Merchant v. Law Society of Saskatchewan, 2002 SKCA 60

• Judge: Bayda, C.J.S., Lane and Jackson, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: July 30, 2001
• Jurisdiction: Saskatchewan
• Citations: 2002 SKCA 60;(2002), 223 Sask.R. 1 (CA)

Merchant v. Sask. Law Soc. (2002), 223 Sask.R. 1 (CA);

    277 W.A.C. 1

MLB headnote and full text

Temp. Cite: [2002] Sask.R. TBEd. MY.023

E.F. Anthony Merchant, Q.C. (appellant) v. Law Society of Saskatchewan (respondent)

(No. 257; 2002 SKCA 60)

Indexed As: Merchant v. Law Society of Saskatchewan

Saskatchewan Court of Appeal

Bayda, C.J.S., Lane and Jackson, JJ.A.

May 10, 2002.

Summary:

Two complaints were brought against a lawyer (Merchant) arising from letters sent by him soliciting the business of the two complainants and asking them to authorize him to pursue claims for wrongs committed while they attended residential schools. The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that the letters were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan. The discipline committee ordered that Merchant be severely reprimanded and that he pay a fine of $5,000 and $10,000 in costs. Merchant appealed the hearing committee's decision and the discipline committee's imposition of a penalty.

The Saskatchewan Court of Appeal, Bayda, C.J.S., dissenting, dismissed the appeal.

Administrative Law - Topic 567

The hearing and decision - Decisions of the tribunal - Motion for nonsuit - Three disciplinary charges were brought against a lawyer (Merchant) - After the investigating committee's counsel concluded his case, Merchant applied for a nonsuit - The hearing committee dismissed the nonsuit application - Merchant elected not to call evidence - The hearing committee found counts 1 and 3 not well founded and count 2 well founded - On appeal, Merchant argued that the committee must have erred when it refused the nonsuit - The Saskatchewan Court of Appeal stated that if it found that the hearing committee erred in failing to grant a nonsuit on counts 1 and 3, it would not be a factor that it would consider in relation to the reasonableness of the decision on count 2 unless the hearing committee used evidence given to support count 1 or 3 in reaching their decision and there was no basis to arrive at that conclusion - The court concluded that the committee correctly applied the principles with respect to a nonsuit - See paragraphs 93 to 101.

Administrative Law - Topic 2143

Natural justice - Administrative decisions or findings - Duty of administrative bodies to act fairly and observe rules of natural justice - [See fourth Barristers and Solicitors - Topic 5204 ].

Barristers and Solicitors - Topic 5204

Discipline - Offences - Misleading marketing - Rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan provided that "any marketing activity undertaken or authorized by a member must not be ... reasonably capable of misleading the recipient or intended recipient" - With respect to whether the standard for determining whether a marketing activity was misleading was an objective or subjective one, a hearing committee of the Law Society of Saskatchewan stated that "[w]hether or not it, in the end result, misled the recipient may be a factor in determining whether it was reasonably capable of misleading, but is not determinative of the issue, in that the prohibition is against undertaking an activity which could mislead" - The Saskatchewan Court of Appeal held that the committee's interpretation was correct - The words "reasonably capable of misleading the recipient or intended recipient" did not depend on whether someone was actually misled - See paragraphs 80 to 82.

Barristers and Solicitors - Topic 5204

Discipline - Offences - Misleading marketing - A lawyer (Merchant) sent letters (with attached retainer agreements) soliciting the business of two people and asking them to authorize him to pursue claims for wrongs committed while they attended residential schools - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that the letters were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - The committee focused on the "misleadingness" coming from the differences between the letter and the attached retainer agreement - On appeal, the Saskatchewan Court of Appeal held that the committee's failure to specifically address the question of whether the retainer agreement explained the letter was not fatal to its decision - It was reasonable for the committee to have taken the approach that the conflict between the letter and the retainer agreement was a source of mischief in and of itself - See paragraphs 84 to 85.

Barristers and Solicitors - Topic 5204

Discipline - Offences - Misleading marketing - A lawyer (Merchant) sent letters (with attached retainer agreements) soliciting the business of two people and asking them to authorize him to pursue claims for wrongs committed while they attended residential schools - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that the letters were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - The committee found that representations in the letters were not consistent with the attached agreements and were misleading in that they assumed that the recipient likely had a valid cause of action, they failed to disclose the rigours and uncertainties of litigation, and they told the recipient that they had "nothing to lose" and "will pay nothing" - The committee found that it would be expected that a reader would rely upon the representations made in the letter rather than reading the attached agreement and that the reference to the agreement in the letter as an "authorization" was also capable of misleading the recipient - The Saskatchewan Court of Appeal held that the committee's conclusion that the letters were reasonably capable of misleading the intended recipients was reasonable - See paragraphs 70 to 85.

