COURT OF APPEAL FOR ONTARIO

CITATION: The Law
    Society of Upper Canada v. Abbott, 2017 ONCA 525

DATE: 20170623

DOCKET: C62169

Sharpe, Lauwers and
    Miller JJ.A.

BETWEEN

The Law Society of Upper
    Canada

Applicant (Appellant)

and

John Paul Abbott

Respondent
    (Respondent)

Sean Dewart and Tim Gleason, for the appellant

James Morton and Michelle Iezzi, for the respondent

Heard: December 22, 2016

On appeal from the decision of the Divisional Court (Justices
    Harriet E. Sachs, Julie A. Thorburn and Brian W. Abrams), dated February 10,
    2016, with reasons reported at 2016 ONSC 641, affirming the order of the Law
    Society Tribunal Appeal Division, dated September 14, 2015, with reasons
    reported at 2015 ONLSTA 25.

Lauwers J.A.:

[1]

The Appeal Division of the Law Society Tribunal found John Paul Abbott
    to have knowingly participated in multiple instances of mortgage fraud, but reversed
    the decision of the Hearing Division to revoke his licence to practise law. In
    my view this unprecedented result was not justified on the facts or on the law.
    I would allow the appeal from the decision of the Divisional Court dismissing the
    appeal from the Appeal Division, set aside the decision of the Appeal Division
    of the Law Society Tribunal on penalty and reinstate the penalty of licence
    revocation ordered by the Hearing Division.

A.

OVERVIEW

[2]

Mr. Abbott was called to the bar in 1989. When the suspect transactions
    took place in 2006-2007, he was a sole practitioner in real estate and acted on
    about 500 transactions annually.

[3]

In February 2007, a lender client advised Mr. Abbott that it suspected
    mortgage fraud in one of its transactions. The client complained to the Law
    Society on February 26, 2007, an investigation was authorized in March, and in
    April, the Law Society investigator required production of Mr. Abbotts
    clients files and client trust ledgers. Over the ensuing years other
    investigators asked for more information. Mr. Abbott was at all times helpful
    and responsive.

[4]

The investigation report was issued on November 6, 2012, more than five and
    a half years after the investigation was authorized. The disciplinary Notice of
    Application was issued on April 9, 2013, and the hearing took place before the
    Hearing Division over four days in August 2014.

[5]

The Hearing Division of the Law Society Tribunal found Mr. Abbott had engaged
    in professional misconduct by knowingly participating in or assisting in mortgage
    fraud in seven transactions over a four-month period in late 2006 and early
    2007; by failing to disclose material facts to his lender clients; and by
    failing to perform legal services to the standard of a competent lawyer. The
    financial losses were estimated to be about $625,000. The Hearing Division
    ordered that Mr. Abbotts licence to practise law be revoked, but gave him the
    opportunity to seek a stay pending appeal. The merits reasons are reported at
    2014 ONLSTH 194, and the penalty reasons are reported at 2015 ONLSTH 12.

[6]

The Hearing Division exhaustively reviewed the suspect transactions and
    the evidence, and summarized the elements of Mr. Abbotts misconduct at paras.
    194-97 of the merits decision, which set out the factual context:

In these transactions, and assuming that Mr. Abbott actually
    made the inquiries that he said he did, these inquiries were manifestly
    insufficient to address the risk of fraud. We conclude that having a concern
    about the risk of fraud and making an inquiry that does not genuinely address
    the concern is no different than having the concern and electing to make no
    inquiry at all. We conclude that Mr. Abbott knowingly assisted in these
    fraudulent transactions whether by failing to make inquiry or by making an
    inquiry that did not actually address the risk of fraud.

This conclusion is reinforced by Mr. Abbott's reaction to
    transactions in which third parties received payments. There were four of these
    transactions. Third party payments are said to be red flags in the Law Society
    Gazette and Law Society Magazine. The expert opinion states at pages 16 and 17
    that inquiries should be made about such payments. While Mr. Abbott did so, his
    inquiry was limited to determining whether the vendor authorized the third
    party payment. As Mr. Abbott's counsel properly conceded in argument, such an
    inquiry does nothing to address the risk of fraud. An inquiry that does not
    address the risk that it is intended to address is practically no inquiry at
    all.

We do not conclude that Mr. Abbott had actual knowledge of
    fraud. We do find that he was reckless and wilfully blind. We conclude, on a
    balance of probabilities, that Mr. Abbott knew of the risk that his conduct
    could bring about fraud by completing fraudulent transactions yet persisted in
    completing the transactions despite that risk. We conclude that Mr. Abbott became
    aware that an inquiry was required that would address the risk of fraud yet he
    made no useful inquiry. He made a different inquiry preferring to remain
    ignorant of what actually mattered.

Standing back and reviewing the pattern of the transactions as
    a whole, we conclude on the balance of probabilities that, by at least
    transaction #3 (which is one of the most problematic transactions), Mr. Abbott
    actually suspected deposit fraud yet chose not to make meaningful inquiries.
    With respect to the two cases of repair credits, we find that Mr. Abbott must
    have been suspicious had he reviewed the file as he said he did yet he made no
    inquiries. We find knowing assistance on the basis of recklessness and wilful
    blindness.

[7]

Mr. Abbott appealed under s. 49.32 of the
Law Society Act
,
    R.S.O. 1990, c. L.8. The Appeal Division unanimously agreed that Mr. Abbott had
    engaged in professional misconduct. Despite accepting the Hearing Divisions
    factual findings, on a three-to-two split, the majority of the Appeal Division
    modified the penalty by substituting a two-year suspension for the licence
    revocation ordered by the Hearing Division, largely in response to what it
    found to be the Law Societys inordinate and unacceptable delay in
    investigating and prosecuting Mr. Abbott. There was undoubtedly a lengthy
    delay, as the chronology of events set out in Appendix A shows. The
    Divisional Court dismissed the Law Societys appeal of the Appeal Divisions
    decision.

B.

The Issues

[8]

This appeal raises two general issues for determination:

1.

Did the Divisional Court err in dismissing the Law Societys appeal of
    the Appeal Divisions order?

2.

Did the Appeal Division err in allowing Mr. Abbotts appeal from the
    penalty of licence revocation imposed by the Hearing Division?

[9]

I will address these issues in reverse order.

C.

Did the Appeal Division err in allowing Mr. Abbotts appeal from the
    penalty of licence revocation imposed by the Hearing Division?

[10]

I begin by describing the governing principles, then turn to the Appeal
    Divisions decision, and conclude by discussing the application of the
    principles to the facts.

(1)

The Governing Principles

[11]

There are two sets of governing principles engaged in this issue. The
    first relates to the standard of review and the second to penalty.

(a)

The Standard of Review

[12]

The Appeal Division is required to defer to the penalty decisions of the
    Hearing Division, just as the court does with respect to the decisions of
    specialized professional disciplinary bodies:
Igbinosun v. Law Society of
    Upper Canada
(2008), 239 O.A.C. 178 (Div. Ct.), affd 2009 ONCA 484, 96
    O.R. (3d) 138, at para. 9;
Groia v. The Law Society of Upper Canada
,
    2016 ONCA 471, 131 O.R. (3d) 1, leave to appeal allowed, [2016] S.C.C.A. No.
    310 (February 2, 2017), at paras. 54-56.

[13]

There are three reasons for judicial deference. The first is that the
    Hearing Division is an expert tribunal. The second is that, unlike the Appeal
    Division, the Hearing Division hears live evidence over a period of time, in
    this case over four days, and has a decidedly more comprehensive understanding
    of the evidence. The third reason for deference is that the determination of
    the appropriate penalty for a lawyers misconduct is a question of mixed fact
    and law, which does not lend itself to the extrication of a pure question of
    law, as the Supreme Court noted in
Law Society of New Brunswick v. Ryan
,
    2003 SCC 20, [2003] 1 S.C.R. 247, at para. 41.

[14]

To paraphrase the jurisprudence, the reasonableness standard requires
    the Appeal Division to pay respectful attention to the Hearing Divisions
    reasons and to consider them as a whole, not as a series of discrete and
    unrelated elements each of which must pass the test of reasonableness. The
    Appeal Division must consider whether the Hearing Divisions outcome falls
    within the range of possible, acceptable and defensible outcomes that are open
    on the evidence. It is not the Appeal Divisions role to seek out what it
    considers to be the single best answer to the issue resolved by the Hearing
    Division. Nor should it seize on an error that does not affect the decision as
    a whole as the pretext for reaching a different result. See
Groia
;
Ryan
;
Dunsmuir v. New Brunswick
, 2008 SCC 9, [2008] 1 S.C.R. 190; and
Newfoundland
    and Labrador Nurses Union v. Newfoundland and Labrador (Treasury Board)
,
    2011 SCC 62, [2011] 3 S.C.R. 708.

[15]

In sum, the Appeal Division must find the penalty decision of the
    Hearing Division to be unreasonable before interfering with it.

(b)

Penalty

[16]

This appeal raises three issues regarding the appropriate penalty to be
    imposed on Mr. Abbott: the presumptive penalty of licence revocation, the
    existence of exceptional mitigating circumstances, and especially the effect of
    investigative and procedural delay on the penalty.

(i)

The presumptive penalty of licence revocation

[17]

The governing principles relating to the penalty to be imposed on a
    lawyer found to have knowingly participated in mortgage fraud were set out in
Law
    Society of Upper Canada v. Mucha
, 2008 ONLSAP 5, a decision of what was
    then called the Appeal Panel.
Mucha
is the converse of this case. After
    finding Mr. Mucha had knowingly participated in mortgage fraud in connection
    with sixteen real estate transactions, the Hearing Panel imposed a one-year
    suspension followed by a one-year practice restriction. The Appeal Panel
    allowed the Law Societys appeal and imposed the penalty of licence revocation.

[18]

The
Mucha
Appeal Panel noted, at para. 21: [W]e know of no
    case in which a penalty other than termination of practice has been granted
    once the Society has proven knowing participation in a mortgage fraud. The
    Panel recognized licence revocation as the presumptive penalty for this form of
    misconduct.

[19]

In
Mucha
,
the
    Appeal Panel instructed itself that the applicable standard of review was
    reasonableness and found, at para. 19, that the Hearing Panels disposition
    was unreasonable, on the basis, echoing
Ryan
, that: There is no line
    of reasoning that can reasonably support this result, and the disposition is
    outside of the range of reasonable dispositions available in the
    circumstances.

