Surrender Or Revocation?

Surrender of license rather than revocation has been accepted by the Tribunal Hearing Division of the Law Society of Upper Canada

Mr. Fine acted on 21 real estate transactions in a condominium project located in Welland. Of those 21 transactions, 18 were completed on the same day in March 2012, one a few days later, and two in 2013.

The parties have entered into an Agreed Statement of Facts in which it is agreed that all of these 21 transactions were fraudulent. The Agreed Statement of Facts provides ample detail supporting this conclusion.

While Mr. Fine denies actual knowledge, he admits to being wilfully blind to fraud as alleged…

On sanction

 it is clear from our jurisprudence that there is a difference between the exceptional circumstances required to allow a penalty other than termination, such as a lengthy suspension where a lawyer retains the ability to practise, and the penalty of surrender, where he does not. The Appeal Division has made it clear that revocation, rather than surrender, is the norm and that any lesser penalty requires exceptional circumstances. Permission to surrender, however, which still results in termination, requires “less exceptional” circumstances than do penalties not involving termination. In Bishop and Abbott, courts have made clear how exceptional the circumstances must be to justify a penalty that does not involve termination…

  The Law Society offers two key mitigating factors in support of the joint submission for permission to surrender. The first is Mr. Fine’s admissions and acceptance of responsibility. The second is the psychological and other evidence which puts the misconduct in context.

These mitigating factors are analogous to those in Molson. Mr. Molson admitted knowing participation in fraud and other forms of professional misconduct. He led psychiatric evidence of low self-esteem and dependent personality traits that explained, but did not excuse, his misconduct.

Here, Mr. Fine’s admission of professional misconduct is a significant mitigating factor. Acceptance of responsibility is important and difficult for a respondent, especially when the misconduct is serious. Entering into an Agreed Statement of Facts and admitting professional misconduct avoids the expense of a hearing on the merits and potential inconvenience for third-party witnesses. As prior cases make clear, proving knowing assistance in fraudulent transactions can be very costly for the Law Society and, as a result, for licensees. It is important that the Law Society have the ability, where appropriate, to negotiate a penalty that is more acceptable to a respondent than revocation, but which nonetheless terminates the respondent’s licence to practise.

The second mitigating factor arises from evidence, including from his family doctor and treating psychiatrist, of Mr. Fine’s personal circumstances. His family doctor describes a number of significant stresses experienced by Mr. Fine in respect of his own health and that of his family. While it is unnecessary to detail these health concerns, it is clear that Mr. Fine faced serious stressors. According to the family doctor, Mr. Fine was in a depression in 2012 and unaware of the extent to which the depression was affecting him. Mr. Fine first sought help from his family doctor in late 2012, as a result of which an anti-depressant and an anxiolytic were prescribed and counselling recommended.

Mr. Fine was referred by his family doctor to a psychiatrist in 2014. In late 2015 and in mid-2016, his psychiatrist reported weekly attendance by Mr. Fine, hard work in therapy and some improvement. 

It is true that the medical evidence is limited and dated. However, it provides some support for Mr. Fine’s evidence that he was not “into critical thinking for myself and by that time, was a workaholic.” Current evidence as to Mr. Fine’s past medical condition would not be particularly useful. Mr. Fine’s effective submission is that his judgment in respect of these transactions was compromised by medical issues and personal factors. There is evidence supporting this submission which is not challenged by the Law Society.

The Law Society also notes for the record that the total amount at risk in the fraud was in excess of $2.2 million, but that it appears that the ultimate loss was quite limited. The time frame of the frauds was reasonably limited, with the substantial majority of the transactions having been closed over a short time. There were also a number of conduct breaches in addition to knowing assistance. As well, Mr. Fine had the benefit of advisories warning against the red flags of fraud, and had previously been reprimanded for failure to co-operate in the context of the same depression and anxiety issues mentioned above. While all of these factors are relevant, we agree with the Law Society that they are less important than the key mitigating factors described above.

Taking into account Mr. Fine’s admissions, his acceptance of responsibility, the evidence of relevant medical issues and personal factors and, most importantly, the fact that Mr. Fine will leave the practice of law, we cannot conclude that surrender is a truly unreasonable or unconscionable penalty. Specific and general deterrence are fully served by loss of licence. Rehabilitation is not a penalty objective in this context. Public confidence in the profession is maintained by the loss of licence of those who knowingly assist in fraud. There is value in recognizing mitigating circumstances including consensual resolution of conduct proceedings.

I have had the benefit of reading Mr. Lerner’s dissenting reasons. I accept that exceptional circumstances have not been demonstrated as discussed in Mucha, Bishop and Abbott. But, as discussed above, the proposed penalty is not a suspension but rather loss of licence by surrender. In my view, taking into account the applicable jurisprudence and the circumstances of this case, a suspension would indeed be unreasonable or unconscionable, but loss of licence by surrender (as opposed to revocation) is not.

Accordingly, we accepted the joint submission…

Michael Lerner dissented and would revoke

The public interest demands that the presumptive penalty be imposed. The fact that there has been a joint submission is important and should be accepted if it is within the reasonable range; however, with mortgage fraud there is no range but rather a presumptive penalty that can only be displaced with the opportunity to surrender one’s licence if there are “exceptional circumstances.”

As such, unless the Lawyer has demonstrated circumstances that can reasonably be considered exceptional, the penalty must be revocation.

As stated above, the Lawyer provided us with dated medical reports pertaining to a timeframe subsequent to the commission of the misconduct and referred to personal and family matters that can be described as life cycle events to which everyone is exposed. These mitigating factors are weak at best. In contrast, the fact that the Lawyer knowingly participated in 21 fraudulent transactions is  significantly aggravating. In my view the mitigating factors do not rise to the required threshold of exceptionality as set out in Bishop, Mucha and Abbott.

When considering all of the factors, both mitigating and aggravating – and most importantly, the need to maintain the public’s confidence and trust that the profession can self-regulate, as well as serving as a general deterrent to like-minded members of the profession – in the absence of exceptional circumstances, I do not find the joint submission a sufficient basis to avoid the presumptive penalty. I would therefore revoke the Lawyer’s licence.

 I do not believe that a reasonable person, fully and properly informed of all of the facts and circumstances that exist in this case, would consider it reasonable for this lawyer to be permitted to surrender his licence.

(Mike Frisch)