COURT OF APPEAL FOR ONTARIO

CITATION: The Law Society of Upper Canada v. Nguyen, 2018
    ONCA 709 DATE: 20180830

DOCKET: C64918

Sharpe, Juriansz and Roberts JJ.A.

BETWEEN

The Law Society of Upper Canada

Applicant (Respondent)

and

Cuong The Nguyen (also known as Steve Nguyen)

Respondent (Appellant)

Brad Teplitsky, for the appellant

Glenn Stuart, for the respondent

Heard: August 14, 2018

On appeal from the order of the Divisional Court
    (Justices Edward F. Then and Harriet H. Sachs, Justice Ian V.B. Nordheimer dissenting),
    dated September 14, 2017, with reasons reported at 2017 ONSC 5431, dismissing
    an appeal from an order of the Law Society Tribunal Appeal Division, dated
    April 27, 2016, with reasons reported at 2016 ONLSTA 9, reversing in part an
    order of the Law Society Tribunal Hearing Division, dated October 30, 2014,
    with reasons reported at 2014 ONLSTH 209.

By the Court:

INTRODUCTION

[1]

The respondent The Law Society of Upper Canada brought disciplinary
    proceedings against the appellant, a Toronto real estate lawyer, alleging
    professional misconduct in relation to eight real estate transactions. The Law
    Society alleged that in each of those transactions, the purchasers had failed
    to provide all of the funds on closing required by the agreements of purchase
    and sale and had relied instead on credits that were not disclosed to the
    lender. The Law Society alleged that the appellants failure to disclose the
    credits to the lenders amounted to assisting or participation in mortgage
    fraud.

[2]

The Law Society Tribunal Hearing Division Panel (the Hearing Panel) found
    that the Law Society had failed to prove that the eight transactions were
    fraudulent or that the appellant had dishonestly withheld information regarding
    the credits from the lender. However, the Hearing Panel also found that as the
    appellant had not disclosed the discrepancy between the amount required to
    close the transactions by the agreements of purchase and sale and the amounts
    actually provided in seven of the eight transactions, he had failed to perform
    legal services in a competent fashion. The Hearing Panel imposed a penalty of
    two months suspension.

[3]

On appeal by the Law Society, the Law Society Tribunal Appeal Division
    Panel (the Appeal Panel) found that the Hearing Panel had erred in law in its
    definition of mortgage fraud and that the error tainted its analysis of the
    evidence. The Appeal Panel ordered a new hearing with respect to six of the
    eight transactions.

[4]

By a majority, the Divisional Court affirmed the Appeal Panels
    decision. The dissenting judge accepted that the Hearing Panel had erred in its
    legal analysis of the elements of mortgage fraud but found that on its
    findings, the mental element required for mortgage fraud could not be made out
    and that the court should not have ordered a new hearing.

[5]

For the following reasons, we allow the appeal. The Divisional Court did
    not err in finding that the Appeal Panels articulation of the legal test for
    mortgage fraud was reasonable. However, the order to remit the matter for a new
    hearing cannot withstand scrutiny in the face of the Hearing Panels careful
    reasons finding that the appellant lacked the mental element required to
    sustain mortgage fraud.

FACTS

[6]

The appellant, who practices exclusively in the area of real estate law,
    completed approximately 750 real estate closings over a 2½ year period between
    2006 and 2009. The Law Society alleged that he had acted improperly in eight of
    those transactions and that his conduct amounted to participation in mortgage
    fraud.

[7]

Six of the eight transactions remain at issue. In four of those
    transactions, the appellant acted for both the purchaser and the lender. In
    one, he acted for all parties and in another, he acted for the vendor. In each
    of these transactions, the purchaser did not provide the funds required by the
    agreements of purchase and sale to close the transaction. The purchasers relied
    on credits of various kinds involving arrangements of which the mortgage lender
    was unaware: a promissory note, set-offs from pre-existing debts, gifts from
    the vendor and money that the purchaser allegedly paid directly to the vendor.
    The appellant investigated these credits, satisfied himself that they were
    legitimate and that the properties were sold at fair market value and did not
    disclose the credits to the lender.

HEARING PANEL

[8]

The Hearing Panel began its analysis by focusing on the appellants
    understanding of mortgage fraud as involving flip and value fraud where the
    sale was for greater than the fair market value of the property with bogus
    credits used to reduce the purchase price. The appellant testified that he was
    aware of the red flags of mortgage fraud, that he investigated the credits
    involved in the eight transactions and that he was satisfied that the
    transactions were completed at fair market value. The Hearing Panel accepted
    his evidence. It found that his limited understanding of mortgage fraud at the
    time, while erroneous, was understandable since the Law Societys publications focused
    on value fraud and given the fact that a lenders major concern was the value
    of its security. The appellant understood his obligation to be to report
    credits that he, after investigation, concluded were bogus or unjustifiably
    inflated the purchase price. The Hearing Panel found that, while mistaken, his
    belief was honest. He had thoroughly investigated each of the credits and
    concluded that all of them were legitimate. There was no evidence that they
    were not.  The Hearing Panel concluded that the Law Society had failed to prove
    that the eight transactions were fraudulent and that it had failed to prove
    that the appellant had dishonestly withheld the credits or other information
    from the lender knowing that they were material to the lenders economic
    interests.

[9]

However, in seven of the eight transactions, the Hearing Panel found
    that by failing to report the credits to the lender, the appellant had failed
    in his duty to serve his client. It imposed a penalty of two months
    suspension.

APPEAL PANEL

[10]

The
    Appeal Panel concluded that the Hearing Panel had erred by starting its
    analysis by focusing on the appellants mental state and on value fraud.
    Nondisclosure of important facts may constitute fraudulent means and fraud need
    not involve actual loss by the lender. Making a misrepresentation to induce a
    loan amounts to fraud as it puts the lenders economic interests at risk, even
    if the purchase price is at fair market value and the loan is properly secured.
    A misrepresentation regarding the funds provided on closing puts the lender at
    risk as it may affect the borrowers ability to service the loan.

[11]

The
    Appeal Panel also found that the Hearing Panel had erred by holding that actual
    knowledge was required as recklessness or wilful blindness is sufficient to
    sustain a case of fraud.

[12]

The
    Appeal Panel ruled that given the nature of the alleged frauds, the Hearing
    Panel should have asked itself the following questions with respect to each
    transaction (at para. 41):

1.

Were material
    facts not disclosed to the lender?

2.

If so, should an
    inference of dishonesty be drawn with respect to the transaction?[A]n
    inference of dishonesty can be made based on circumstantial evidence, including
    red flags for fraud. In the absence of any other evidence, an inference should
    be drawn that the borrower was subjectively aware that the failure to disclose
    material facts put the economic expectations of the lender at risk, and
    accordingly was dishonest.

3.

If the
    transactions were fraudulent, was the lawyer aware of, wilfully blind or
    reckless to the fraud?

4.

If the lawyer
    had not knowingly participated in mortgage fraud, had he nevertheless committed
    a less serious form of professional misconduct by failing to recognize or act
    on signs of possible fraud?

[13]

The
    Appeal Panel ruled that the Hearing Panel did not begin its analysis by asking
    whether the material facts were disclosed to the lender, and if they were not,
    whether an inference of dishonesty should be drawn with respect to the
    transaction. Because of this error, the Hearing Panels review of the evidence
    was skewed. The Appeal Panel accordingly ordered a new hearing with respect to
    six of the transactions to determine whether mortgage fraud was made out.

