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Discretion - Fettering. Aubin v. Law Society of Ontario
In Aubin v. Law Society of Ontario (Div Ct, 2026) the Divisional Court granted a JR, this brought against a decision by the Compensation Fund Subcommittee of the LSO that it was 'without jurisdiction' to grant the applicant's claim.
Here the court considers whether the LSO subcommittee had 'fettered' it's discretion by treating it's policy guidelines as law:[2] Leeanne Aubin retained a lawyer in 2022 who sexually harassed her and attempted to extort sexual favours from her in exchange for legal services. When she reported the lawyer to the Law Society, he publicly defamed her, threatened to kill her and attempted to procure a firearm with which to do so. Ms. Aubin successfully sued the lawyer and was awarded damages of $195,000.00 plus costs. By the time she did so, the lawyer’s licence had been revoked and he was a serving a four-year penitentiary sentence.
[3] As she was unable to enforce the judgment, Ms. Aubin applied for a grant from the Fund. The Subcommittee was satisfied that Ms. Aubin had suffered significant harm as a result of the lawyer’s dishonesty. However, the Guidelines define “loss” as “the difference between what the lawyer … received from the claimant or on the claimant’s behalf, and the amount that was earned and accounted for, and/or returned to the claimant.” Since the loss Ms. Aubin was seeking compensation for did not meet that definition, the Subcommittee concluded that it was “without jurisdiction” to grant the claim.
[4] Ms. Aubin applies to this court for judicial review of the Subcommittee’s decision. She submits that the Subcommittee fettered its discretion by treating the Guidelines as binding, resulting in an unreasonable decision. The Law Society disagrees and submits that the Subcommittee’s decision was the result of a reasonable exercise of its discretion to decide what types of losses should be compensated.
[5] The following reasons explain why I agree with Ms. Aubin and would grant the application and set aside the Subcommittee’s decision.
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B. Fettering Discretion: Relevant Legal Principles
[21] Any discretionary decision-making power of a public administrative body, like all exercises of public authority, must find its source in law: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at paras. 27-28. The law that gives the decision-maker the discretion also informs how it is exercised, as any such discretion must be exercised in “accord with the purposes for which it was given”: Vavilov, at para. 108.
[22] In exercising discretion, it is entirely appropriate for a decision-maker to create and rely on decision-making guidelines. Such guidelines can serve a useful purpose by ensuring that relevant factors are considered and by promoting consistency: El-Hennawy v. Law Society of Upper Canada, 2014 ONSC 375, 316 O.A.C. 260 (Div. Ct.), at para. 30; Stemijon Investments Ltd. v. Canada (Attorney General), 2011 FCA 299, 341 D.L.R. (4th) 710, at paras. 59. However, such guidelines do not have the force of law and cannot have the effect of superseding the law that is the source of the decision-making power. As stated in Stemijon Investments, at para. 60:An administrative policy is not law. It cannot cut down the discretion that the law gives to a decision-maker. It cannot amend the legislator's law. A policy can aid or guide the exercise of discretion under a law, but it cannot dictate in a binding way how that discretion is to be exercised. [23] It follows from the foregoing that a decision-maker cannot abdicate a statutorily-imposed responsibility to exercise its discretion to guidelines or policies that do not have the force of law, what is often referred to in the caselaw as “fettering discretion.” It is well-established that any decision that is the result of a fettered discretion is per se unreasonable: Kanthasamy v. Canada (Citizenship and Immigration), 2015 SCC 61, [2015] 3 S.C.R. 909, at para. 60; Maple Lodge Farms v. Government of Canada, 1982 CanLII 24 (SCC), [1982] 2 S.C.R. 2, at pp. 6-7; Canadian Assn. of Refugee Lawyers v. Canada (Minister of Immigration, Refugees and Citizenship), 2020 FCA 196, 92 Admin. L.R. (6th) 1, at para. 53; Stemijon Investments, at paras. 23-34.
C. Did the Subcommittee Fetter Its Discretion?
(i) The Issue
[24] As this court recognized in El-Hennawy, at para. 31, the Guidelines in this case are not intended to be binding or to fetter the discretion of the Subcommittee, as is clearly stated in the Preface. The issue in this case is whether despite this, the Subcommittee treated them as binding and thereby fettered its own discretion. In my view, it did. There are several reasons for this conclusion.
(ii) The Guidelines “Define” the term “loss”
[25] First, while the Guidelines are overall clearly not intended to be binding, the portion relating to the meaning of the term “loss,” which the Subcommittee relied on in denying the applicant’s claim, is worded in such a way as to suggest otherwise. It purports to “define” the term “For the purposes of the Compensation Fund” and restricts it to losses of money paid by the claimant to the lawyer which are not earned, accounted for or returned to the client.
[26] Section 51(5) of the LSA requires only that a loss be sustained by a person “in consequence of . . . dishonesty on the part of a person, while a licensee, in connection with his or her professional business or in connection with any trust of which he or she was or is a trustee.” It is clear from the wording of the section that while the term “loss” is not defined, it refers to more than misappropriated trust funds and includes any loss “in connection with” the lawyer’s professional business.
[27] In this case, the Subcommittee was satisfied that the applicant suffered harm as a result of the lawyer’s dishonesty and there is no issue that she had been awarded damages for that harm which she was unable to recover. The respondent accepts that it was open to the Subcommittee to grant compensation to the applicant, from which it follows that she suffered a “loss” for the purposes of s. 51(5). The language of the Guidelines, however, suggests that there was no “loss,” which supports the conclusion that the Subcommittee fettered its discretion.
