



COURT OF APPEAL FOR ONTARIO

CITATION: Conway v. The Law Society of Upper Canada, 2016
    ONCA 72

DATE: 20160126

DOCKET: C59451

Weiler, van Rensburg and Roberts JJ.A.

BETWEEN

David Robert Conway

Appellant

and

The Law Society of Upper Canada
and Lorne
    Levine

Respondent

David Robert Conway, in person

Brendan van Niejenhuis, for the respondent

Heard:  September 8, 2015

On appeal from the judgment of Justice F.L. Myers of the Superior
    Court of Justice, dated September 11, 2014.

By the Court:

Overview
:

[1]

The appellant appeals from the
    dismissal of his action as against the respondent, The Law Society of Upper
    Canada (the LSUC), following a motion to strike the appellants statement of
    claim, as disclosing no reasonable cause of action and as being frivolous,
    vexatious and an abuse of process.

[2]

The appellants dispute with the
    LSUC has a long history stretching back to his first administrative suspension
    in June 2000 for his failure to pay transaction levies, and involves a myriad
    of different civil, disciplinary and bankruptcy proceedings that form the basis
    for his claims against the LSUC.

[3]

In particular, the appellant
    complains that he has been the subject of relentless and inequitable targeting,
    abuse of process and denial of due process by the LSUC in the following
    proceedings:  the administrative suspensions by the LSUC for his failure to
    remit transaction levies and forms; the civil proceedings brought by the LSUC
    to recover the transaction levies owing, in which he counterclaimed for unfair
    treatment by the LSUC; the disciplinary proceedings leading to disbarment for
    practising as a paralegal while his license to practise as a lawyer was
    suspended; the refusal of the LSUC to consider his application to practise as a
    paralegal on a grandfathered basis; the trustee proceedings involving his
    client accounts; and his bankruptcy proceedings in which the LSUC opposed his
    filing of a proposal and then unsuccessfully opposed his discharge.

[4]

The appellant settled the civil
    and trustee proceedings with the LSUC and entered into releases and consent
    judgments. He was discharged unconditionally from bankruptcy. The finding that
    the appellant had engaged in unauthorized practice resulted in his disbarment,
    but was set aside in appeal proceedings.  Ultimately, the appellants L1
    licence was reinstated in April 2013.

[5]

On April 10, 2013, he commenced
    his present claim against the LSUC.

Analysis
:

i.        Whether the statement of claim as against
    the LSUC should have been struck out in its entirety:

[6]

The appellant argues that the motion
    judge erred in striking out his statement of claim in its entirety as
    disclosing no reasonable cause of action and as being frivolous, vexatious and
    an abuse of process. In particular, he complains that the LSUCs mistake in
    proceeding with his administrative suspension under s. 46 of the
Law
    Society Act
, R.S.O. 1990, c. L.8 (failure
    to remit transaction levies), rather than s. 47 of the Act (failure to file
    levy forms), gave rise to a new cause of action that was not covered by the
    2008 release and consent judgment in the LSUCs civil action.

[7]

Before a statement of claim is
    struck out under rule 21.01(1)(b) of the
Rules of Civil Procedure
, it must be plain and obvious, on a generous reading
    of the pleading, and taking the factual allegations as true or capable of
    proof, that it discloses no reasonable cause of action:
Hunt v.
    Carey Canada Inc.
, [1990] 2 S.C.R. 959.

[8]

The motion judge struck out the
    entirety of the appellants statement of claim as against the LSUC for the
    reasons that are summarized as follows:

i.
Many of the appellants factual allegations are
    completely irrelevant to any reasonable cause of action against the LSUC,
    constitute a pleading of evidence, and are frivolous, vexatious and scandalous.

ii.       The appellants allegations concerning the
    LSUCs conduct in dealing with the appellants failure to pay transaction
    levies were the subject of litigation that was settled by a release and court
    order such that the allegations were an improper attempt to re-litigate those
    settled and released issues. Buyers remorse regarding settlement and
    complaints about the pre-trial judge do not give rise to a tenable cause of
    action.

iii.      The appellants allegations concerning the
    LSUCs trustee services, including its efforts to obtain fees for acting as trustee
    of the appellants practice, resulted in a release and consent order of the
    court which cannot be subject to collateral attack or re-litigation. Alternatively,
    these are bald allegations of defamation which are statute-barred.

iv.      The appellants allegations concerning the
    regulatory proceedings under the
Law Society Act
with respect to the
    LSUCs regulation of lawyers and paralegals are a collateral attack on
    administrative decisions already made or that ought to have been pursued under
    the administrative regime.

v.       The appellant has no right of action against
    the LSUC because there is no right of action against a creditor for merely voting
    to reject a debtors proposal in bankruptcy and opposing a bankrupts discharge
    from bankruptcy.

vi.      The appellants allegations could be taken
    together as an allegation that the LSUC intentionally abused its statutory
    authority to single out and injure the appellant. The only tort that could
    apply would be misfeasance in public office, the constituent elements of which
    were not pleaded by the appellant. In any event, even if the LSUC was wrong in
    refusing to allow the appellant to apply for a paralegal license while
    suspended, it was corrected by the appeal tribunal.