DIVISIONAL COURT

[14]

By
    a majority, the Divisional Court dismissed the appellants appeal. The majority
    found that the Appeal Panels articulation of the test for fraud was reasonable.
    The majority also agreed that the Hearing Panel had skewed its analysis by
    focusing on the appellants understanding of fraud. The issue was not the
    appellants subjective belief as to what was or was not fraud but rather whether
    on an objective view, the conduct of the purchasers amounted to fraud. While
    the undisclosed credits did not inflate the value of the properties, those
    credits did bear upon the borrowers ability to make the mortgage payments and
    thereby put the lenders economic interests at risk. As the Hearing Panels
    findings relating to the appellants mental state were based upon an erroneous
    and incomplete definition of mortgage fraud, those findings could not be
    sustained and a new hearing was required.

[15]

The
    dissenting judge accepted the majoritys conclusions on the definition of
    mortgage fraud. However, he concluded that, even though the Hearing Panels
    legal analysis of mortgage fraud was flawed, it did not automatically follow
    that the Hearing Panels factual findings relating to the appellants mental
    state were irretrievably tainted. To find the appellant guilty of mortgage
    fraud, it was necessary to find that he was aware of, wilfully blind or
    reckless to the fraud. On the basis of the Hearing Panels factual findings concerning
    the investigations the appellant conducted and his state of mind, it would be
    impossible to conclude that he knew or was wilfully blind or reckless to a
    fraud that put the lenders financial interests at risk.

ISSUES

[16]

The
    appellant raises two issues:

1.

Did the
    Divisional Court err in upholding the Appeal Panels conclusion that the
    Hearing Panel applied the incorrect test for mortgage fraud?

2.

Did the Divisional Court err in upholding the decision of the Appeal
    Panel to order a new hearing?

ANALYSIS

(1)

Did the Divisional Court
    err in upholding the Appeal Panels conclusion that the Hearing Panel applied
    the incorrect test for mortgage fraud?

(a)

Standard of Review

[17]

We
    do not accept the appellants submission that the appropriate standard of review
    is correctness on the ground that the test for fraud turns upon general
    principles of criminal law.

[18]

The
    issue of fraud that arises in this case is of a very specific nature, namely,
    what amounts to mortgage fraud in relation to a solicitors work in real estate
    transactions. We agree with the Divisional Court that the appropriate standard
    of review is reasonableness. As both this Court and the Supreme Court of Canada
    held in
Groia v. The Law Society of Upper Canada
, 2016 ONCA 471, 131
    O.R. (3d) 1, at paras. 53, 76-77; 2018 SCC 27, 34 Admin L.R. (6th) 183, at
    paras. 51, 57, reasonableness applies to Appeal Panel decisions on questions of
    law unless the question is both of central importance to the legal system and
    outside the tribunals area of expertise . The issue of mortgage fraud by
    practising lawyers is a matter with which the Appeal Panel deals on a regular
    basis and that falls squarely within its area of expertise. It follows that the
    applicable standard of review is reasonableness.

(b)

The Test for Mortgage Fraud

[19]

The
    Appeal Panel provided a detailed review of the principles of mortgage fraud
    based upon the jurisprudence of the Law Society Tribunal. We agree with the
    Divisional Court that the Appeal Panels statement of the proper test for
    mortgage fraud in the context of legal practice was reasonable.

[20]

We
    do not accept the appellants submission that there is any inconsistency
    between parts one and two of the test as stated by the Appeal Panel. In our
    view, when applied to transactions of the kind at issue on this appeal, the
    test is well-supported by the Law Society Tribunals jurisprudence and, indeed,
    by general principles of criminal law. There is no error in principle that
    would justify judicial intervention.

[21]

Accordingly,
    we do not give effect to this ground of appeal.

(2)

Did the Divisional Court err in upholding the decision of the Appeal
    Panel to order a new hearing?

[22]

The
    Hearing Panel found the appellant to be a credible and truthful witness and
    accepted his evidence. The Hearing Panel noted that his demeanour carried the
    conviction of truth, and that he was earnest, consistent and at times
    impassioned in his evidence. He admitted to the errors he had made without
    hesitation. In particular, he admitted that his decision not to disclose
    credits unless they appeared to him to be bogus was incorrect. He stated that
    he now understood that the governing professional standard required that he
    disclose such facts and leave it to the lenders to decide whether or not to
    proceed with the transaction.

[23]

The
    Hearing Panel accepted the appellants evidence that he was aware that the
    credits were red flags of fraud, that he had investigated each one and that in
    each case, he was satisfied with the explanation that the purchasers or their
    solicitors gave that the credits were proper. His conclusion that the credits
    were valid was supported by the fact that vendors do not typically accept less
    than fair market value and that he was satisfied that the transactions were
    completed at fair market value.

(a)

Analysis of the Six Transactions

[24]

The
    Hearing Panel reviewed the particular circumstances of each transaction in
    detail.

1.

28-3690
    Keele St., Toronto

[25]

In
    this transaction, the appellant acted for both the purchaser and the lender.
    The purchaser paid $14,690.98 on closing and the balance of the funds due on
    closing, $28,931.14, was shown as a credit paid by way of promissory note. The
    appellant knew the vendor and had acted for him on a prior transaction. As the
    closing date drew near, the purchaser informed the appellant he had
    insufficient funds to close. The appellant asked the vendors solicitor for an
    extension of the closing date. The vendor did not want to delay the transaction
    as there were power of sale proceedings pending. The vendor agreed to take a
    promissory note to close the transaction to avoid power of sale. The appellant
    considered the amount of the mortgage and the prices paid for the property in
    prior transactions. He concluded that the sale price was at fair market value,
    the credit and the promissory note were genuine and that the lenders economic
    interest was not at risk.

[26]

The
    Hearing Panel accepted the appellants evidence that he believed there was no
    fraud or risk of fraud in the transaction. While the appellant fell below the
    standard of a reasonably competent practitioner in failing to report the credit
    to the lender, his failure to do so was not dishonest.

2.

5442 Wellington Road, Guelph

[27]

The
    appellant acted for both the purchaser and the vendor. The purchaser did not
    pay the $5,000 deposit and did not provide funds on closing. Rather, there was
    a $52,434.69 credit on the statement of adjustments. The appellant investigated
    the situation and was satisfied that the purchase price was not inflated. As
    for the unpaid deposit and closing funds, the vendors solicitor told the
    appellant that the parties were cousins and that the credit was a set-off for a
    pre-existing debt. The appellant was satisfied that the credit was genuine.

[28]

The
    Hearing Panel accepted the appellants evidence that he did not believe there
    was a fraud or that the credit was material to the bank. The Law Society did
    not dispute that the sale was for fair market value. The Hearing Panel
    concluded that the appellant was not knowingly involved in fraud but that he
    had fallen below the standard of an ordinarily competent lawyer in failing both
    to obtain written confirmation of the loan and to disclose the credit to the
    lender.

3.

116 Comoq Avenue, Vaughan

[29]

The
    appellant acted for both the purchaser and the lender. There was a $77,477
    credit on closing and the purchaser provided no funds on closing. The appellant
    investigated and both the vendors solicitor and the purchaser told him that
    the credit was for a pre-existing debt. The sale price was at fair market value
    and the mortgage was less than the prior mortgage. The Hearing Panel found the
    appellant had fallen below the required standard but accept[ed] [the
    appellants] evidence that he believed there was no fraud and that the credit
    was not material to the bank. The Hearing Panel stated that the appellant had
    a reasonable basis for coming to those conclusions based on his understanding
    of fraud and all of the facts.

4.

320 Hemlock Avenue, Stoney Creek

[30]

The
    appellant acted for both the purchaser and the lender. The transaction was
    between brothers and the purchasers common law spouse. There was a gift of
    $84,322 from the vendor and the vendor paid $64,258 to the purchaser on
    closing. The appellant explained that both brothers had previously bought the
    property, but only the brother who was the vendor appeared on title. There was
    a refinancing involving both brothers and the transaction at issue resolved the
    accounting between them. The price was at fair market value and the appellant
    confirmed with the vendors solicitor that the credit was legitimate. The
    Hearing Panel found that while the transaction did not appear legitimate on its
    face, the appellants explanation was credible and the Law Society did not
    offer a plausible alternative.

