLSTA 25 (CanLII)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.

Text Box: 2015 ONLSTA 25 (CanLII)[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.

Text Box: 2015 ONLSTA 25 (CanLII)[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 reached21In  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.  Nicholas2015  ONLSTH 134,  where the Tribunal granted an adjournment  of an interlocutory suspension   hearing,
in part because of the delay in bringing the motion.

Text Box: 2015 ONLSTA 25 (CanLII)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        Text Box: 2015 ONLSTA 25 (CanLII)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

[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.          Text Box: 2015 ONLSTA 25 (CanLII)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.          Text Box: 2015 ONLSTA 25 (CanLII)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. Marler2014 ONLSTH  203.

circumstances having regard to the hardship or punishment that  delay has entailed or the misconduct, if any,  giving rise to the   delay.

Text Box: 2015 ONLSTA 25 (CanLII)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]      Iwas 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 Blencoewhether 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:

Text Box: 2015 ONLSTA 25 (CanLII)[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.

Text Box: 2015 ONLSTA 25 (CanLII)[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.

Text Box: 2015 ONLSTA 25 (CanLII)[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.


[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.


[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.

Text Box: 2015 ONLSTA 25 (CanLII)[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 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.

Text Box: 2015 ONLSTA 25 (CanLII)[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 Igbinosunbecause 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.

Text Box: 2015 ONLSTA 25 (CanLII)[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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