[20]

The
Mucha
Appeal Panel quoted Sir Thomas Bingham M.R. in
Bolton
    v. Law Society
, [1993] EWCA Civ 32, [1994] 2 All E.R. 486, who said, at
    para. 14:

Any solicitor who is shown to have discharged his professional
    duties with anything less than complete integrity, probity and trustworthiness
    must expect severe sanctions to be imposed upon him by the Solicitors
    Disciplinary Tribunal. Lapses from the required high standard may, of course,
    take different forms and be of varying degrees. The most serious involves proven
    dishonesty, whether or not leading to criminal proceedings and criminal
    penalties
.
In such
    cases the tribunal has almost invariably, no matter how strong the mitigation
    advanced for the solicitor, ordered that he be struck off the Roll of
    Solicitors
.
[Emphasis in
Mucha
.]

[21]

Licence revocation as the presumptive penalty for knowing participation
    in a mortgage fraud was considered and effectively adopted by the Divisional
    Court in
Bishop v. Law Society of Upper Canada
, 2014 ONSC 5057, 325
    O.A.C. 160 (Div. Ct.). In that case the member had participated in fourteen
    instances of mortgage fraud. The majority of the Hearing Panel imposed a
    penalty of revocation, which the Appeal Panel upheld, and the members appeal
    to the Divisional Court was dismissed. Justice Nordheimer stated, at para. 30:
    there is nothing
per se
objectionable to a profession setting out
    presumptive penalties for breaches of different types of professional
    obligations.

[22]

There is, as yet, no precedent for a lower penalty than licence
    revocation for a lawyer who has knowingly participated in mortgage fraud.

(ii)

Exceptional mitigating circumstances

[23]

The
Mucha
Appeal Panel stated, at para. 22: only exceptional
    circumstances of mitigation may justify a departure from the ordinary
    disposition of revocation of licence. The Panel took the position, at para.
    23, that presumptive revocation was compelled by the penalty factors,
    particularly the overriding public interest, so that only extraordinary or
    exceptional circumstances warrant a departure from that disposition.

[24]

The
Mucha
Appeal Panel expressly limited what it would consider
    to constitute such extraordinary or exceptional circumstances, at para. 28:

As noted earlier, we do not suggest that there can never be
    exceptional circumstances justifying departure from the ordinary disposition of
    revocation where the licensee has knowingly participated in mortgage fraud. By
    way of illustration only, there may be compelling psychiatric or psychological
    evidence that, among other things, credibly indicates not only that the
    misconduct was out of character and unlikely to recur,
but explains why it occurred
.
[Emphasis
    in
Mucha
.]

[25]

Arguably, in
Bishop
the Divisional Court allowed for mitigating
    factors beyond those personal factors that would explain the lawyers
    misconduct, at para. 31:

The other observation is that the mitigating factors that will
    amount to exceptional circumstances in any given case are not restricted to
    only certain types or forms. Medical reasons or financial desperation or
    situations of duress serve as examples of the type of mitigating factors that
    may amount to exceptional circumstances but those situations are not exhaustive
    of such factors. That said,
it remains the case that any
    such factors will normally have to be ones that would rise to the level where
    it would be obvious to other members of the profession, and to the public, that
    the underlying circumstances of the individual clearly obviated the need to
    provide reassurance to them of the integrity of the profession
. I would
    add, on that point, that factors that provide an explanation for the conduct of
    the lawyer will generally be ones that would most likely reach that requisite
    level of mitigation
but they are not the only ones that
    may achieve that result
. [Emphasis added.]

[26]

The majority of the Appeal Division in this case stated fairly, in para.
    41 of the decision, that
Bishop
widened the concept of exceptional circumstances
    beyond
Mucha
.

(iii)

The effect of investigative delay on penalty

[27]

The effect of investigative or procedural delay in administrative
    proceedings was addressed by the Supreme Court in
Blencoe v. British
    Columbia (Human Rights Commission)
, 2000 SCC 44, [2000] 2 S.C.R. 307. Mr.
    Blencoe resigned his position as a minister in the Government of British
    Columbia after accusations of sexual harassment. In the summer of 1995, two
    complaints of discriminatory conduct by sexual harassment against him were
    filed with the British Columbia Council of Human Rights, later known as the
    British Columbia Human Rights Commission. The incidents were alleged to have
    occurred between March 1993 and March 1995. The hearings were scheduled before
    the British Columbia Human Rights Tribunal in March 1998, over 30 months after
    the complaints were filed.

[28]

Mr. Blencoe suffered severe depression. He began judicial review
    proceedings in November 1997 to have the complaints stayed, arguing the
    Tribunal had lost jurisdiction because of the unreasonable delay in processing
    the complaints that caused serious prejudice to him and his family.

[29]

Speaking for the five-person majority in
Blencoe
,
Bastarache J. set out some
basic
    principles. While he agreed state-caused delay could give rise to an
    administrative law remedy, at para. 101, he cautioned that delay, without
    more, will not warrant a stay of proceedings as an abuse of process at common
    law, because it would not be appropriate to impose a judicially created
    limitation period. He added: In the administrative law context, there must be
    proof of significant prejudice which results from an unacceptable delay.

[30]

Blencoe
identified two grounds on which the prejudice arising
    from delay might affect administrative proceedings. The first, under the rubric
    of hearing fairness, relates to the impairment of: a party's ability to answer
    the complaint against him or her, because, for example, memories have faded,
    essential witnesses have died or are unavailable, or evidence has been lost,
    then administrative delay may be invoked to impugn the validity of the
    administrative proceedings and provide a remedy (at para. 102).

[31]

The second ground is that an unacceptable delay could amount to an abuse
    of process even where the fairness of the hearing has not been compromised
    (at para. 115). Justice Bastarache expressed considerable caution about this
    ground, at para. 115:

Where inordinate delay has directly caused significant
    psychological harm to a person, or attached a stigma to a person's reputation,
    such that the human rights system would be brought into disrepute, such
    prejudice may be sufficient to constitute an abuse of process. It must however
    be emphasized that
few lengthy delays will meet this
    threshold
. I caution that
in cases where there is
    no prejudice to hearing fairness, the delay must be clearly unacceptable and
    have directly caused a significant prejudice to amount to an abuse of process.
    It must be a delay that would, in the circumstances of the case, bring the
    human rights system into disrepute
. [Emphasis added.]

[32]

The meaning of abuse of process was discussed in para. 118 of
Blencoe
.
    The Supreme Court adverted with approval to the principles of the criminal
    doctrine, which permit a stay where: compelling an accused to stand trial
    would violate those fundamental principles of justice which underlie the
    community's sense of fair play and decency", or where the proceedings are
    "oppressive or vexatious". Justice Bastarache added, at para. 120:

"[A]buse of process" has been characterized in the
    jurisprudence as a process tainted to such a degree that it amounts to one of
the clearest of cases
. In my opinion, this would apply
    equally to abuse of process in administrative proceedings.
For there to be abuse of process, the proceedings must be
    "unfair to the point that they are contrary to the interests of
    justice"
. "Cases of this nature will be
extremely
    rare
" In the administrative context, there may be abuse of process
    where conduct is equally oppressive. [Emphasis added.]

[33]

Further, for there to be an abuse of process, there must be a causal
    connection between the delay and the prejudice: the delay must have caused
    actual prejudice of such magnitude that the public's sense of decency and
    fairness is affected (at para. 133).

[34]

The court is required to balance the competing interests in assessing
    whether a delay amounts to an abuse of process, as noted at para. 120:

In order to find an abuse of process, the court must be
    satisfied that, "the damage to the public interest in the fairness of the
    administrative process should the proceeding go ahead would exceed the harm to
    the public interest in the enforcement of the legislation if the proceedings
    were halted.

[35]

Bastarache J. recognized, at para. 117: There is, however, no support
    for the notion that a stay is the only remedy available in administrative law
    proceedings. However, he found that the personal prejudice to Mr. Blencoe
    coupled with the delay of 24 months did not amount to an abuse of process and
    that accordingly no remedy was warranted.

[36]

Justice LeBel, speaking for the minority of four judges, agreed with the
    majority that a stay was not warranted but would have found an abuse of process
    and granted a modest remedy for the delay, namely an order expediting
    proceedings and awarding costs to Mr. Blencoe.

(c)

A Summary of the Governing Principles

[37]

To summarize, the relevant governing principles are the following:

·

the
    Appeal Division must find the penalty imposed by the Hearing Division on a
    lawyer to be unreasonable before it may substitute its own penalty;

·

in
    determining the penalty for knowing participation in mortgage fraud, priority
    is to be given to the public interest in maintaining the integrity of the
    profession;

·

the
    presumptive penalty is licence revocation;

·

that
    penalty can be withheld only in extraordinary or exceptional circumstances;

·

such
    circumstances will usually be personal to the member, and explain why the
    misconduct occurred and why there is no fear of repetition; and

·

where
    delay is claimed to constitute such an extraordinary circumstance, the effect
    of delay must be examined via the two branches of
Blencoe
:

·

first, hearing fairness - whether the delay impairs the defences
    ability to make full answer and defence given the quality of the evidence; and

·

second, whether the delay gives rise to an abuse of process.

(2)

Appeal Division: The Majority Decision

[38]

The Appeal Division was divided in its reasoning and in the result. The
    Chair, Raj Anand, wrote the majoritys reasons, and was joined by Roger
    Yachetti and Constance Backhouse. They set aside the penalty of licence
    revocation imposed by the Hearing Division on Mr. Abbot and substituted a two-year
    suspension. The dissent was written by Christopher Bredt, who was joined by lay
    bencher Marion Boyd. They would have dismissed Mr. Abbotts appeal and upheld
    the revocation of his licence to practise law.

(a)

The Standard of Review

[39]

The majority found that on questions of fact, credibility, and mixed
    fact and law, the standard of review is reasonableness, but with respect to
    questions of law, the standard of review is correctness (at para. 7).

(b)

Penalty

[40]

The majority upheld the Hearing Divisions findings on Mr. Abbotts
    professional misconduct without reservation (at para. 11). The majority made
    several pertinent observations. First, and significantly, it pointed out that Mr.
    Abbott did not argue that the fairness of the hearing below was compromised by
    the passage of time, thus setting aside the first branch of
Blencoe
. Second,
    the majority specifically upheld as reasonable the Hearing Panels finding
    that, on the second branch of
Blencoe
: Mr. Abbott had not
    demonstrated significant psychological harm or stigma to his reputation, caused
    by the length of the investigation. They continued, at para. 15:

The panel's ruling about the impact on the Lawyer and his
    reputation was largely factual. Based on the Lawyer's affidavit, and the report
    filed by his social worker, together with the examinations of both witnesses,
    the Hearing Division at paras. 32 to 63 carefully analyzed the Appellant's
    claim that he had suffered psychological and economic prejudice due to the
    delay. The panel acknowledged at para. 60 that "the length of the
    investigation was stressful and difficult for Mr. Abbott." Its factual
    finding that no significant prejudice was proven is reasonable. In this
    context, its finding of mixed fact and law, characterizing the damage to the
    public interest should the hearing proceed as falling short of the harm to the
    public interest in professional regulation if the proceeding were halted, was
    also reasonable and should not be disturbed on appeal.

