2016 MBCA 119, 2016 MBCA 119

Citation: The Law Society of Manitoba v Cherrett, Date: 20161208 2016 MBCA 119 Docket: AI15-30-08506 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Freda M. Steel Madam Justice Barbara M. Hamilton Madam Justice Diana M. Cameron BETWEEN : THE LAW SOCIETY OF MANITOBA ) G. M. Wood ) for the Appellant (Applicant) Respondent ) ) R. H.

Kravetsky ) for the Respondent - and - ) ) Appeal heard: ) November 21, 2016 LAWRENCE BREMNER CHERRETT ) ) Judgment delivered: (Respondent) Appellant ) December 8, 2016 On appeal from 2015 MBLS 10 HAMILTON JA [ 1 ] A panel of the discipline committee of the Law Society of Manitoba (the Law Society) disbarred the appellant for misappropriating $20,000 from his trust account and misleading his client about those funds. The panel also ordered the appellant to pay costs of $16,000. [ 2 ] The appellant appeals the finding of misappropriation and the disposition of disbarment.

He does not appeal the finding that he misled his client. Nor does he take issue with the findings as to what he did with the $20,000. He argues that the finding of misappropriation was unreasonable, given his ill health and the effects on his state of mind. He also asserts that the panel ignored some of his evidence that was relevant to whether his actions were intentional or careless in nature.

Relying on The Law Society of Manitoba v McDowell , 2007 MBLS 9 , he seeks an order that permits him to resign from the practice of law, rather than be disbarred. [ 3 ] For the reasons that follow, I am of the view that the finding of misappropriation and the disposition of disbarment are reasonable. See Doolan v Law Society of Manitoba , 2016 MBCA 57 , 330 ManR (2d) 68 . Therefore, I would dismiss the appeal.

Background [ 4 ] The appellant has had significant health issues for a number of years. [ 5 ] On April 16, 2009, the chief executive officer of the Law Society, Allan Fineblit, contacted the appellant to arrange to meet with him about the continuation of his practice. At that time the appellant was facing a number of disciplinary charges and investigations. Mr.

Fineblit met with the appellant the next day and provided him the option to undertake, to the Law Society, to withdraw from practice, on certain conditions. [ 6 ] On April 17, 2009, the appellant transferred $20,000 from his trust account to a bank account in the name of a

numbered company for which he was the sole director and signing authority. The $20,000 was a holdback on an estate file pendingreceipt of a clearance certificate from the Canada Revenue Agency. Using this money on two subsequent occasions, he obtained a bankdraft for $10,000 payable to another bank where he had a personal account. Using these bank drafts, he made two deposits of $10,000each into his personal account. [7] On April 22, 2009, the appellant signed the undertaking to withdraw from practice and to turn over all his open filesto a custodian.

He also undertook to disburse all monies remaining in his pooled trust account in accordance with the trust accountingrules. [8] Over the course of several years, the appellant led the client to believe that the appellant would be able to release the$20,000 holdback when he returned to practice. [9] The Law Society has reimbursed the client. Appeal of the Finding of Misappropriation [10] The appellant’s main contention is that the panel failed to address the effect of his ill health on his mental capacity.

Insupport, he says that the panel’s reasons do not refer to all of his evidence, including the fact that the numbered company was establishedfor a family trust related to another client, that this client owed him $10,000 for past services that had been previously billed but unpaid(no bill was tendered in evidence) and he was confused about what happened at the time of depositing the $20,000 into the numberedcompany bank account. He argues that the panel ignored this evidence, which he says is important because it is consistent with hisposition that he was in a “cognitive fog” when he dealt with the trust funds.

Therefore, he says that the panel’s reasons and the findingof misappropriation are not reasonable. [11] I disagree. The panel acknowledged the appellant’s many medical problems in its reasons. It understood, but did notaccept his argument that he misappropriated the money in a “cognitive fog”. The panel found that the appellant’s methodical actionswere inconsistent with that argument, and that his actions were done “purposefully” and were “deliberate and considered conduct.” [12] The panel was not required to refer to all of the evidence in its reasons.

As Abella J stated in Newfoundland andLabrador Nurses’ Union v Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 SCR 708 (at para 16): Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would havepreferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis. A decision-maker isnot required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion (ServiceEmployees’ International Union, Local No. 333 v.

Nipawin District Staff Nurses Assn., (SCC), [1975] 1 S.C.R. 382, atp. 391). In other words, if the reasons allow the reviewing court to understand why the tribunal made its decision and permit it todetermine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir [Dunsmuir v New Brunswick, 2008 SCC 9,[2008] 1 SCR 190] criteria are met. [13] The record of the hearing demonstrates that the panel engaged the appellant during the hearing to ensure that the panelunderstood his evidence and submissions.

The fact that the panel did not mention in its reasons that the numbered company was relatedto another client that owed him money does not detract from the significance of the fact that the appellant deposited the $20,000 into abank account that he controlled. [14] The reasons demonstrate, particularly when read in the context of the record, that the panel did not accept theappellant’s evidence that he was confused and careless. Given that, the finding of misappropriation was inevitable.

Appeal of the Disbarment [15] The panel considered many relevant factors, including the appellant’s prior disciplinary record, and the fact that he hadmade no effort to repay the client or the Law Society. It concluded that his actions showed a “particularly culpable disregard for theLaw Society” given its remedial and conciliatory approach. [16] The panel addressed the appellant’s ill health and the effect on him, including psychologically and emotionally.

Importantly, however, the panel distinguished the medical evidence filed in this case from that filed in McDowell, where the member,who was permitted to resign, provided a psychiatrist’s opinion linking the member’s ill health to his misconduct (misleading his clientfor a long period of time).

While the panel acknowledged that the appellant’s ill health affected his ability to practice law, it found thatthe appellant’s diminished capacity argument was inconsistent with what he did, and explained why. [17] The panel accepted the Law Society’s submission that there were no exceptional extenuating circumstances to permitthe appellant to resign rather than be disbarred. [18] Given the panel’s findings, which are unassailable, the disposition of disbarment is well within the range of possibleoutcomes.

Conclusion [19] The appellant has not demonstrated that the panel’s findings and conclusions do not meet the deferential standard ofreview of reasonableness. The reasons “fit comfortably with the principles of justification, transparency and intelligibility” (Canada(Citizenship and Immigration) v Khosa, 2009 SCC 12 at para 59, [2009] 1 SCR 339). Furthermore, the finding of misappropriation and

the disposition of disbarment fall well within the range of possible outcomes, in light of the facts and the law. [ 20 ] I would dismiss the appeal with costs. JA I agree: JA I agree: JA