PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - TRIAL DIVISION LAW SOCIETY OF PRINCE EDWARD ISLAND

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1 Date: Docket: GSC Registry: Charlottetown PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - TRIAL DIVISION BETWEEN: LAW SOCIETY OF PRINCE EDWARD ISLAND APPLICANT AND: PAULA M. MacKINNON AND THE PROTHONOTARY OF THE SUPREME COURT OF PRINCE EDWARD ISLAND Before: The Honourable Mr. Justice J. Armand DesRoches RESPONDENT J. Gordon MacKay, Q.C. - Solicitor for the Applicant Paula M. MacKinnon - On Her Own Behalf Place and Date of Hearing Charlottetown, Prince Edward Island (In Chambers) April 16, 1998 Place and Date of Judgment Charlottetown, Prince Edward Island May 14, 1998

2 LAW SOCIETY OF PRINCE EDWARD ISLAND AND PAULA M. MacKINNON AND THE PROTHONOTARY OF THE SUPREME COURT OF PRINCE EDWARD ISLAND Prince Edward Island Supreme Court - Trial Division Before: DesRoches, J. Date Heard: April 16, 1998 (In Chambers) Date of Judgment: May 14, 1998 [10 pages] Date: Docket: GSC Registry: Charlottetown APPLICANT RESPONDENT ADMINISTRATIVE LAW - Judicial Review - The Court held that the Prothonotary of the Supreme Court had no jurisdiction to assess a Certificate of Account rendered by the Law Society in connection with an investigation of a member who was found guilty of unprofessional conduct. Cases Considered: Re Freeburne, [1973] 1 O.R. 423 (H.C.J); Benson v. Labourers International Union of North America et al. (1996), 142 Nfld. & P.E.I.R. 81 (P.E.I.S.C.- A.D.); Pearlman v. Manitoba Law Society Judicial Committee (1991), 130 N.R. 121, [1991] 2 S.C.R Statutes Considered: Legal Profession Act, S.P.E.I. 1992, Cap. 39, ss. 24, 32, 38, 43, 57; Judicial Review Act, R.S.P.E.I. 1988, Cap. J-3, s. 1(h); Supreme Court Act, R.S.P.E.I. 1988, Cap. S-10, ss. 3(3)(a), 3(3)(b), 20(1), 20(3), 20(5), 25(1); Civil Service Act, R.S.P.E.I. 1988, Cap. C-8; Solicitors Act, R.S.O. 1990, c. S.15. Rule Considered: Rules of Civil Procedure, J. Gordon MacKay, Q.C., solicitor for the applicant Paula M. MacKinnon, on her own behalf

3 DesRoches J.: [1] This is an application for judicial review of a decision of the Prothonotary of the Supreme Court of Prince Edward Island (the Prothonotary) wherein he held he had jurisdiction to proceed with a certain assessment. BACKGROUND [2] The material facts giving rise to this application are relatively straight forward. On July 26, 1995 a formal complaint was filed by the Secretary-Treasurer of the Law Society of Prince Edward Island (the Law Society) pursuant to a decision of a Discipline Committee alleging certain unprofessional misconduct against Paula M. MacKinnon who was then a member of the Law Society. On November 18, 1995, another Discipline Committee, which was to hear the complaint, accepted Ms. MacKinnon s admission that she had committed certain unprofessional conduct and made a finding to that effect. [3] Counsel representing Ms. MacKinnon and counsel for the Law Society jointly recommended that Ms. MacKinnon be allowed to resign as a member upon her undertaking certain conditions one of which was: The member will pay costs of the Society and as a separate condition the Society recognizes the member is not in a position to pay costs at the present time and that the member would have to make satisfactory arrangements with the Society, prior to readmission, for the payment of those costs. [4] The Discipline Committee by written resolution dated November 18, 1995 recommended to the Council of the Law Society that Ms. MacKinnon be given permission to resign, pursuant to s. 32 of the Legal Profession Act, S.P.E.I. 1992, Cap. 39, upon a number of conditions including: 7. Paula M. MacKinnon will pay the Society s costs of its investigation and hearing in this matter, the amount of which is to be certified by the Secretary-Treasurer within 30 days. [5] At a special meeting of the Council of the Law Society held on November 23, 1995, Council accepted the Committee s recommendation and gave Ms. MacKinnon permission to resign subject to the conditions outlined in the Committee s resolution. [6] On December 11, 1995, the Secretary-Treasurer of the Law Society issued a Certificate certifying that the Law Society had incurred $30, in its investigation and hearing of the matter relating to Ms. MacKinnon. That amount was calculated as follows: Investigation Expenses (re two meetings by Committee with Member): Travel by Committee $ Clerk Room rental