[41]

Third, the majority upheld the Hearing Divisions refusal to dismiss Mr.
    Abbots application for a stay on account of delay, concluding that its refusal
    was reasonable (at para. 16).

(i)

The presumptive penalty of licence revocation

[42]

The majority accepted that the presumptive penalty in the case is the
    revocation of Mr. Abbotts licence to practise law (at para. 31). It rejected
    Mr. Abbotts request to revisit whether licence revocation should be the
    presumptive penalty.

(ii)

Exceptional mitigating circumstances

[43]

The majority accepted, at paras. 41-42, that the Divisional Courts
    decision in
Bishop
widened the concept of exceptional circumstances,
    but only in situations where the underlying circumstances of the individual case
    provided assurance to the public that the integrity of the profession will be
    maintained.

[44]

Mr. Abbott advanced twelve mitigating circumstances. The Hearing Division
    rejected them as individually and cumulatively insufficient to mitigate the
    presumptive penalty of licence revocation even though it did not question the
    truth of many of them. The majority noted, at para.46:

While this panel may not have reached precisely the same
    conclusions with respect to each of the listed mitigation items, that is not the
    test on appeal. Most of the Hearing Division's conclusions addressed questions
    of fact or mixed fact and law, and were reasonable.

[45]

The majority of the Appeal Division went on to decide that the
    investigative and procedural delay was capable of constituting an exceptional
    circumstance that could mitigate the presumptive penalty of licence revocation.

(iii)

The effect of investigative delay on penalty

[46]

Despite its earlier conclusion that the Hearing Divisions rejection of
    most of the mitigating circumstances was reasonable, the majority said at
    para. 54: we are unfortunately unable to say whether the full range of
    mitigating circumstances was given proper effect. The majority focussed on
    what it considered to be the Law Societys inordinate investigative and procedural
    delay, expressed at para. 47:

Our focus, however, is on the panel's consideration of the
    overriding issue of delay, and the impact of its reasoning on the ultimate
    conclusion that Mr. Abbott's mitigating circumstances fell short of exceptional
    circumstances that would relieve against revocation.

[47]

The majority found, at para. 17, that the delay in this case was indeed
    inordinate, and added, at para. 29, that the delay up to and somewhat beyond
    the issuance of the Notice of Application was inordinate and unacceptable, and
    exceeded what the community would regard as fair in the context of this case.

(iv)

The Appeal Divisions Penalty

[48]

The majority took the position that the Hearing Division had made
    several errors of law in assessing the effect of the Law Societys
    investigative and procedural delay on Mr. Abbotts penalty. I discuss these alleged
    errors of law in more detail below. In view of these errors, the majority
    decided, at para. 56: the Appeal Division is entitled to reach its own
    conclusion after directing itself to the proper factors and weighing them.

[49]

The majority substituted a two-year suspension for the licence
    revocation imposed by the Hearing Division on Mr. Abbott, stating
, at para. 90, that the mitigating circumstances,
    coupled with the delay,
constituted exceptional circumstances that
    merited the mitigation of the presumptive penalty of revocation of the Lawyer's
    licence. It picked out in particular, at para. 84, several mitigating
    circumstances that spoke in his favour, which it took from para. 22 of the
    Hearing Divisions penalty decision. I will review these below. Accordingly,
    the majority found, at para. 103, that, contrary to the Hearing Divisions
    conclusion: this is a sufficiently extreme and rare case that it justifies the
    substitution of a suspension in place of the presumptive penalty. This
    followed the majoritys conclusion, at para. 101, again contrary to the
    findings of the Hearing Division, that: Overall, the circumstances do not
    point to a likelihood of a reoccurrence of professional misconduct. The core
    of the majoritys penalty reasoning is found in para. 104:

Considering all of the mitigating factors together, and after
    anxious and careful review, we have determined that the Lawyer has demonstrated
    "exceptional circumstances" that, in the formulation adopted in
Mucha
,
    are "more exceptional" than those that would justify an order to
    surrender his licence. A suspension will, for the reasons we have put forward,
    satisfy the onerous standard set by the Divisional Court in
Bishop
:
    the underlying facts concerning Mr. Abbott, in tandem with the institutional,
    stakeholder and personal interests concerning excessive delay, require the
    imposition of a remedy that will provide reassurance to the public of the
    integrity of the profession and its processes.

[50]

The majority added, at para. 105:

At the same time, the imperatives of specific deterrence, general
    deterrence, and the maintenance of public confidence in the integrity and the
    regulation of the profession obviously point to the need for a lengthy
    suspension, in recognition of the nature and seriousness of the misconduct that
    occurred in this case, and the objectives that a long line of this Tribunal's
    case law has attempted to vindicate in cases of fraud and misappropriation.

(3)

The Principles Applied

[51]

In this section of the reasons I begin with the standard of review and
    then address the errors the majority made in its decision.

(a)

The Standard of Review

[52]

As I have noted, the Hearing Division imposed the penalty of revocation
    of Mr. Abbotts licence to practise law in view of his knowing participation in
    mortgage fraud. There are no decisions supporting a lesser penalty. On the face
    of things, the Hearing Divisions imposition of the presumptive penalty fell
    within the range of possible, acceptable and defensible outcomes that were open
    on the evidence. In order to justify its rejection of that outcome, the Appeal
    Division was required to identify an overriding error of principle made by the
    Hearing Division that renders its penalty decision unreasonable, in the sense
    given metaphorically by Stratas J.A. in
South Yukon Forest Corporation v.
    Canada
, 2012 FCA 165, 431 N.R. 286, leave to appeal refd, [2012] S.C.C.A.
    No. 349, at para. 46:

"Overriding" means an error that goes to the very
    core of the outcome of the case. [I]t is not enough to pull at leaves and
    branches and leave the tree standing. The entire tree must fall.

[53]

The majority did not identify any such error of principle.

[54]

In my view, the majority failed to: defer to the Hearing Divisions
    penalty decision, as it was obliged to do; pay respectful attention to the
    Hearing Divisions penalty reasons and consider them as a whole; and consider
    whether the Hearing Divisions penalty fell within the range of possible,
    acceptable and defensible outcomes that were open on the evidence.

(b)

The Majoritys Errors

[55]

The majoritys reasons identify several issues on which it disagreed
    with the Hearing Division, to which I now turn.

(i)

Does the Law Society Tribunal have a role in policing prosecutions?

[56]

This is the core of the difference between the majority and the Hearing
    Division. The majority of the Appeal Division considered it to be part of the
    Law Society Tribunals function to curb inordinate delay (at para. 78).
    Accordingly, the majority noted, at para. 84:

[H]arm to the administration of self-regulation, concern about
    repetition of delays, values of fairness, and efficient and effective service
    to the public and indeed to complainants are all prejudicial to the public
    interest more widely conceived. Delay in investigation and prosecution may be
    as harmful to public confidence in the legal professions ability to regulate
    itself as Mr. Abbotts continued right to practise law.

[57]

The dissent rejected the majoritys approach, noting at para. 139:

The majority's rationale for reducing the penalty from
    revocation to a suspension in this case, is that it is necessary in the public
    interest to send a message to the Law Society that this type of delay is
    unacceptable. In our view, this rationale is not consistent with the need to
    assure the public of the integrity of the profession.

[58]

Under the
Law Society Act
, questions of policy and resource
    allocation belong to Convocation, not to the Law Society Tribunal of which the
    Hearing and the Appeal Divisions form parts. Both Divisions are adjudicative
    bodies in the disciplinary scheme, with only limited policing functions.

[59]

The majority criticized the Hearing Division for failing to make
    findings of the significance of the delay for the intersecting public and
    private interests that were relevant to its penalty determination (at para.
    88). The majority added that if the Hearing Division had accorded significant
    weight to the extraordinary delay that took place here  we do not believe the
    panel's conclusion on delay as a mitigating factor and the overall
    circumstances as exceptional would have been the same (at para. 89).

[60]

With respect, the majority did not read the Hearing Divisions reasons
    fairly. The Hearing Division was fully alive to the actual delay and knew the
    reasons for it, as it explained in the merits decision at paras. 17-20:

The Investigation Report in this matter is dated November 6,
    2012. The Notice of Application was issued on April 9, 2013. There was a period
    of slightly over six years between the commencement of the investigation and
    the commencement of this Application. This hearing proceeded over seven years after
    the commencement of the investigation. As Mr. Dewart said in apparent
    understatement, this is not ideal.

The explanation for this delay has little if anything to do
    with this particular case. Rather, mortgage fraud investigations are among the
    most complex and time-consuming investigations and are extremely demanding upon
    resources.

The Law Society has faced a growing inventory of mortgage fraud
    complaints with the volume of investigations becoming much greater by 2005.
    Because of this volume, the Law Society triaged investigations based on
    perceived urgency/risk in order to best apply available resources.

A situation such as this raises difficult issues of resource
    allocation. Some may think that the Law Society should have diverted sufficient
    resources from other regulatory activities to address the volume of mortgage
    fraud investigations. Others may think that Law Society fees should have been
    raised to generate further resources. Irrespective of the right answer, if
    there is one, to this resource problem, there was a lengthy delay in this case.

[61]

It is serious business for an adjudicative body to disturb, on grounds
    of investigative and prosecutorial delay, what would otherwise be the ordinary
    operation of the disciplinary scheme. This is because two public interests are
    in tension, as the Supreme Court noted in
Blencoe
at para. 120: the
    public interest in the fairness of the administrative process should the
    proceeding go ahead, on the one hand, and, on the other hand, the harm to the
    public interest in the enforcement of the legislation if the proceedings were
    halted. In my view, the role of the Law Society Tribunal in policing the
    prosecutorial function with respect to delay is defined by and limited to the
    authority of
Blencoe
.

[62]

The Hearing Division adverted precisely to the balance between two aspects
    of the public interest in para. 63 of the merits decision in determining that
    the prosecution would not be stayed:

However, assuming inordinate delay which we need not decide, we
    find that the damage to the public interest in the fairness of this
    administrative process should this hearing proceed does not exceed the harm to
    the public interest in the professional regulation pursuant to the
Law
    Society Act
if this proceeding were halted. To the contrary, the public
    interest demands in the context before us that there be a determination of
    whether Mr. Abbott has engaged in professional misconduct in the serious
    circumstances alleged despite the fact of lengthy delay and the prejudice
    resulting from that delay.

