Groia v. LSUC: The civility war

With the Law Society of Upper Canada's prosecution of Joseph Groia headed to the Supreme Court of Canada, the legal profession’s obsession with civility will soon come to a head.

Groia v. LSUC: The civility war

The fraud trial of John Bernard Felderhof began in a downtown Toronto courtroom in the fall of 2000. Because Felderhof had been vice president of exploration at Calgary-based Bre-X Minerals, perpetrator of one of the greatest frauds in Canadian history, the trial consumed people across the country and around the world. Bre-X had risen from a penny stock to a $6-billion behemoth on the back of its claim to have discovered one of the world’s largest gold finds in the jungles of Borneo, Indonesia. When word got out that those claims were fake — samples had been “salted” with gold from elsewhere — the stock cratered. Investors lost hundreds of millions of dollars, and a fountain of investigations and lawsuits followed in both Canada and the U.S. One criminal prosecution, launched by the Ontario Securities Commission in the Ontario Court of Justice, was of Felderhof on charges of insider trading and the release of misleading press releases. The OSC also alleged that Felderhof sold $84-million worth of stock while having information not disclosed to the investing public.

The sordid, complicated and fascinating story of Bre-X and Felderhof’s culpability in the corporate deceit has been written about extensively, and it was recently given the Hollywood treatment in the movie “Gold,” starring Matthew McConaughey. But this story isn’t about Bre-X. It isn’t even about Felderhof. This story is about an almost equally compelling offshoot of the Felderhof trial. It’s about a prosecution launched by the Law Society of Upper Canada two years after Felderhof’s case ended in 2007.

That fall, the LSUC began a proceeding against Felderhof’s defence lawyer, Joe Groia, alleging that he’d been guilty of professional misconduct in his defence of Felderhof by, among other things, relentlessly attacking OSC prosecutors, both professionally and personally. After a hearing, a disciplinary panel of the LSUC found that Groia was guilty of incivility and suspended his licence to practise for two months. It also ordered him to pay costs of $247,000. Those penalties were reduced on appeal to one month and $200,000, but through that appeal and two others, all the way to the Ontario Court of Appeal, the courts have upheld Groia’s guilt of professional misconduct.

The courts, and the LSUC’s panels before them, wrestled with no fewer than three important legal issues in reaching their decisions. The first is the law society’s jurisdiction to assess a lawyer’s in-court behaviour, particularly when the presiding judge himself seemed to have no concern with it. The second involves the tension between the legal profession’s broadly accepted duty of civility and the criminal defence bar’s passionately guarded duty of zealous advocacy, in which the risk of an accused’s imprisonment trumps any genteel notions of civility. Finally, Groia argues that enforced civility has infringed his freedom of speech.

But there’s more to Joseph Peter Paul Groia v. Law Society of Upper Canada than legal determinations. The case raises several practical considerations with which the legal profession is wrestling. The first involves the use of court resources. The Supreme Court of Canada’s decision in R. v. Jordan last summer, which dealt with an accused’s right to a trial within a reasonable amount of time, highlighted how justice systems across the country are under strain. Drawn-out proceedings in which every point is fought has many commentators blaming, at least in part, protracted battles between Crown and defence counsel for consuming precious time. Secondly, there is a debate about whether zealous advocacy and the duty of civility are mutually exclusive or whether they are two components of good lawyering. Finally, many commentators, particularly from academia, allege that the concept of civility itself has often been used to exclude outsider groups, particularly women and minorities, from the profession. They also wonder if the legal profession isn’t focusing its efforts on civility to the detriment of the larger issue of access to justice.

Felderhof was the only person ever charged in relation to the Bre-X scandal. To the disgust of thousands of investors, the case ended with his acquittal and he now lives a quiet life in the Philippines. In contrast, the Groia case continues to consume endless cartridges of ink — and court time. It will have its final hearing, before the Supreme Court of Canada, this fall.

The Felderhof trial headed south soon after it began, before Justice Peter Hryn, in the fall of 2000. “To say that the OSC prosecution against Mr. Felderhof was complex, protracted and exceptionally acrimonious significantly understates the time-consuming, stressful and confrontational climate that rapidly infected the proceeding,” wrote Justice E. A. Cronk, for the majority of the Court of Appeal in its June 2016 decision on the merits of the Groia prosecution. The first witness, former Bre-X executive vice president Rolando Francisco, didn’t begin testifying until late November, more than six weeks after the trial began. Those first weeks were taken up with four weeks of preliminary motions, eight days of introduction from the OSC and three days of Groia’s opening statement. There was an extended Stinchcombe application alleging that the Crown was not meeting its disclosure obligations and repeated disputes over the admissibility of documents.

By the time Francisco took the stand, tensions between opposing counsel were obvious. Groia repeatedly accused the prosecution of misconduct and incompetence. The prosecution, and various members of the judiciary involved in the hearings since, described Groia’s conduct as improper, appallingly unrestrained, unprofessional, inappropriate and extreme.

