Law Society of Newfoundland & Labrador v. Regular, 2011 NLCA 54

Editor’s Note: Corrigendum released on August 8, 2011. Original judgment has been corrected with text of corrigendum appended. Date: 20110801 Dockets: 10/80 & 10/94 Citation: Law Society of Newfoundland & Labrador v. Regular 2011 NLCA 54 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN : LAW SOCIETY OF NEWFOUNDLAND AND LABRADOR APPELLANT/ RESPONDENT BY CROSS-APPEAL AND : ROBERT REGULAR RESPONDENT/APPELLANT ON CROSS-APPEAL Coram: Wells, Rowe and Harrington, JJ.A.

Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (General) 200901T0725 Appeal Heard: May 20, 2011 Judgment Rendered: August 1, 2011 Reasons for Judgment by Wells, J.A. Concurred in by: Rowe and Harrington, JJ.A. Counsel for the Law Society: John L. Ennis Counsel for Robert Regular: Raj Anand and Farah Malik Wells, J.A.:

[ 1 ] This is an appeal and cross-appeal from a decision of a judge of the Trial Division on judicial review of a decision of the governing body (“Benchers”) of the Law Society of Newfoundland and Labrador (“the Law Society”) under the Law Society Act , 1999, S.N.L. c. L-9.1 (“the Act ”). That decision of Benchers affirmed, on appeal, a decision of an adjudication panel (“the Panel”) determining that the appellant by cross-appeal (“Mr.

Regular”) was guilty of professional misconduct by breaching three rules in the Law Society’s Code of Professional Conduct (“ Code” ) as a result of engaging in a sexual relationship with a person (“S.G.”) to whom he provided professional services. BACKGROUND [ 2 ] The sexual relationship giving rise to those proceedings commenced within two months of Mr. Regular’s first meeting S.G. as a client and continued, secretly, over a period of some fifteen years. During that fifteen year period S.G. married T.P., gave birth to a child and was divorced from T.P. Mr.

Regular occasionally provided legal services to S.G. and her husband, T.P., and to S.G. in proceedings connected with her divorce from T.P. The Trial Division judge succinctly summarized the relevant background facts. He wrote: [8] While there are matters of disagreement on the facts as between Mr. Regular and S.G., what is not disputed is that shortly after his being retained by S.G. to represent her on a peace bond application, Mr. Regular and S.G. became involved in what was to become a 15-year personal, consensual and sexual relationship. During that period of years, Mr.

Regular and S.G. met up to three times per week to engage sexually. Almost all of these encounters occurred at the law office of Mr. Regular. During this period of time, Mr. Regular provided monies to S.G. on occasion as well as arranged housing for her, on some occasions without the payment of rent and through companies he had an interest in. [9] It is also not disputed that S.G. married during this 15-year period, had one child as a result of that marriage and eventually separated. Mr. Regular assisted S.G. in negotiating a settlement on her student loan debt in 1993 after the sexual relationship commenced.

As well, while their sexual relationship continued and during the time of the relationship between S.G. and her husband, Mr. Regular provided certain other legal services to them by acting with regard to the sale and purchase of properties. Mr. Regular further assisted S.G. with legal matters involving her separation from her husband … [10] It is also readily apparent from the transcript of the hearing before the Adjudicative Panel that the end of the relationship in 2005 between Mr. Regular and S.G. was very acrimonious. It was at that time that S.G., who testified that Mr.

Regular had told her he would be leaving his wife to cohabit with her, made known the relationship between her and Mr. Regular that had up to then been kept secret. It was as a result of an attempt to have her removed from a home that Mr. Regular had arranged previously for her to live in that S.G. claimed an ownership interest in that property and subsequently filed her complaint with the Law Society. [ 3 ] The Law Society established the Panel to consider the specific allegations of misconduct, put forward by the Vice President of the Law Society, as the formal complainant.

That complaint summarized the several allegations, based on complaints to the Law Society by S.G., as follows: The Complainant says that she has reason to believe and does believe that Robert R.

Regular, a solicitor and a member of the Law Society of Newfoundland and Labrador (hereinafter called the “Respondent”) is guilty of conduct deserving of sanction in that he: Did fail to comply with the Trust Account Rule re: lending money to a client, did fail to act with integrity, did fail in his duty respecting confidential information, did fail to maintain impartiality and to avoid a conflict of interest between clients, did fail to avoid a conflict of interest between lawyer and client, did fail in his duty as advocate, and did fail to avoid questionable conduct, further particulars of which include… PRIOR PROCEEDINGS (

a) Before the Panel and before Benchers [ 4 ] The proceedings before the Panel and before Benchers are succinctly and clearly summarized by the Trial Division judge in describing the appeal before him. He wrote: [2] Mr. Regular has filed an appeal related to findings of an Adjudicative Panel (“the Adjudicative Panel”), as well as a decision on appeal of a panel of Benchers (“the Benchers”), that he breached certain parts of the Law Society’s Code of Professional Conduct (“the Code ”).

The breaches relate to events that occurred specifically to two separate points of time, the first being early in 1990 shortly after Mr. Regular acted for the complainant, S.G., related to a peace bond matter and, the second, dealing with the involvement of Mr. Regular as a lawyer in a family law matter involving S.G.’s separation from her husband, between 2001 and 2005. This appeal has been filed pursuant to

section 55.2 of the Law Society Act, 1999 , S.N.L. 1999, c. L-9.1 (“the Act ”). [3] On October 15, 2007, the Adjudicative Panel duly appointed pursuant to the Act (now presumably an adjudicative tribunal pursuant to subsequent amendments made to the Act ), determined that four allegations made against Mr. Regular by the complainant should be dismissed, while finding him guilty of two others, namely: 1) “The Respondent is guilty of failure to comply with his duty to act with integrity under

Chapter I of the Code and his duty to avoid questionable conduct under

Chapter XIX of the Code by initiating a sexual relationship with his client within the confines of a solicitor-client relationship.”; and 2) “The Respondent is guilty of failure to comply with his duty to act with integrity under

Chapter I of the Code , his duty to avoid a conflict of interest between lawyer and client under

Chapter VI of the Code , and his duty to avoid questionable conduct under

Chapter XIX of the Code by representing his client in a family law matter at the same time as he had a personal and sexual relationship with his client.” [4] On February 4, 2008, the Adjudicative Panel subsequently determined that Mr. Regular would be suspended from the

practice of law for a period of two months commencing June 8, 2008, he would pay a fine of $5,000 payable within 90 days, he wouldpay one-third of the Law Society’s expenses for the investigation and hearing within 90 days and that there would be publication of thesanction in accordance with “Law Society Rules”. [5] On January 7, 2009, an appeal of both decisions by the Adjudicative Panel by Mr. Regular to a panel of Benchers wasdismissed with some changes made with regard to sanction related to the commencement date for the suspension as well as the paymentof the fine and Law Society expenses. Costs for that appeal were also ordered as against Mr. Regular to be paid within 60 days. (

b) Before the Trial Division [5] The Trial Division judge described what was involved in the appeal before him, including his having to consider theconclusions of the Panel with respect to credibility of the critical witnesses, Mr. Regular and S.G. He wrote: [6] It is with regard to the decisions described that Mr.

Regular has appealed to this Court. [7] This appeal involves a consideration of the ambit of authority that the Law Society has to regulate lawyers, particularly where thelawyer involves himself or herself in a personal and sexual relationship with a person he/she meets in the confines of the practice of law,and whether a lawyer can be in a conflict of interest when he/she represents a person with whom the lawyer is then having a personaland sexual relationship in a family law proceeding. …. [11] The degree of acrimony surrounding the end of the relationship between S.G. and Mr.

Regular was properly considered by theAdjudicative Panel and the Benchers in concluding that there were significant credibility concerns, particularly related to S.G.’sallegations. Much of her testimony was not accepted as being truthful on a balance of probabilities by the Adjudicative Panel. As forMr. Regular, the Adjudicative Panel obviously seems to have found his testimony more reliable and this appears to have played asignificant role in the dismissal of a number of allegations against him. While recognizing possible “bias, interest or other motives” onthe part of both Mr.