[63]

The Hearing Division carefully assessed the tension between the public
    interest in fairness and in enforcement, and its assessment was entirely
    reasonable. The Appeal Division erred in setting that assessment aside.

[64]

The majority also faulted the Hearing Division for giving priority to
    general deterrence over specific deterrence in setting the penalty, noting at
    para. 83: the Hearing Division gave precedence to general deterrence and
    maintenance of public confidence in the legal profession as the penalty
    objectives in this case, and minimized the importance of specific deterrence.
    The majority found this to be wrong, and required both objectives to be
    accommodated. The majority added, at para. 84: we do not agree that reducing
    a penalty because of prejudice is most relevant where specific deterrence is
    the principal penalty goal.

[65]

The Hearing Division recognized the need to take into account both
    specific and general deterrence and addressed the issue directly at paras. 30 and
    32 of its reasons on penalty:

We accept the submission that delay causing prejudice can be a
    mitigating factor in many cases. However, we do not accept that prejudice
    arising from delay in this case is a proper basis to turn revocation into a
    lengthy suspension.

The second reason is that the principal basis for the
    presumptive revocation penalty is general deterrence and maintenance of public
    confidence in the legal profession. On the other hand, reducing a penalty
    because of prejudice arising from delay is most relevant where specific
    deterrence is the principal penalty goal. Where a panel is concerned about the
    prospect of a lawyer engaging again in professional misconduct, a panel can
    reasonably conclude that the lawyer will reflect on all of the impacts of the
    prior misconduct and want to avoid all such impact. To the extent that a
    penalty in a discipline proceeding can properly be seen as punishment, it is
    fair to reflect prejudice suffered from investigative delay in the penalty
    ultimately ordered. While there might be cases where prejudice was sufficiently
    significant that general deterrence and maintenance of public confidence would
    be sufficiently served by a lengthy suspension rather than revocation, this is
    far from being such a case.

[66]

The Hearing Divisions emphasis was entirely consistent with precedent.
    As Nordheimer J. observed, at para. 28 of
Bishop
:

I agree with the Appeal Panel that the penalty imposed by the
    Hearing Panel was a reasonable one. It fulfills the two purposes set out in
Bolton
[preventing the lawyer from repeating the misconduct
    and maintaining the reputation of the profession]
. I acknowledge
    that there does not appear to be any real concern in this case that the
    appellant would repeat the conduct but that fact does not detract from the
    pressing need to send a consistent message that engaging in fraudulent conduct
    by a lawyer is a matter that will not be tolerated because of its impact on the
    profession as a whole. As was observed by Sir Thomas Bingham M.R. in
Bolton
,
    at p. 519:

The reputation of the profession is more important than the
    fortunes of any individual member. Membership of a profession brings many
    benefits, but that is a part of the price.

Although the majority of the Appeal Division quoted this
    passage from
Bolton
at para. 58, it does not appear to have given it any
    further thought.

[67]

In my view, Hearing Divisions consideration of general and specific deterrence
    in a case where the presumptive penalty is licence revocation was entirely reasonable.

(ii)

Did the Hearing Division assess the delay evidence properly?

[68]

The majority asserted the Hearing Division misdirected itself as to
    the effect of delay on penalty in light of the widened formulation of
    mitigating circumstances from
Bishop
(at paras. 48, 53, and 55).

[69]

This is not a fair reading of the Hearing Divisions penalty decision.
    The Hearing Division instructed itself correctly, at para. 21, that it would be
    wrong to adopt a restrictive reading of
Mucha
, in light of
Bishop
.
    After noting the holding in
Bishop
, it listed the mitigating
    circumstances advanced by Mr. Abbott at para. 22. The first raised the delay
    issue and its effect on the penalty squarely:

There was substantial delay in the investigation as was
    discussed in our prior reasons. While we did not order a stay of proceedings as
    asked, it is now submitted that the delay in this case and the attendant
    prejudice suffered by Mr. Abbott justifies a lesser penalty than revocation;

[70]

In the succeeding paragraphs the Hearing Division analyzed each of the
    grounds. It addressed delay at paras. 30-31:

Finally, we address the issue of delay.
We
    accept the submission that delay causing prejudice can be a mitigating factor
    in many cases. However, we do not accept that prejudice arising from delay in
    this case is a proper basis to turn revocation into a lengthy suspension.

The first reason is that we are not persuaded that much of the
    prejudice described by Mr. Abbott in his earlier evidence and during the
    penalty phase arises from investigative delay as opposed to from the issuance
    of the Notice of Application in the spring of 2013. The evidence of prejudice
    arising from investigative delay is quite limited as discussed in our decision
    on finding at paras. 32 to 60. While there was no doubt some prejudice, we do
    not find there to have been substantial prejudice arising from investigative
    delay. The evidence of prejudice was vague and general. Mr. Abbott sought no
    professional assistance during the investigation. There is no evidence from
    anyone about Mr. Abbott and his circumstances during the investigation. No
    medical or other expert evidence was adduced during the penalty phase of the
    hearing despite our earlier findings. To be clear, we continue to be concerned
    about the lengthy investigative delay in this case. However, our assessment
    here relates to the issue of prejudice arising from that delay.

(The second reason given by the Hearing Division
    emphasized general deterrence and was excerpted earlier in para. 65.)

[71]

The Appeal Division drew several mitigating circumstances from para. 22
    of the Hearing Divisions penalty decision, which included the following:

·

Prior
    to the real estate transactions of 2006 and 2007 that are in issue in this
    case, Mr. Abbott's conduct was unimpeached.

·

There
    were a limited number of problematic transactions over a few months.

·

Since
    these real estate transactions, Mr. Abbott's conduct is also unimpeached and
    his dealings with the Law Society in this matter have been entirely
    appropriate.

·

Mr.
    Abbott testified willingly and honestly.

·

Mr.
    Abbott has a reputation for honesty and integrity in support of which a number
    of letters were filed from colleagues and clients.

[72]

With respect, these mitigating circumstances are quite generic, and in
    the context of an active prosecution, one would expect the member to be on his
    best behaviour or risk making things worse. As for the supportive reference
    letters, it is well to keep in mind the observations of Sir Thomas Bingham M.R.
    in
Bolton
, at para. 16:

It often happens that a solicitor appearing before the Tribunal
    can adduce a wealth of glowing tributes from his professional brethren. He can
    often show that for him and his family the consequences of striking off or
    suspension would be little short of tragic. Often he will say, convincingly,
    that he has learned his lesson and will not offend again. On applying for
    restoration after striking off, all these points may be made, and the former
    solicitor may also be able to point to real efforts made to re-establish
    himself and redeem his reputation. All these matters are relevant and should be
    considered.
But none of them touches the essential issue,
    which is the need to maintain among members of the public a well-founded
    confidence that any solicitor whom they instruct will be a person of
    unquestionable integrity, probity and trustworthiness
. [Emphasis added.]

[73]

The Appeal Division asserted that the Hearing Division resiled from
Bishop
in stating that the evidence did not provide a credible explanation for Mr.
    Abbotts misconduct. The majority stated, at para. 55, that the locus of the
    Hearing Divisions error was in paras. 23 and 35 of the penalty decision, which
    I excerpt for convenience:

In our view, this all [referring to the claimed mitigating
    circumstances] falls far short of circumstances justifying anything other than
    revocation. Clearly, there is no "compelling psychiatric or psychological
    evidence that, among other things, credibly indicates not only that the
    misconduct was out of character and unlikely to recur, but explains why it
    occurred." There is no evidence that explains why the misconduct occurred
    or that it is unlikely to recur.

Ultimately, we conclude that revocation is the appropriate
    penalty given the gravity of the misconduct that we have found. We find no
    exceptional circumstances that would credibly explain the misconduct let alone
    credibly indicate that it is out of character and unlikely to recur.

[74]

At bottom, this review shows the majority simply disagreed with the
    Hearing Divisions reasoning about the effect of delay as an exceptional circumstance
    warranting the mitigation of Mr. Abbots penalty. In my view, the Hearing
    Division considered the right questions and gave cogent answers. The majority
    disagreed with the weight the Hearing Division gave to the prejudice to Mr.
    Abbott and the sufficiency of the evidence that he would not repeat the
    misconduct. However, in the absence of a palpable and overriding error of fact,
    a misapprehension, or an error of law, the issue of the weight of the evidence
    is not within the purview of an appellate body and does not constitute an error
    of law entitling it to intervene. The Hearing Division made no such errors
    here.

(iii)

What prejudice must be shown to warrant a reduction in the penalty?

[75]

The Hearing Division and the majority disagreed about the prejudice the
    affected member must show in order to warrant a reduction in penalty under the
    principles of
Blencoe
. The Hearing Division followed
Blencoe
s
    requirement that exceptional circumstances must be shown, while the majority
    backed away from such a high standard, going so far as to confine
Blencoe
to cases where a stay of proceedings is at issue (at para. 81).

[76]

The majority asserted the Hearing Division misapprehended
Blencoe
and erred in applying the more rigorous
Blencoe
test for a stay to its
    consideration of whether the delay could reduce Mr. Abbotts penalty (at para.
    82). The majoritys view was that while investigative and procedural delay
    coupled with the mitigating circumstances might not be sufficient to justify
a
    stay of proceedings
under
Blencoe
, the same delay coupled with
    the same mitigating circumstances could nonetheless warrant
a reduction in
    Mr. Abbotts penalty
(at para. 80). It asserted that beyond the context of
    a stay application, the applicable prejudice test was much less onerous (at para.
    81).

[77]

The sense conveyed by the majoritys reasons is that once a tribunal is
    out from under the onerous burden relating to a stay of proceedings, then it is
    free to indulge para. 117 of
Blencoe
, where Bastarache J. noted that
    other remedies might be available. The majority relies especially on the
    minority reasons in
Blencoe
, which it explains at para. 66. The
    linchpin to the majoritys approach is found in para. 73: There is no basis,
    in our respectful view, to carve out revocation cases from the application of
    the impact of institutional delay.