[9]

We agree with the motion judges
    reasoning and conclusions that the various individual acts by the LSUC of which
    the appellant complains are incapable of giving rise individually to any viable
    cause of action in the manner as pleaded by the appellant.

[10]

Many of the factual allegations
    are irrelevant to any tenable of cause of action, such as the recitation of his
    family, education and work history. As a result, the motion judge correctly
    struck out these allegations as scandalous, frivolous and vexatious.

[11]

The appellant`s main focus on
    appeal was that the motion judge failed to appreciate that the appellant had a
    separate cause of action against the LSUC because his administrative suspension
    was actually and erroneously carried out under s. 47 of the
Law
    Society Act
for his alleged failure to
    remit levy forms, rather than under s. 46 of the Act for his admitted failure
    to remit transaction levies. The appellant argues that he did not discover this
    error until after he had settled the civil proceedings with the LSUC.

[12]

On a fair reading of the statement
    of claim, there is no question that by virtue of the releases he signed and the
    consent judgments that he agreed to, the appellant settled his complaints
    against the LSUC in relation to the civil and trustee proceedings that he is
    now seeking to re-litigate in the present action. The appellants long and
    detailed pleading recites the entire history of his dealings with the LSUC,
    including the terms and conditions of the settlements of certain LSUC
    proceedings and his complaints and claims. The appellant confirmed that he has
    pleaded all of the facts on which he relies.

[13]

The motion judge correctly struck out
    these claims as an abuse of process under rule 21.01(3)(d).

[14]

In particular, the appellants
    complaints about his administrative suspensions, whether under section 46 or 47
    of the
Law Society Act
, are
    included in his counterclaim under the rubric of the alleged unfairness of the LSUCs
    procedures and mistreatment of him. There is no question that the appellant had
    not remitted transaction levies so that the LSUC could properly suspend him
    from practice in 2000 under s. 46 of the Act. The release that the appellant
    signed in August 2008 comprised all claims that he had arising out of his
    suspension from practice, including his claims related to the alleged lack of due
    process and destruction of his law practice.


ii.      Whether
    leave to amend the statement of claim should have been granted
:

[15]

The appellant argues that the
    motion judge erred in determining that the appellant should not be granted
    leave to amend his pleading because of the motion judges conclusion that there
    was no actionable tort possible on the facts as alleged in the statement of
    claim.

[16]

The decision not to grant leave to
    amend should only be made in the clearest of cases, when it is plain and
    obvious that no tenable cause of action is possible on the facts as alleged:
South
    Holly Holdings Ltd. v. The Toronto-Dominion Bank
, 2007 ONCA 456, at para. 6. That said, the decision whether or not to
    grant leave to amend a pleading is a discretionary one, and absent palpable and
    overriding error of fact or error of law, such a decision is subject to
    deference on appeal:
Mortazavi v. University of Toronto
, 2013 ONCA 655, at para. 3.

[17]

The motion judge carefully
    considered the cumulative effect of all of the appellants complaints against
    the LSUC and concluded that the only tort that may have any application based
    on the facts as pleaded was the tort of misfeasance in public office. The
    motion judge explained his reasoning as follows:

As noted above, nearly all of the plaintiffs allegations could
    be taken together as an allegation that the LSUC intentionally abused its
    statutory authority to single out and injure the plaintiff. The appellant
    submitted that the LSUC is accountable in damages if [it] acts outside its
    statutory authority. He had no law to support that submission. The plaintiff
    does not expressly mention the tort of misfeasance in public office by name,
    but it is the only tort that might cover the essential thrust of the
    plaintiffs allegations. (para. 11)

[18]

The motion judge reviewed the
    constituent elements of the tort of misfeasance in public office and concluded:
    Try as I might to allow for pleading deficiencies, I cannot see a proper plea
    of this tort or that one is possible on the facts alleged (para. 12).

[19]

While the motion judge correctly
    concluded that the appellants statement of claim was untenable in that it did
    not disclose in proper form the constituent elements of the tort of misfeasance
    in public office or any other properly pleaded tort, he erred in determining
    that the pattern of acts and omissions alleged by the appellant in his
    statement of claim, even if properly pleaded, could not give rise to a cause of
    action, and in failing to grant leave to amend the pleading if it was deficient
    in pleading the cause of action.