Regular and S.G., parts of the testimony of each were accepted by the Adjudicative Panel as true on a balance ofprobabilities. It is with all of this, as well as a consideration of the full transcript and exhibits, that I must now decide the appeal filed byMr. Regular. Both counsel before me have provided me with excellent guidance in this regard. [6] After describing the matter before him, the Trial Division judge considered the standard of review he was required to apply.

He concluded that “the reasonableness standard is to be the standard of review applicable to questions of fact and mixed fact [and] law aswell as questions regarding the legal

interpretation of the Law Society’s own legislation.” He also decided that pure questions of lawwere to be reviewed on the more rigorous standard of correctness. With respect to the application of the reasonableness standard, theTrial Division judge expressed the view that “the question to be asked is whether the reasons, when considered as a whole, are tenable assupport for the decision.

If there is no line of analysis in the reasons that could have reasonably led the Adjudicative Panel or Benchersto reach the conclusion it did, then the decision would be unreasonable.” [7] With respect to the meaning of reasonableness the Trial Division judge quoted from paragraph 47 of Dunsmuir v.

NewBrunswick, 2008 SCC 9 , [2008] 1 S.C.R. 190, as follows: Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards ofreasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range ofacceptable and rational solutions.

A court conducting a review for reasonableness inquires into the qualities that make a decisionreasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concernedmostly with the existence of justification, transparency and intelligibility within the decision-making process.

But it is also concernedwith whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [8] As to the role of the reviewing court, in applying the reasonableness standard, the Trial Division judge concluded that “thereviewing court ought not to reweigh the evidence or substitute their own appreciation of the appropriate solution but rather mustdetermine if the outcome falls within a range of reasonable outcomes”. (

c) Decision of the Trial Division judge [9] With respect to the incident occurring at the March 12th, 1990 meeting of S.G. with Mr. Regular, the Trial Division judgeexplained the reasoning that led him to conclude that the findings of the Panel and Benchers on the issue were not unreasonable and toconclude that the reasons given provide the necessary justification, transparency and intelligibility. As Mr. Regular challenges thatreasoning and conclusion, it is helpful to set it out in some detail.

The Trial Division judge wrote: [37] The Adjudicative Panel and Benchers were also reasonable in concluding on a balance of probabilities that at the March 12thmeeting, the personal relationship between S.G. and Mr. Regular “developed” and that a future sexual relationship was discussed. TheAdjudicative Panel, having heard the testimony, had an appropriate basis upon which to conclude this to be the case. [38] The initiation of the establishment of such a relationship during this meeting at Mr. Regular’s office was found to be a violationof the duty of Mr.

Regular to act with integrity and to avoid engaging in questionable conduct. Again, here it was within the domain ofthe Adjudicative Panel and Benchers to make this determination and I am satisfied that such was a reasonable result based upon thetestimony and all of the circumstances in existence. While there was no sexual activity on this occasion, even Mr. Regular admitted thatthere may have been hugging and kissing. Based upon what was accepted by the Adjudicative Panel as regards S.G.’s vulnerability andMr.

Regular’s knowledge of her circumstances, it was not unreasonable to conclude that to act as he did was not keeping with hisresponsibilities under the Code. [39] Here, I would suggest that it is purely a question of semantics for Mr. Regular to say that as there was no sexual activity at the

March 12th meeting, there was no breach on his part. What was found by the Adjudicative Panel to have occurred at this meeting is reasonably sufficient in the specific circumstances to constitute professional misconduct. It was therefore reasonable for the Adjudicative Panel and the Benchers to conclude that at the March 12, 1990 meeting, Mr. Regular “abused his position as a lawyer and took advantage of S.G.’s vulnerability at the time” by initiating a sexual relationship.

Such can reasonably be seen as breaching his duty to his client to act with integrity and, as well, engaging in questionable conduct. …. [43] The argument made before me by counsel for Mr. Regular is that on March 12, 1990, Mr. Regular was not performing any legal services for S.G. so it matters not what was discussed at that particular meeting. Counsel bases his argument on the position that there was no evidence before the Benchers that legal services were being provided to S.G. on that date and, as a result, the appointment did not create a solicitor-client environment or relationship.

The prior solicitor-client relationship had ended. [44] … Here the Adjudicative Panel found that S.G. returned to see and seek the assistance of Mr. Regular based upon his invitation to her to do so. As well, it is clear that there was proximity in time to the peace bond application and the events that had occurred leading up to that application and the March 12th meeting.

In the circumstances here, the decision of the Adjudicative Panel, as accepted by the panel of Benchers, indicating that the meeting could be linked back to the prior solicitor-client relationship was not an unreasonable one to reach… …. [46] As a result, I must deny the appeal with regard to the guilty finding of the Adjudicative Panel, as approved by the panel of Benchers, with regard to the March 12th meeting.

The reasons given by the Adjudicative Panel provide the necessary “justification, transparency and intelligibility” that does not allow me to decide otherwise on appeal. [ 10 ] As a consequence of that reasoning, the Trial Division judge affirmed the findings of the Panel, and the affirmation by Benchers, that Mr. Regular was guilty of failure to comply with his duty, under

Chapter I of the Code , to act with integrity, and guilty of failure to comply with his duty, under

Chapter XIX of the Code , to avoid questionable conduct. [ 11 ] With respect to the second incident, Mr. Regular’s representation of S.G. in the family law proceedings, the Trial Division judge explained in detail why he had doubts about the existence of a conflict of interest. Nevertheless, he decided that the Panel’s conclusion could not be found to be unreasonable in that the reasons given provided the necessary justification, transparency and intelligibility.

He also explained why he decided that the Panel “was not reasonable in concluding that S.G. did not effectively waive any existing or potential conflict of interest on the part of Mr. Regular.” Again, as the reasoning of the Trial Division judge in this regard is critical to the outcome of the appeal of each of the Law Society and Mr. Regular, it is convenient to more fully set out that reasoning here. The Trial Division judge wrote: [54] With regard to Mr. Regular’s representation of S.G. in her family law proceeding, the facts as found by the Adjudicative Panel really are not in question.

Again, the Adjudicative Panel was in the best position to, and in my opinion properly did, consider the testimony and reach what must be regarded as a reasonable conclusion as regards to what had transpired. I see no basis or right to interfere with these factual findings based upon my review of the evidence at the hearing.

The reasoning of the Adjudicative Panel and Benchers was clearly expressed and those factual determinations made are ones that could reasonably result based upon everything before them. [55] At issue here really is the determination made by the Adjudicative Panel and the panel of Benchers on appeal that Mr. Regular breached the Code by being in a conflict of interest in representing or involving himself in S.G.’s family law proceedings.

While the Adjudicative Panel, and ultimately the panel of Benchers, made guilty findings with regard to a failure to act with integrity and avoiding questionable conduct related to Mr. Regular’s involvement in S.G.’s family proceeding, these findings were obviously based upon their determination that Mr. Regular was in a conflict of interest at that time. A review of that determination related to there being a conflict of interest here will, in effect, resolve those other findings. [56] The Adjudicative Panel and panel of Benchers seem to have been clear that representation of S.G. by Mr.

Regular while a sexual relationship was taking place, of itself, would not amount to a breach of the Code . This is the effect of their finding that for other earlier matters involving the student loan of S.G. and the property matters, there was no breach of the Code . It appears that the nature of the proceedings, being in a family law context together with the specific circumstances, justify finding a conflict of interest was in play. …. [61] … By the time of her separation from T.P., S.G. and Mr.

Regular had been involved in a consensual sexual relationship for some eleven years… …. [70] As stated earlier, the standard for any review here must be on the basis of reasonableness. While I may not agree with the decision made related to the conflict of interest in question, that is of no matter if it is a reasonable one based upon the record. Here, deference must be given to the Adjudicative Panel’s expertise and to their conclusions on the facts and inferences reasonably taken from them.

This being the standard, I am unable to conclude that the findings made and the conclusions reached in this regard were unreasonable in that the reasons given do provide the required justification, transparency and intelligibility expected when all of the circumstances and the context of the matter for which Mr. Regular provided assistance to S.G. is considered… [71] However, even in concluding that the Adjudicative Panel and the panel of Benchers were reasonable in finding that the circumstances in this case caused Mr. Regular to be, or potentially be, in a conflict of interest, that does [sic] end the matter.

