The Supreme Court of Canada has found that the Law Society Appeal Tribunal erred when it found lawyer Joseph Groia committed professional misconduct during a case that ended more than a decade ago, and it has dismissed the complaints against him.
"It’s a huge win for Joe and his family," Groia's lawyer Earl Cherniak of Lerners LLP told Legal Feeds. "He has gone through this for 17 years. He put up a struggle that I don’t think another lawyer in the country would have done, certainly not many, if any, and he did it certainly for himself but also as part of a service to the profession because he felt an obligation to see this thing through to the end given the intransigent position of the law society. We lost at every level — motions, before the appeal panel and the Court of Appeal. It was a lonely difficult struggle and we put up a good fight on all those levels."
Groia, a Toronto lawyer who practises securities litigation, has been locked in a high-profile battle with the law society up through the courts.
He had been found guilty of misconduct for his behaviour during a trial where he was hired to defend Bre-X vice president John Felderhof who was accused by the Ontario Securities Commission of insider trading and authorizing the release of misleading press releases.
The SCC wrote that the trial “was characterized by a pattern of escalating acrimony and by a series of disputes” between Groia and OSC prosecutors, which included “personal attacks, sarcastic outbursts and allegations of professional impropriety” by Groia.
In its ruling, the SCC noted that much of the conflict came from Groia’s “honest but mistaken understanding of the law of evidence and the role of the prosecutor,” and it ultimately concluded that a finding of professional misconduct by a Law Society Appeal Tribunal “against [Groia] on the basis of incivility was unreasonable.”
“[E]ven though the Appeal Panel accepted that G’s allegations of prosecutorial misconduct were made in good faith, it used his honest but erroneous legal beliefs as to the disclosure and admissibility of documents to conclude that his allegations lacked a reasonable basis,” said the SCC ruling, in which former chief justice Beverley McLachlin and justices Michael Moldaver, Rosalie Abella, Richard Wagner and Russell Brown concurred.
“Allegations of prosecutorial misconduct based on a sincerely held but mistaken legal belief will be reasonably based as long as they have a sufficient factual foundation. The question for incivility purposes is not whether G was right or wrong on the law; rather, the question is whether, based on his understanding of the law, his allegations of prosecutorial misconduct, which the Appeal Panel found were made in good faith, had a factual foundation. In this case, they did,” it added.
After the trial finished, the Law Society of Ontario started disciplinary proceedings against Groia — spawning a long legal battle. A hearing panel determined that Groia was guilty of misconduct and suspended his licence for two months as a result, as well as ordered him to pay about $247,000 in costs.
After further appeal by Groia, the Law Society Appeal Panel came to the same finding, but it lessened his suspension to one month and told Groia he would only have to pay $200,000 in costs. The decision was upheld, after it was appealed by Groia, by the Divisional Court of Ontario and later dismissed by the Ontario Court of Appeal, before making its way to the Supreme Court of Canada.
In its ruling, the SCC acknowledged that Groia “was not deliberately misrepresenting the law and was not ill‑motivated.”
“Requiring a reasonable basis for allegations protects against unsupportable attacks that tarnish opposing counsel’s reputation without chilling resolute advocacy. However, the reasonable basis requirement is not an exacting standard. It is not professional misconduct on account of incivility to challenge opposing counsel’s integrity based on a sincerely held but incorrect legal position so long as the challenge has a sufficient factual foundation, such that if the legal position were correct, the challenge would be warranted,” said the ruling.
Cherniak became involved in Groia's case in 2009 when the law society decided it was going to charge him.
"What’s really good about this decision, apart from the benefit to Joe, is that it provides a roadmap. It maintains the jurisdiction of the law society to deal with these cases — that’s an argument we lost — but if you look at paragraphs 71 to 76 you will see the analysis Justice Moldaver goes through as to the importance of balancing the obligation of civility with the obligation to resolutely and fearlessly defend your client, particularly but not limited to a criminal case," says Cherniak.
He adds the decision explains what the proper approach of a law society panel should be and applies it to Groia's case.
"It's a roadmap for future cases and I think anyone from the criminal bar will tell say they are very, very heartened by what Justice Moldaver said and by the result in the case and analysis that any future discipline panel, really anywhere in the country, is going to have to make," says Cherniak. "This case is going to be studied at every law school in the country and criminal and civil law conferences. I rarely say this, but this case really is important."
Cherniak had also argued that the law society, in a case where the trial judge has no issue with the lawyer’s conduct as the trial judge didn’t in Groia's case, should not prosecute unless the judge complains.
"I argued that law societies should refrain from prosecuting in those cases — nobody agreed with me and Justice Moldaver didn’t agree with me so that’s one important issue I argued all the way up and was not successful — you can’t win every argument but what's important is whether you win or lose in the end and we won," he says.
The Law Society of Ontario released a statement later Friday morning on the ruling saying the ruling “reaffirmed the important role of the Law Society of Ontario in regulating in-court conduct and the importance of both civility and resolute advocacy."
“Although the Court allowed Mr. Groia’s appeal, the Court accepted the test for incivility and misconduct that was defined by the Law Society’s Appeal Panel. On the facts of this case, however, the Court concluded that Mr. Groia’s in-court statements which gave rise to the proceeding, were made in good faith and were reasonable, based on a view of the law that turned out to be incorrect, and did not constitute professional misconduct.
“The Law Society welcomes the Supreme Court’s recognition of the importance of civility in the courts and its decision to endorse the Law Society Tribunal Appeal Panel’s test for incivility in court. This decision upholds the Law Society’s jurisdiction to regulate the legal professions’ conduct in court.”
— with files from Jennifer Brown