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Representation - Lawyers - Application for Licence. Mundulai v. Law Society of Ontario [good character/Armstrong test]
In Mundulai v. Law Society of Ontario (Div Court, 2024) the Divisional Court considered (and dismissed) a JR (by a former LSO lawyer member) of an "Order of the Hearing Division of the Law Society Tribunal (the “Hearing Division”)" denying the applicant's application for licensing, as he "was not presently of good character" (the case invokes the 'Armstrong Test'):[15] On September 19, 2022, the Hearing Division found that the Applicant was not presently of good character and denied his application for re-licensing.
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[25] In its decision, dated August 17, 2023, the Appeal Division found the appeal meritless and dismissed it.
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Analysis
[31] The Law Society has an obligation to regulate the legal professions in the public interest, including licencing. It has a duty to ensure that only applicants of good character are granted licences to practice law or provide legal services (LSUC v. Davidovic, 2017 ONLSTH 47; LSUC v. Sharon Ellen Shore, 2008 ONLSAP 6; Gaya v. LSO, 2022 ONLSTH 53).
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[35] With respect to the second issue raised by the Applicant, the Appeal Division found that the Hearing Division did not err in its assessment of the evidence or its application to the law when concluding that the Applicant had breached s. 8(2) of By-Law 4.
[36] The Appeal Division correctly set out the law. Section 8(2) of By-law 4 provides, in part, that “An applicant who makes any false or misleading representation or declaration on or in connection with an application for a licence, by commission or omission, is deemed thereafter not to meet and not to have met, the requirements for the issuance of a licence under the Act.”
[37] The Appeal Division’s decision with respect to the finding of facts and the application of the facts to the law was reasonable. There was a strong evidentiary basis before the Hearing Division for them to conclude that the Applicant breached s.8(2) of By-Law 4, including that Mr. Mundulai misled the Law Society about his outstanding civil judgments; he breached a court order; he had been disciplined by a regulator; he had been the subject of an insurance claim; and he failed to update the Law Society when he was criminally charged in 2019 as he was obligated to do.
[38] The Applicant’s third ground of appeal claims that the Hearing Division’s application of the ‘Armstrong Test’ was incorrect (LSUC v. Armstrong, 2011 ONLSAP 1, at para. 13 [“Armstrong”]). This “good character” requirement outlined in section 27(2) of the Act, calls for the protection of the public, maintaining high ethical standards, and maintaining public confidence in the legal profession and its ability to regulate itself (Gaya, at para. 8). Good character is determined as of the date of the hearing (Preyra, Re, 2003 CanLII 48959 (ON LST), at para. 99). In assessing whether an applicant whose application is referred to the Tribunal meets the good character requirement, several factors must be assessed including the nature and duration of the misconduct, whether the applicant is remorseful, what rehabilitative efforts, if any, the applicant has taken and the success of such efforts, the applicant’s conduct since the proven misconduct, and the passage of time since the misconduct. The list of factors to be considered is non-exhaustive.
[39] The Appeal Division found that the Hearing Division carefully reviewed each of the factors and did not mis-apply the Armstrong Test. The Appeal Division reasonably concluded that the Hearing Division’s assessment of the evidence, including the Applicant’s lack of remorse; his failure to make any effort to rehabilitate himself; the serious nature of the prior misconduct; and his deliberate efforts to mislead the Law Society during the investigation process, was correct. The Appeal Division reasonably found that the Applicant had failed to identify any error in principle in the Hearing Division’s reasoning. . Amendola v. Law Society of Ontario
In Amendola v. Law Society of Ontario (Div Court, 2023) the Divisional Court considered a JR of Law Society Tribunal's decisions that the applicant had misrepresented facts on their paralegal application [under By-law 4, Part 2, s.8(2) - the same applies to lawyers], leading to the refusal of their application when re-assessed.
In these quotes the court cited the essence of the Hearing and Appeal Division's findings:[10] In February 2009, the LSO granted the Applicant’s application for a paralegal licence. In his license application, he answered “no” to the following questions:#7 – Have you ever been suspended, disqualified, censured or otherwise disciplined as a member of any professional organization? If yes, attach a letter or certificate of good standing to this application.
#13 – Have you ever been sanctioned or had a penalty imposed upon you by a court, an administrative tribunal or a regulatory body? ...