The Adjudicative Panel in their reasons went on to speak to the issue of whether there had been an effective waiver of any conflict of interest by S.G. They concluded that there was no effective waiver on the basis that a request that a lawyer act on a matter does not amount to a

waiver. They went on to say that proof of a waiver would “normally” require “a signed document indicating a fully informed waiver and may require independent legal advice depending on the circumstances.” The panel of Benchers did not deal with this reasoning at all in their decision and nor did they expressly consider whether S.G. had waived any conflict of interest that Mr.

Regular may have had. …. [73] While it was reasonable for the Adjudicative Panel to conclude that a request for a lawyer to represent a client on a matter, of itself, is not proof of an effective waiver of any conflict or potential conflict of interest, the factual context surrounding that request and the knowledge on the part of the client are very much important additional factors to consider. As well, there is no basis in law, or for that matter in the Code , that an effective waiver absolutely requires a written confirmation of same and/or independent legal advice… …. [76] Here, the evidence of Mr.

Regular was that he had discussed the appropriateness of his representing S.G. with her but that she still wanted him to act for her in the family proceeding. For instance, [lengthy excerpt of Mr. Regular’s evidence explaining his concerns at the time and describing his dialogue with S.G. advising her he ought not to represent her omitted]. The Adjudicative Panel and Benchers appear to have made no specific reference to this part of Mr. Regular’s testimony.

They certainly made no finding that these comments lacked any credibility. [77] Based upon the specific circumstances here, as explained above and referred to elsewhere in the transcript, as well as the approach taken by the Adjudicative Panel as to the credibility of S.G. and Mr. Regular referred to earlier, I find that the Adjudicative Panel was not reasonable in concluding that S.G. did not effectively waive any existing or potential conflict of interest on the part of Mr. Regular. Full disclosure and existence of full knowledge on the part of S.G. as to any conflict related to Mr.

Regular’s personal interests were evident here. Notwithstanding this knowledge on her part, S.G. “insisted” on Mr. Regular representing her in the family law proceeding. She had full knowledge of her rights and unequivocally and intentionally abandoned them by insisting that Mr. Regular act for her.

I am satisfied here that, in these full circumstances, there was an effective waiver of any conflict of interest by S.G. [78] The Adjudicative Panel unreasonably appear to have placed too great an emphasis on the lack of a written and signed waiver document and the possible requirement for independent legal advice in these circumstances. While clearly here I do not want to be understood as agreeing fully that Mr.

Regular should have represented S.G. in her family matter, the existence of an effective waiver on her part negates any possible finding of professional misconduct in these circumstances on the basis of a conflict of interest… [ 12 ] As a consequence of that reasoning, the Trial Division judge set aside, on the basis of waiver by S.G. of Mr. Regular’s conflict of interest, the guilty findings with respect to the conduct of Mr. Regular in representing S.G. in family law proceedings at the same time as he was engaging in a personal and sexual relationship with her.

Specifically he wrote: [80] Therefore, the guilty finding by the Adjudicative Panel and panel of Benchers related to Mr. Regular’s failure to act with integrity, his breach of duty to avoid a conflict of interest, and his failure to avoid questionable conduct by representing S.G. in the family law proceedings at the time he was having a personal and sexual relationship with her cannot be upheld as being reasonable based upon the specific circumstances in this case and my comments above.

Having varied the decision of Benchers in that manner he remitted the matter to the Panel for further hearing as to the sanction appropriate to the varied findings. APPEAL [ 13 ] From that decision the Law Society appealed the setting aside of the guilty finding with respect to Mr. Regular’s conduct representing his client in a family law proceeding while he was having a personal and sexual relationship with her. The Law Society set out separate grounds in respect of different aspects of the order set aside by the Trial Division judge. By cross-appeal, Mr.

Regular then appealed the decision of the Trial Division judge affirming the guilty finding with respect to Mr. Regular establishing a sexual relationship with S.G. at the March 12th, 1990 meeting. Mr. Regular also appealed the decision of the Trial Division judge that, while he might not have concluded that a conflict of interest existed when Mr. Regular represented S.G. in the family law proceedings, applying the standard of review applicable he was unable to conclude that the Panel’s decision that a conflict existed was an unreasonable one.

Between the two parties all of the decisions of the Trial Division judge are challenged. [ 14 ] At the hearing, counsel advised the Court that they were in agreement that both appeals could be most efficiently presented if Mr. Regular’s full argument were presented first. As the parties were in agreement, the Court heard the arguments in that manner. Accordingly, counsel for Mr.

Regular addressed both his cross-appeal against the Trial Division judge’s affirmation of the guilty finding in respect of the March 12th, 1990 meeting, and his cross-appeal in relation to the family law proceeding, and presented his response to the Law Society’s appeal. Counsel for the Law Society then responded to the cross-appeal by arguing in support of the Trial Division judge’s affirmation of one guilty finding and presented its appeal against the several aspects of his decision setting aside the other guilty finding on the basis that the Panel’s finding respecting waiver was unreasonable.

ISSUES [ 15 ] In their facta, the parties identified the number and character of the issues somewhat differently. At the hearing, however, their arguments covering both appeals were presented by addressing the following three primary issues: 1. Did the Trial Division judge err in his determination of the standard of review applicable, or in his application of it, in confirming the finding of the Panel, and Benchers’ affirmation of it, that Mr.

Regular failed to act with integrity and failed to avoid questionable conduct by initiating at the March 12th, 1990 meeting, a sexual relationship with his client within the confines of a solicitor-client relationship? 2. Did the Trial Division judge err by ordering that:

2. The finding of the Adjudicative Panel, as upheld by the panel of Benchers, related to Mr. Regular’s failure to act with integrity, toavoid a conflict of interest and engaging in questionable conduct by representing S.G. in family law proceedings at the same time as hewas engaging in a personal and sexual relationship with her is hereby set aside; and, in particular, err A in his determination of the standard of review applicable, or in his application of it, in upholding the finding of the Panel, andBenchers’ affirmation of it, that Mr.

Regular, failed to avoid a conflict of interest by representing S.G. in family law proceedings at thesame time as he was engaging in a personal and sexual relationship with her; and B in deciding that the Panel was not reasonable in concluding that S.G. did not effectively waive any existing or potential conflict ofinterest, and, by setting aside by reason of his finding of waiver by S.G., the whole of the finding of the Panel and its affirmation byBenchers, including that Mr. Regular is guilty of failure to comply with: ● his duty to act with integrity under

Chapter I of the Code, ● his duty to avoid a conflict of interest between lawyer and client under

Chapter VI of the Code, and ● his duty to avoid questionable conduct under

Chapter XIX of the Code by representing his client in a family law matter at the same time as he had a personal and sexual relationship with the client. [16] Both the Law Society and Mr. Regular challenge the decision of the Trial Division judge respecting costs. The Law Societyseeks an order for costs before the Trial Division judge and on this appeal. Mr. Regular seeks the same, as well as an order for costsbefore the Panel and before Benchers. THE LAW (

a) Statutory And regulatory provisions [17] There is no major issue as to the statutory provisions relevant to this matter. It is not, therefore, necessary to set them out here. However, it will be helpful to indicate the general nature of those provisions in order to place these discussions in proper legal context. Iwould note that the whole of

Part II of the Law Society Act, providing for disciplinary proceedings, was repealed and replaced by astatute assented to on June 4, 2008, after completion of the proceedings before the Panel but prior to the proceedings before Benchers. For the most part, the original provisions were repeated with minor variation. There were some significant adjustments, but none thatappear to bear on the issues in this matter. No issue consequent upon the amendment was raised by the parties and they argued theirpositions by reference to the final version of the statute. [18] In general terms, the statute empowers the Law Society to establish “rules of professional ethics or conduct” (paragraph (

p) ofsection 18). It also enacts disciplinary procedures (Part II, sections 41 to 55.3) by which “conduct deserving of sanction”, defined tomean “breach of the rules of professional ethics or conduct” (paragraph (

c) of

section 41), is to be adjudicated. Those procedures assignto an adjudication panel or tribunal, appointed to hear the disciplinary complaint, power to “decide whether or not a respondent is guiltyof conduct deserving of sanction (old sub-section 48(1), new sub-section 50(1)). The term “respondent” is defined to include, amongstothers, a member of the Law Society (paragraph (

f) of

section 41). (

b) Standard of review by this Court [19] There is no dispute between the parties as to the standard of review to be applied by this Court in hearing the appeal from thedecision of the Trial Division judge. However, as the standard of review chosen by the Trial Division judge, and his application of it, isat issue in virtually all aspects of this appeal, it is helpful to set out the basis on which this Court will review his decision. The approachthat is appropriate was succinctly and clearly expressed in Burke v.