Barristers and Solicitors - Topic 5204

Discipline - Offences - Misleading marketing - A hearing committee found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two people were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - On appeal, Merchant argued that the hearing committee breached the rules of natural justice by considering and giving priority to its findings that the letters were misleading in that they assumed that the recipient likely had a valid cause of action and they failed to disclose the rigours and uncertainties of litigation, matters which were not raised by the investigating committee's counsel or addressed at the hearing - The Saskatchewan Court of Appeal rejected the argument - A review of the committees' reasons as a whole demonstrated that the above matters were part of the reasoning process that the committee used to come to a conclusion as to whether the letters were misleading - Further, the hearing committee was not bound by the submissions of counsel for the investigation committee as to how the letters were misleading - See paragraphs 102 to 109.

Barristers and Solicitors - Topic 5205

Discipline - Offences - Conduct unbecoming a lawyer - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two people were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - The Saskatchewan Court of Appeal dismissed an appeal - With respect to the question of whether the activity amounted to "conduct unbecoming", the court stated that while the committee's reasons did not engage in an analysis as to whether the letter constituted conduct unbecoming, that was the charge before them and they found the charge made out - Further, if the body expressly constituted to decide whether lawyers had engaged in conduct unbecoming decided that a certain activity was conduct unbecoming, an appellate court should not intervene unless the finding was unreasonable - The committee's finding was not unreasonable - See paragraphs 86 to 89.

Barristers and Solicitors - Topic 5283

Discipline - Punishments - General - Considerations - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two people were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - The discipline committee ordered that Merchant be severely reprimanded and that he pay a $5,000 fine and $10,000 in costs - Merchant appealed, arguing that the discipline committee considered extraneous factors where it considered evidence in relation to two counts which the hearing committee had found were not well founded - The Saskatchewan Court of Appeal rejected the argument, stating that "[w]hile it is regrettable that counsel for the investigation committee referred to these previous counts in his submissions to the discipline committee, the chair of the committee advised him that those submissions would not be heard" - See paragraph 125.

Barristers and Solicitors - Topic 5283

Discipline - Punishments - General - Considerations - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two persons were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - The discipline committee ordered that Merchant be severely reprimanded and that he pay a $5,000 fine and $10,000 in costs - Merchant appealed, arguing that the discipline committee considered extraneous factors where it considered two letters from members of the public who took issue with comments made by Merchant following the hearing committee's decision - The Saskatchewan Court of Appeal rejected the argument - The discipline committee was able to consider the letters and it would have been open to Merchant to ask for an adjournment to rebut it - He did not avail himself of that option - See paragraph 125.

Barristers and Solicitors - Topic 5283

Discipline - Punishments - General - Considerations - [See Barristers and Solicitors - Topic 5481 ].

Barristers and Solicitors - Topic 5481

Discipline - Fines - General - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two people were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - The discipline committee ordered that Merchant be severely reprimanded and that he pay a $5,000 fine and $10,000 in costs - Merchant appealed, arguing, inter alia, that the penalty was disproportionate to penalties imposed on others - The Saskatchewan Court of Appeal dismissed the appeal, stating that "a $5,000 fine appears high in relation to the other penalties imposed, but as the discipline committee pointed out this individual has been before the discipline committee before. In light of this, we cannot say that the penalty is clearly wrong so as to permit intervention" - See paragraphs 119 to 124.

Barristers and Solicitors - Topic 5504

Discipline - Costs - Calculation of - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two persons were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan (count 2) - The hearing committee found that two other counts were not well-founded - Counsel for the investigation committee urged the discipline committee to fix Merchant with all costs incurred with respect to all counts including the two found not to be well founded - The discipline committee instead divided the costs by three and assessed one-third of the costs to Merchant - On appeal, Merchant argued that the committee should have made a calculation of the costs actually incurred in relation to count 2 as though it had been the only charge - The Saskatchewan Court of Appeal held that the discipline committee's approach was reasonable - See paragraph 126.

Barristers and Solicitors - Topic 5582

Discipline - Appeals - Judicial review - Standard of review - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two people were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - Merchant appealed - The Saskatchewan Court of Appeal held that the appropriate standard of review in assessing the finding of conduct unbecoming was that of reasonableness - As to the question of law raised (whether rule 1601(2)(c) was to be interpreted objectively or subjectively), the court held that it was not necessary to decide the standard of review in relation to that question because it concluded that the hearing committee answered that question correctly - See paragraphs 16 to 67.

