Law Society Tribunal accepts LSO reading of disclosure rule but refuses its ‘exceptional circumstances’ test
The Law Society Tribunal has ruled that licensees may be entitled to disclosure in support of their responses to interlocutory suspension proceedings.
The Tribunal accepted the Law Society of Ontario’s submission that it had no disclosure obligations at all on interlocutory suspension motions absent a Tribunal order. But it rejected the notion that licensees had to demonstrate “exceptional circumstances” to succeed on disclosure motions at that stage.
The case involved a motion by the LSO for an interlocutory order suspending Rajvinder Singh Grewal’s licence. The allegations, which have not been proved, included misappropriation of trust funds, registering charges on properties without the owners’ consent, and participating in a fraudulent mortgage discharge and falsified title insurance policy scheme.
Grewal responded with a motion for disclosure of relevant information in the investigator’s file. The material he sought included statements by and correspondence involving the complainants; the LSO investigator’s notes regarding an attendance at his office, RSG Law; and statements and communications involving certain individuals mentioned in the LSO’s supporting affidavit.
The LSO opposed the motion. The LSO’s lawyer, Sean Dewart of Toronto’s Dewart Gleason LLP, argued that the tribunal rules did not entitle licensees to any disclosure other than in exceptional circumstances.
Dewart also submitted that the litigation privilege attached to the documents because their dominant purpose was to prepare for litigation.
While conceding that the material sought was potentially relevant to the conduct application, the LSO argued that it was not pertinent to the interlocutory motion because the focus of that proceeding was to determine whether there was a significant risk of harm to the public.
Grewal, the LSO submitted, could not turn the motion hearing into a conduct hearing. If licensees could demand broad disclosure from the LSO at the interlocutory stage, a serious risk of delay emerged.
But the Tribunal held that, while Rule 10.3 meant the LSO owed no disclosure until a panel ordered it, existing jurisprudence still provided the starting point for what a panel should order. Disclosure limited to potentially relevant materials that the LSO has in fact reviewed, are not privileged, and are not the licensee’s own documents. Panels could order more, up to everything potentially relevant in the LSO’s possession, or less, including nothing at all.
Potential relevance, the Tribunal added, was to be assessed against the grounds of the motion read together with what the LSO put in issue through the evidence it led. Here, the LSO had put certain of the accounts given to the investigator in issue by advancing them as hearsay in the investigator’s affidavit.
Applying these standards, the Tribunal concluded that “fairness demands disclosure” in the circumstances of this case.
Otherwise, the LSO had provided “no evidentiary basis” for its privilege claims. More significantly, the Tribunal rejected the notion that an investigator's dominant purpose in a conduct investigation is to prepare for a conduct application.
“If it were the case (which we do not accept) that the prima facie dominant purpose of a conduct investigation is a conduct application, that would mean that investigators pursue an outcome rather than having an open mind as to the appropriate regulatory response after a balanced factual investigation,” the Tribunal wrote.
If the LSO had other grounds for asserting privilege, it could do so subsequently.
In the result, the Tribunal granted the motion in part, excluding disclosure of communications involving two of the eight individuals cited in the affidavit. The LSO’s supporting affidavit did not provide sufficient information about their identities or what relevance material relating to them would have.
In response to email inquiries from Law Times, the LSO stated that Rule 10.1 did not apply to interlocutory motions, and the decision reflected a misunderstanding of the difference between conduct applications and such motions.
“The practical effect of the Order was that the Tribunal did not consider whether the evidence presented demonstrated a risk of harm to the public, warranting an interlocutory suspension,” the LSO wrote.
According to the LSO, such disclosure orders interfered with the integrity of investigations “including providing licensees an opportunity to destroy or fabricate evidence and to discourage witnesses.”
The LSO has filed an application for judicial review. Grewal has agreed to a stay of the Tribunal's order pending the hearing.