After 70 days of trial, the OSC applied for judicial review in the Superior Court, arguing that Groia had repeatedly engaged in uncivil conduct in violation of the LSUC’s Rules of Professional Conduct and that Hryn, by failing to control this unacceptable conduct, had lost jurisdiction. This application was dismissed, in the Superior Court and then the Court of Appeal, and the matter was remitted to Hryn. Those first 70 days, known in Groia v. LSUC lore as phase one, form the basis of the case headed to the SCC.

In his factum to the SCC, Groia makes the case that the law society has no jurisdiction to reprimand him for his in-court behaviour, particularly when he was not disciplined at the time by the presiding judge. He says the proceedings started by the LSUC damage the independence of our judicial system and harm the public interest. “If the decisions below stand,” he writes, “Canadians may regrettably conclude that it is the state — in this case, through its statutory agent the Law Society of Upper Canada — and not the trial judge [that] has the final say on how a criminal or civil trial is conducted.”

The LSUC, naturally, sees things differently and argues that this case is not about the independence of the judiciary. It says that, while trial judges have authority to control the courtroom, responsibility for the conduct of trial lawyers is not theirs alone and the law society has a distinct role to play.

Both sides refer to the recent SCC decision of R. v. Jodoin, which confirmed that law societies have the jurisdiction and the duty to regulate the profession, and a judge’s ability to discharge her task of ensuring a fair process is not undermined by a law society’s exercise of its parallel jurisdiction to discipline a lawyer. Groia argues that Jodoin was an example of a lawyer who had been criticized by the court and ordered to pay costs and who challenged the ability of the court to discipline him. “We’ve never disputed the ability of a court to discipline a lawyer acting as an officer of the court,” he says. He points out that he was not chastised by the trial judge for uncivil conduct, let alone sanctioned.

But the Court of Appeal came down solidly in favour of the law society’s jurisdiction to discipline lawyers for in-court conduct and specifically to discipline Groia in this case. “There are many reasons why a trial judge may elect not to criticize or complain about an advocate’s uncivil conduct in court, including the simple reality that refraining from such action in a given case may permit the proceeding to advance more efficiently,” wrote Cronk. “Further, some judges are reluctant to intervene because intervention might interfere with the appearance of judicial impartiality.”

Groia points repeatedly to Justice David Brown’s dissenting opinion at the Court of Appeal. Brown accepts the argument that the presiding judge is in the best position to determine if counsel has crossed the line and what the proper penalty ought to be if he has. “Part of the duty of the presiding judge is to maintain order in this arena of potential chaos,” wrote Brown. “The trial judge is the person best placed to determine whether a barrister’s conduct is approaching or has crossed over the all-too-grey line that separates zealous advocacy from impermissible courtroom conduct.”

That tension between civility and zealous advocacy will likely take up most of the SCC’s time.

Groia, quite naturally, being a member of the defence bar, comes down on the side of virtually unfettered advocacy. “When all is said and done, we’re advocates for our clients, and they’re the ones who stand to be sent to jail,” he says. “When a lawyer stands up in a courtroom to represent their client, I believe and courts have said historically they need to be fearless.”

The Court of Appeal accepts the central importance of zealous advocacy, and it says the concept must be jealously protected and broadly construed, “but it is not absolute and must not be abused,” wrote the court. “The Conduct Rules provide for a constellation of obligations that together make up the overarching duty of professionalism that conditions the privilege of practising law in Ontario.” Specifically, professionalism “includes the duty of civility, and an advocate’s duty to his or her client does not permit the advocate to act unprofessionally or absolve him of his duty to the Court and to other lawyers.”

The Court of Appeal makes clear that not every single lapse of judgment or disparaging comment about opposing counsel will or ought to lead to disciplinary action. “The Law Society disciplinary panels were concerned here with an advocate’s alleged pattern of making unfounded, personalized attacks on the integrity of opposing counsel and baseless allegations of prosecutorial misconduct,” wrote the court. “The Appeal Panel’s test was specifically designed to address the serious and repetitive nature and manner of expression of these allegations.”

Regardless, Groia says a ruling against him will still have a chilling effect on the defence bar. “No matter what a regulator says and no matter how they say it, the reality is if lawyers are going to be prosecuted for submissions they make to a judge, there’s a problem and it damages the profession as a whole and the way our clients think of us as an advocate.”

A third issue for the SCC to determine will be whether Felderhof’s constitutional right to make full answer and defence to the OSC charges was breached. “Denying a lawyer’s right to free expression on behalf of a client in a court of law in favour of a vague definition of civility and its application after the fact fetters and chills the lawyer’s ability to engage in vigorous advocacy,” Groia argues in his factum, “in turn damaging the public interest, as well as infringing [on] the ability of an accused or client to make full answer and defence in a judicial proceeding.”

The law society argues that lawyers do not enjoy an absolute freedom of speech and that Groia’s personal attacks and allegations of prosecutorial misconduct were of low value and deserve little protection as free speech. “Simply because words are spoken by a lawyer does not necessarily mean they are more important or worthy of greater constitutional protection,” says the LSUC.

