John Paul Abbott is seeking leave of a Court of Appeal decision that reinstated the original Law Society hearing penalty of revocation and set aside the two-year suspension imposed by the regulator’s appeal division.
“Tribunals are meant to facilitate access to speedy justice. The ability to hold regulators accountable for dysfunction or negligence is essential to this role,” says Frank Addario, the lawyer for Abbott, in written submissions filed with the Supreme Court.
The Court of Appeal in its ruling “stepped into the Appeal Division’s shoes and substituted its own reasoning. This interventionist approach was inconsistent with the principle of deference that guides review of expert tribunals,” writes Addario, who heads Addario Law Group LLP in Toronto.
In response, the law society in its written submissions states that mortgage fraud by lawyers in Ontario had become an “epidemic” at the time the actions of Abbott were brought to the attention of the regulator. “The volume and complexity of mortgage fraud investigations temporarily overwhelmed the Society,” write Sean Dewart and Chris Donovan of Dewart Gleason LLP on behalf of the regulator in its leave submissions.
“The only issue below was whether or not the delay in investigating the applicant’s misconduct justified the imposition of a lesser penalty. That is, should the applicant have been favoured with a lesser penalty because he and so many lawyers were engaged in mortgage fraud that the Law Society could not keep up,” they ask. “This conclusion cannot be justified on any standard of review.”
The Court of Appeal, in its decision in Abbott, noted that revocation of a lawyer’s licence is the presumptive penalty for mortgage fraud.
“There is, as yet, no precedent for a lower penalty than licence revocation for a lawyer who has knowingly participated in mortgage fraud,” wrote Justice Peter Lauwers, with justices Robert Sharpe and Bradley Miller concurring. Only in “exceptional circumstances” would there be justification for a penalty less than revocation for this type of misconduct, the Court of Appeal stressed.
The Supreme Court of Canada in its decision in 2000 in Blencoe v. British Columbia (Human Rights Commission) stated that there must be “proof of significant prejudice” as a result of delay for there to be an administrative law remedy such as a stay of proceedings.The investigation into Abbott’s misconduct took six years to complete, notes Addario in his written submissions.
“The Law Society did not attempt to justify or explain the delay,” he writes. The “high bar” of the Blencoe test should be re-examined to permit remedies such as lesser penalties as a result of unreasonable delay by regulators, Addario suggests.
“The proposed appeal invites the Court to bring the administrative delay analysis in line with modern thinking about the effect of delay on the legal system. Blencoe is nearly twenty years old and much has changed,” Addario writes. “The public is increasingly preoccupied with delayed justice.”
Benjamin Kates, a lawyer at Stockwoods LLP in Toronto, says disciplinary panels are in a difficult position when there has been serious misconduct proven against a lawyer and also lengthy delays in the investigation process by a regulator.
“The focus is on maintaining public confidence in the legal profession,” says Kates, who has previously acted for the LSO in other proceedings. “That is why the delay must be so bad that it overrides the public interest in revocation.”
The Supreme Court, in its 2016 ruling in Jordan, stated that it was setting time limits for cases to conclude, after which the delay was presumed unreasonable, because of a “culture of complacency” in the criminal courts.
“I don’t think there is a culture of complacency” in terms of the law society’s current handling of allegations of misconduct by lawyers, Kates says.
The Court of Appeal, in its decision, indicated that delay will almost never be a reason to reduce the penalty for a lawyer found to have engaged in mortgage fraud.
“In my view it is appropriate to carve out revocation cases,” wrote Lauwers.
“The key point made in all of the mortgage fraud lawyer discipline cases is that dishonest misconduct presumptively results in revocation. It is in a different register, or of a different quality, than other lawyerly misconduct. The cases question whether, in the public interest, the profession can accept the continued licensing of a person who has shown himself to be willing to participate, for personal gain, in stealing someone else’s money; does the member have the moral character to continue to be in a position of trust?”
Daniel Goldbloom, a Toronto lawyer who acts in regulatory defence and discipline proceedings, suggests that there should be some kind of consequence for a regulator that causes unreasonable delay.
“It is frustrating to have a wrong with no remedy. If you have delay that most people accept is problematic, there should be a way to address this,” says Goldbloom. The other aspect of the leave application is whether the appeal division of the law society is an “expert tribunal” similar to the hearing panel or closer to that of a reviewing court. The Court of Appeal found that it went beyond its jurisdiction in considering that its function included sending a message about unreasonable delay.
“The Appeal Division exceeded its responsibility as an adjudicative body and misapprehended Blencoe. It did not defer to the Hearing Division but actively sought to subvert its reasoning,” wrote Lauwers.
Addario, in his written submissions, argues that the Court of Appeal was wrong to conclude that the appeal division had to defer to the hearing division in the same way a court would to a tribunal.
“There is no nationally consistent approach to the review of multi-level administrative adjudication,” Addario writes. “It is not the courts’ role to determine the scope of a statutory tribunal’s appellate intervention. This is a decision for the tribunal,” he states. In arguing against the granting of leave, the law society argues that the role of the appeal division was determined more than a decade ago and no court has interfered with this interpretation.
“Unsurprisingly, given its name, the Appeal Division has repeatedly determined that is sits as an appellate body,” write Dewart and Donovan.
“This means, among other things, that the Appeal Division does not consider the issue of penalty de novo,” they add.
Kates agrees with the regulator’s reasoning.
“You have to look at the context. This is an appeal body,” he says.
The Supreme Court is expected to announce later this spring if leave is granted. If the Supreme Court wants to take another look at Blencoe, then it may grant leave, suggests Kates.
If leave is granted, Goldbloom says, the impact of the case will go far beyond that of just the LSO.
“It could do for delay in administrative tribunals what Jordan has done in criminal trials,” he says.