March 9, 2015

The latest ruling by the Divisional Court makes clear that a lawyer’s conduct in court is not beyond reproach

In Groia v Law Society of Upper Canada, Justice Nordheimer of the Superior Court of Justice’s Divisional Court issued the latest ruling in a long-running legal saga that has become infamous for its questions of balancing the duty of lawyers to conduct themselves with civility against the client’s right to a vigorous defence.

The case involves Joseph Groia, the lawyer who defended John Felderhof, a Bre-X officer and director, against charges brought under the Securities Act. Bre-X is well known in Canada for its spectacular implosion in 1997. After the company announced that it had discovered massive amounts of gold in Busang, Borneo, the value of shares skyrocketed. the claim was later determined to be fraudulent and investors lost over $6 billion in the ensuing fallout.

The Ontario Securities Commission (“OSC”) charged Felderhof with eight counts for insider trading and authorizing misleading news releases. Felderhof was the only person to be charged in the fraud, considered one of the biggest corporate scandals in Canadian history.

The trial proceedings began in 1999 and only wrapped up eight years later in 2007. During the trial, Groia used controversial and aggressive tactics, such as repeatedly and sarcastically attacking the professional integrity of the prosecutor (allegations which were held to be false). The trial was delayed when the OSC sought to have the judge removed on jurisdictional grounds because it believed the judge was not properly dealing with Groia’s behaviour. A lower court and an appeals court agreed that Groia’s conduct during the trial was abrasive, uncooperative, and combative. However, both courts ordered the trial to continue anyways, holding that the judge had committed no error in law by not intervening in regards to Groia’s conduct. At the end of the trial, in 2007, the trial judge acquitted Felderhof on all counts.

Felderhof’s acquittal was not the end of the story. Five years after the trial ended, the Law Society of Upper Canada, the regulatory body governing Ontario’s lawyers, held a hearing in regards to complaints about Groia’s conduct during the Felderhof trial. In 2012, the Hearing Panel ruled that Groia had engaged in professional misconduct. It held that he had failed to treat the court with courtesy and respect and that he undermined the integrity of the legal profession. The panel then suspended Groia for two months and ordered him to pay costs of $246,960.53. Groia appealed the decision to the Law Society Appeal Panel. The Appeal Panel upheld the decision, noting the repeated and lengthy attacks on the prosecutor’s integrity by Groia, but reduced the penalty to a one month suspension and the costs to $200,000.00. Groia appealed again, this time to the Superior Court of Justice’s Divisional Court.

In his decision, Justice Nordheimer dismissed Groia’s appeal. First, the Divisional Court held that there was no legislation that restricted the Law Society’s right to review and sanction the courtroom conduct of its members. Next, it held that there is a need for lawyers to conduct themselves with civility in the courtroom, and that there had to be consequences when lawyers failed to live up to that responsibility. Justice Nordheimer also considered the question of whether and when incivility rises to the level of professional misconduct.

The Divisional Court rejected the idea that a lawyer’s conduct is beyond reproach.  Rather, it agreed with the Law Society Appeal Panel’s contextual approach to judging a lawyer’s conduct, which takes into account the sometimes highly emotional nature of litigation. The Divisional Court held that a high degree of deference should be given to a regulatory body’s determination of the appropriateness of its member’s conduct, as the concept of incivility does not allow for a fixed definition.

The court responded to concerns about creating a “chill” on zealous advocacy in the legal profession. Justice Nordheimer cautioned that findings of misconduct should be reserved to the “clearest and most egregious cases.” Where the interests of zealous advocacy and incivility clash, zealous advocacy should prevail.

The court set out when it is appropriate to penalize a lawyer for “uncivil” behaviour. First, the court recognized that passionate or stinging words may often be necessary to make the point. But conduct which is rude, unnecessarily abrasive, or demeaning, or unreasonable attacks on the personal integrity of persons, and even then only when done repeatedly, may justify sanctions. Furthermore, such conduct must bring the administration of justice into dispute.

The Divisional Court concluded that the decision of the Law Society Appeal Panel was reasonable in the circumstances. The court further elected not to disturb the reduction in the penalty.

It is likely that the Divisional Court decision will be appealed by at least one of the parties. However, it is certain that the bar will continue to look at this the evolving case to provide guidance on this complex and often contentious issue.