[31]

The
    Hearing Panel accepted that the appellant did not believe that this was a
    fraudulent transaction or that the credit was material to the bank. The
    arrangement between the brothers was unorthodox but believable. There was no
    reason to believe that the brothers intended to mislead or hide the
    arrangements from the bank.

[32]

Again,
    while the appellant fell below the required standard in failing to report the
    credit to the bank, his failure to do so was not dishonest.

5.

60 William Cragg Drive, Toronto

[33]

The
    appellant acted for all parties involved in this transaction. The purchaser did
    not provide any funds on closing through the appellant. However, the vendor
    acknowledged that he had received $55,000, the amount of the deposit and the
    funds required to close, directly from the purchaser. The vendor and purchaser
    were friends and the bank confirmed it held the purchasers $55,000 redeemable
    Guaranteed Investment Certificate. The price was at fair market value and the
    mortgage was not inflated.

[34]

The
    Hearing Panel was not persuaded that the parties intended to mislead the bank
    and accepted the appellants evidence that he did not believe there was any
    fraud or that the credit was material to the lender. The appellant fell below
    the required standard by failing to advise the lender of the credit and that he
    acted for all parties but the mistake was not dishonest.

6.

5 Montcrieff Drive, Toronto

[35]

The
    appellant acted for the vendor. The purchaser did not pay the deposit of
    $10,000 to the appellant as required but the vendor acknowledged that he had
    received it directly from the purchaser. There was a credit to the purchaser of
    $15,685. The explanation for the credit was that the purchaser was buying the
    property to set off a debt from the vendor who was also indebted to other
    parties. The price was at fair market value. The Hearing Panel did not accept
    that there was any intent to mislead the lender or that the parties had
    structured the transaction to obtain financing under false pretences. The
    Hearing Panel found that the appellant did not fall below the standard of a
    competent lawyer in his inquiries or in executing his retainer for the vendor.

(b)

Mortgage fraud: Hearing
    Panels conclusion

[36]

The
    Hearing Panel accepted the appellants evidence that in not disclosing these
    various credits to the lenders, he had not acted dishonestly but had made an
    honest mistake. That mistake meant that his conduct fell below the required
    standard and warranted a finding of failing to serve his client. However, given
    the lack of dishonesty, the Law Society had failed to make out an essential
    element of participation in mortgage fraud.

(c)

Was it unreasonable to
    order new hearings on the allegations of mortgage fraud?

[37]

The
    majority of the Divisional Court upheld the Appeal Panels order for new
    hearings with respect to these six transactions as the Hearing Panels findings
    relating to the appellants mental state were based upon an erroneous and
    incomplete definition of mortgage fraud.

[38]

While
    we accept the reasonableness of the Appeal Panels articulation of the test for
    mortgage fraud, we are unable to agree that it was reasonable to order new
    hearings in the circumstances of this case.

[39]

For
    convenience, we repeat here the approach the Appeal Panel laid down, at para.
    41:

1.

Were material facts not disclosed to the lender?

2.

If so, should an inference of dishonesty be drawn with respect to the
    transaction?[A]n inference of dishonesty can be made based on circumstantial
    evidence, including red flags for fraud. In the absence of any other evidence,
    an inference should be drawn that the borrower was subjectively aware that the
    failure to disclose material facts put the economic expectations of the lender
    at risk, and accordingly was dishonest.

3.

If the transactions fraudulent, was the lawyer aware of, wilfully blind
    or reckless to the fraud?

4.

If the lawyer
    had not knowingly participated in mortgage fraud, had he nevertheless committed
    a less serious form of professional misconduct by failing to recognize or act
    on signs of possible fraud?

[40]

The
    Hearing Panel did not approach the case in this manner. We point out, however,
    that the Hearing Panel was aware that fair market value is no defence to
    mortgage fraud and that it is fraudulent to tell a lie to induce a loan,
    even a loan that is well-secured (para. 27, quoting
The Law Society of
    Upper Canada v. Durno
, 2013 ONSLAP 42, at para. 34, affd 2014 ONSC 2993
    (Div Ct)).

[41]

Nonetheless,
    as is clear from step three of the Appeal Panels test, to sustain a finding of
    participation in mortgage fraud, the Law Society must prove that the lawyer was
    aware of, wilfully blind or reckless to the fraud. At para. 25 of its
    reasons, the Appeal Panel distinguished participation in mortgage fraud from
    failure to live up to the standard of the reasonable practitioner:

A lawyer who is aware of, willfully blind or
    reckless as to fraud will be found to have knowingly participated in mortgage
    fraud. A lawyer who has failed to recognize or act on signs of possible
    fraud may be found to have committed a less serious form of professional
    misconduct, even absent knowledge, willful blindness or recklessness. For
    example, the licensees conduct may have fallen below the standards of a
    reasonable practitioner to a point that justifies its characterization as
    professional misconduct. [citation omitted]

[42]

None
    of the shortcomings in the legal test for mortgage fraud that the Hearing Panel
    applied undermine its finding that the appellant was not aware of, wilfully
    blind or reckless to any fraud. In each transaction, the appellant specifically
    investigated credits that could put the lenders economic interests at risk. He
    concluded that those credits were legitimate and would not be material to the
    lenders economic interests. The Hearing Panel accepted the appellants
    testimony that if he investigated a suspicious credit and determined that it
    was legitimate, did not affect the property value, and did not indicate an
    unjustified price escalation, he did not see the credit as being material to
    the lender: paras. 51, 77-78. The Hearing Panel noted that the Law Society had
    pointed out no warnings to the profession to be on the lookout for value fraud
    in the context of a sale for fair market value and a credit, and that the Law
    Societys expert witness admitted in cross-examination that if the purchasers
    lawyer determines on reasonable grounds that a credit is legitimate, he need
    not always disclose it to the bank. The Hearing Panel found as a fact that the
    appellant did not understand at the time that legitimate credits or gifts of
    equity could disrupt the mortgage ratio: paras. 53, 55, 57. While this belief
    was mistaken, it nonetheless indicates that the appellant was not aware,
    wilfully blind or reckless to the possibility that his failure to disclose the
    credits could put the lenders economic interests at risk.

[43]

On
    this issue, we agree with and adopt para. 81 of the reasons of the dissenting
    judge in the Divisional Court:

There was no suggestion that the appellant was
    himself engaged in a fraudulent endeavour, that is, that he was an active
    participant in some plan to mislead the lenders. Indeed, there does not appear
    to be any evidence that the parties to the underlying real estate transactions
    were engaged in any such fraudulent conduct. The question was whether the
    appellant had, in some fashion, participated, or assisted, the perpetration of
    a fraud by intentionally withholding information from his lender clients. The
    evidence is clear that the appellant was alert to this possibility. Indeed, it
    was the appellants concern that the parties might be involved in a fraudulent
    transaction, and his recognition of the red flags, that led him to make the
    inquiries that he did regarding the credits so as to satisfy himself that the
    parties were acting honestly.

[44]

The
    Hearing Panel carefully considered the evidence of the way the appellant had
    conducted these transactions. As the dissenting judge in the Divisional Court
    stated, at para. 85: It is evident from the factual findings of the Hearing
    Panel that the appellant did not believe that the undisclosed credits had any
    financial impact onthe position of his lender clients, nor did it put their
    financial interests at risk. In our view, in the face of that finding, it was
    unreasonable for the Appeal Panel to conclude that it would be possible to come
    to a different conclusion on a new hearing simply by viewing the appellants
    conduct through a different legal lens.