[78]

I do not agree. In my view it is appropriate to carve out revocation
    cases. The key point made in all of the mortgage fraud lawyer discipline cases
    is that dishonest misconduct presumptively results in revocation. It is in a
    different register, or of a different quality, than other lawyerly misconduct.
    The cases question whether, in the public interest, the profession can accept
    the continued licensing of a person who has shown himself to be willing to
    participate, for personal gain, in stealing someone elses money; does the
    member have the moral character to continue to be in a position of trust? To
    repeat the words of Sir Thomas Bingham M.R. in
Bolton
, at para. 16,
    the character question gets at the need to maintain among members of the
    public a well-founded confidence that any solicitor whom they instruct will be
    a person of unquestionable integrity, probity and trustworthiness.

[79]

The same sense of gravity reflected in the presumptive revocation
    penalty for dishonesty must be brought to bear on the assessment of the
    prejudice suffered by the lawyer as a result of the delay. The prejudice must
    be very serious.

[80]

In my view, the majority did not pay sufficient attention to the
    statement of Bastarache J. at para. 122 of
Blencoe
: the determination
    of whether a delay is inordinate is not based on the length of the delay alone,
    but on contextual factors, including the nature of the various rights at stake
    in the proceedings, in the attempt to determine whether the community's sense
    of fairness would be offended by the delay. In the case of mortgage fraud, the
    significant contextual factor is the presumptive penalty and the need to
    reassure the public of the integrity of the legal profession.

[81]

The majority referred to several cases which, in my view, are
    unpersuasive authority for the proposition that a penalty short of revocation
    was called for.

[82]

In
Wachtler v. College of Physicians and Surgeons of the Province of
    Alberta
, 2009 ABCA 130, 448 A.R. 317,the Council of the College found Dr.
    Wachtler guilty of unbecoming conduct concerning his drug-prescribing
    practices. The Council increased his suspension by two months from the penalty recommended
    by the Investigating Committee and required him to pay costs. In light of the 35-month
    delay, the Court of Appeal of Alberta set aside the two-month increase in the
    suspension and the costs award. The penalty imposed by the Council was not the
    termination of his licence to practise medicine, but what the College suggested
    was a rehabilitative rather than a deterrent penalty (at para. 43).

[83]

The majority also cited
Law Society of Upper Canada v. Marler
,
    2014 ONLSTH 203. The Hearing Division found the lawyer had committed
    professional misconduct, at para. 15, by letting the [office] manager operate
    on his own with little or no direct supervision, which enabled the manager to
    steal over $600,000 in trust funds. The member did not personally engage in
    intentional misconduct. The delay in
Marler
was found to be seven
    years. The case slipped through the cracks because the Law Society was swamped
    by mortgage fraud claims (at para. 29). Both the Law Society and the member
    agreed that the delay along with several other strong mitigating factors should
    mitigate the penalty. The normal penalty was a suspension not revocation, and
    it was accordingly set at the low end of the range, at 90 days (at para. 37).

[84]

The majority also cited
Law Society of Upper Canada v. Totera
, 2014
    ONLSTA 45, revd 2016 ONSC 1578, 347 O.A.C. 59 (Div. Ct.), a decision of the
    Appeal Division. The Divisional Courts reasons setting aside that decision were
    released March 8, 2016, after Appeal Division rendered its decision in this
    case. The allegation was that the member had knowingly participated in twelve
    fraudulent real estate transactions. The Hearing Panel found that the lawyer
    had not knowingly participated in mortgage fraud or failed to be honest or
    candid. It then dismissed the application on the basis of a five year delay.
    The Divisional Court set out the parties positions, at para. 22:

The parties agree that there was inordinate delay, and the Law
    Society does not dispute that the public interest would not be compromised if
    the Disciplinary Proceeding against the Appellant were dismissed as the Hearing
    Panel concluded that the Appellant did not knowingly participate in mortgage
    fraud or fail to be honest or candid.

[85]

The issue was whether the member had proven he suffered serious personal
    prejudice resulting from the delay under
Blencoe
. The Appeal Division
    seized on an error in the Hearing Panels decision in which it stated that the
    member had not been cross-examined, and ordered a new hearing. However, the
    Divisional Court found that the Hearing Panels failure to consider the members
    cross-examination did not undermine its conclusion that the member suffered
    serious psychological harm as a result of the delay in the investigation (at para.
    59). Accordingly, the Divisional Court set aside the Appeal Divisions order
    and re-instated the Hearing Panels dismissal of the prosecution based on
Blencoe
.

[86]

The majority also cited the
Law Society of Upper Canada v. Durno
,
    2015 ONLSTH 122, in support of the proposition that delay could result in a
    lesser penalty. The member admitted to knowingly assisting in mortgage fraud in
    eight real estate transactions. There were mitigating circumstances in addition
    to a delay of nearly a decade between the time the investigation started and
    its culmination, (there was an earlier application and an appeal that led back
    to the Hearing Division). Instead of revoking his licence, the Hearing Division
    permitted him to resign. In
Durno
, the Hearing Division emphasized, at
    para. 104, an important contextual point to which the majority in this case did
    not refer:

The appeal panel in
Mucha
acknowledged, at para. 30,
    that "
the circumstances
    justifying permission to resign (which also results in a termination of licence)
    may be less exceptional than those that could ever justify a disposition that
    does not involve termination
." [Emphasis in
Durno
.]

[87]

The cases cited by the majority are all distinguishable and provide no
    guidance in a case where the presumptive penalty is licence revocation. Things
    are substantially different where the usual penalty is less than outright
    licence revocation.
Totera
was a straight application of
Blencoe
leading
    to dismissal for delay. In
Durno
the member would no longer be
    practising law.

[88]

It is arguable that, under
Blencoe
, delay could mitigate the
    presumptive penalty of licence revocation if the delay amounts to an abuse of
    process. However, where there is a presumptive penalty of licence revocation, a
    member should be obliged to establish that the delay was so egregious and
    caused him such personal prejudice that revoking his licence to practise law
    would bring the regulatory system for lawyers into disrepute. The Hearing
    Division did not err by following
Blencoe
and insisting the penalty
    should be reduced only where the member could show that the delay was the cause
    of substantial prejudice.

[89]

In contrast to
Blencoe
, the majority of the Appeal Division considered
    that any prejudice to Mr. Abbott from the delay could give rise to a remedy and
    would have inferred prejudice from the delay (at para. 79), noting that Mr. Abbott
    did not have to prove substantial prejudice to himself (at para. 80). This
    was an error.

[90]

In setting a penalty, the adjudicator should take into account in
    possible mitigation such factors as the Law Societys investigative and
    procedural delay, the prejudice to the interest of the public in a timely
    investigative and prosecutorial process, and to the interests of licensees more
    generally, to which the Appeal Division alluded. However, to convert a
    presumptive licence revocation into a lesser penalty that allows a member to
    continue to practise law requires egregious personal prejudice of the kind
    demanded by the Supreme Court in
Blencoe
as necessary to establish an
    abuse of process. As the Hearing Division found, this case does not meet that
    standard.

(iv)

Concluding Observations on the Majoritys Errors

[91]

In my view, the Hearing Division did not make any palpable and
    overriding errors in apprehending the evidence, nor did it make any errors of
    law. Its reasons were reasonable in the sense expressed by the Supreme Court in
Dunsmuir
, at para. 47, in that they demonstrate the existence of
    justification, transparency and intelligibility within the decision-making
    process." The Hearing Divisions imposition of the presumptive penalty
    fell within the range of possible, acceptable and defensible outcomes that were
    open to it on the evidence.

[92]

The findings of the Appeal Division that the Hearing Division made errors
    of law reflect its strong resolve to impose a lesser penalty than revocation on
    Mr. Abbott in order to send a message to the Law Society that delay is
    unacceptable, as the dissent pointed out. In doing so the Appeal Division
    exceeded its responsibility as an adjudicative body and misapprehended
Blencoe
.
    It did not defer to the Hearing Division but actively sought to subvert its
    reasoning, contrary to the Supreme Courts reasoning in
Newfoundland Nurses
.
    These were clear errors in principle.

D.

Did the Divisional Court err in dismissing the Law Societys appeal of
    the Appeal Divisions order?

[93]

This courts approach in an appeal from the Divisional Court on an
    administrative law matter is to step into the shoes of the lower court and
    focus on the administrative decision:
Groia
,

at para. 49;
Ottawa
    Police Services v. Diafwila
, 2016 ONCA 627, 352 O.A.C. 310, at para. 51.

[94]

The question to ask is whether the Divisional Court identified the
    correct standard of review and applied it properly: see
Agraira v. Canada (Public
    Safety and Emergency Preparedness)
, 2013 SCC 36, [2013] 2 S.C.R. 559, at
    paras. 45-47. The court does not take the same approach as is does to an appeal
    from a lower court:
Groia
, at para.
54, citing
Mouvement
    laïque québécois v. Saguenay (City)
, 2015 SCC 16, [2015] 2 S.C.R. 3, at
    paras.
29, 37-38 and 43.

[95]

Acting as the appeal court, the Divisional Court is to apply a
    presumption of reasonableness to decisions of specialized professional
    disciplinary bodies like the Appeal Committee, as this court noted in
Groia,
at paras. 55-62, following Supreme Court jurisprudence post-
Dunsmuir
.
    But reasonableness review is not a rubber stamp.

[96]

This court owes no deference to a decision of the Divisional Court on
    judicial review:
Diafwila
, at para. 51.

[97]

In my view the Divisional Court erred in failing to apply the recognized
    principles of reasonableness review referred to earlier, to ensure that the
    Appeal Division deferred appropriately to the penalty decision of the Hearing
    Division, just as the court does with respect to the decisions of specialized
    professional disciplinary bodies. The errors in the Appeal Divisions approach
    were laid out earlier and need not be repeated. The Divisional Court erred in
    failing to grapple with them. The Appeal Divisions decision was unreasonable
    and the Law Societys appeal ought to have been allowed.

E.

Disposition

[98]

I would allow the appeal from decision of the Divisional Court, set
    aside the decision of the Appeal Division of the Law Society Tribunal on
    penalty and reinstate the penalty of licence revocation ordered by the Hearing
    Division, with costs payable to the Law Society fixed as agreed at $15,000
    inclusive of disbursements and taxes.

Released: RJS JUN 23 2017

P. Lauwers J.A.

I agree. Robert J.
    Sharpe J.A.

I agree. B.W. Miller
    J.A.

F.