NLAPPE et al. (2010), 2010 NLCA 12 , 294 Nfld. &P.E.I.R. 230 by Green, CJNL: [49] The standard of review by this Court of the decision of the applications judge on the choice of standard applicable on judicialreview, or the application of that standard, is one of correctness. See, Carpenters and Joiners of America, Local 579 v.

NorthlandContracting Inc. (2006), 2006 NLCA 11 , 261 Nfld. & P.E.I.R. 256 (NLCA) per Mercer J.A. at paras 14, 23; Macdonald v.Mineral Springs Hospital, 2008 ABCA 273, per Hunt J.A. at para. 19. [50] In the current context, that means that this Court will examine the decision of the applications judge to determine whether thejudge was correct in her choice of the applicable standard of review and the application of that standard in dismissing the application forjudicial review.

In other words do we agree, applying the appropriate standard of judicial review (determined by the applications judgeto be a reasonableness standard), that the decision reached by the applications judge is one that this Court would have reached? If not,we will substitute our decision for that of the applications judge.

ANALYSIS Issue 1: Upholding the finding of failure to act with integrity and failure to avoid questionable conduct, arising out of theMarch 12, 1990 incident [20] The arguments of the parties identify two aspects to be addressed: first, whether, in reviewing the determination by the Panel,and affirmation of it by Benchers, of whether a solicitor-client relationship existed on March 12th, 1990, the Trial Division judgeincorrectly applied the reasonableness standard of review instead of the correctness standard; and second, whether Mr.

Regular’ssolicitor-client relationship with S.G. was at an end prior to the March 12th, 1990 meeting and, for that reason, his conduct with S.G. isnot subject to review or sanction by the Law Society.

(

a) Standard of review aspect (

i) Mr. Regular’s argument [21] With respect to the choice of the standard of review, Mr. Regular argues that the question of the existence of a solicitor-clientrelationship is a pure question of law. He cites, amongst other cases, Canada (Director of Investigation and Research) v. Southam Inc., (SCC), [1997] 1 S.C.R. 748 as authority for that proposition.

He also argues that neither the Panel nor Benchers couldhave resolved the question of what constitutes a solicitor-client relationship without resorting to the common law. (ii) The Law Society’s argument [22] The Law Society addresses the standard of review question only very briefly. It cites and relies on Dunsmuir as establishingthe standard of review required to be applied generally by the Trial Division judge. (iii) Conclusion as to standard of review [23] In his factum, Mr. Regular refers to paragraph 35 of the Southam decision.

That paragraph reads as follows: Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually tookplace between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests. A simpleexample will illustrate these concepts. In the law of tort, the question of what “negligence” means is a question of law. The questionwhether the defendant did this or that is a question of fact.

And, once it has been decided that the applicable standard is one ofnegligence, the question whether the defendant satisfied the appropriate standard of care is a question of mixed law and fact. I recognize,however, that the distinction between law on the one hand and mixed law and fact on the other is difficult. On occasion, what appears tobe mixed law and fact turns out to be law, or vice versa.

The correct conclusion to be drawn from that paragraph is that what constitutes, in general terms, a solicitor-client relationship is a purequestion of law but whether, on the facts of a particular case, a solicitor-client relationship exists is a question of mixed law and fact. Ishould also note, as the Court did in Dunsmuir (see paragraph 51), that “some legal issues, however, attract the more deferential standardof reasonableness”.

I do not consider it necessary to determine whether that is the case here, as the overwhelming considerations beforethe Panel and Benchers were factual in nature not legal. [24] A review of the decisions of both the Panel and Benchers indicates clearly that there was no issue as to what constituted, inlaw, a solicitor-client relationship. The basis on which the Panel made its decision, and Benchers affirmed it, is set out in the followingexcerpt from the Panel’s decision: S.G. met Robert Regular when she was a client and he represented her on a peace bond application.

She was 21 years old and had a highschool education. He was 38 years old and had practiced law in the community for about three years. During the course of hisrepresentation of S.G. on the peace bond application, she disclosed to him instances of previous sexual assaults and sexual harassmentagainst her. S. G. was under psychiatric treatment and was taking medication for depression related to the recent breakup with her boyfriend. During the course of his representation of S.G. on the peace bond application, Mr. Regular advised S.G. she could talk to him atany time about any problems.

There was likely a physical attraction, but no personal or sexual relationship until after Mr. Regular’srepresentation on the peace bond application ended in February, 1990. S. G. attended at Mr. Regular’s Law Offices on March 12, 1990,after she made an appointment. It is likely that S.G. believed she was seeing Mr. Regular in his role as a lawyer on March 12, 1990. Themeeting occurred soon after his attendance with her in Provincial Court on the peace bond application, the meeting occurred at Mr.Regular’s law offices, and the meeting was initially scheduled during regular business hours.

There was a solicitor/client relationshipwhen S.G. attended at Mr. Regular’s law offices to talk to him on March 12, 1990. S.G. was vulnerable and impressionable. There wasa power imbalance between S.G. and Mr. Regular at that time. At that meeting the personal relationship developed and the sexualrelationship was discussed. There was no continuing solicitor/client relationship when the sexual relationship commenced soon after thatmeeting… [25] In this case there is no blurring as to “the distinction between law on the one hand and mixed law and fact on the other”.

Theissue before the Panel turned almost exclusively on the proven factual circumstances. That is clear from reading the excerpt from thePanel decision quoted in the preceding paragraph. Mr. Regular’s argument that the Trial Division judge erred by not subjecting thePanel’s conclusion as to the existence of a solicitor-client relationship to a standard of correctness must be rejected.

His proposition isquite inconsistent with the view expressed in Dunsmuir (see paragraphs 43 to 64), in particular that: [53] Where the question is one of fact, discretion or policy, deference will usually apply automatically (Mossop, at pp. 599-600: Dr. Q.,at para. 29; Suresh, at paras. 29-30).

We believe that the same standard must apply to the review of questions where the legal and factualissues are intertwined with and cannot be readily separated. [26] The Trial Division judge made no error in quoting and relying on paragraph 47 of Dunsmuir, set out in paragraph 7 above, or inchoosing reasonableness as the standard of review. Mr. Regular’s appeal on that ground must be dismissed. (

b) The finding as to whether a solicitor-client relationship existed

(

i) Mr. Regular’s argument [27] With respect of the second aspect of this issue, Mr. Regular’s argument is that a solicitor-client relationship did not exist at thepoint in time of his meeting with S.G. in his office on March 12, 1990 because his representation on the peace bond matter wascompleted on February 21st, 1990 and the account billed on February 22nd, 1990. In support of this proposition he relies on Taylor v.The Law Society of Prince Edward Island (1992), (PE SCAD), 97 D.L.R. (4th) 427 (PEISC-A.

D) which, he submits,“was adopted with approval by this Court” and, to support that submission he cites Hussey v. Parsons (1997), (NLSC), 152 Nfld. & P.E.I.R. 1 (NLSCTD) at paras. 777-783. [28] Mr. Regular quotes Carruthers, CJPEI, in Taylor, as writing at page 435: It cannot be said that the prior solicitor-client relationship between the appellant and the [vendor] required the appellant to perform anylegal services for [the vendor]. He submits that the same applies here, and Mr.