[17] In the Hearing Decision, at paras. 18-20, the panel considered the application of s. 8(2) of the LSO’s By-Law 4, which provides as follows:Misrepresentations
(2) An applicant who makes any false or misleading representation or declaration on or in connection with an application for a licence, by commission or omission, is deemed thereafter not to meet, and not to have met, the requirements for the issuance of any licence under the Act. [18] Citing the Appeal Division’s decision in Law Society of Upper Canada v. Stewart, 2012 ONLSAP 30, at paras. 25, 29, the hearing panel found that given the unequivocal wording of s. 8(2) of By-Law 4, a hearing panel has no discretion to grant a licence application where the applicant has deliberately made false or misleading representations in the application: Hearing Decision, at para. 20.
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[23] In conclusion, the panel found that because of the Applicant’s deliberately false declaration when answering question 13, he was deemed inadmissible as a licensee. Therefore, it was not necessary for the panel to consider whether he presently met the good character requirement in s. 27(2) of the LSA: at para. 47. After considering the parties’ written costs submissions, the Hearing Division ordered the Applicant to pay costs of $6,000. In these quotes the court sets out it's own analysis:[38] The Applicant’s judicial review application raises the following issues:a. Tribunal’s jurisdiction: Did the Hearing Division have jurisdiction to refuse the Applicant’s license application after a licence was issued, based on a false declaration in his application?
b. Procedural fairness: Was the Applicant denied procedural fairness? ....
[59] With respect to jurisdiction, the Applicant submits that the Appeal Division erred in determining that the Hearing Division had jurisdiction under s. 27(4) of the LSA to reconsider and refuse his license application. The Applicant’s submissions can be summarized as set out below.
[60] Section 27 of the LSA sets out the requirements relating to a licence application. The LSO is required to issue a licence if the applicant meets the licensing requirements. Under s. 27(4), a licence may be refused only after a hearing by the Hearing Division on referral by the LSO. There is nothing in the language of s. 27 or elsewhere in the LSA that would justify the conclusion that it was open to the LSO to refer an application for a hearing once a licence is issued. Upon issuance of a licence, the person who made the application is no longer an applicant. That person is a licensee. The LSA permits the LSO to commence four types of licensee proceedings (relating to conduct, competency, capacity and compliance) with respect to matters arising after the licence was issued. It would be inconsistent with the LSA’s legislative scheme to find that it was also open to the LSO to refer the licensee’s already-granted license application for a hearing. The LSO’s interpretation of the legislation also unreasonably results in automatic licence revocation, the harshest penalty that could be imposed. It may also call into question the validity of the services the Applicant performed as a licensee, such as commissioning documents, which may now be void and invalid. To the extent that there is a gap in the legislation relating to the LSO’s ability to hold to account licensees who deliberately made a false declaration in their licence application, the gap must be addressed by the legislature, not the Tribunal.
[61] I disagree with that analysis.
[62] As explained below, I have concluded that it was reasonable for the majority of the Appeal Division to find that the Hearing Division had the jurisdiction to refuse the Applicant’s licence application after the license was issued, adopting the approach taken in previous decisions of the Tribunal.
[63] When addressing the Hearing Division’s jurisdiction relating to licensing hearings under s. 27(4), the textual/contextual/purposive approach to statutory interpretation requires the decision maker to consider the regulatory scheme of the LSA and the by-laws made by Convocation under s. 62(0.1) of the LSA, including By-Law 4 (Licensing). By-laws made by Convocation under s. 62(0.1) are to be interpreted as if they formed part of the statute: LSA, s. 62(2).
[64] Consistent with s. 27(2) of the LSA, one of the licensing requirements in s. 8(1) of By-Law 4 is that the applicant must be of good character. To that end, s. 8(2) of By-Law 4 provides that an applicant who makes false or misleading declarations or representations in their licence application “is deemed thereafter not to meet, and not to have met, the requirements for the issuance of any licence under the Act” (emphasis added).
[65] In the Appeal Decision, at para. 20, the majority adopted the reasoning of the hearing panel in Khan relating to the interpretation of s. 8(2) of By-Law 4. I agree that it was reasonable for the majority to do so.
[66] In Khan, the hearing panel refused to stay a licensing hearing that the LSO referred to the hearing panel under s. 27(4) after a license had already been issued. The LSO alleged that the licensee did not meet the good character requirements in s. 27(2) of the LSA and s. 8(2) of By-Law 4 since he made a misleading representation in his licence application. As a result, the LSO submitted that the application should be refused, in effect revoking the existing licence. The licensee submitted that the LSO had no jurisdiction to proceed under s. 27(4), arguing that s. 8(2) should be interpreted as referring “only to a person to whom a license has not yet been granted” and noting that “once the licence is granted, the person becomes a licensee and is no longer an applicant”: Khan, at para. 3. The licensee’s position was that proceedings resulting in penal consequences, such as a licence revocation, “must be clearly based in the statute and the By-Laws, and not only by implication” and that jurisdiction “should not be read into the legislation based upon cases and principles of statutory interpretation”: Khan, at para. 7.