Appendix A

Chronology

DATE

DESCRIPTION

Late 2006/Early 2007

Eight transactions involving alleged mortgage fraud

February 22, 2007

Bridgewater Bank, Mr. Abbotts client, advises him of its
          concerns of possible mortgage fraud involving two of the transactions

February 26, 2007

Bridgewater complains to the Law Society

March 2007

Law Society investigation authorized

April 19, 2007

Law Society investigator requires production of Mr.
          Abbotts client files and trust ledgers

November 6, 2012

Investigation report issued

April 9, 2013

A notice of application for a determination by the Law
          Society Hearing Panel of whether the respondent had contravened s. 33 of the
Law
          Society Act
by engaging in professional misconduct

May 23, 2013

Mr. Abbott moves for an order staying or dismissing the
          application for delay

August 18, 19, 20 and 21, 2014

Hearing before the Hearing Division

October 10, 2014

Decision of the Hearing Division

October 10, 2014

Order of the Hearing Division dismissing Mr. Abbotts
          motion for an order staying or dismissing the application for delay

December 4, 2014

Hearing Divisions penalty submissions

January 22, 2015

Hearing Divisions penalty decision and order

March 24, 2015

Appeal Decision Hearing

September 14, 2015

Appeal Division decision and order allowing the appeal in
          part

January 5, 2016

Divisional Court Hearing of the Law Societys appeal

February 10, 2016

Divisional Court decision released

May 25, 2016

Law Societys notice of appeal to the Court of Appeal


COURT OF APPEAL FOR ONTARIO

CITATION: Total Mechanical Systems Limited v. Sheet Metal
    Workers' International Association, Local 30, 2017 ONCA 559

DATE: 20170629

DOCKET: C62931

LaForme, Hourigan and Paciocco JJ.A.

BETWEEN

Total
    Mechanical Systems Limited, Total Mechanical Systems Ltd.,

Riccardo Lettieri

Plaintiffs (
Appellant
)

and

Sheet Metal Workers' International Association,
    Local 30, Lea West

Defendants (Respondents)

Allan Rouben, for the appellant, Riccardo Lettieri

Julian Heller, for the respondents

Heard: June 28, 2017

On appeal from the order of Justice Andra Pollak of the Superior
    Court of Justice, dated October 19, 2016.

REASONS FOR DECISION

[1]

Riccardo Lettieri appeals the order of the Superior Court of Justice
    striking out his Fresh as Amended Statement of Claim:
Total Mechanical
    Systems v. Sheet Metal Workers International Association Local 30
, 2016
    ONSC 4732. We think a review of the relevant facts will provide a clear guide
    to the appropriate resolution of this appeal.

Background Facts

[2]

In July 2008, the appellant, Lettieri entered into a Voluntary
    Recognition Agreement (the VRA) on behalf of his wholly owned company, Total
    Mechanical Systems Limited, with the respondent Union. Since then, he has
    attempted to contest the validity of that agreement.

[3]

First, in response to a grievance by the Union before the Ontario Labour
    Relations Board (the OLRB) in October 2011, in part because he was not of sound
    mind due to a health condition when he signed it on behalf of Total Mechanical
    Systems Limited. In April 2013 the Divisional Court denied a judicial review
    application of the Boards decision.

[4]

Second, and while the OLRB proceedings were going on, Lettieri
et
    al
. launched an action in the Superior Court for damages in July 2011.
    Despite prior agreements to the contrary, Lettieri
et al
. noted the
    Union in default on February 28, 2012, which on consent was set aside on May
    25, 2012. On January 14, 2013 the Union is again noted in default. In December
    2015 the corporate plaintiffs discontinued against the Union leaving only
    Lettieri. Finally, on January 21, 2016, Lettieri issues a
Fresh as Amended Statement of Claim.

[5]

By order dated December 7, 2016, the Union was successful in obtaining
    an order that: (i) the default of January 13, 2013 was set aside; and (ii) the
    Fresh as Amended Statement of Claim dated January 21, 2016 was dismissed under
    r. 21.01 as disclosing no reasonable cause of action.

Conclusion of the Motion Judge

[6]

It is with this factual background, which is largely uncontested and
    abundantly clear from the record and in the relevant pleadings that the motion
    judge carried out her analysis. She concluded at para. 19 that, notwithstanding
    that Lettieri was seeking personal damages, the essential character of the
    issues in this matter are based on a determination of the very validity of the
    Voluntary Recognition Agreement signed by Mr. Lettieri on behalf of his
    corporations.  At para. 20 of her reasons, the motion judge concluded:

The OLRB has exclusive jurisdiction to deal with the issues
    that form the basis of Mr. Lettieris claim in this action. The fact that Mr.
    Lettieri could not claim personal relief does not give this Court jurisdiction
    to relitigate the validity of the Voluntary Recognition Agreement, which
    includes the alleged misrepresentations of the Defendants. The OLRB has
    exclusive jurisdiction over this issue and has made a judicial determination
    finding the Voluntary Recognition Agreement to be valid. The doctrine of abuse
    of process is designed to stop this type of Claim made by Mr. Lettieri and it
    is, in my view, applicable in this case to grant the relief requested by the
    Defendants. I therefore find that the Plaintiffs Fresh as Amended Statement of
    Claim discloses no cause of action and is therefore struck out.

[7]

As we noted, Lettieri appeals the motion judges order only in
    connection with the dismissal of his action. The essence of his complaint is
    that he was not personally a party to the collective agreement, and therefore
    he can attack the validity of it in a Superior Court action notwithstanding the
    OLRBs determinations. For that reason, he also says the doctrines of
res
    judicata
and abuse of process do not apply.

Analysis

[8]

The appeal is dismissed. We agree with the motion judges conclusion set
    out above and for the additional reasons set out below.

[9]

First, the motion judge correctly notes that all of Lettieris claims in
    the Fresh as Amended Statement of Claim are dependent on his assertion that he
    was not a party to the [VRA] because he had no capacity to execute the
    agreement and the union representatives were aware of that: Reasons, at para.
    5. The record thoroughly illustrates the correctness of this as we reveal
    further below.

[10]

On September 15, 2011 the OLRB granted an adjournment to the corporate
    parties on the basis that the only issue to be determined was whether or not
    the state of Lettieris health would be sufficient to cause the [VRA] to be set
    aside. In its October 2011 decision, the OLRB concluded the VRA applied and
    there was no basis upon which the VRA should not be enforced as valid. This
    included Lettieris assertion that he was unwell at the time of signing the
    agreement, and did not understand the nature and effect of what he was signing.

[11]

Significantly, all the alleged misrepresentations relied on by the
    Lettieri in the Fresh as Amended Statement of Claim were included in the
    response to the OLRB proceedings. These grounds were abandoned as part of those
    proceedings and so,
the only issue relied upon
    in opposing the grievance was
Lettieris
health
    issue.

[12]

In its April 10, 2013 decision, the Divisional Court dismissed the
    application of Letteiri
et al
for judicial review:
Total
    Mechanical Systems v. Sheet Metal Workers International Association Local 30
,
    2013 ONSC 1922. In doing so it found, at para. 20:

the evidence before the Board was that at the time that Mr.
    Lettieri signed the agreement, his brother was unaware of his incapacity, if
    his own brother was unaware of the problem, it stands to reason that the union
    was not in a position to have either actual or constructive knowledge of Mr.
    Lettieris incapacity.

[13]

Thus, the enforceability of the VRA and the effect of Lettieris health
    on its validity and enforceability have already been adjudicated upon. Indeed, Lettieris
    health issue has been front and centre in connection with the validity of the
    VRA since the earliest stages of these proceedings. Not surprisingly, the
    motion judge concluded the OLRB properly had jurisdiction over this matter
    because the essential character of the claim arises from the VRA. The VRA is
    a collective agreement and its interpretation, application, administration or
    violation is to be determined by an arbitrator: Reasons, at para. 17. She is
    correct in reaching this conclusion: see
Bhaduria v. Toronto Board of
    Education
, [1999] 173 D.L.R. (4
th
) 382 (Ont, C.A.).

[14]

Second, just as the motion judge held, we agree that the Fresh as
    Amended Statement of Claim amounts to an abuse of process. It very clearly
    reads as simply another attempt to re-litigate decisions of the OLRB and the
    Divisional Court in another forum. While not all re-litigation is necessarily
    abusive, permitting a collateral challenge in a court action on an issue within
    the exclusive jurisdiction of the OLRB relating to the validity of a collective
    agreement is damaging to the integrity of the administration of justice. This
    claim is
vexatious
and violate[s] the
    fundamental principles of justice underlying the communitys sense of
fair play and decency:
Toronto v.
    C.U.P.E., Local 79
, 2003 CarswellOnt 4328 [SCC] at para. 35.

Disposition

[15]

For the reasons given, the appeal must be dismissed. The respondent is
    awarded costs of the appeal in the amount of $14,000 inclusive of disbursements
    and HST.

H.S.
    LaForme J.A.

C.W. Hourigan J.A.

David M. Paciocco
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Tisi v. St. Amand, 2017 ONCA 539

DATE: 20170627

DOCKET: M47973 (C63870)

Brown J.A. (In Chambers)

BETWEEN

Lynn Tisi

Applicant

(Appellant)

(Moving Party)

and

Claude St. Amand

Respondent

(Respondent)

(Responding Party)

Derek
    A. Schmuck, for the moving party

Duncan
    M. Macfarlane, for the responding party

Heard: June 23, 2017

REASONS FOR DECISION

A.

MOTION FOR A STAY PENDING APPEAL

[1]

The
    parties dispute the validity and enforceability of an Agreement of Purchase and
    Sale dated November 2, 2016 (the Agreement) for the purchase of a residential
    house by the moving party appellant, Lynn Tisi, from the respondent, Claude St.
    Amand. As a result of their dispute, both commenced applications: Ms. Tisi
    sought specific performance of the Agreement, with a claim for damages in lieu;
    Mr. St. Amand sought a declaration the Agreement was null and void, together
    with an injunction prohibiting Ms. Tisi from encumbering title to the property.
    Ms. Tisi obtained and registered a certificate of pending litigation (CPL)
    against the property prior to the hearing of the applications.

[2]

By
    reasons dated May 19, 2017, the application judge found the parties were not
ad idem
on
    the essential elements of the contract and declared no valid agreement of
    purchase and sale was entered into by them. She ordered Mr. St. Amand to return
    the $10,000 deposit to Ms. Tisi. He did, but Ms. Tisi has not cashed the
    cheque. The application judge also ordered Ms. Tisi to discharge the
    certificate of pending litigation (CPL) she registered against the property.
    Ms. Tisi has not.

[3]

Instead,
    Ms. Tisi filed a notice of appeal dated June 5, 2017. She now moves for a stay
    pending appeal of para. 3 of the Judgment directing her to discharge the CPL.

B.