Regular was not, by reason of having earlier represented S.G. on the peace bond issue,performing legal services on March 12th, 1990. (ii) Argument of the Law Society [29] The Law Society argues that “the question of whether a person is to be considered a client of the lawyer is to be determinedhaving regard to all the circumstances.” In its factum the Law Society identifies the circumstances established by the evidence which,the Law Society submits, justified the Panel concluding that a solicitor-client relationship existed on March 12th, 1990.

Thesecircumstances include: ● in January, 1990 S.G. was under the care of a psychiatrist who had prescribed antidepressant drugs; ● on February 5, 1990 Mr. Regular received a report from that psychiatrist indicating S.G. had symptoms of endogenous depressionand that she likely experienced a loss of self-esteem and self-confidence with increasing dependence on those close to her; ● Mr. Regular’s notes of their first meeting, on January 25, 1990, indicates S.G. made him aware that she had been sexually assaultedat ages 13 and 18; ● S.G.’s evidence that the peace bond undertaking was signed in Mr.

Regular’s office in Manuels and he drove with her to the courthouse in St. John’s; ● the Panel’s finding that it was likely that Mr. Regular told S.G. during his representation of her on the peace bond application, that“she could talk to him if she was upset about anything”; ● the evidence of both S.G. and Mr. Regular that, at the time of the March 12th, 1990 meeting, S.G. saw Mr. Regular because shewas upset about something and, in Mr. Regular’s words she “was having some sort of an anxiety issue and she needed somebody to talkto”; ● Mr.

Regular’s evidence on cross-examination that S.G. “was upset about something and she wanted to talk to somebody, and shesaid that she felt she could talk to me”. (iii) Conclusion as to the existence of a solicitor-client relationship [30] Solicitor-client obligations may arise from circumstances other than a specific agreement to act as a solicitor. As was decidedin Tracy v.

Atkins (1977), (BC SC), 83 D.L.R. (3d) 46 (BCSC), (affirmed on appeal (1979), 105 D.L.R. (3d) 632(BCCA)): … though fiduciary responsibilities normally arise from an existing contractual relationship of solicitor and client the contractual tie isnot essential. Since the judgment of the Privy Council in Hedley Byrne & Co., Ltd. v.

Heller & Partners, Ltd. [1963] 2 All E.R. 575, the law hasrecognized three situations in which a solicitor may be imposed with legal duty: in contract, by fiduciary relationship, and by therelationship which Cordery describes in these words: circumstances may, in the absence of any contract or fiduciary relationship, create a special relationship between the adviser and theperson advised sufficient to impose upon the adviser a duty of care in the giving of advice.

In fact these relationships were recognized and established as long ago at least as the decision of the House of Lords in Nocton v.Lord Ashburton, [1914] A.C. 932. In that case Vicount Haldane said at pages 955-6: Such a special duty may arise from the circumstances and relations of the parties. These may give rise to an implied contract at law or toa fiduciary obligation in equity. ...I have only to add that the special relationship must, whenever it is alleged, be clearly shewn to exist. [31] A similar conclusion was reached by Adams J. in Dobbin v.

Acrohelipro Global Services Inc. (2004), 2004 NLSCTD 178, 240 Nfld.&P.E.I.R. 313 (NLSCTD) (affirmed on appeal 2005 NLCA 22). The Trial Division judge cited the decision ofAdams J. and quoted the following: [17] In determining the answer to the question of whether a solicitor and client relationship existed, one must look not just to whetherthe lawyer had actually been retained by the client who now seeks to have him removed. In my view, one must also have regard to thebroader policy considerations referred to by Sopinka, J., in MacDonald Estate [MacDonald Estate v.

Martin, [2002] 3 S.C.R. 1235] andalluded to earlier in these reasons: viz, the high standards of the legal profession and the integrity of our system of justice.

[ 32 ] I am satisfied that the Trial Division judge made no error when he concluded that the ruling in the Taylor case did not have application in this matter. As was noted by Puddester J. in Hussey , the Taylor case involved alleged conflict in relation to a client for whom the lawyer had earlier acted and a new client. The lawyer involved made clear to both clients, present at the same time, the client for whom he was acting in that specific matter. Neither objected.

At paragraph 18 of Hussey , Puddester J. also noted that the conclusion of the court in Taylor was that “a prior solicitor-client relationship did not in itself impose any current duties or obligations in relation to legal services”[emphasis added].

I agree with that observation and would add that it is not inconsistent with a conclusion that whether a solicitor-client relationship exists is to be determined by consideration of all of the circumstances, not simply by the point in time when a specific legal service was concluded. [ 33 ] The mere fact that the actual work on a matter has been completed, or indeed that a final account has been rendered in respect of work in that matter, does not mean that because there is no specific agreement to act on a new matter, a subsequent office consultation is not in the character of a solicitor-client relationship.

This is especially so where, as the Panel found here, it was in such close proximity to the prior engagement and it was in response to an invitation to S.G. by Mr. Regular to consult him any time she had concerns. [ 34 ] Whatever the ratio in Taylor it cannot be said to have been “adopted with approval by this Court” as counsel for Mr. Regular asserts. Hussey is a decision of the Trial Division not a decision of the Court of Appeal.

The Trial Division judge here made no error when he decided: [44] Based upon the findings of the Adjudicative Panel, I am not satisfied that the ruling in the Taylor case has any significant application with regard to the facts in this matter. Here the Adjudicative Panel found that S.G. returned to see and seek the assistance of Mr. Regular based upon his invitation to her to do so. As well, it is clear that there was proximity in time to the peace bond application and the events that had occurred leading up to that application and the March 12th meeting.

In the circumstances here, the decision of the Adjudicative Panel, as accepted by the panel of Benchers, indicating that the meeting could be linked back to the prior solicitor- client relationship was not an unreasonable one to reach. Therefore, the argument being made at this time by counsel for Mr. Regular cannot be adopted by me. The factual context in [the Taylor ] case is far different from the situation involving Mr. Regular. …. [46] As a result, I must deny the appeal with regard to the guilty finding of the Adjudicative Panel, as approved by the panel of Benchers, with regard to the March 12th meeting.

The reasons given by the Adjudicative Panel provide the necessary “justification, transparency and intelligibility” that does not allow me to decide otherwise on appeal. ( Emphasis added.) [ 35 ] The emphasized sentence in the excerpt set out in the preceding paragraph clearly indicates application by the Trial Division judge of the first prong of the Dunsmuir test. His application of the second prong is not quite so obvious.

How the Dunsmuir approach should be applied by a judge on judicial review was clearly described by this Court in Burke where Green, CJNL wrote: [53] The question in this case is whether, in concluding that the Board’s decision was reasonable, the applications judge correctly applied the reasonableness standard.

The analysis is described in Dunsmuir as having a two-pronged approach; first, to analyze the Board’s reasons for decision to determine whether they satisfy the requirements of justification, transparency and intelligibility and then to address whether the decision falls within a range of possible acceptable outcomes which are defensible in respect of facts and law.

With that analysis as background, the correctness of the applications judge’s decision will then be brought into focus. …. [77] Although the Dunsmuir reasonableness analysis contemplates a two-pronged test, it is to be noted that the majority in that case observed that reasonableness is concerned “mostly” with the decision-making process.

Nevertheless, it did assert that it was “also” concerned with whether the decision fell within a range of “possible, acceptable outcomes”… [ 36 ] While the Trial Division judge did not state expressly, as the Supreme Court did in Dunsmuir , that the tribunal’s decision falls “within the range of acceptable outcomes that are defensible in respect of the facts and the law”, that must be inferred from his conclusion that the decision of the Panel, as accepted by Benchers, was not an unreasonable one to reach. As was decided by Binnie J. in Canada (Citizenship and Immigration) v.

Khosa , 2009 SCC 12 , [2009] 1 S.C.R. 339: [59] Reasonableness is a single standard that takes its colour from the context. One of the objectives of Dunsmuir was to liberate judicial review courts from what came to be seen as undue complexity and formalism. Where the reasonableness standard applies, it requires deference. Reviewing courts cannot substitute their own appreciation of the appropriate solution, but must rather determine if the outcome falls within “a range of possible, acceptable outcomes which are defensible in respect of the facts and law” ( Dunsmuir , at para. 47 ).