[45]

The
    majority of the Divisional Court relied on the principle from
R. v. Thé
roux
,
[1993] 2 S.C.R. 5,
that the
actus reus
of the
    offence of fraud must be determined on an objective basis and that fraud may
    exist even when the perpetrator of the fraud viewed his or her actions as
    morally correct. However, the crucial point is that the
mens rea
required for fraud in the circumstances of this case demanded proof that the
    appellant knew or was reckless or wilfully blind to conduct that would put his
    lender clients at financial risk. While it is no defence to fraud if the
    accused identifies a risk but merely hopes that it will not materialize, those
    are not the facts of this case. In
Théroux
, McLachlin J. found that the
    accused knew that he was placing his clients money at risk but merely believed
    that the risk he perceived would not materialize: at p. 27. In contrast, in
    this case the Hearing Panel found as a fact that the appellant sincerely did
    not believe that his actions created any risk to the lenders economic
    interests.

[46]

The
    Hearing Panel properly found that the appellant made an honest mistake and fell
    below the required professional standard. In reaching this conclusion the
    Hearing Panel considered whether the appellant suspected dishonesty and
    decided not to inquire, or was aware the transactions were dishonest but
    continued on despite the risk. We fail to see how it could be possible to find
    that this mistake could nonetheless amount to knowing, wilfully blind or
    reckless participation in fraud when the appellant honestly believed that his
    actions did not put the lenders economic interests at risk.

DISPOSITION

[47]

Accordingly,
    the appeal is allowed, the orders of the Divisional Court and the Appeal Panel
    are set aside and the order of the Hearing Panel is reinstated.

[48]

Costs
    to the appellant fixed at $7,500 in this court and $5,000 in the Divisional
    Court, inclusive of disbursements and taxes, as agreed by the parties.

Released: August 30, 2018

Robert
    J. Sharpe J.A.

R.G.
    Juriansz J.A.

L.B.
    Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Le Feuvre (Re), 2018 ONCA 712

DATE: 20180831

DOCKET: C64874

Watt, Huscroft and Fairburn JJ.A.

IN THE MATTER OF: Geoffrey Le Feuvre

AN APPEAL UNDER PART XX.1 OF THE
CODE

Joe Hanna, for the respondent

Anita Szigeti, for the appellant

Kathryn Hunt, for the Person in Charge of the Centre for
    Addiction and Mental Health

Heard: August 21, 2018

On appeal from the disposition of the Ontario Review
    Board, dated December 18, 2017.

REASONS FOR
    DECISION

[1]

Geoffrey Le Feuvre appeals from the December 18, 2017 disposition of the
    Ontario Review Board, pursuant to which he remains detained at the Centre for
    Addiction and Mental Health (CAMH).

[2]

Before the Board, the parties agreed that the appellant continues to
    pose a significant threat to the safety of the public. The only issue on the
    review concerned the appropriate disposition. The Board continued the
    appellants hybrid order, requiring that he be detained within the Secure
    Forensic Unit, with discretion to transfer him to the General Forensic Unit. If
    and when detained within the General Forensic Unit, the Board granted the
    Person in Charge the discretion to permit the appellant to live in the
    community in 24-hour a day supervised accommodation.

[3]

The appellant argued that the appeal should be allowed and that he
    should be granted an order detaining him in the General Forensic Unit of CAMH,
    with the discretionary privilege of residing in the community in supervised
    accommodation on the approval of the Person in Charge. In the alternative, he
    asked that the matter be remitted to the Board for a new hearing before a
    differently constituted panel of the Board. Despite the position taken by
    counsel for the appellant (not appeal counsel) before the Board  that a
    detention order was appropriate  the appellant also submitted to this court that
    an absolute or conditional discharge should be ordered. In the further
    alternative, the appellant requested that this court order CAMH to retain
    independent professional services to break what he described as a treatment
    impasse.

[4]

The Crown and the Person in Charge seek to uphold the Boards
    disposition, arguing that the Boards decision is reasonable and that there is
    a reasonable treatment plan in place.

[5]

For the reasons that follow, we have concluded that the Boards
    disposition is not reasonable. The appeal is allowed and the Board is directed
    to take action in accordance with this decision.

Background

[6]

The appellant is a 67-year-old man with a lengthy psychiatric history. Among
    other things, he has been diagnosed with bipolar disorder, polysubstance
    dependence, personality disorder (with marked antisocial, narcissistic, and
    psychopathic traits), and a differential diagnosis of schizoaffective disorder.
    He lacks insight into his mental health.

[7]

He has a number of complex and serious medical conditions, including
    Hepatitis C, reflux disease, and diabetes. He has a lengthy history of alcohol
    abuse, a history of marijuana and cocaine use, and has also engaged in glue-sniffing,
    the use of prescription opiates, and the consumption of methamphetamine.

[8]

The index offence occurred in 2007. The appellant was found not
    criminally responsible on account of mental disorder after having carried out a
    series of attacks on strangers and having caused damage to property.

[9]

The appellant was detained on the General Forensic Unit of CAMH for
    seven years, with privileges including indirectly supervised passes and the
    possibility of community living in approved accommodation. However, in 2015, he
    was transferred from the General Forensic Unit to the Secure Forensic Unit, in
    order to have access to more effective and suitable rehabilitative programs.

The Evidence

[10]

From
    the perspective of his treating psychiatrist, Dr. Liu, and the CAMH report, the
    difficulty in returning the appellant to the community is his inability to follow
    the rules. The appellants indirectly supervised passes have been suspended
    since August 2017 because of rule violations and an incident in which he went
    AWOL in order to obtain cigarettes, which are forbidden in CAMH buildings.

[11]

Dr.
    Liu gave evidence that a plan then under consideration was to transfer the
    appellant not to the General Forensic Unit but to the LGUD, a more secure and highly
    supportive general unit, while providing behavioural programs to address these
    concerns. The transfer was to occur within the following three months.

[12]

Under
    questioning from the Board, Dr. Liu said that transferring the appellant to a
    secure home in the community was premature in light of his constant rule-breaking,
    and it was necessary to see how he fared in the general unit before making such
    a transfer. The Board found that [t]he hope appears to be that the creation of
    a specialized behavioural program for Mr. Le Feuvre on the LGUD will pave the
    way for his re-entry into the community.

Discussion

[13]

We
    start from the position that the Board properly found that the appellant
    remains a significant threat to the safety of the public, a matter not in
    dispute at the hearing. The question is whether the Boards disposition is
    reasonable in light of all of the circumstances.

[14]

The
    Board notes that the efficacy of rehabilitative programs in the secure unit
    has been exhausted, and refers to an apparent impasse in Mr. Le Feuvres
    rehabilitation process. Following that finding, the Boards decision is replete
    with a sense of urgency. The Board notes:

a.

the need to
    transfer Mr. Le Feuvre into a General Forensic Unit
without delay

in order to
    facilitate his future entry into the community;

b.

that [i]t is
    abundantly clear that, if Mr. Le Feuvre
is ever to get out of Hospital and
    into the community
in supervised accommodation, the general cascading
    principle does not apply to him;

c.

that
[t]he time is now
for Dr. Liu and the
    treatment team to work toward Mr. Le Feuvres transfer to the LGUD in the
near future
, with a more immediate
    view to a resumption of his indirectly supervised passes;

d.

that [i]t may
    not be reasonably expected that Mr. Le Feuvre will be living in the community
    in the
next reporting year
,
    however, the Board expects the Hospital to
work
    toward that goal
by focusing on a transition from the LGUD into
    the community;

e.

that [t]here
    may be a maximum level of compliance which [Mr. Le Feuvre] can achieve within
    the Hospital setting and a
transition to a high security, structured
    facility in the community may be the best option
; and that

f.

active steps need to be taken
to look
    for the correct fit, and efforts made to facilitate Mr. Le Feuvres placement [in
    a high security, structured community facility] in a
timely fashion
.
    [Emphasis added.]