GOVERNING PRINCIPLES

[4]

The
    principles governing the granting of a stay pending appeal are those set out in
RJR-MacDonald Inc.
    v. Canada (Attorney General)
, [1994] 1 S.C.R. 311, at p.
    334, as explained and applied by this court in several decisions, including
BTR Global Opportunity Trading
    Limited v. RBC Dexia Investor Services Trust
, 2011 ONCA 620, at
    paras. 18 and 19, and
Yaiguaje v. Chevron Corporation
, 2014 ONCA 40, at para. 19.
    The over-arching principle is that the court must decide whether the interests
    of justice call for a stay.

C.

ANALYSIS

Serious question for appeal

[5]

The
    party seeking a stay must demonstrate her appeal raises serious issues for
    appeal. The threshold to overcome is a low one. Although the grounds of appeal
    advanced by Ms. Tisi in her notice of appeal largely concern questions of fact
    or mixed fact and law where a deferential standard of review applies, I am
    satisfied she has met the low threshold for establishing a serious question for
    appeal.

Irreparable harm

[6]

Under
    the second element of the
RJR-MacDonald
test, Ms. Tisi must establish she will
    suffer irreparable harm should a stay not be granted. Generally, demonstrating
    irreparable harm requires the moving party to establish she will suffer a loss
    not quantifiable in monetary terms.

[7]

In
    the present case, Ms. Tisi sought specific performance of the Agreement or, in
    the alternative, damages in lieu thereof. Specific performance should not be
    granted as a matter of course absent evidence that the property is unique to
    the extent that its substitute would not be readily available:
Semelhago v. Paramadevan
,
    [1996] 2 S.C.R. 415, at para. 22.

[8]

In
    an affidavit on the application, Ms. Tisi deposed the house at issue is a
    custom-built one. The respondent did not file any evidence disputing that
    characterization. Given Ms. Tisis evidence, I am satisfied she has
    demonstrated she would suffer irreparable harm should a stay not be granted.

Balance of convenience

[9]

The
    balance of convenience branch of the stay test requires a court to consider and
    balance the respective harm to each party from the grant or refusal of a stay.

[10]

Ms.
    Tisi has filed evidence that Mr. St. Amand was wrapping things up in Welland
    and moving further north in Ontario. As well, she has filed the results of some
    title searches that disclose Mr. St. Amand sold three properties in the Niagara
    area during May 2017. This evidence may well support an inference that Mr. St.
    Amand is wrapping up his business in the Niagara area, but it does not suggest
    he lacks assets in Ontario.

[11]

In
    his factum, Mr. St. Amand argues the CPL places an unfair burden on him by
    preventing the sale of the house and accounting to his mortgagee and other
    creditors. Although he did not file evidence to support those submissions, it
    is common sense that the house likely will remain unsold as long as a CPL is
    registered against title.

[12]

That
    said, I am puzzled by the lack of a responding affidavit from Mr. St. Amand on
    this motion. In his February affidavit on the application, he talked about the
    need for his business to close the sale to Ms. Tisi by mid-March of this year.
    Yet, he has not filed any evidence about the current state of affairs regarding
    the house  Is it finished? Is he trying to sell it?  or about the effect of
    the CPL on his business. Simply put, there is a lack of evidence about what
    prejudice, if any, the continued registration of the CPL is causing Mr. St.
    Amand.

[13]

When
    one adds to this state of the record Ms. Tisis willingness to expedite her
    appeal, I see the balance of convenience tipping in her favour.

Conclusion

[14]

Ms.
    Tisi has met the low threshold of establishing a serious question on appeal,
    she has demonstrated some irreparable harm, and the balance of convenience tips
    in her favour. The over-arching principle is that the court must decide whether
    the interests of justice call for a stay. In the present circumstances, I am
    satisfied Ms. Tisi has demonstrated a stay should be granted.

D.

DISPOSITION

[15]

For
    the reasons set out above, I grant the motion. I order Ms. Tisi to perfect her
    appeal by July 17, 2017, following which the parties shall secure an expedited
    date for the hearing of this appeal.

[16]

I
    fix the costs of this motion at $3,000, payable in the cause of the appeal.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Velgakis v. Servinis, 2017 ONCA 541

DATE: 20170627

DOCKET: C63138

LaForme, Hourigan and Paciocco JJ.A.

BETWEEN

Ippokratis Velgakis

Plaintiff (Respondent)

and

Gus Servinis, Rose T. Filipchuck and Laura
    Iliagviev (also known as Leora Ilia also known as Leora Laichter) carrying on
    business (variously) as Papefinch Dental, Pape Finch Dental and Pape Finch
    Dentistry

Defendants (Appellants)

and

Diana Lam

Third Party

Michelle Gibbs, for the appellants

Bruce Day, for the respondent

Heard: June 26, 2017

On appeal from the order of Justice Mario D. Faieta of
    the Superior Court of Justice, dated November 25, 2016.

REASONS FOR DECISION

[1]

The respondent felt his lower denture work was improperly done and
    needed to be fixed. He commenced an action in Small Claims Court for $25,000. T
he appellants filed a defence and issued a third party
    claim.

[2]

The respondent then commenced this action for $100,000 of general
    damages and $50,000 of special damages in the Superior Court against the same
    parties, with the addition of one defendant. He moved to transfer the action
    from the Small Claims Court and/or consolidate the actions in the Superior
    Court.

[3]

The appellants motion for summary judgment on the basis the action was
    time-barred, was dismissed. They appeal that decision and essentially complain
    that the motion judge misinterpreted and misapplied the law relating to
    discoverability. We disagree.

[4]

The sole issue before the motion judge was whether the respondents
    action was statute-barred because the two-year limitation period established by
    s. 4 of the
Limitations Act
, S.O. c. 24, Sched. B (the Act), had
    expired.

[5]

Under s. 5 (1)(a) of the Act, a claim is discovered on the date the
    claimant knew, or ought to have known, the material facts giving rise to the
    claim, and that a proceeding would be an appropriate means to seek to remedy
    the claim. When an action is appropriate depends on the specific factual
    setting of each individual case:
407 ETR Concession Company Limited v. Day
,
    403 D.L.R. (4th) 485, at paras. 33-34. Finally, when s. 5(1)(b) of the Act

is
    applied, deciding whether legal action would be appropriate takes into
    account what a reasonable person with the abilities and in the circumstances of
    the plaintiff ought to have known  a modified objective test:
Presidential
    MSH Corporation v. Marr Foster & Co. LLP
, 2017 ONCA 325, at para. 18.

[6]

In
Presidential MSH
, at paras. 17-20, this court clarified
    certain principles governing cases such as the one before us on the issue of
discoverability
:

1.       A
    legal proceeding against an expert professional may not be appropriate if the
    claim arose out of the professionals alleged wrongdoing but may be resolved by
    the professional himself or herself without recourse to the courts, rendering
    the proceeding unnecessary.

2.       The
    defendants ameliorative efforts and the plaintiffs reasonable reliance on
    such efforts to remedy its loss are what may render the proceeding premature.
    The plaintiff and defendant must have engaged in good faith efforts to right
    the wrong it caused.

[7]

For our purposes, the motion judge correctly applied the modified
    objective test and made three critical findings:

(i)       It
    was appropriate for the respondent to make reasonable efforts to have his
    complaints regarding his dentures resolved on a consensual basis without
    quickly resorting to potential litigation.

(ii)      It
    was appropriate for the respondent to rely on the appellants agreement
    indicating that repairs may be made at no additional fee  and pursue a
    consensual resolution of his complaints. And,

(iii)     The
    first day on which a reasonable person in the respondents circumstances ought
    to have known that a proceeding would be an appropriate means to seek to remedy
    this claim was the date the respondents request to have his dentures repaired
    at no cost to him had been refused by all the appellants.

[8]

The motion judge ultimately concluded the date of refusal by the
    appellants meant that the limitation period
did
    not begin to run

until then.
The
    findings of the motion judge were amply supported by the evidence and were
    entirely reasonable. We see no error in the decision.

[9]

The appeal is dismissed. The respondent is awarded costs of the appeal
    in the amount of $10,000 inclusive of disbursements and HST.

H.S.
    LaForme J.A.

C.W. Hourigan J.A.

David M. Paciocco
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Wakeling (Re), 2017 ONCA 536

DATE: 20170628

DOCKET: C63037

Strathy C.J.O, Benotto and Miller JJ.A.

IN THE MATTER OF: ANDREW WAKELING

AN APPEAL UNDER PART XX.1 OF THE
CODE

Daniel F. Moore and Taufiq Hashmani, for the appellant

Gavin S. MacKenzie, for the respondent, The Person in
    Charge of the Centre for Addiction and Mental Health

Peter Fraser, for the respondent, The Attorney General
    of Ontario

Heard: June 20, 2017

On appeal against the disposition of the Ontario Review
    Board, dated October 31, 2016.

REASONS FOR DECISION

[1]

Mr. Wakeling was found not criminally responsible on a charge of
    criminal harassment. He has been detained at the General Forensic Unit of the
    Centre for Addiction and Mental Health with privileges to enter the community
    while accompanied.

[2]

On October 31, 2016, the Ontario Review Board declined to expand his
    privileges or to grant him the absolute discharge he requested. The Board found
    Mr. Wakeling continued to present a significant threat to the safety of the
    public. The Board based its finding on the assessment of risk set out in the
    Hospital Report, which stated Mr. Wakelings level of insight into his illness
    is incomplete: he denies psychotic symptoms and does not believe he has a
    serious mental illness requiring treatment. The Report indicated if Mr.
    Wakeling discontinues his medication, his risk to re-offend is high. The Board
    concluded the current disposition was the least onerous and the least
    restrictive.

[3]

Relying on the case of
Winko v. British Columbia (Forensic
    Psychiatric Institute)
, [1999] 2 S.C.R. 625, Mr. Wakeling submits both the
    criminal offence and the risk to the public must be serious. He submits the
    Board did not engage in a separate and specific analysis of whether his conduct
    would give rise to a serious criminal offence with a real risk of physical
    or psychological harm occurring to individuals in the community: see
Winko
,
    at para 57.

[4]

An appellate court may only allow an appeal against a disposition of the
    Board where the disposition is unreasonable, based on an error of law, or
    results in a miscarriage of justice:
Criminal Code
, R.S.C. 1985, c.
    C-46, s. 672.78.  We find no such grounds in this case.