There might be more than one reasonable outcome. However, as long as the process and the outcome fit comfortably with the principles of justification, transparency and intelligibility, it is not open to a reviewing court to substitute its own view of a preferable outcome. (Emphasis added.) It may have been helpful, but it was not essential for the Trial Division judge to have explicitly stated that the decision of the tribunals fell within that range of acceptable outcomes that is defensible in respect of the facts and the law.

The quotation from his reasons expressed in paragraph 8 above, shows that he was alert to the necessity for the decision to fall within an acceptable range of outcomes. The whole of his reasoning, and his stated conclusion that the decision of the Panel and Benchers “was not an unreasonable one to reach”, demonstrate that he came to such a conclusion. To employ the words of Binnie J., “the process and the outcome fit comfortably with the principles of justification, transparency and intelligibility”. [ 37 ] Mr. Regular’s appeal on that ground must be dismissed.

Issue 2A: Upholding as reasonable the conclusion respecting conflict of interest by reason of representing S.G. in her family law proceedings. [ 38 ] This issue is the aspect of the Trial Division judge’s setting aside the Panel’s finding of breach of duty by Mr. Regular, in connection with representing S.G. in the family law proceeding, that is appealed by Mr. Regular. He contends that the Trial Division judge erred when, notwithstanding his expressed difficulty in understanding how such a conclusion could have been reached, the Trial Division judge upheld, as reasonable, the Panel’s conclusion that Mr.

Regular was in a conflict of interest when he represented S.G. in the family law proceedings. The Law Society, of course, contends that while the Trial Division judge was correct in finding that the Panel’s conclusion as to the existence of a conflict of interest was reasonable in the circumstances, he erred when he decided that the Panel’s conclusion, that there was no waiver of that conflict, was unreasonable. I will treat the waiver aspect as a separate issue, as both parties did in their facta and on the hearing. [ 39 ] Again, Mr.

Regular presents this issue as having two separate aspects : first, that the Trial Division judge ought to have applied a correctness standard instead of the more deferential reasonableness standard; and second, he argues that, even if the Trial Division judge were correct in applying the reasonableness standard, he erred in deciding that the Panel’s conclusion as to the existence of a conflict of interest was reasonable. (

a) Choice of standard of review [ 40 ] This aspect of the issue requires little further consideration. I reject Mr. Regular’s argument that the Trial Division judge applied the incorrect standard of review.

I do so for the same reasons, and on the basis of the same authorities, as that argument was rejected in his appeal in respect of the March 12th, 1990 incident (see paragraphs 23-25 above). [ 41 ] While, the generic question of what constitutes a conflict of interest may be a question of law to be reviewed on the correctness standard, whether a conflict of interest exists in the factual circumstances established by the evidence in a specific case is, unquestionably, a question of mixed fact and law. Resolving that question in this case depends primarily on factual considerations, not legal ones.

As the Trial Division judge stated: … A determination as to whether a conflict of interest exists is very much one that must be made on a case by case basis and will be fact intensive. Any finding in this regard is inextricably dependent on factual findings and inferences about the conduct involved and the interests of the public as well as the legal profession. As such, in my view, the more deferential standard of reasonableness must be applied in any review of this issue on appeal.

The Trial Division judge made no error in his determination of the standard by which the decision of the Panel was to be reviewed. (

b) Application of the standard of review to the Panel’s finding that a conflict of interest existed. (

i) Argument of Mr. Regular [ 42 ] The argument made by Mr. Regular is best summarized by quoting from his factum: In the alternative, even if the judge applied the appropriate reasonableness standard in upholding the lower tribunals’ conclusion on conflict of interest, he erred in concluding that that conclusion was reasonable. The reasons in support of this finding do not fall within a range of possible, acceptable outcomes which are defensible in respect of the uncontradicted evidence summarized at paragraph 43 above.

The evidence that was summarized in the referenced paragraph of his factum is as follows: ● The appellant was reluctant to accept this retainer and advised S.G. of the nature of his conflict; ● S.G. refused to apply for legal aid; ● S.G.’s financial circumstances were such that she was not able to afford other competent counsel; ● The appellant was S.G.’s first choice of counsel; ● S.G. insisted on retaining him and was dissatisfied with others; ● The appellant was directly involved in S.G.’s family law matter for ten months only, i.e., from November of 2001 until August 31, 2002; and, ● There was no evidence that the appellant’s inability to adopt a “tough stance” with S.G. caused her prejudice in any way. (ii) Argument of the Law Society [ 43 ] In reply, the Law Society’s factum presents an exhaustive review of the evidence, particularly that of Mr.

Regular, as to Mr. Regular’s representation of S.G. in the family law proceedings and his involvement with respect to advising S.G. as to how she should instruct others to represent her in the family law proceedings. Counsel submits both the Panel and Benchers reviewed all of the pertinent evidence, weighed it appropriately, provided adequate reasons and drew proper conclusions of fact and law on the basis of the evidence. As a result, counsel submits, the Trial Division judge was correct in his decision.

Applying the Dunsmuir guidance, the Trial Division judge was unable to conclude that the findings made and the conclusions reached by the Panel and by Benchers were unreasonable. (iii) Conclusion respecting the finding that a conflict of interest existed [ 44 ] To begin with, the argument by Mr. Regular that “the reasons in support of this finding do not fall within a range of possible

acceptable outcomes which are defensible”, considering the evidence referred to in his factum, and itemized in paragraph 42 above, is without merit. The first five of the seven items of evidence are relevant to waiver and not at all relevant to conflict, or potential conflict, of interest as such. The sixth refers only to time and the seventh deals only with whether or not there was evidence of prejudice to S.G. [ 45 ] A review of the decision of the Trial Division judge demonstrates that he employed the Dunsmuir approach.

He acknowledged that he had “some difficulty in understanding how the adjudicative panel, and the panel of Benchers on appeal, could have reached their conclusions regarding there being a conflict of interest in these circumstances.” After explaining how that difficulty arose, he then correctly applied the law that, notwithstanding the fact that he “may not agree with the decision”, he was required to show deference to the Panel’s expertise and to their conclusions on the facts and inferences reasonably taken from them.

Taking that approach, he decided that he was “unable to conclude that the findings made and the conclusions reached in this regard were unreasonable in that the reasons given do provide the required justification, transparency and intelligibility” [emphasis added.]. [ 46 ] As in the case of his review of the decision related to the March 12th, 1990 incident, the Trial Division judge made no specific comment about the second prong of the Dunsmuir test: whether the finding falls within a range of possible acceptable outcomes which are defensible in respect of facts and law.

A detailed review of the Trial Division judge’s reasons indicates he did a sufficiently thorough review of all relevant facts, and weighed them in the context of the law applicable, to enable application of the second prong of the Dunsmuir test. [ 47 ] The Trial Division judge identified as the law applicable here, and the “rule most relevant to this case”, Rule (

c) of

Chapter VI of the Code , dealing with conflict of interest as between lawyer and client. It is cast solely in terms of duty to a client. It provides: The lawyer shall not act for the client where the lawyer’s duty to the client and the personal interest of the lawyer or an associate are in conflict. He then weighed the factual circumstances in that context. Some of his comments particularly relevant to this issue would include: [62] To me, the nature of the relationship between Mr.

Regular and S.G. in 2001 seems more akin to one of a lawyer representing a spouse, partner, business associate or possibly even a friend in some respects. Admittedly, the element of secrecy of the relationship would not be in play in those situations but one must question whether this would actually be a factor that necessitates a conclusion that an actual or potential conflict of interest might exist. This is of particular import where, as found here by the Adjudicative Panel, Mr.

Regular, while involved in S.G.’s family law proceedings, provided his services and assisted S.G. in a competent manner and without any prejudice to the eventual outcome for S.G. [63] Notwithstanding this, the Adjudicative Panel, and the panel of Benchers on appeal, found that there was a conflict of interest between Mr.

