A Tribunal Hearing Division of the Law Society of Upper Canada found no basis to sanction an attorney found in contempt of a court order.

The Law Society commenced an investigation into Mr. Carey’s conduct after Madam Justice Roberts’ October 12, 2011 finding that he was in contempt of court for breaching a court order. The investigation was discontinued after Justice Roberts overturned her earlier finding of contempt on September 10, 2012. It was re-opened after the Court of Appeal reinstated the initial finding of contempt, suspended during the Supreme Court of Canada proceedings and re-opened after the April 16, 2015 decision.

The Notice of Application was issued on April 7, 2016. It alleged professional misconduct, in particular breach of Rule 4.06 of the Rules of Professional Conduct for breaching the Mareva order and committing civil contempt.

It appears that a Mareva order freezes a defendant’s assets.

At the hearing of this application, both parties acknowledged that the case was unusual. The Law Society accepted that Mr. Carey did not intentionally breach the Mareva order but argued that his breach of the order and commission of civil contempt brought disrespect on the administration of justice and discredit upon the legal profession. Mr. Carey argued that the Supreme Court of Canada’s confirmation that his breach of the Mareva order was without intent to prejudice or disrespect the administration of justice was determinative of the lack of professional misconduct.

The panel concluded that, as a general rule, breach of a court order and a consequent finding of contempt will almost always be prejudicial to the administration of justice and bring discredit upon the profession, whether intentional or otherwise. It noted that Mr. Carey was fully aware of the Mareva order and its prohibitions, that there was no evidence he had carefully considered the wording of the order and whether it applied to him, and that he did not consult with others.

On balance, however, as Mr. Carey had acted in good faith, had considered the issue in light of his solicitor-client obligations, had no guidance in the case law or literature and had acted in accordance with the standard of conduct in the profession at the time, the panel concluded that his error in judgment was one of the rare exceptions to the general rule. We dismissed the Law Society’s application.

Analysis

These proceedings against Mr. Carey were warranted. A determination of whether Mr. Carey’s breach of the Mareva order and finding of contempt constituted professional misconduct, even though he lacked intent to prejudice or disrespect the administration of justice, was in the public interest. It was neither doomed to fail nor unnecessary.

The Supreme Court of Canada found that Mr. Carey breached the Mareva order and that he was in contempt of court. It accepted that in breaching the order, Mr. Carey did not intend to disrespect the administration of justice but confirmed that civil contempt did not require intent to do so. In rejecting Mr. Carey’s argument that civil contempt required the higher level of intent, the Supreme Court noted that accepting the higher level of intent would allow lawyers to escape a finding of contempt because they had, in effect, relied on their own legal advice: The Supreme Court did not determine whether professional misconduct required contumacious intent. It did not address whether requiring such intent would allow lawyers to escape a finding of professional misconduct by simply relying on their own (erroneous) legal advice. 

No costs were awarded. (Mike frisch)