[5]

The Boards reasons indicate it considered that criminal harassment is a
    serious offence and that his conduct presents a real risk of psychological harm
    to members of the community. Before the events giving rise to the index
    offence, the appellant was convicted of criminal harassment three times. The
    stalking behaviours he exhibited were directed at adult females and disclosed a
    level of forethought and planning. The evidence before the Board indicated the
    victim suffered psychological harm. In particular, at para. 30, the Board found
    as follows:

The Board also accepts the evidence of the hospital report and
    the testimony of Dr. Kolla that the offence of criminal harassment is a serious
    one in light of its severe effect upon the victim. The evidence is that the
    victim was terrified of [Mr. Wakeling] and suffered real psychological harm
    from the offence of the criminal harassment and the Board accepts that as a
    fact.

[6]

For these reasons, the appeal is dismissed.

G.R. Strathy C.J.O.

M.L. Benotto J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: 1162740 Ontario Limited v. Pingue, 2017 ONCA 583

DATE: 20170710

DOCKET: C59933

Hoy A.C.J.O., van Rensburg and Roberts JJ.A.

BETWEEN

1162740 Ontario Limited, Joseph Pingue
and Sabatino Pingue Jr.

Plaintiffs (Respondents)

and

Venanzio Pingue, 2077626 Ontario Inc.
and 912618 Ontario Limited

Defendants (Appellants)

Ryan Wozniak, Eric Sherkin and Kevin Sherkin, for the
    appellants

Hari S. Nesathurai and Glen M. Perinot, for the
    respondents

Heard: June 19, 2017

On appeal from the judgment of Justice Linda M. Walters of
    the Superior Court of Justice, dated December 22, 2014, with reasons reported
    at 2014 ONSC 7418.

REASONS FOR DECISION

[1]

The appellants appeal from the judgment of the trial judge granting a
    constructive trust over their properties, declaring that the appellant,
    Venanzio Pingue, is not a shareholder of the respondent, 1162740 Ontario
    Limited (116), and removing him as an officer and director of 116 in light of
    her finding that he breached his fiduciary duties.

[2]

These proceedings arise out of a failed business venture among two
    brothers  Venanzio Pingue and the respondent, Sabatino Pingue Jr.  and their
    cousin, Joseph Pingue, involving the purchase of an apartment building at 315
    Glendale Avenue in St. Catharines.

[3]

The trial judge made the following findings concerning the agreement
    among the parties with respect to the ownership of 315 Glendale Avenue and the
    shareholdings of 116. Although it was ostensibly set up as a bare trustee, the
    parties treated 116 as the absolute owner of 315 Glendale Avenue. Joseph Pingue
    advanced the monies to purchase 315 Glendale Avenue. In consideration of his providing
    these funds, Sabatino and Venanzio Pingue transferred their respective shares in
    116 to Joseph. The shares of Venanzio and Sabatino Pingue Jr. represented 50%
    of the shares of 116. Venanzio and Sabatino Pingue Jr. had a period of five
    years to reacquire their shares by repaying Joseph Pingue their respective
    portions of the monies, interest free, that he had advanced to purchase 315
    Glendale Avenue and keep the second mortgage in good standing, and also by
    repaying any profits that he had re-invested for capital improvements. Venanzio
    never paid Joseph Pingue for his shares. The relationship foundered when Joseph
    and Sabatino Pingue Jr. discovered that Venanzio had misappropriated $592,671.43
    from 116.

[4]

The trial judge granted judgment for the respondents and imposed a
    constructive trust over three properties owned by the appellants to secure
    repayment of the misappropriated funds. She declared that Venanzio Pingue was
    not a shareholder of 116 because he had not paid for his shares, and removed
    him as an officer and director of 116 because of his breach of his fiduciary
    duties to 116.

[5]

The appellants advance the following main grounds of appeal:

i

The trial judge erred in disregarding the parties written agreements
    and in finding that Venanzio Pingue was under an obligation to repurchase his
    shares, which the appellants submit were held by 116 as a bare trustee for the
    three shareholders.

ii

The
    trial judge erred in failing to admit the forensic accounting report prepared
    by the appellants expert. Leave to file the report was mandatory under r.
    53.08 of the
Rules of Civil Procedure
. Moreover, the trial judges
    refusal to grant leave created trial unfairness to the appellants because it
    left unchallenged the experts report of the respondents on which the trial
    judge principally relied for her findings of misappropriation and breach of
    fiduciary duty.

[6]

For the reasons that follow, we reject these grounds of appeal.

(1)

Did the trial judge err in her interpretation of the parties agreement?

[7]

The appellants submit that the trial judge erred by effectively
    re-writing the parties written agreements, which, they submit, provided in
    clear and unambiguous terms that 116 would hold 315 Glendale Avenue as a bare
    trustee for the three shareholders. As a result, the trial judge erred in
    determining that Venanzio had to pay any monies for his shares. Moreover,
    according to the appellants, the trial judge granted rectification of the written
    agreements when this relief was neither pleaded nor requested by any party.

[8]

We disagree. In their amended statement of claim, their evidence and
    their written submissions at trial, the respondents clearly maintained that the
    parties had never treated 116 as a bare trustee but always as absolute owner of
    315 Glendale Avenue, and that Venanzio had transferred his shares to Joseph
    Pingue but never paid for them.

[9]

The trial judge interpreted the parties written agreements and found
    them to be confusing and incomplete. This was a finding that was open to her on
    the record. As she was entitled to do, the trial judge accepted the
    respondents evidence as to the parties agreement concerning their
    relationship and the structure of their business venture. She determined that
    116 was the absolute owner of 315 Glendale Avenue and that Venanzio and
    Sabatino Pingue Jr. were required to pay for their shares by reimbursing Joseph
    Pingue for his advances within five years. She found that Venanzio Pingue never
    paid for his shares and that Joseph Pingue remained beneficial owner of them. We
    see no basis to interfere with her conclusions.

[10]

While not pressed at the hearing of the appeal because of their position
    that Venanzio Pingue was not obliged to repurchase his shares of 116, the
    appellants submitted in their factum that the trial judge erred in finding that
    Venanzio had not paid for his shares of 116 when there was clear evidence of a
    cheque and a bank deposit in payment of his shares. Given our rejection of the
    appellants first ground of appeal, it becomes necessary to deal with this ground.

[11]

We also reject this ground. The appellants challenge the trial judges
    finding of fact that Venanzio Pingue did not pay for his shares. Giving
    detailed and cogent reasons, the trial judge rejected Venanzios evidence that
    the proffered cheque represented payment for his shares, preferring the
    respondents evidence that the cheque was in reimbursement for unauthorized
    withdrawals by the appellants. This finding was open to the trial judge on the
    evidence before her and, again, is entitled to deference by this court. We see
    no palpable and overriding error in her finding that would justify interference
    with it.

(2)

Did the trial judge err in refusing to admit the appellants expert
    report?

[12]

Granting of leave under r. 53.08 of the
Rules of Civil Procedure
is
    mandatory in that it requires the trial judge to grant leave on just terms,
unless
the court determines that granting leave will
    cause prejudice to the other party or undue delay in the conduct of the trial:
Pavao
    v. Pinarreta
, [1995] O.J. No. 1197, 40 C.P.C. (3d) 84 (C.A.), at para. 11.
    The right to obtain leave under r. 53.08 is therefore not absolute because it
    is subject to the courts exercise of discretion having regard to the questions
    of prejudice and undue delay, and the overarching consideration of trial
    fairness to the parties.

[13]

The trial judges decision to dismiss the appellants motion for leave
    to file their experts report was discretionary and is subject to considerable
    deference by this court. Absent an error of law or palpable and overriding
    error, we cannot intervene. We see no error here. The trial judge carefully and
    thoroughly considered and balanced all relevant factors. She determined,
    correctly in our view, that the admission of the experts report at the end of
    the already lengthy second trial, following the conclusion of all of the
    evidence, would result in non-compensable prejudice to the respondents and
    undue delay.

[14]

There is no basis for the appellants to complain of trial unfairness in
    the circumstances of this case because the appellants are entirely responsible
    for the late service of their experts report. The appellants were aware since
    the pre-trial conference in June 2010 that expert reports were necessary and they
    had the respondents experts report since September 2011. Most significantly,
    the appellants failed, without reasonable excuse, to comply with the October
    19, 2011 order following the first trial that they deliver an expert report by
    January 26, 2012.

[15]

Notwithstanding their clear failure to comply with the court order, the
    appellants did not move before or at the beginning of the second trial in
    October 2013 for leave to file their experts report. Rather, they inexplicably
    waited until after the completion of all of the evidence, including Venanzio
    Pingues testimony, to retain their expert to prepare a report. They then further
    delayed until the 37
th
day of the 40-day trial to serve their motion
    for leave to file her report. The appellants long, unexplained delay
    distinguishes the present case from the cases (such as, for example, in
Pavao
)
    where the parties seeking leave to file their experts reports had sought and
    were granted that relief at or close to the beginning of trial
.

[16]

In these circumstances, we agree with the trial judges determination
    that the admission of the report would have effectively resulted in another trial
    and enormous trial unfairness to the respondents who had prepared for and participated
    in the trial in the absence of any expert report from the appellants.

(3)

Motion to Admit Fresh Evidence

[17]

The appellants seek to admit as fresh evidence a copy of the parcel
    register that shows that 315 Glendale was sold by 116 on January 25, 2017 for
    the amount of $7,200,000. The appellants submit that this evidence demonstrates
    the tremendous importance to Venanzio Pingue of the loss of his shares in 116. This
    evidence is not necessary or relevant to any issue on this appeal, and we
    dismiss the motion.

(4)

Leave to Appeal Costs Order

[18]

Finally, the appellants seek leave to appeal the trial judges order
    that they pay the respondents their substantial indemnity costs in the amount
    of $350,000.00.

[19]

It is well-established that an appellate court is not entitled to
    interfere with a trial judges discretionary assessment of costs absent error
    of law or overriding and palpable error. We see no such error here. The trial
    judge awarded substantial indemnity costs because she found that the judgment
    obtained by the respondents was more favourable than their three offers to
    settle. She further found that Venanzio Pingue had misappropriated thousands of
    dollars, breached his fiduciary obligations, and attempted to deceive the court.
    These findings justified the award at a substantial indemnity rate. We also
    agree that the amount awarded of $350,000 was fair, reasonable and
    proportionate in the circumstances of this second, 40-day trial. There is no
    basis to intervene.

(5)

Disposition

[20]

Accordingly, the appeal from the judgment, the motion to admit fresh
    evidence, and the motion for leave to appeal the costs order are dismissed.

[21]

The respondents, as the successful parties, shall have their partial
    indemnity costs in relation to the appeal and all preliminary appeal motions in
    the amount of $25,000, inclusive of disbursements and HST.

Alexandra
    Hoy A.C.J.O.

K. van Rensburg J.A.

L.B. Roberts J.A.