Regular’s personal interests and those owed to S.G. and to the Court based upon the following: 1) his interest in maintaining the secrecy of the relationship; 2) his interest in maintaining his relationship with S.G.; 3) his interest in not having S.G. blame him for not seeking spousal support and having this issue adjudicated in Court when he felt her expectations related to this were unrealistic; 4) his interests conflicted with his statutory duty pursuant to the Divorce Act , R.S.C. 1985, c. 3 (2nde Supp.) to advise S.G. about facilities available to assist with possible reconciliation with her husband; and 5) there was a potential that he would be a witness at the trial based upon his previously employing and paying income to her. …. [66] It is clear that a conflicting interest, as is described in the Code, would have to be something that would, or likely would, adversely affect the lawyer’s judgment or advice on behalf of or loyalty to his client.

In this case, the Adjudicative Panel found that Mr. Regular’s judgment and advice was affected by his relationship with S.G. Even if this finding is correct, there remains a question as to whether this affect [sic] amounted to something that did, or was likely to, have an adverse affect [sic] on his judgment or advice to S.G. [67] Bearing in mind the Adjudicative Panel’s apparent concern with the credibility of S.G.’s evidence and their reliance, to a significant degree, on what Mr.

Regular had stated in his testimony, I must confess having some difficulty in understanding how the Adjudicative Panel, and the panel of Benchers on appeal, could have reached their conclusions regarding there being a conflict of interest in these circumstances. When Mr. Regular stated that he felt “boxed in” in the sense of his representing S.G. due to wanting to keep the relationship secret and wanting to assist S.G. due to his empathy for her situation and her inability to afford to retain another counsel, this in my view, of itself, does not mean Mr.

Regular was then in a situation where there was, or potentially existed, a conflict of interest based upon him having an adverse interest to S.G. The relationship then in play did not necessitate a conclusion that a conflict of interest arose. As stated previously, the secrecy issue does not mean there were adverse interests in play. Similarly, empathy towards a client does not create a conflict of interest as intended by the Code .

A conflict of interest must have as a necessary component at least a potential for an adverse effect on the judgment and advice provided. [68] The panel of Benchers on the appeal hearing also focused on the inability of Mr. Regular to take a “tough stance” with regard to S.G.’s spousal support expectations. At best, the evidence on this aspect of the case seems to be somewhat divergent.

In any event one must query whether a lawyer is in a conflict of interest, or potential conflict, when he/she follows instructions from a client after indicating to that client that the claim is not well founded in law as the evidence before the panel indicates was done here by Mr. Regular. Here the Adjudicative Panel and Benchers referred only to part of what Mr. Regular testified to in this regard.

[69] There are other aspects of potential conflict here that were also of concern to the Adjudicative Panel and the panel of Benchers. For instance, the issue of Mr. Regular’s having employed S.G. through a company that he controlled and then providing letters to confirm income paid to her to counsel to the husband has to be considered. The fact that he was possibly going to have to be a witness as a result is certainly a practical and reasonable concern. Similarly, the issue of Mr. Regular’s meeting the statutory obligations under the Divorce Act was of concern.

Interestingly, there seems to be a dearth of evidence on this latter point. [ 48 ] The assessment by the Trial Division judge, set out in the excerpts from his reasons quoted in the preceding paragraph, demonstrates that he gave consideration to all of the facts and the law necessary to enable him to be satisfied as to the range of possible acceptable outcomes defensible on the facts and law. Having done that detailed assessment, and having earlier in his reasons identified the specific requirements of the Dunsmuir test, satisfies me that he applied his mind to the range of possible outcomes.

The doubts that he expressed would clearly indicate that one end of the range of possible outcomes is closer to there being no conflict of interest. [ 49 ] Against that, however, in paragraph 63 of the excerpts from his reasons, quoted in paragraph 47 above, he lists the factual circumstances identified by the Panel and by Benchers in finding that there was a conflict of interest. They are all significant. One of these is a statutory duty under the Divorce Act , R.S.C. 1985, c.

Section 9 of that statute provides: 9.

(1) It is the duty of every barrister, solicitor, lawyer or advocate who undertakes to act on behalf of a spouse in a divorce proceeding (

a) to draw to the attention of the spouse the provisions of this Act that have as their object the reconciliation of spouses, and (

b) to discuss with the spouse the possibility of the reconciliation of the spouses and to inform the spouse of the marriage counselling or guidance facilities known to him or her that might be able to assist the spouses to achieve a reconciliation. It is difficult to imagine how Mr. Regular could discharge that duty, with the objectivity required of a lawyer acting for a client in the ordinary course in a divorce action, in the circumstances proven on the record in this case.

The factors referred to in paragraph 69 of the decision of the Trial Division judge, set out in paragraph 47 above, are also factors clearly pointing toward a conflict or potential conflict of interest. Those too are significant. [ 50 ] The whole of that discussion by the Trial Division judge demonstrates consideration of a range of possible acceptable outcomes defensible on the facts and law. The reasoning I have expressed in paragraph 36 above applies here as well.

The express conclusion of the Trial Division judge, that applying proper principles of judicial review he was unable to conclude that the conclusion reached by the Panel and affirmed by Benchers was unreasonable, must be taken to be a determination that the decision falls within a range of possible acceptable outcomes which are defensible on the facts and law. [ 51 ] On the foregoing considerations I would conclude that the Trial Division judge made no error in coming to the conclusion, on the record in this case, that the finding by the Panel, as affirmed by Benchers, that Mr.

Regular was in a conflict of interest when he represented S.G. in the family law matter, was not an unreasonable finding. Issue 2B: Setting aside, on the basis of waiver, the Panel’s decision respecting the failure of Mr. Regular to comply with his duties respecting integrity, avoiding conflict of interest and avoiding questionable conduct, while representing S.G. in family law proceedings [ 52 ] Exactly what the Law Society appealed must be discerned from its notice of appeal.

In respect of this matter, the notice of appeal indicates the relevant ground to be that the Trial Division judge: … erred in law in setting aside the Benchers’ finding at paragraph (ii) of page 16 of its decision dated January 7, 2009, relating to the Respondent’s failure to act with integrity, to avoid a conflict of interest and engaging in questionable conduct by representing S.G. in family law proceedings at the same time as he was engaging in a personal and sexual relationship with her.

The finding referred to in the notice of appeal is the finding of the Panel, and its affirmation by Benchers, expressed by both in the summaries of their decisions, that Mr. Regular: … fail[ed] to comply with his duty to act with integrity under

Chapter I of the Code , his duty to avoid a conflict of interest between lawyer and client under

Chapter VI of the Code and his duty to avoid questionable conduct under

Chapter XIX of the Code by representing his client in a family law matter at the same time he had a personal and sexual relationship with the client. [ 53 ] While it was not an issue addressed by the parties, to avoid any doubt as to the context in which this Court viewed and dealt with that finding of three breaches, I would note here that, in writing these reasons, I recognized the potential ambiguity in the findings of the Panel and Benchers excerpted in the preceding paragraph. A question could arise as to whether Mr.

Regular’s representing his client in a family law matter was the basis for finding all three failures or just the failure to avoid questionable conduct. Strict adherence to rules of punctuation would lead to the conclusion that the absence of a comma between “ Code ” and “by” in the second last line means that the Panel found, and the Benchers affirmed, the following three specific failures on the part of Mr. Regular: (

i) to comply with his duty to act with integrity under

Chapter I of the Code; (ii) to comply with his duty to avoid a conflict of interest between lawyer and client under

Chapter VI of the Code; and, (iii) to comply with his duty to avoid questionable conduct under

Chapter XIX of the Code, by representing his client in a family law matter at the same time that he had a personal and sexual relationship with the client. [ 54 ] On reading the whole of the reasons of both the Panel and Benchers, the only rational conclusion is that the absence of the comma between “ Code ” and “by”, even though it occurs in the

summary of the reasons of each of the Panel and Benchers, is inadvertent. In expressing its conclusion in that part of its reasons dealing with that specific item of the Law Society’s complaint, the Panel wrote:

The Panel conclude that Mr. Regular’s representation of S.G. on the family law matter, at the same time as the intimate personal andsexual relationship, was a violation of the rule respecting integrity (Chapter I), the rule respecting impartiality and conflict of interestbetween lawyer and client (Chapter VI), and the rule respecting questionable conduct (Chapter XIX) of the Code of ProfessionalConduct. The whole of the reasoning of both the Panel and the Benchers clearly indicates each concluded those three breaches arose as a result ofMr.