Practice - Topic 9031

Appeals - Evidence on appeal - Admission of "new evidence" - The hearing committee of the Law Society of Saskatchewan found Merchant guilty of conduct unbecoming a lawyer in that letters which he sent to two people were a marketing activity that was reasonably capable of misleading the intended recipient in breach of rule 1601(2)(c) of the Rules of the Law Society of Saskatchewan - Merchant appealed and applied to admit fresh evidence on the basis that the hearing committee did not advise him that they were looking beyond the statement in the letters that "you have nothing to lose" and that if he had known that the hearing committee was going to look at the letters more broadly, he would have testified or submitted evidence - He claimed that he was denied the benefit of audi alteram partem - The Saskatchewan Court of Appeal dismissed the application to admit fresh evidence - Merchant could not use the allegation of a lack of fairness to put before the court material which was not fresh evidence or which the committee already found not to be relevant - See paragraphs to 110 to 117.

Cases Noticed:

Shumiatcher v. Law Society of Saskatchewan (1967), 58 W.W.R.(N.S.) 465 (Sask. C.A.), refd to. [paras. 17, 210, footnote 4].

Carson v. Benchers of Law Society of Saskatchewan et al., [1975] 6 W.W.R. 544 (Sask. C.A.), refd to. [para. 17, footnote 5].

Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; 26 N.R. 341; 25 N.B.R.(2d) 237; 51 A.P.R. 237; 97 D.L.R.(3d) 417; 79 C.L.L.C. 14,209, refd to. [para. 17, footnote 6].

Chow v. Law Society of Saskatchewan, [1985] S.J. No. 300 (C.A.), refd to. [para. 18, footnote 7].

Lamontagne v. Law Society of Saskatchewan (1991), 89 Sask.R. 219; 81 D.L.R.(4th) 64 (C.A.), refd to. [paras. 18, 213, footnote 8].

Pearlman v. Manitoba Law Society Judicial Committee, [1991] 2 S.C.R. 869; 130 N.R. 121; 75 Man.R.(2d) 81; 6 W.A.C. 81; 84 D.L.R.(4th) 105, refd to. [para. 19].

Law Society of Manitoba v. Savino (1984), 23 Man.R.(2d) 293; 1 D.L.R.(4th) 285 (C.A.), refd to. [paras. 20, 211].

Pearlman v. Manitoba Law Society Judicial Committee (1988), 51 Man.R.(2d) 151; 49 D.L.R.(4th) 42 (Q.B.), refd to. [paras. 20, 207, footnote 15].

Riviera Development Corp. v. Law Society of Saskatchewan, [1992] 4 W.W.R. 289; 100 Sask.R. 53; 18 W.A.C. 53 (C.A.), refd to. [para. 21, footnote 17].

Segal v. Law Society of Saskatchewan (1999), 189 Sask.R. 134; 216 W.A.C. 134 (C.A.), refd to. [paras. 22, 206, footnote 19

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1; [1994] 7 W.W.R. 1; 92 B.C.L.R.(2d) 145; 14 B.C.R.(2d) 217; 22 Admin. L.R.(2d) 1; 114 D.L.R.(4th) 385, refd to. [para. 23, footnote 21].

Superintendent of Brokers v. Pezim - see Pezim v. British Columbia Securities Commission et al.

Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1997] 1 S.C.R. 748; 209 N.R. 20; 144 D.L.R.(4th) 1, refd to. [para. 23, footnote 22].

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, addendum [1998] 1 S.C.R. 1222; 226 N.R. 201; 160 D.L.R.(4th) 193, refd to. [para. 23, footnote 23].

Minister of National Revenue (Customs and Excise) v. Mattel Canada Inc., [2001] 2 S.C.R. 100; 270 N.R. 153; 199 D.L.R.(4th) 598, refd to. [paras. 24, 205, footnote 24].

Asbestos Corp., Société nationale de l'Amiante and Quebec (Province), Re, [2001] 2 S.C.R. 132; 269 N.R. 311; 146 O.A.C. 201, refd to. [para. 25, footnote 25].

Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission) - see Asbestos Corp., Société nationale de l'Amiante and Quebec (Province), Re.

Ryan v. Law Society of New Brunswick (2001), 236 N.B.R.(2d) 243; 611 A.P.R. 243 (C.A.), leave to appeal granted (2001), 280 N.R. 200 (S.C.C.), refd to. [paras. 26, 206 footnotes 26, 32].

McOuat v. Law Society of British Columbia, [2001] 3 W.W.R. 435; 149 B.C.A.C. 41; 244 W.A.C. 41 (C.A.), refd to. [paras. 27, 206, footnote 27].

Singh v. Law Society of Alberta, [2001] 3 W.W.R. 419 [paras. 28, 206, footnote 28].