[67] The hearing panel in Khan rejected the licensee’s submissions relating to the interpretation of s. 8(2) of By-Law 4, under which an applicant who makes a false or misleading declaration is “deemed thereafter not to meet, and not to have met” the licensing requirements (emphasis added). At para. 13, the hearing panel noted that if the licensee’s “position is accepted, the words ‘is deemed…not to have met’ are redundant and have no meaning.” After considering and applying the textual/contextual/purposive approach to statutory interpretation, the hearing panel in Khan found as follows, at para. 16(6):The words “deemed not to have met” have to be given their clear meaning in the context of the purpose and object of the act, which is to protect the public and to ensure high ethical standards in the professions. The words “deemed not to have met” clearly refer to the circumstances before the licence was issued, but have effect after the licence has been issued. [68] Based on the analysis at paras. 16-18, the hearing panel in Khan concluded that it had the jurisdiction to proceed with a hearing under s. 27(4) of the LSA, after the licence was issued, to determine whether application should be refused because the licensee failed to meet the good character requirements of s. 27(2) and s. 18(2) of By-Law 4. The language of s. 18(2), in the context in which it is used and given the purpose of the LSA, made it clear that a hearing under s. 27(4) could occur either before or after a licence is issued. In each case, the consequences of finding that there was a false declaration would be the same. In a hearing prior to a licence being issued, the applicant would be “deemed not to meet” the good character requirement, with the result that a licence would not be issued. In a hearing after the licence is issued, the applicant would be “deemed not to have met” the requirement, with the result that the applicant would no longer have a valid licence. In both cases, the result would be consistent with the LSA’s legislative purpose of protecting the public and ensuring high ethical standards in the professions.
[69] While the Khan hearing panel refused to stay the s. 27(4) licensing hearing, the panel later found that s. 8(2) of By-Law 4 did not result in automatic revocation of the licence in the circumstances of that case since the false statements were not made deliberately: Appeal Decision, at para. 97. That result was consistent with the Tribunal’s previous decision in Stewart, at paras. 25, 29, where the appeal panel found that the effect of s. 8(2) was that where an applicant makes a false declaration, the panel must revoke the licence except where the false declaration was not deliberate. In the Hearing Decision, at para. 20, the Hearing Division adopted that approach in the matter under review, which was confirmed by the majority of the Appeal Division: see Appeal Decision, at para. 22.
[70] I agree that the approach the majority of the Appeal Division took was reasonable. Whether an applicant’s false statement is discovered before or after licensing, its bearing on the applicant’s integrity and character, and the risk to the public, is the same. The interpretation that the Applicant urges would provide the LSO with authority to address the false statements in licence applications only if discovered before a licence is granted. As the majority of the Appeal Division found, such an interpretation would “[pave] the way for applicants to falsify information the Law Society considers critical to an application for a licence, in the hope that they can get away with the lie, become a member of the legal professions and continue to practise, effectively with impunity”: Appeal Decision, at para. 14. That situation would frustrate the legislative purpose of the licensing regime and impede the LSO’s ability to fulfill its statutory duty of public protection, maintenance of high ethical standards, and maintenance of public confidence in the legal professions.
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[74] I do not agree that the Applicant was denied procedural fairness.
[75] In furtherance of the LSA’s legislative purpose to protect the public and to ensure high ethical standards in the professions, s. 8(2) of By-Law 4 deems an applicant to be inadmissible as a licensee by deliberately making a false declaration in the licence application. As indicated in previous decisions of the Tribunal, when the LSO discovers what it believes to be a deliberately false declaration that comes to light after a licence has been granted, the LSO has brought licensees before the Hearing Division by referring their application for a licensing hearing under s. 27(4). At the licensing hearing, the licensee would have the opportunity to provide evidence that the false declaration was not deliberate. That process was followed in this case. It is appropriate for a reviewing court to respect and defer to that choice of procedure: see Baker, at para. 27. I see no reason why the Applicant would have legitimately expected the LSO to adopt a different procedure: see Baker, at para. 26.
[76] At the licensing hearing, the Applicant had the opportunity to provide evidence that the false declaration in response to question 13 was not made deliberately. The Hearing Division did not accept that evidence. Applying the mandatory requirement in s. 8(2) of By-Law 4, the Hearing Division refused the application. In all the circumstances, I see no unfairness that would justify this court’s intervention. Reviewed on the standard of correctness, I am satisfied the Appellant was afforded procedural fairness.
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