Regular representing his client in a family law matter at the same time as he had a personal and sexual relationship with the client. The Trial Division judge viewed it in the same manner. That is indicated in his comment that: … While the Adjudicative Panel, and ultimately the panel of Benchers, made guilty findings with regard to a failure to act with integrityand avoiding questionable conduct related to Mr. Regular’s involvement in S.G.’s family proceeding, these findings were obviouslybased upon their determination that Mr. Regular was in a conflict of interest at that time.

A review of that determination related to therebeing a conflict of interest here will, in effect, resolve those other findings. [55] Before setting out the arguments of the parties as to this issue, it is important to consider the manner in which the TrialDivision judge handled the finding of the Panel, and Benchers’ affirmation of it. Clearly, in the foregoing excerpt from his reasons, theTrial Division judge is asserting that the reasonableness of the Panel’s findings and Benchers’ affirmation, that Mr. Regular breachedChapter I of the Code by failing to act with integrity and breached

Chapter XIX of it by failing to avoid questionable conduct, dependson the Panel’s and Benchers’ conclusion respecting conflict of interest being sustained. Thus, on that reasoning, it would appear that heconcluded that if the finding respecting conflict of interest were to be set aside, the whole of the Panel’s finding respecting the threespecified breaches, arising out of Mr. Regular’s involvement in the family law proceedings, would be set aside as well.

Having foundthat, by reason of waiver by S.G., the Panel’s and Benchers’ findings respecting conflict of interest should be set aside, the Trial Divisionjudge set aside all three findings of failure to comply with the Code arising out of Mr. Regular representing S.G. in the family lawproceeding. [56] The Law Society challenges this and contends that there are two specific errors: first, that the Trial Division judge erroneouslysubstituted his own opinion respecting a finding of fact, waiver by S.G. of any conflict of interest on the part of Mr.

Regular, for theopinion of the Panel, and its affirmation by Benchers, that there was no such waiver; and second, that he erred by setting aside, as aconsequence of his conclusion that the conflict of interest had been waived by S.G., the whole of the finding, including the finding thatMr. Regular failed to act with integrity, and failed to avoid questionable conduct, instead of setting aside only the finding that Mr.Regular failed in his duty to avoid a conflict of interest. As a result, this issue must be resolved by addressing as sub-issues: (

a) thecorrectness of the Trial Division judge’s conclusion that the finding by the Panel and Benchers that there was no waiver wasunreasonable; and (

b) the correctness of his setting aside the finding of the tribunals that Mr. Regular failed to comply with his duty toact with integrity and that he failed to comply with his duty to avoid questionable conduct in addition to setting aside the finding that Mr.Regular failed to comply with his duty to avoid a conflict of interest. (

a) Respecting the finding that the conflict of interest was not waived, was unreasonable (

i) Argument of the Law Society [57] The Law Society makes several specific arguments. It argues, citing Federal Business Development Bank v. SteinbockDevelopment Corp., [1983] A.J. No. 896, 42 A.R. 231, that the existence of waiver requires a finding of knowledge and intention and is,therefore, a finding of fact. That being so, it submits, the Trial Division judge was not entitled to substitute his own opinion, that therewas a waiver by S.G. of the conflict of interest, for the opinion of the Panel and Benchers that there was no such waiver.

Secondly, theLaw Society challenges the conclusion of the Trial Division judge that Benchers did not deal with the Panel’s reasoning as to waiver anddid not consider whether S.G. waived any conflict of interest. Thirdly, the Law Society submits that the reasons given by the Panelrespecting the issue of waiver do provide, in all of the circumstances, the required justification, transparency and intelligibility. (ii) Argument of Mr. Regular [58] As to the first of the Law Society’s arguments, Mr.

Regular submits that the existence of a waiver cannot be determinedwithout first determining what is legally required to establish an effective waiver. The issue before the Panel, he submits, was a questionof law. He also argues that

an act of waiving need not be in writing and does not depend on independent legal advice for its validity. Hecites Saskatchewan River Bungalows Ltd. v. Maritime Assurance Co., (SCC), [1994] 2 S.C.R. 490 as authority for theproposition that proof of waiver does not require a signed document or proof of independent legal advice. [59] With respect to the remainder of the arguments of the Law Society, and waiver generally, Mr. Regular argues that, given thatthe tribunals did not refer to Mr.

Regular’s important and unchallenged evidence on the issue of waiver and that they began their analysisby relying on an incorrect legal test, it was open to the Trial Division judge to conclude that the findings of the Panel regarding waiver,as affirmed by Benchers, were unreasonable, and he made no error in doing so. (iii) Conclusion with respect to the existence of waiver [60] The Law Society’s argument that the reasoning of the Panel provides the necessary justification, transparency and intelligibilitycannot be accepted.

The only expression of that reasoning by the Panel is: … The Panel also finds that there was no effective waiver by S.G. of the conflict of interest. A request that a lawyer act on a matter doesnot amount to a waiver. Proof of waiver would normally require at least a signed document indicating a fully informed waiver, and mayrequire independent advice depending on the circumstances.

The decision of Benchers did not refer to waiver specifically. It did quote the whole of the paragraph of the Panel’s decision in whichthe five lines quoted above appear. However, it neither expressed approval nor disapproval of those specific comments. Benchers madeno other comment with respect to the question of waiver. Therefore, there is no merit to the Law Society’s challenge to the comment ofthe Trial Division judge that the panel of Benchers did not deal with the Panel’s reasoning nor did they expressly consider whether S.G.had waived any conflict of interest on the part of Mr. Regular. [61] As well, Mr.

Regular’s argument as to what constitutes waiver must be accepted. In Saskatchewan River Bungalows, Major J.,at pages 499-500, wrote: Waiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some known right ordefect in the performance of the other party: Mitchell and Jewell Ltd. v. Canadian Pacific Express Co., 1974 ALTASCAD 18 ,[1974] 3 W.W.R. 259 (Alta. S.C.A.D.); Marchischuk v. Dominion Industrial Supplies Ltd., (SCC), [1991] 2 S.C.R. 61(waiver of a limitation period). The elements of waiver were described in Federal Business Development Bank v.

SteinbockDevelopment Corp. (1983), 42 A.R. 231 (C.A.), cited by both parties to the present appeal (Laycraft J.A. for the court, at p. 236): The essentials of waiver are thus full knowledge of the deficiency which might be relied upon and the unequivocal intention to relinquishthe right to rely on it. That intention may be expressed in a formal legal document, it may be expressed in some informal fashion or itmay be inferred from conduct. In whatever fashion the intention to relinquish the right is communicated, however, the consciousintention to do so is what must be ascertained.

Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) anunequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since no consideration movesfrom the party in whose favour a waiver operates. An overly broad

interpretation of waiver would undermine the requirement ofcontractual consideration. [62] Considering that authority, and the Panel’s reasoning excerpted in paragraph 47 above, two conclusions can clearly be drawn.

First, the Trial Division judge was correct in concluding that the Panel erred in law in deciding that “proof of waiver would normallyrequire at least a signed document indicating a fully informed waiver, and may require independent advice depending on thecircumstances.” As the comment of Major J. in Saskatchewan River Bungalows indicates, the intention to waive “may be expressed in aformal legal document, it may be expressed in some informal fashion or it may be inferred from conduct.” I do not suggest that there areno circumstances in which independent legal advice may be required in order to establish waiver, but I am satisfied that is not the casehere.

Mr. Regular was, in fact, recommending and promoting independent legal advice, which S.G. resisted. It is the informedconscious intention to waive which must be discernable from all of the circumstances.

Second, it must be concluded that the decision ofthe Trial Division judge, that neither the Panel nor Benchers gave proper consideration to whether or not all of the circumstancesestablished such a conscious intention, was also correct. [63] It is not possible to find in the reasoning of the Panel or Benchers, anything to indicate justification, transparency orintelligibility in relation to the waiver decision of either of them, nor is it possible to find any basis on which to conclude that theirdecisions fall within a range of possible acceptable decisions defensible on the facts and law.

That circumstance clearly warranted theTrial Div

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