[20]

The tort of misfeasance in public
    office has been variously described in the case law as the tort of abuse of
    public office or abuse of statutory power:
Odhavji Estate v.
    Woodhouse
, 2003 SCC 69, at paras. 25 and
    30. Whatever the nomenclature, the essence of the tort is the deliberate and
    dishonest wrongful abuse of the powers given to a public officer, coupled with
    the knowledge that the misconduct is likely to injure the plaintiff:
Odjhavji
    Estate v. Woodhouse,
at para. 23.  Bad
    faith or dishonesty is an essential ingredient of the tort:
Odhavji
    Estate v. Woodhouse
, at para. 28 and
Gratton-Masuy
    Environmental Technologies Inc. v. Ontario,
2010 ONCA 321, at para. 85.

[21]

The LSUC relies on the statutory
    immunity under s. 9 of the
Law Society Act
, for acts engaged in good faith in the performance of
    its duties or functions.  Section 9 of the
Law Society Act
provides as follows:

No action or other proceedings for damages shall
    be instituted against the Treasurer or any bencher, official of the Society or
    person appointed in Convocation for any act done in good faith in the
    performance or intended performance of any duty or in the exercise or in the
    intended exercise of any power under this Act, a regulation, a by-law or a rule
    of practice and procedure, or for any neglect or default in the performance or
    exercise in good faith of any such duty or power.

[22]

Mere negligence in the good faith
    performance of the LSUCs duties or functions is not enough to establish
    liability. However, an absence of good faith or bad faith, involving malice
    or intent, is sufficient to ground a properly pleaded cause of action against
    the LSUC. See:
Edwards v. Law Society of Upper Canada
, [2001] 3 S.C.R. 562;
Finney v. Barreau du
    Québec,
[2004] 2 S.C.R. 17.

[23]

The appellants statement of claim
    is replete with allegations that the LSUC intentionally acted dishonestly,
    fraudulently, and without statutory authority in its dealings with the
    appellant, knowing that its actions would cause and did cause damages to the
    appellant.

[24]

In particular, the appellants
    allegations concerning the LSUCs commencement of disciplinary proceedings in
    relation to the appellant practising as a lawyer while under suspension, the
    LSUCs failure to process his application as a paralegal, and the manner of the
    LSUCs opposition to his discharge application from bankruptcy, may support, if
    properly pleaded, a cause of action against the LSUC, based upon an alleged
    cumulative and relentless pattern of bad faith conduct by the LSUC that was
    directed against the appellant and caused him harm.

[25]

We do not agree with the motion
    judges assessment that the allegations of fact in the appellants statement of
    claim could not give rise to a properly pleaded cause of action for misfeasance
    in public office.

[26]

While, as the motion judge stated,
    [a]llegations of singling out may be no more than a regular carrying out of
    its duties against an individual (para. 13), they, and some of the other
    allegations in the statement of claim, may also support a cause of action against
    the LSUC on the ground that the LSUC abused its statutory authority and acted
    in bad faith in its dealings with the appellant, namely, that the LSUC may have
    acted with malice or intent to harm.

[27]

For example, in paragraph 182 of
    his statement of claim, the appellant complains of the uneven treatment that he
    received in relation to his paralegal application, pleading that the LSUC
    singled out the appellant where it refused to process his application and denied
    his grandparent status. Although the issue came up during the course of the
    proceedings, LSUC has not named any other applicant who was treated in a like
    manner.

[28]

The appellants factual allegations
    of unequal treatment by the LSUC resemble those in the claim of the plaintiff
    lawyer in
Dechant v. Law Society of Alberta
, 2006 ABQB 908, which the Alberta Court of Queens
    Bench refused to dismiss. In that case, the parties had entered into a
    settlement of disciplinary proceedings. The plaintiff lawyer alleged in her
    statement of claim that she was the victim of specialized and malicious
    treatment by the Law Society after the execution of the Settlement Agreement
    (para. 10). The specific malicious and egregious actions that the plaintiff
    lawyer pleaded included that the Law Society treated her differently than other
    members with her status and that they impeded her efforts to practise law. The
    court held that the allegations of specialized treatment, among other actions
    by the Law Society, could support the claims that included abuse of public
    office.

[29]

The LSUCs challenge of the
    statement of claim was brought by way of a motion under rule 21 of the
Rules
    of Civil Procedure
and was not a motion for
    summary judgment under rule 20. As a result, as the motion judge noted, the
    factual allegations contained in the appellants statement of claim had to be
    taken as true unless they were patently ridiculous or incapable of proof:
Nash
    v. Ontario
(1995), 27 O.R. (3d) 1 (C.A.).

