Estate Planning

Appeal Panel Finds Bias at LSUC Hearing

By Hull and Hull LLP

I could not help but do a double-take when I came across an article with the above-captioned title in the Law Times (June 7, 2010 issue).

It was reported that in 2004, a Toronto lawyer was charged by the Law Society of Upper Canada (LSUC) with professional misconduct for conflict of interest while acting as an estate trustee and solicitor without adequate disclosure to the beneficiaries. It was also alleged that he breached his fiduciary duty as trustee by making several imprudent unsecured loans from the estate. It seems that the line between acting as estate trustee versus acting as lawyer for the estate may have been blurred in this case.

In 2008, the lawyer was found guilty, and he received a two-month suspension and a lifetime prohibition from acting for both borrowers and lenders in private mortgage transactions. The lawyer appealed the decision.

The appeal panel, with Larry Banack writing for the majority, granted the appeal. It found that the original proceeding had 'compromised the appearance of fairness' and created a 'reasonable apprehension of bias'.  This conclusion appears to have been based on the determination that interventions by the original panel during the lawyer's oral testimony gave the appearance of 'descending into the arena and assuming the role of the prosecution'. This is a departure from the proper role of neutral fact-finder.

This seems to be one of the first times, if not the very first time, that the LSUC appeal panel has made a finding of reasonable apprehension of bias. This decision is also noteworthy given that it involves benchers on the appeal panel being called upon to find against fellow benchers comprising the original panel. As noted in this article, this demonstrates that the LSUC can be very fair in its self-regulating function.

Have a good day,

Natalia R. Angelini - Click here for more information on Natalia Angelini.

Full post as published by Toronto Estate Law Blog on June 21, 2010 (boomark / email).