(iii) The Language in the Decision Letter
[28] The language in the Decision Letter from counsel for the Fund supports the conclusion that the Subcommittee fettered its discretion. The letter specifically refers to the term “loss” being “defined” by the Guidelines and states that the claim “does not meet the Fund’s definition of compensable loss,” suggesting that the Subcommittee did not exercise its discretion to decide whether the loss in this case justified a grant from the Fund. This conclusion is supported by the Subcommittee minutes, which reflect that the sole reason for denying the applicant’s claim was “Guideline 8 (“loss” definition).”
[29] The letter also stated, incorrectly, that the Fund was “governed by specific criteria under the Fund’s Guidelines.” This reflects a misunderstanding of the purpose of the Guidelines, which is to guide, not govern.
[30] Finally, the letter ended by stating, “We are truly sympathetic to the Claimant’s experience and regret that we are without jurisdiction to assist.” Counsel for the respondent submitted in her factum that what was meant by this was that the Subcommittee had determined that the claim “fell outside the scope of the statutory scheme.” However, in oral argument counsel conceded that it was open to the Subcommittee to grant all or part of the applicant’s claim, so doing so would clearly not fall outside the statutory scheme.
[31] The word “jurisdiction” has a specific legal meaning when referring to a decision-maker, especially when the term is used by a lawyer, and refers to the scope of a statutory power: Vavilov, at para. 65; Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2018 SCC 31, [2018] 2 S.C.R. 230, at para. 38. The statement in the Decision Letter that the Subcommittee was “without jurisdiction to assist” can only be understood as expressing a belief on the part of the Subcommittee that it did not have the statutory authority to grant the applicant’s claim. This reflects a clear misunderstanding of the powers granted to the Subcommittee by s. 51(5) and shows that it fettered its own discretion.
(iv) Failure to Consider Other Factors
[32] Finally, the Subcommittee did not consider any factors other than whether the loss in this case met the definition in the Guidelines. Section 51(5) grants the Subcommittee a broad discretion and it is for the Subcommittee to determine what factors are relevant in a given case. Such factors could (but do not have to) include the egregiousness of the lawyer’s dishonest conduct, the causal connection between the misconduct and the loss, the extent to which the loss was connected to the lawyer’s professional business, and the Law Society’s duty, pursuant to s. 4.2 of the LSA, to “advance the cause of justice” and “protect the public interest”: El-Hennawy, at paras. 36-39. The fact that no such factors were considered also supports the conclusion that the Subcommittee did not exercise its discretion but, rather, denied the claim because it believed that the Guidelines required it to do so. . Bell Canada v. British Columbia Broadband Association
In Bell Canada v. British Columbia Broadband Association (Fed CA, 2020) the Federal Court of Appeal considered one indicia of fettering discretion:[157] ... An administrative decision-maker fetters the exercise of their discretion by relying exclusively on an administrative policy without regard to the law (Stemijon Investments Limited v. Canada (Attorney General), 2011 FCA 299, 475 N.R. 341, at paragraphs 24 and 60). . Canada v. Bowker
In Canada v. Bowker (Fed CA, 2023) the Federal Court of Appeal considered a Crown appeal from a Tax Court cost award. In this quote the court considers whether the court below was 'fettering it's discretion':[23] The appellant argues that the Court erred, by fettering its discretion, in limiting the range of costs to 50%-75% of solicitor-client costs while the respondent argues that the appellant places too much emphasis on the sequence in which the Tax Court ordered its analysis, that is, dealing with the issue of the range before examining the various relevant factors.
[24] It is true that the argument that the Court fettered its discretion arises from the fact that the Court established the range before it had even considered the factors set out in Rule 147(3).
[25] When one reviews the Tax Court’s analysis of the various factors listed in Rule 147(3), it is apparent that the Court’s focus is on how each factor moves the needle higher or lower in the 50%-75% range that it had previously selected. But a review of like cases undertaken after the Tax Court had addressed the various factors may have pointed to the possibility of a lower range. The fact that the possibility of a lower range was precluded by the approach taken by the Tax Court is an indicator that the Tax Court had, in fact, fettered its discretion and, in doing so, erred in law.
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[28] The Tax Court’s selection of the 50% to 75% range was made in the name of consistency. Unfortunately, the sources cited showed no consistency. Assuming that the Court had in mind that its award should be consistent with other decisions of the Tax Court, it is notable that it did not cite other costs decisions of the Tax Court to demonstrate that the amount which it awarded was consistent with what had been done in other cases.
[29] The Tax Court was right to advance consistency as a basis upon which to base an award of costs but it erred in principle in not addressing the Court’s own jurisprudence in setting a range of possible awards. The Court’s own jurisprudence is important because a lack of consistency in the treatment of comparable cases leads to arbitrary results: see Teva Canada Ltd. v. TD Canada Trust, 2017 SCC 51, [2017] 2 S.C.R. 317 at para. 138, Sriskandarajah v. United States of America, 2012 SCC 70, [2012] 3 S.C.R. 609 at para. 18.
[30] Consistency is important for another reason. A consistent approach to costs leads to predictability. Litigants’ decision-making is improved if they are able to assess, to a reasonable degree, the potential quantum of costs to which they may be exposed in the event of an adverse result. To the extent that a secondary purpose of costs is to encourage proportionality and advance settlements (Decision at para. 19), a reasonable grasp of one’s potential exposure to costs can only assist in achieving those purposes.
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