[30]

Taking all of the appellants
    factual allegations as true and reading the essence of the pleading as a claim
    for misfeasance in public office, it is not plain and obvious that a proper
    pleading of a reasonable cause of action founded on the alleged bad faith
    conduct against the LSUC would fail. As a result, the motion judge erred in
    refusing leave to amend to correct the deficiencies in the pleading.

[31]

That being said, the appellants
    allegations of his mistreatment by the LSUC up to August 2008, namely, the
    allegedly unfair actions of the LSUC towards him in relation to his
    administrative suspensions and disciplinary proceedings, formed part of his
    counterclaim against the LSUC in the civil action and were released by the
    appellant in the settlement of that action. They cannot be resurrected under an
    allegation of bad faith to found a claim for damages.

[32]

Similarly, the appellants
    allegations about the LSUCs unfair treatment of him during the trustee
    proceedings are nothing more than a re-litigation of the issues that he settled
    with the LSUC. Again, they cannot form the basis of any new claim for damages
    because the appellant could have raised them during the trustee proceedings.

[33]

While the appellant cannot claim
    damages arising out of the LSUCs conduct that he has released, he may refer to
    this conduct, if appropriate, as part of the narrative of the alleged pattern
    of bad faith conduct by the LSUC that the appellant alleges caused him damages.

[34]

At the hearing of the appeal, in
    addition to his argument about bad faith, the appellant asked that the appeal
    be heard as if he had amended paragraph 214 of his statement of claim to
    include allegations of breach of fiduciary duty and negligence against the LSUC,
    which were not raised before the motion judge, and to delete the particulars
    contained in the subparagraphs of 214 except for g, h, q, r, s, z, bb, cc, dd, and
    ee. The LSUC did not consent to these amendments. However, its counsel did not
    object to the appeal being considered as if those amendments had been made and
    the appeal proceeded on that basis.

[35]

For the reasons that follow, even
    taking into account the appellants proposed amendments that were not submitted
    to the motion judge, we find that there is no basis to grant the appellant
    leave to amend his pleading to include claims against the LSUC for breach of
    fiduciary duty and negligence.

[36]

The appellant has provided no
    particulars in support of his allegations that the LSUC owed to him a fiduciary
    duty in the performance of its administrative and regulatory duties. Moreover,
    none of the allegations contained in his presently drafted statement of claim
    would give rise to such a claim.

[37]

Similarly, the appellants
    proposed claim of negligence against the LSUC is  not supported by the allegations
    in his statement of claim. Rather, all of the factual allegations in the
    statement of claim relate to the appellants allegations of the LSUCs
    intentionally improper, dishonest, corrupt and illegal actions against him.

[38]

While the appellant should have
    been granted leave to plead properly the tort of misfeasance in public office,
    the appellants pleading as it presently stands is woefully deficient. The LSUC
    is entitled to know with particularity the case that it has to meet.

[39]

The appellant has not pleaded any
    of the requisite elements of any viable cause of action based on alleged bad faith
    conduct that may deprive the LSUC of its statutory immunity, nor with any
    precision the particulars that support these allegations, as required under the
Rules of Civil Procedure.
Since
    bad faith or dishonesty is an essential ingredient of the tort of misfeasance
    in public office, rule 25.06(8) requires that full particulars be pleaded:
Gratton-Masuy
, at para. 88-89.

Disposition:

[40]

For these reasons, the appellants
    appeal is allowed to grant him leave to permit him to serve and file within 60
    days of today a fresh as amended statement of claim to plead with proper
    particulars a tenable cause of action against the LSUC based on the tort of
    misfeasance in public office arising out of its alleged bad faith conduct in
    relation to the appellant.

[41]

The appellants fresh as amended
    statement of claim shall be subject to any applicable defences, including the
    application of any limitation periods, to a request for particulars, and to any
    further motions to strike or dismiss the fresh as amended claim, if warranted.

[42]

His appeal is otherwise dismissed.

[43]

The LSUC, and Mr. Levine if
    applicable, shall serve and file an amended statement of defence, a request for
    particulars, or a notice of motion to strike the fresh as amended claim and
    dismiss the action, within 45 days of receipt of the appellants fresh as
    amended statement of claim.

[44]

If the parties cannot agree on the
    disposition of costs of the appeal, including the motion below, they shall
    submit brief written submissions of no more than two pages, plus their respective
    costs outlines, as follows:  the appellant shall deliver his submissions within
    two weeks of today; the LSUC shall respond ten days thereafter.

Released: January 26, 2016

K.M. Weiler J.A.

K. van Rensburg
    J.A.

L.B. Roberts
    J.A.


