Intent Requirements for Professional Misconduct

It is an oversimplification to say that intent is not required to prove professional misconduct. Sometimes it is. The recent case of Law Society of Upper Canada v. Nguyen, 2017 ONSC 5431 demonstrates that this can be a tricky issue. 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.

The hearing tribunal found that the lawyer had not participated in fraud because he had made inquiries and satisfied himself that there were legitimate reasons for the credits. However, the appeal panel found that the hearing tribunal made a number of errors. In particular, whether the lawyer believed he was being dishonest was irrelevant. The majority of the Divisional Court agreed and a new hearing was required. The hearing tribunal should have asked whether there was a fraudulent transaction and if so, whether the lawyer was aware, willfully blind or reckless.

In a strong dissent, one judge concluded that where the allegation is participating in mortgage fraud, the regulator had to prove that the lawyer subjectively believed he was putting his clients at risk. According to the dissenting judge, there was no evidence of this level of intent and therefore the hearing tribunal’s decision should be reinstated.

The wording of the applicable definition of professional misconduct and the specific allegations are important in assessing the intent requirements for making a finding.

[Since posting this article, the decision has been appealed and the result is found at The Law Society of Upper Canada v. Nguyen, 2018 ONCA 709,]

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