[15]

Plainly,
    the Board recognized the pressing need to take meaningful steps toward the
    ultimate goal of returning the appellant to the community. He is 67 years old
    and in poor health. The Board also noted that the appellants treatment
    suspension of his indirectly supervised passes for mere rule violations
    (typically involving the appellants smoking addiction) that did not rise to
    the level of a significant threat  was bordering on punitive.

[16]

Having
    identified a treatment impasse and recognized the urgency of the situation, it
    was unreasonable for the Board simply to continue the hybrid order and make
    suggestions about what CAMH should do  suggestions that do not appear to have
    been acted upon, at least in a timely way. Given the appellants advancing age
    and declining health, the length of his detention, and in particular the lack
    of progress that has been made in improving his situation, the Boards
suggestions
to CAMH are inadequate.

[17]

Accordingly,
    we allow the appeal to this extent: the Person in Charge is directed to obtain
    an independent assessment of the appellant and to have a report prepared, in
    consultation with the appellants current treatment team, reviewing the
    appellants history and establishing a plan to advance the appellant toward the
    ultimate goal of reintegration into the community. The report should be
    prepared within three months of the date of this decision.

[18]

The
    matter is referred back to a differently constituted panel of the Board for
    rehearing as soon as possible after the report has been prepared and, in any
    event, not later than the date of the appellants next annual review.

David
    Watt J.A.

Grant
    Huscroft J.A.

Fairburn
    J.A


COURT OF APPEAL FOR ONTARIO

CITATION:

Lemon v. Lemon, 2018 ONCA 684

DATE: 20180821

DOCKET: C64113

Feldman, Hourigan and Brown JJ.A.

BETWEEN

Dawn Charlotte Lemon and Sean Lemon

Applicants (Respondents)

and

Julie Anne Lemon

Respondent (Appellant)

Ms. Alix Nenniger, for the appellant

Dawn Charlotte Lemon and Sean Lemon, acting in person

Heard: July 05, 2018

On appeal from the order of Justice Kirk W. Munroe of the
    Ontario Superior Court of Justice, dated July 5, 2017.

REASONS FOR DECISION

Overview

[1]

The appellant is the mother of two children, D.L. (age 13) and E.L. (age
    10). She appeals from the order granting sole custody to the childrens aunt
    and uncle, the respondents, with limited access to her.

[2]

We allow the appeal in part and alter the access order to grant
    increased access to the mother.

Background Facts

[3]

The appellant is the biological mother of D.L. and E.L. She was in her
    early to mid-twenties when they were born. At that time she was living with her
    mother in Detroit. Between 2005 and 2010, the appellant raised her children in
    her mothers home while working and studying part-time. D.L.s and E.L.s
    fathers have had no role in their upbringing.

[4]

In April 2010, the appellants mother evicted her and the children.  They
    initially moved in with her brother and sister-in-law, the respondents, in
    Windsor, but in September the appellant moved out on her own, leaving the
    children with the respondents. She rented an apartment in Windsor and visited
    her children regularly. Their agreement was that the children would remain in
    the respondents care until the appellant was stable in her career and able to
    obtain housing for the three of them.

[5]

The appellant continued to work and study part-time in Windsor until
    2013, when she moved to Toronto to continue her studies and work part-time in
    retail there. She also moved in with her same-sex partner, S.L.

[6]

The custody dispute between the parties began in 2013, when the
    respondents consulted a lawyer to obtain custody of the children. When the
    appellant learned of this development, she drove to the childrens school in
    Windsor, picked them up, and drove them back to Toronto to live with her.

[7]

The custody dispute was made all the more difficult because of stark
    religious differences between the appellant and the respondents; while the
    appellant had been raised as a Jehovahs Witness, she left the faith when she
    was 19 and became quite critical of the religion. The respondents are Jehovahs
    Witnesses who disapprove of the appellants same-sex relationship and secular
    lifestyle.

[8]

The respondents brought an application for custody of the children. In
    2013, Pomerance J. ordered interim custody to the respondents, with access in
    favour of the appellant. Pursuant to court requests, the Ontario Childrens
    Lawyer (OCL) became involved and an initial report and an update were
    prepared by the same clinician:    the first report recommended granting
    custody to the respondents with access in favour of the appellant; the update recommended
    that the appellant be granted custody of the children with access to the
    respondents.

[9]

On July 5, 2017, after an eight day trial, Munroe J. found that it was
    in the best interests of the children to remain in the sole custody of the
    respondents, with access in favour of the appellant. The appellant appeals from
    both the custody and access orders on the basis that the trial judge
    misapprehended the evidence, failed to consider and apply the maximum contact
    principle, and failed to consider and apply a preference in favour of
    biological parents over non-parents in custody disputes.

Findings of the Trial Judge

[10]

The
    trial judge applied the best interests test mandated by s.24 of the
Childrens
    Law Reform Act
, R.S.O. 1990, c. C.12 (
CLRA
)
    to decide custody and access.

[11]

Section
    24 provides that the merits of custody or access shall be determined on the
    basis of the best interests of the child, in accordance with subsections (2),
    (3) and (4).  Subsections (3) and (4) require the court to consider past
    conduct that is relevant to the persons ability to act as a parent as well as
    any violence and abuse.

[12]

Subsection
    (2) requires the court to consider all the childs needs and circumstances,
    including,

(a) the love, affection and emotional ties between the child
    and,

(i) each person, including a parent or grandparent, entitled
    to or claiming custody of or access to the child;

(ii) other members of the childs family who reside with the
    child, and

(iii) persons involved in the childs care and upbringing;

(b) the childs views and preferences, if they can reasonably
    be ascertained;

(c) the length of time the child has lived in a stable home
    environment;

(d) the ability and willingness of each person applying for
    custody of the child to provide the child with guidance and education, the
    necessaries of life and any special needs of the child;

(e) the plan proposed by each person applying for custody of or
    access to the child for the childs care and upbringing;

(f) the permanence and stability of the family unit with which
    it is proposed that the child will live;

(g) the ability of each person applying for custody of or
    access to the child to act as a parent; and

(h) any familial relationship between the child and each person
    who is a party to the application.

[13]

The
    trial judge concluded that the children are loved deeply by the appellant and
    the respondents, who love them deeply in return; that the children had
    expressed a clear wish to remain in the care of the respondents; that the
    childrens time with the respondents (seven years at that time) had been
    stable, loving, and a positive home environment; that the respondents were able
    and willing to provide guidance, education, and the necessities of life to the
    children, but that the appellants ability to do so was questionable.

[14]

His
    conclusion on ability and willingness to provide for the children was based in
    part on the fact that the appellant had quit a job, gone on social assistance,
    and moved further away from the children in the year prior to the application
    for custody.
[1]
He referred to the appellants relationship with S. as the one big positive
    and said that he was impressed by S. when she gave evidence.  At the same
    time, he expressed uncertainty as to whether the relationship would last and
    cited the fact that the parties were not married, did not have joint finances,
    and had separate leases.

[15]

He
    found that the respondents plan for the childrens care and upbringing was
    stable, but that the appellants plan presented too many variables to conclude
    that it would offer stability for the children; that while the respondents
    provide a permanent and stable family unit, he could not find the same for the
    appellants proposed family unit.

[16]

He
    also found that the respondents were markedly better able to act as parents
    than was the appellant since her ability to parent remained to be seen.  He
    referred there to the appellants desire to be the cool aunt to the
    respondents older sons by, among other things, smoking marijuana with them. In
    considering familial relationships under s.24(2)(h), he only noted that the
    appellant is the biological mother and the respondents are the biological uncle
    and his wife.

