Administrative Law – Appeal – Application to Stay – Abuse of Process, Administrative Law – Appeal – Standard of Review – Correctness, Administrative Law – Appeal – Standard of Review – Palpable and Overriding Error, Appeal – Professions and Occupations – Lawyers – Discipline – Law Society
The hearing committee of the respondent found the appellant guilty of four counts of conduct unbecoming a lawyer (conduct decision) in January 2018. The appellant was found to have breached the Law Society of Saskatchewan Rules (Rules) and the version of the Code of Professional Conduct (Code) that was then in effect. The appellant was disbarred with no right to apply for readmission as a lawyer prior to January 1, 2021 (penalty decision). The appellant appealed his conviction and the penalty decision pursuant to s. 56(1) of The Legal Profession Act, 1990 (LPA). The appellant was a member of the professional association (LSS) for 46 years and this was his first disciplinary event. The LSS was still investigating allegations of tax evasion by the appellant that were first identified in 2013. The LSS first started to look into the appellant’s financial records in 2012 when irregularities were identified relating to a lawyer with whom the appellant shared a trust account. The appellant self-reported that he failed to promptly deposit $36,578.45 in fees from eight files into his office account as required by s. 10 of the LPA. The LSS auditor therefore attended at the appellant’s office to review his records in December 2012. He asked for and received additional documents. In January 2013, the Conduct Investigation Committee (CIC) determined that it knew enough to prepare a Notice of Intention to Interim Suspend the appellant. In March 2013, the appellant signed an undertaking to retain an approved member of the LSS (supervisor) to oversee and monitor his practice and trust account activities. The auditor returned to the appellant’s office in August 2013 to review further records. The auditor completed his final trust report in October 2014. The trust report resulted in a second Notice of Intention to Interim Suspend by the CIC in November 2014. The appellant took the position that tax matters between him and the Canada Revenue Agency were not relevant, and he objected to the LSS request that he produce personal and corporate income tax returns. That matter was bifurcated from the discipline proceedings. The CIC prepared a report recommending seven charges be brought against the appellant for conduct unbecoming a lawyer. The formal complaint was signed in October 2015. All of the charges were related to the first Notice of Intention to Interim Suspend from February 2013. The hearing was conducted in May 2017, and continued in August and September. The conduct decision was rendered in January 2018 where the Hearing Committee found the appellant guilty of four charges. In July 2018, the appellant advised that he would apply to dismiss the prosecution for delay (stay application). The stay application was dismissed. The appellant was disbarred and prohibited from applying for re-admission prior to January 1, 2021. Further, the CIC also sought to recover $102,629.18 in costs. Costs of $58,645.24 against the appellant were imposed. The issues were: 1) whether the Hearing committee erred by convicting the appellant of failing to maintain proper books and records; 2) whether the hearing committee erred by convicting the appellant of entering into or continuing a debtor-creditor relationship with clients; and 3) whether the hearing committee erred in dismissing the stay application.
HELD: The appeal was allowed in part. The issues were determined as follows: 1) the appeal court found that Rule 962(f) included cancelled cheques and could include documents recording the payments into and out of a trust account, such as a statement of adjustments. That ground of appeal was dismissed; 2) the facts found by the hearing committee supported the conclusion that the advances by the appellant were loans that resulted in debtor-creditor relationships, and that the transactions resulting in those loans were business transactions. The conclusion was reasonable and correct. The hearing committee did not err; 3) there were four principles identified in Blencoe: a) the period of delay must be so inordinate as to be clearly unacceptable; b) the party claiming abuse of process must show that the inordinate delay directly caused them a significant prejudice that was related to the delay itself; c) the analysis requires a weighing of competing interests; and d) a stay is not the only remedy available in administrative law proceedings. The appeal court agreed with the hearing committee that the clock began ticking December 4, 2012, which was the time the LSS was obliged to take further action. The appeal court determined that the clock should stop on May 17, 2017, the date the hearing commenced. The period of delay was 53 months. The appeal court reviewed all time periods in the 53 months and concluded that 32.5 months were found to be undue delay with only 2.5 months attributable to the appellant and 18 months being inherent to the process. The hearing committee did not reach the same conclusion due to palpable and overriding errors and its failure to correctly apply the law to the facts. The appeal court concluded that the delay so grossly exceeded the inherent requirements of the case as to be “clearly unacceptable” within the meaning of Blencoe. Whether the appellant suffered significant prejudice as a result of the inordinate delay was the next consideration. The appeal court concluded that the appellant demonstrated that the there was unreasonable delay that resulted in very significant personal prejudice such that the public’s sense of decency and fairness would be affected. The appeal court then weighed the competing interests. The appeal court found that the delay would bring the LSS disciplinary process into disrepute. There was an abuse of process. The appeal court concluded that the hearing committee erred by failing to find that the damage to the public interest in the fairness of the LSS regulatory system if the proceedings continued would exceed the harm to the public interest in the enforcement of the LPA, Rules, and Code if the proceedings were halted. A stay was the appropriate remedy and it should have been granted. The appeal was allowed. The penalty and costs award was set aside, but the findings of professional misconduct stood. The appellant was awarded costs.