On this point, the Court of Appeal again sided with the law society, quoting favourably from the appeal panel’s decision, in which it wrote that “zealous advocacy did not require Mr. Groia to make unfounded allegations of prosecutorial misconduct. Zealous advocacy did not dictate that Mr. Groia improperly impugn the integrity of his opponents. Zealous advocacy did not require Mr. Groia to frequently resort to invective in describing opponents who were trying to do their jobs.”

The SCC’s decision in this case will have repercussions well beyond the legal principles involved. The case is being decided in an era of the Canadian judicial system that is being defined by the SCC’s Jordan decision, where the court put a ceiling of 18 months between charges and trial in a provincial court and of 30 months in other cases. Courts across the country have complained that a lack of resources — available judges, Crowns and court time — is making it difficult to meet those rules, and a number of charges have been stayed or dismissed on the basis of Jordan. That has drawn the ire of the victims and the broader public.

While delay was not a specific concern in Groia, the type of fractious relationship between opposing counsel that was seen in the case has been identified as one factor contributing to delays. “When lawyers aren’t getting along, when they don’t like each other, when they make it personal, they fight over everything and waste court time,” says Robin Flumerfelt, a vice president with the Ontario Crown Attorney’s Office. “There’s a responsibility in the profession now to realize that there’s a limited amount of court time and that we have to get our work done during that period of time and have to co-operate to some extent.”

Beyond the consumption of time, Flumerfelt questions whether Groia’s tactics and conduct in his defence of Felderhof are effective advocacy. He brings out a well-worn analogy about defence lawyers that circulates among Crowns: If the Crown’s case is like a car, the unnecessarily aggressive defence lawyer takes a baseball bat and smashes in the windows and doors and smashes out the headlights, but when they’re done the Crown gets in it, turns the key and the car starts. “The really good lawyers just reach under and unscrew the oil pan and the car won’t start,” he says.

Veteran defence lawyer Liam O’Connor agrees with the analogy’s basic premise. “You catch more flies with honey than vinegar,” he says. “In the last 20 years, I can think of three times when I raised my voice inappropriately with Crown counsel and I ended up having to eat my words and apologize.” He says he’s seen the abrasive style over the years and doesn’t think it works. “Some people think it impresses clients,” he says. “I don’t think so. My adversaries are the witnesses, not the Crown attorneys or the court.”

But there are bigger fish in play than good advocacy, says Adam Dodek, a professor at the University of Ottawa and a founding member of the Canadian Association for Legal Ethics. He has followed, and written about, the Groia case for years. “When Canadian legal history is written, it may show that the profession was distracted by civility and failed to devote sufficient interest to access to justice,” he wrote in 2011. He argues that the legal system is accessible only to large corporations and desperate people charged with serious criminal offences. That, if not addressed, will lead to an existential crisis for law societies — the end of self-regulation.

Dodek also argues that notions of civility have long been used to exclude outsider groups, such as women and minorities, from the profession. He cites his colleague Constance Backhouse, a legal historian and LSUC bencher, who wrote about Bertha Wilson, the first woman to serve on the SCC: “Professional norms of civility and collegiality were used to demarcate, bolster and protect the masculine judicial circle. These ethical norms, so touted in professional rhetoric, were not used to extend collegial community to the first woman as an equal, but to isolate and exclude her.”

Dodek concludes that the prosecution of Groia on the basis of incivility calls to mind notions of manners dating back to the time of Jane Austen. “The halls of legal offices in Canada are replete with tales of rudeness and incivility on the part of elite lawyers,” he wrote, “but somehow these lawyers do not become the subject of law society discipline process.” In an email, Dodek concluded that the LSUC’s prosecution of Groia is a regulatory misstep. “It has been a colossal waste of time and resources for the LSUC, which would’ve been much better spent elsewhere protecting and promoting the public interest.”

Joe Groia, the man at the centre of the maelstrom, isn’t particularly proud of his role in phase one of the Felderhof trial. But he won’t renounce the idea of using similar tactics in the future should the need arise. “I will try and use different words, but I hope I will be every bit as zealous in my defence because I believe that’s what clients deserve,” he says. He points out that phase two of the trial, during which different prosecutors argued the OSC’s case, went relatively smoothly. “I was dealing with a prosecutor who acted in the finest tradition of prosecutors and I did what a good defence lawyer does, which is to make reasonable accommodations when I could and we fought about what we had to fight about.”

The Bre-X saga came to a head in March of 1997 when the company’s Filipino geologist, Michael de Guzman, jumped — some say he was pushed — from a helicopter to his death in the Borneo jungle. The Bre-X story unravelled from there, with investors ultimately out an estimated $6 billion. After a 160-day trial, Felderhof was acquitted of any wrongdoing. Justice Hryn found that “tampering at Bre-X was unprecedented” but that there were no red flags that should have been obvious to Felderhof. “I am satisfied on a balance of probabilities that Felderhof has proven that he took all reasonable care.”

Groia won one of Canada’s most-watched trials with an impressive and controversial style. But the waves rippling out from that victory continue to be felt, both by former investors and by the legal profession.

The SCC is set to hear Groia’s appeal on Nov. 6.

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