[17]

Based
    on all the evidence, the trial judge concluded that it was in the childrens
    best interests to remain in the respondents sole custody.

[18]

He
    declined to follow the recommendation in the second OCL report on the basis
    that the authors conclusions about stability were founded on the appellants
    word, which he found unreliable.  He also noted that the appellants stability
    circumstances  job, residence, social assistance  changed after the report
    was written and that the author did not communicate with the childrens
    teachers and was unaware that the appellants conduct during visits did create
    at least a risk of emotional harm to the children.

[19]

As
    for access, the trial judge found that the current distance between homes made
    frequent access very difficult, expensive, time consuming and not in the best
    interests of the children.

[20]

He
    also made permanent the prior order of King J., dated October 23, 2015, which
    directed the appellant not to include the children in any activity or
    festivity that is contrary to the religious beliefs [of the respondents].  In
    his view, that order calmed the waters of the initial anxiousness, both by the
    children and by [the respondents] over [the appellants] conduct during
    access.

Issues

[21]

The
    appellant raises the following issues:

1.

Whether the trial judge erred by finding that the appellants
    relationship was not stable, and that the appellant was not stable by
    extension;

2.

Whether the trial judge erred by failing to consider the maximum contact
    principle;

3.

Whether the trial judge erred by failing to appreciate that parents have
    a favoured status when competing with non-parents for custody of their child;

4.

Whether the trial judge misapprehended the relevant
status quo
;
    and

5.

Whether the trial judge erred by treating the appellants secular
    beliefs as less significant at law than the respondents faith.

Analysis

Misapprehension of Evidence

[22]

The
    appellant asserts that the trial judges conclusion that the appellants
    same-sex relationship was unstable was clearly wrong and not supported by the
    evidence.  She asserts this on the basis that the appellant has been cohabiting
    with her partner in a committed relationship for over three years; the
    appellants partner testified that she was committed to the relationship and
    willing to financially support the appellant and her children; the appellants
    partner assisted the appellant to rent living space to accommodate the
    childrens anticipated return; and that since many common law relationships are
    characterized by a lack of marriage and a separation of finances, it does not
    logically follow that those are indicia of instability.

[23]

We
    agree with the appellant that it would have been wrong to conclude on the
    evidence that her same-sex relationship was unstable.  The trial judge himself
    stated that As I see it, the one big positive is her relationship with S.  I
    was impressed by S. when she gave evidence before me.  While he mentioned his
    concerns about the stability of the appellants family unit under s. 24(2)(f),
    read as a whole, the focus of the reasons appears to be on indicia of instability
    in the appellants own life and its potential effect on the children.

[24]

In
    considering ability and willingness to provide as required by s.24(2)(d), the
    trial judge first commented at para. 49 on the instability of the appellants
    life more generally.  He stated that [h]er life is an example of instability
    with constant changing of education, jobs and residences.  In the past year, [the
    appellant] has quit one job, gone on social assistance, moved to a residence
    significantly farther away from [the respondents], and reconnected with
    employment in a different city.

[25]

These
    findings about the appellants employment and finances were not unavailable on
    the record.  And they were in contrast to his findings about the respondents demonstrated
    ability to provide admirably for the last seven years.

[26]

The
    trial judge referred to s. 24(2) of the CLRA and addressed each of the factors
    prescribed by that section when considering the best interests of the children.
    As one factor among others in the best interests analysis, the trial judge was
    entitled to consider the appellants employment and financial circumstances as
    potential sources of future instability.

[27]

The
    best interests analysis is intensely fact-specific and deference is owed
    accordingly.  The trial judge heard evidence from all parties, from the OCL
    clinician who prepared both reports, and from two of the childrens teachers.
    He heard this evidence over an eight-day trial.

[28]

Without
    necessarily agreeing with the trial judges assessment on the stability issue,
    given all the other factors taken into account in the best interests analysis,
    we would not interfere with the custody order on this basis.

Status Quo

[29]

The
    appellant also asserts that given the agreed temporary nature of the
    arrangement, the trial judge erred in law in misconstruing the status quo.

[30]

We
    do not agree.

[31]

The
    status quo was nowhere considered explicitly by the trial judge.  In our view,
    he only appropriately considered the existing circumstances as they implicated
    the childrens current and future best interests.  In this, he did not err.

Preference for Biological Parents & Maximum Contact
    Principle

[32]

In
    deciding custody, the appellant asserts that the trial judge ought first to
    have considered a biological parents favoured status.  She cites the Supreme
    Court of Canadas decision in
C.(G.)v. V.-F.(T.), [1987] 2 S.C.R. 244
,
which in interpreting
    the Quebec Code of the time, stated at para. 65 that, [a] third person who
    wishes to obtain custody of a child must rebut the presumption to the effect
    that the parent is in a better position to ensure his childs well-being.

[33]

She
    also asserts that it was an error not to consider and apply the maximum contact
    principle articulated in s.16(10) of the
Divorce Act
, R.S.C., 1985, c.
    3 (2
nd
Supp.) (
DA
).

[34]

Section
    16(10) of the
DA
requires the
    court in making a custody or access order to give effect to the principle that
    a child of the marriage should have as much contact with each spouse as is
    consistent with the best interests of the child and, for that purpose, shall
    take into consideration the willingness of the person for whom custody is
    sought to facilitate such contact. While the maximum contact principle is
    specifically articulated in the
DA
,
it has been held to apply to custody disputes between parents under the
CLRA
as well:
A.C.W. v. T.M.P
,
    2014 ONSC 6275 (Ont. Div. Ct.) at para. 30.

[35]

Our
    responses to both arguments are the same.  The
CLRA

s best interests analysis already contemplates
    the importance of the parental bond and maximum contact through the best
    interests lens. That is, s. 24(2) of the
CLRA
explicitly requires the court to consider familial relationships  s. 24(2)(h)
     as well as love, affection and emotional ties  s. 24(2)(a) -  in making
    custody and access orders that are in the childrens best interests.

[36]

Accordingly,
    in our view, the trial judge was correct to apply the best interests framework
    under s. 24(2) to decide the questions of custody and access.

The Trial Judges Application of the Best Interests Test

[37]

While
    the trial judge applied the correct test, the question remains, whether he
    erred in his application of that test to the facts as he found them.

[38]

In
    our view, in considering familial relationships, love, affection and emotional
    ties, the trial judge overlooked the evidence of the strong indicators in this
    case that time with all three parties  the mother, aunt and uncle  should be
    maximized.

[39]

In
    considering love, affection and emotional ties, the trial judge stated:

It is very clear from the evidence that the children are loved
    deeply by both parties and the children love both parties.  The children have a
    significant bond with [the respondents] who have raised them for the last seven
    years.  They call them mommy and daddy.  It is also true that the children love
    their biological mother, J.  In addition, they are beginning to form a
    relationship with Js partner, S.

[40]

However,
    when assessing the childrens views and preferences, he erred by concluding only
    that the effect of the two OCL reports made it clear that the children wish
    to remain in the care of [the respondents].  Equally clear was the childrens
    desire to maximize their time with their mother.

[41]

Further,
    he gave insufficient consideration to s. 24(2)(h), which requires the court to
    consider any familial relationship between the child and each person who is a
    party to the application, by limiting his analysis to the two sentences: [J.]
    is the biological mother of [D.] and [E.].  [S.] is the biological uncle of the
    children and [D.] is [S.]s wife.

[42]

In
    our view, the trial judge misapprehended the evidence of the childrens views
    and preferences in simply stating that they wished to remain with the
    respondents.  He also erred in doing no more than state the facts of biological
    relationship, by misapprehending clear statements from the children consistent
    with a desire to be with their mother as much as possible as well.