Law Society of Manitoba v. Frohlinger, [1997] 7 W.W.R. 747; 118 Man.R.(2d) 89; 149 W.A.C. 89 (C.A.), refd to. [para. 29, footnote 29].

Chen v. Law Society of Manitoba (2000), 145 Man.R.(2d) 281; 218 W.A.C. 281 (C.A.), refd to. [paras. 29, 206, footnote 30].

Pitre et al. v. Law Society of Prince Edward Island et al. (1998), 165 Nfld. & P.E.I.R. 39; 509 A.P.R. 39 (P.E.I.T.D.), refd to. [paras. 31, 206, footnote 33].

Dunne v. Law Society of Newfoundland (2000), 191 Nfld. & P.E.I.R. 129; 577 A.P.R. 129 (Nfld. T.D.), refd to. [paras. 32, 206, footnote 35].

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; 153 N.R. 81; 106 Nfld. & P.E.I.R. 140; 334 A.P.R. 140; 102 D.L.R.(4th) 402, refd to. [para. 49, footnote 40].

Travel West (1987) Inc. v. Langdon Towers Apartments Ltd., [2000] Sask.R. Uned. 173 (Q.B.), refd to. [para. 93, footnote 62].

Reid v. Kraus (2000), 189 Sask.R. 122; 216 W.A.C. 122 (C.A.), refd to. [para. 93, footnote 62].

Law Society of Manitoba v. Crump (1982), 14 Man.R.(2d) 405 (C.A.), refd to. [para. 109, footnote 73].

Public School Boards' Association (Alta.) et al. v. Alberta (Attorney General) et al., [2000] 1 S.C.R. 44; 251 N.R. 1; 250 A.R. 314; 213 W.A.C. 314, refd to. [para. 112, footnote 76].

R. v. Palmer, [1980] 1 S.C.R. 759; 30 N.R. 181; 14 C.R.(3d) 22 (Eng.); 106 D.L.R.(3d) 212; 50 C.C.C.(2d) 193; 17 C.R.(3d) 34 (Fr.), refd to. [para. 112, footnote 77].

R. v. Hudson (1990), 87 Sask.R. 288 (C.A.), refd to. [para. 118, footnote 81].

R. v. Kaysaywaysemat (1992), 97 Sask.R. 66; 12 W.A.C. 66 (C.A.), refd to. [para. 118, footnote 81].

Stevens v. Law Society of Upper Canada (1979), 55 O.R.(2d) 405 (Div. Ct.), refd to. [para. 154].

Hall v. Brooklands Auto Racing Club, [1933] 1 K.B. 205 (C.A.), refd to. [para. 159].

MacKeigan, J.A. et al. v. Royal Commission (Marshall Inquiry), [1989] 2 S.C.R. 796; 100 N.R. 81; 94 N.S.R.(2d) 1; 247 A.P.R. 1; 61 D.L.R.(4th) 688, refd to. [para. 174].

Marshall Inquiry - see MacKeigan, J.A. et al. v. Royal Commission.

Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342; 92 N.R. 110; 75 Sask.R. 82; 38 C.R.R. 232; 57 D.L.R.(4th) 231; 47 C.C.C.(3d) 1; 33 C.P.C.(2d) 105; [1989] 3 W.W.R. 97, refd to. [para. 194].

Fan and Law Society of British Columbia, Re (1977), 77 D.L.R.(3d) 97 (B.C.C.A.), refd to. [para. 200].

Cadillac Fairview Corp. et al. v. Saskatoon (City) et al. (2000), 199 Sask.R. 72; 232 W.A.C. 72 (C.A.), refd to. [para. 208].

A Solicitor, Re, [1956] 3 All E.R. 516 (D.C.), refd to. [para. 213].

Statutes Noticed:

Rules of the Law Society of Saskatchewan, rule 2(1) [para. 8]; rule 1601(2)(c) [para. 11]; rule 1602 [para. 12].

Authors and Works Noticed:

Jones, David Phillip, and de Villars, Anne S., Principles of Administrative Law (3rd Ed. 1999), p. 498 [para. 123, footnotes 86, 87].

Law Society of Saskatchewan, Code of Professional Conduct (1991), Preface [para. 86, footnote 59]; c. 14 [para. 13].

Counsel:

G.J. Kuski, Q.C., for the appellant;

L.T. Priel, Q.C., for the respondent.

This appeal was heard on June 19 and July 30, 2001, before Bayda, C.J.S., and Lane and Jackson, JJ.A., of the Saskatchewan Court of Appeal. The judgment of the Court of Appeal was delivered on May 10, 2002, including the following opinions:

Lane and Jackson, JJ.A. - see paragraphs 1 to 127;

Bayda, C.J.S., dissenting - see paragraphs 128 to 216.