Further Clarity on the Mental Intent for Professional Misconduct

A recent decision of the Ontario Court of Appeal further clarifies that the required intent for a finding of professional misconduct depends on the nature of the definition of professional misconduct. As previously reported, in The Law Society of Upper Canada v. Nguyen, 2018 ONCA 709, http://canlii.ca/t/htqbc a lawyer was found to have engaged in professional misconduct by failing to advise his clients (mortgage lenders) of material facts (relating to credits the purchasers received on closing). There was no dispute about those findings. The information was material and it was not disclosed. The lawyer’s intent was irrelevant. However, there was a dispute as to whether the lawyer had also participated in mortgage fraud. A finding of mortgage fraud would result in a much more serious sanction.

The Court of Appeal accepted the finding of failing to maintain the standard of practice of the profession but indicated that a finding of mortgage fraud would require dishonesty, willful blindness or recklessness on the part of the practitioner. Since the hearing panel found that the practitioner had made an honest mistake, the intent requirement was not met and no finding of mortgage fraud could be made. The Court of Appeal declined to order the matter back for a new hearing on the issue as desired by the internal appeal tribunal and the Divisional Court.

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