[43]

When
    asked for three wishes, D. said that she wished that her mother could reside
    with her, E., and her aunt and uncle,  and that she wished they could either
    live in the same house, as they had before, or in the same city.  She also said
    that she sometimes has a feeling that she should be visiting her aunt and
    uncle and living with her mother.  She reported nightmares about being
    separated from her mother.  E.s wish was to have more visits with his
    mother.  He also reported kinda missing the other party while with the other
    when transitioning from his moms to his aunt and uncles place.  He said he
    enjoyed residing with his aunt and uncle but would like to spend more time with
    his mother.

[44]

The
    reports also stress that the children clearly love their mom, aunt and uncle.
    Their mother has always been part of their life and they have always known her
    as their mother.

[45]

On
    the whole, what is most clear from these reports is that the children would
    like to spend as much time as possible with all the people they love: their
    mom, aunt and uncle.

Remedy

[46]

Based
    on these errors, what is the most appropriate remedy? We would defer to the
    trial judges decision on custody.  Given the distance between the parties
    both geographically and philosophically  sole custody is practical.  The
    decision to award that sole custody to the aunt and uncle was available to the
    trial judge on this record.

[47]

We
    do, however, find reversible error in the trial judges insufficient analysis
    of the childrens views and preferences, familial relationships, emotional
    ties, love and affection in the context of the amount of access awarded to the
    mother.  In our view, a complete consideration of these factors is incompatible
    with the limited access awarded to her.

[48]

While
    we appreciate that the geographical distance between the parties  and the
    childrens stated dislike of the long commute between Windsor and Toronto  speaks
    against more regularly rotating access, the issue can be addressed by  increasing
    the length of time spent with the mother and her partner to the maximum
    available given school year constraints. If the appellant and her partners employment
    circumstances were to change, allowing them to move closer to Windsor, access
    time could be further increased accordingly.

Religious Restriction on Access

[49]

The
    mother also submits that paragraph 2f. of the order below, which prohibits her
    from including her children in any activity or festivity contrary to the aunt
    and uncles Jehovahs Witness religious beliefs, is both unfeasible and
    contrary to
Charter
values.

[50]

We
    agree.

[51]

Paragraph
    2f. of the Order reads as follows:

The respondent mother, Julie Anne Lemon, shall not include the
    children in any activity or festivity that is contrary to the religious beliefs
    of the applicants; solely non-controversial secular holidays, such as Victoria
    Day and Canada Day, are not deemed contrary to the religious beliefs.

[52]

The
    way this Order is worded goes far beyond a prohibition on celebrating holidays
     such as birthdays, Easter and Christmas  that are contrary to Jehovahs
    Witness beliefs.

[53]

The
    mother is living in a committed same-sex relationship.  This in itself is an
    activity contrary to the religious beliefs of the [respondents], who
    communicate their disapproval to the children. Both the appellants sexual orientation
    and her secular beliefs are entitled to the same respect as are the
    respondents beliefs. See
R. v. Big M Drug Mart Ltd.
,
[1985] 1
    S.C.R. 295 at para. 123.

[54]

The
    Order, as worded, therefore cannot stand.

[55]

In
    considering whether to include the children in activities and festivities, as
    in all things, the childrens best interests should govern.  Both parties
    should let the childrens own views and preferences on this matter guide them
    and should respect the childrens choices.

[56]

This
    restriction on the mothers access will be deleted.

Order

[57]

The
    custody appeal is dismissed.

[58]

The
    access appeal is allowed.

[59]

Paragraphs
    2b. and 2c. of the Order shall be deleted and replaced with the following:

b.

Eight weeks
    during the summer months of July and August.  The weeks are to be agreed upon
    by the parties which said agreement shall not be unreasonably withheld;

c.

During the entire school break at Christmas and March school break, the
    exact periods to be agreed upon by the parties which said agreement shall not
    be unreasonably withheld.

[60]

Paragraph
    2f. shall be deleted.

[61]

If
    the above access orders conflict significantly with the childrens activities,
    the parties are to agree on an appropriate modification which said agreement
    shall not be unreasonably withheld.

Costs

[62]

As
    success was divided, there will be no order as to costs.

K.
    Feldman J.A.

C.W.
    Hourigan J.A.

David
    Brown J.A.

[1]

The appellant and her partner S. had moved from Toronto to a
    family-sized house in Oshawa that was available through S.s brother.


COURT OF APPEAL FOR ONTARIO

CITATION: Ontario Medical Association v. Ontario (Information and Privacy Commissioner), 2018 ONCA 673

DATE: 20180803

DOCKET: C64567, C64568 & C64569

Hoy A.C.J.O., Rouleau and Benotto JJ.A.

BETWEEN

C64567

Ontario Medical Association

Applicant (Appellant)

and

Information and Privacy Commissioner for Ontario,
    The Honourable Eric Hoskins, Minister of Health and Long-Term Care, The
    Ministry of Health
    and Long-term Care and Theresa Boyle

Respondents (Respondents)

AND BETWEEN

C64568

Several Physicians Affected Directly By the Order

Applicants (Appellants)

and

Information and Privacy Commissioner for Ontario, The Honourable Eric
    Hoskins, Minister of Health and Long-Term Care, The Ministry of Health and Long-term Care and Theresa Boyle

Respondents (Respondents)

AND BETWEEN

C64569

Affected Third Party Doctors

Applicants (Appellants)

and

Theresa Boyle (Requestor), Information and Privacy Commissioner of
    Ontario, The Honourable Eric Hoskins, Minister of Health and Long-Term Care,
    (Respondent Head), Ministry of Health and Long-term Care (Institution)

Respondents
    (Respondents)

Joseph Colangelo and
    Jennifer Gold, for the Ontario Medical Association

Chris Dockrill, for Several
    Physicians Affected Directly By the Order

Linda Galessiere, for
    Affected Third Party Doctors

Paul Schabas, Iris Fischer
    and Skye Sepp, for Theresa Boyle

Heather Burnett, for the Minister
    of Health and Long-Term Care

William Challis, for the Information
    and Privacy Commission of Ontario

Heard: June 12, 2018

On appeal from the
    orders of the Divisional Court (Justices Frances P. Kiteley, Ian V.B. Nordheimer
    and David L. Edwards), dated June 30, 2017, with reasons reported at 2017 ONSC
    4090, affirming an order of the Information and Privacy Commissioner of
    Ontario, dated June 1, 2016, with reasons reported at [2016] O.I.P.C. No. 99.

REASONS FOR
    DECISION

Overview

[1]

A reporter for the Toronto Star requested access to information from the
    Ministry of Health and Long-Term Care (the Ministry) pursuant to the
Freedom
    of Information and Protection of Privacy Act
,
R.S.O. 1990, c. F.31 (the Act). She sought access to the
    names of the top 100 physician billers to the Ontario Health Insurance Program
    (OHIP) for the 2008 to 2012 fiscal years and a breakdown of the physicians
    medical specialties and the dollar amounts billed.

[2]

An adjudicator assigned by the Information and Privacy Commissioner (the
    IPCO and the Adjudicator) directed the Ministry to disclose the physicians
    names, the amounts billed and the physicians fields of specialization, if
    applicable. The Divisional Court upheld the Adjudicators order on judicial
    review.

[3]

The Ontario Medical Association (OMA) and two groups of physicians now
    appeal. They argue that a physicians name is personal information and
    thereby exempt from disclosure by s. 21(1) of the Act.

[4]

Section 21(1) states, in part:
A head shall refuse to
    disclose
personal information
to any person other than the individual to whom the information relates
    (emphasis added). Section 21(1)(f) of the Act permits disclosure of personal
    information
if the disclosure does not
    constitute an unjustified invasion of personal privacy.

[5]

Section 2(1) of the Act defines personal information as follows:

2

(1) In this Act,

personal information means recorded information
    about an identifiable individual, including,

(b) information relating to the education or
    the medical, psychiatric, psychological, criminal or employment history of the
    individual or information relating to financial transactions in which the
    individual has been involved,

(h) the individuals name where it appears
    with other personal information relating to the individual or where the disclosure
    of the name would reveal other personal information about the individual;

(3) Personal
    information does not include the name, title, contact information or
    designation of an individual that identifies the individual in a business,
    professional or official capacity.

Decisions Below

[6]

The Adjudicator determined that the requested information did not
    constitute personal information within the meaning of s. 2(1) and, therefore,
    the s. 21(1) exemption from disclosure did not apply.

[7]

In analyzing whether the records at issue constituted personal
    information, the Adjudicator applied the two-step test set out in
Order
    PO-2225; Ontario (Rental Housing Tribunal)
, [2004] O.I.P.C. No. 8:

(1) In what context do the names of the individuals appear?

(2) Is there something about the
    particular information at issue that, if disclosed, would reveal something of a
    personal nature about the individual?

[8]

At the first step, the Adjudicator determined that the context was the
    provision of medical services. He concluded that this was a professional or
    business activity because submitting bills to OHIP, and receiving payment,
    occurred in a context removed from the personal sphere.

[9]

At the second step, the Adjudicator concluded that the information did
    not reveal something of a personal nature about the physicians. He emphasized
    that the payments received were in relation to a business or profession and the
    amounts billed and received do not reflect actual personal income.

[10]

The
    Divisional Court determined that the Adjudicators decision was reasonable and
    dismissed the application for judicial review.

Analysis

[11]

On
    appeal to this court, the appellants agree that the standard of review is
    reasonableness and that it was appropriate for the Adjudicator to apply the
    two-step test from
Ontario (Rental Housing Tribunal)
.

[12]

They
    submit, as they did before the Divisional Court, that the Adjudicators application
    of the two-step test was unreasonable because: (i) he departed from
    long-standing IPCO decisions concluding that physicians names are personal
    information and therefore did not apply
stare decisis
;
(ii) he failed to consider a report the
    Honourable Peter deC. Cory prepared for the Minister of Health and Long-Term
    Care in 2005 (the Cory Report), which resulted in amendments to the
Health
    Insurance Act
, R.S.O. 1990, c. H.6; (iii) he failed to consider
Charter
values; and (iv) the presumption of prejudice in s. 21(3) of the Act makes
    it clear that disclosure of a name in conjunction with an individuals finances
    is prohibited.

[13]

We
    do not accept these submissions.

[14]

We
    agree with the Divisional Courts conclusion that the Adjudicator was not bound
    by the principle of
stare decisis.
As Iacobucci J. explained in
Weber
    v. Ontario Hydro,
[1995] 2 S.C.R. 929, at para. 14:

Courts must decide cases according
    to the law and are bound by
stare decisis
. By contrast, tribunals are
    not so constrained. When acting within their jurisdiction, they may solve the
    conflict before them in the way judged to be most appropriate.

[15]

We
    also agree with the Divisional Court that the Adjudicator did not ignore the
    prior IPCO decisions. He made specific reference to these earlier decisions and
    observed that there was a split in the IPCOs jurisprudence. His decision
    addressed this dichotomy.

[16]

We
    reject the appellants argument that this courts decision in
Ontario

(Attorney
    General) v. Pascoe
(2002
),
    166 O.A.C. 88 (C.A.) stands for the proposition that a physicians identity
    cannot be disclosed. In that case, the IPCO was not satisfied that information
    as to the top ten items billed by the highest paid general/family practitioner
    in Toronto was personal information. The Divisional Court and this court
    agreed that the IPCOs decision was reasonable.

[17]

The
    appellants submit it is implicit in the courts decisions that had the
    physicians names been requested, this would have constituted personal
    information. We do not agree. The particular information at issue in
Pascoe
was different from the information sought in this case. The courts analyses
    are therefore inapplicable.

[18]

The
    appellants raised the Cory Report for the first time on appeal to the
    Divisional Court. It was not provided to the Adjudicator, nor argued before
    him. We agree with the Divisional Court that it is therefore difficult to
    criticize the Adjudicator for not referring to or relying on it. In any event,
    the Cory Report dealt with audits of physicians billings. That issue is not raised
    in this appeal, nor does it assist in this appeals determination.

[19]

The
    appellants further rely on the Adjudicators failure to consider
Charter
values.
    They argue that the protection of privacy is a fundamental value and the disclosure
    of physicians names would be inconsistent with this privacy value.

[20]

As
    the Supreme Court made clear in
Bell ExpressVu Limited Partnership v. Rex
,
    2002 SCC 42, [2002] 2 S.C.R. 559, at para. 62, when interpreting a statute,
Charter
values are only considered in circumstances of genuine ambiguity. Far from
    being ambiguous, the purposes of the Act are clearly set out in s. 1:

1. The purposes of this Act are,

(a) to provide a right of access to information under the
    control of institutions in accordance with the principles that,

(i) information should be available to the public,

(ii) necessary exemptions from the right of access
    should be limited and specific, and

(iii) decisions on the disclosure of government
    information should be reviewed independently of government; and

(b) to protect the privacy of
    individuals with respect to personal information about themselves held by
    institutions and to provide individuals with a right of access to that
    information.

[21]

The
    balancing of access to information against the protection of individuals privacy
    with respect to personal information is therefore already built into the Act.

[22]

Lastly,
    the appellants submit that the Adjudicator erred by failing to implement the
    presumption in s. 21(3)(f) that information about a persons finances is
    private. That section provides:

Presumed invasion of privacy

(3) A disclosure of personal information is presumed to
    constitute an unjustified invasion of personal privacy where the personal
    information,

(f) describes an individuals finances, income, assets,
    liabilities, net worth, bank balances, financial history or activities, or
    creditworthiness.

[23]

Essentially, the appellants argue that, while s.
    21(3) only applies to personal information as defined in s. 2(1), it informs
    the interpretation of personal information and the Adjudicator erred by
    failing to have regard to it. They submit that the billing information sought
    describes a physicians finances or income and, because s. 21(3)(f) provides
    that disclosure of such information is presumptively an unjustified invasion of
    personal privacy, the only reasonable interpretation is that the billing
    information is personal information as defined in s. 2(1). They say that it
    is of no moment that the billing information reflects the gross revenue of the
    physicians practice, and not the physicians actual, personal income.

[24]

We do not agree.

[25]

The Adjudicator applied the second step of the
    test from
Ontario (Rental Housing Tribunal)

which
    involves looking to the nature of the information to determine if it would
    reveal something of a personal nature about the individual. The information
    sought was the affected physicians gross revenue before allowable business
    expenses such as office, personnel, lab equipment, facility and hospital
    expenses. The evidence before the Adjudicator indicated, however, that, in the
    case of these 100 top billing physicians, those expenses were variable and
    considerable. As a result, applying the second part of the
Ontario
    (Rental Housing Tribunal)

test, the Adjudicator concluded
    that disclosure of this billing information would not reveal something of a
    personal nature about the physician and was therefore not personal information.

[26]

In our view, where, as here, an individuals
    gross professional or business income is not a reliable indicator of the
    individuals actual personal finances or income, it is reasonable to conclude
    not only that the billing information is not personal information as per s.
    2(1), but also that it does not describe an individuals finances [or]
    income", for the purpose of s. 21(3)(f). As a result, we are not persuaded
    that s. 21(3)(f) demonstrates that the Adjudicator erred in concluding that the
    billing information was not personal information.

Conclusion

[27]

For
    these reasons, the appeal is dismissed with costs of $25,000.00 all-inclusive
    to the respondents in accordance with the agreement between the parties.

Alexandra
    Hoy J.A.

Paul
    Rouleau J.A.

M.L. Benotto J.A.