4 Page: 2 Meeting among Chair, Secretary-Treasurer & Mentor Advertising (Suspension and Reinstatement) Receiver s costs (June 20 - August 11) 1, Hearing Expenses Room rentals Clerk Transcript (requested by Counsel) Panel expenses Counsel Fees and Disbursements 26, Administration Fee TOTAL (Now due and owing) $30, [7] Ms. MacKinnon acknowledged that she had received a copy of this Certificate in January, [8] It should be noted at this point that s. 38 of the Legal Profession Act provides the Council or a Discipline Committee with the authority to impose certain sanctions upon a member who is found to be guilty of unprofessional conduct. One of the authorized sanctions is as follows: 38(1)(f) order that the expenses of the society incurred in connection with the inquiry and investigation be paid by the member. [9] It was pursuant to this provision that Ms. MacKinnon was required to pay the $30, By June 19, 1996 the amount set out in the certificate had not been paid and on that date the Secretary-Treasurer of the Law Society issued another certificate, this one pursuant to s. 57 of the Legal Profession Act which reads: 57. (1) All fees, fines and assessments owing by a member to the Society, including any amounts ordered to be paid pursuant to section 38, may be recovered, notwithstanding that the person owing them, after they became due, may have ceased to be a member. (2) Where default is made in the payment of any fee, fine or assessment, or any part thereof, the Council may cause the Secretary-Treasurer to issue a certificate stating (a) (b) (c) (d) that the fee, fine or assessment was made; the matter in respect of which the amount is due and payable; the amount remaining unpaid on account thereof; and the person by whom it is payable. (3) The certificate may be filed with the Registrar of the Supreme Court, and when so

5 Page: 3 filed and sealed with the seal of the Supreme Court, becomes an order of the Supreme Court, upon which a minute of judgment may be entered for the amount set forth in the certificate, together with the fees of the Registrar of the Supreme Court for entry of a minute of judgment. (4) The order may be enforced by execution or otherwise as an order of the Supreme Court. [10] This second Certificate was filed with the Registrar of the Supreme Court and a minute of judgment was entered on June 19, This minute of judgment was amended on July 17, 1996, but only to make a small change in the style of cause. A writ of execution was issued by the Registrar on June 26, 1996, but to date no action has been taken to enforce the writ. [11] By letter dated December 4, 1996 addressed to the Prothonotary, Ms. MacKinnon requested a time be scheduled for an assessment of the statement of account submitted by the Law Society in the matter of the disciplinary proceedings against her. Her letter indicated her request was being made pursuant to s. 24 of the Legal Profession Act which reads: 24. No account of a member for fees and disbursements shall be assessed except within twelve months of the rendering of the account. [12] By letter dated December 16, 1996, Mr. Jeffrey Lantz of the law firm Matheson & Murray informed the Prothonotary of the position of the Law Society which was: (a) (b) (c) (d) there is no jurisdiction for you to assess and determine the costs in this matter as this is not an account rendered by a member but, rather, is a Certificate of Costs issued by the Secretary-Treasurer of the Law Society pursuant to the direction of Discipline Committee AB@ in a formal hearing; Ms. MacKinnon was granted permission to resign subject to various conditions, one of which was the payment of the Society s costs as certified by the Secretary-Treasurer; no Appeal has been taken in relation to the finding of Discipline Committee AB@ on November 18, 1995, nor the Resolution of Council of the Law Society dated November 23, 1995, nor the Certificate issued by the Secretary- Treasurer on December 11, 1995; and the time in which to appeal any of the foregoing matters has long since expired. [13] The Prothonotary replied by letter dated March 6, 1997 in which he disagreed with the position of the Law Society and with which he enclosed a Notice of Appointment for

6 Page: 4 Assessment of Costs setting the matter for April 1, 1997 at 9:30 a.m. The Prothonotary s letter included the following: Here we have a third party (MacKinnon) responsible to pay the legal fees of an attorney (Murray) providing legal services to a client (Law Society). Not very much unlike a mortgagor being responsible to pay for the mortgagee s attorney in a power of sale or foreclosure proceedings. I get quite a few of them as the mortgagor is not privy to what was done so he/she has the right to question the account. This situation is also similar to the reason why Rule 57:15 was enacted, and the public is lucky to have that Rule on the books. You provided legal services to the Law Society in its prosecution of Ms. MacKinnon. Since she is paying, or will be paying, surely Ms. MacKinnon has the right to have the amount charged assessed by the Court. Yes, she agreed to pay the legal costs but always subject to the right to have them assessed. [14] At this point the Law Society retained Mr. J. Gordon MacKay, Q.C. to represent its interests. As it turned out, the assessment was not carried out on April 1, 1997 but subsequently Mr. MacKay made further submissions concerning the question of jurisdiction. By written Reasons for Ruling issued on December 10, 1997, the Prothonotary confirmed his earlier decision to proceed with the assessment requested by Ms. MacKinnon. That decision is the subject of this application for judicial review; it includes the following: I see no reason not to proceed with the assessment. Section 24 of the Legal Profession Act is not relevant as Ms. MacKinnon applied within the year. Section 43 also is not applicable. Ms. MacKinnon is not seeking to appeal the certificate as she merely wants to assess the legal fees plus counsel s disbursements. In other words, she will pay the amount as assessed and is not saying she will not pay any legal fees. By proceeding, I am not usurping the Discipline Committee s decision. Also by proceeding, I am not usurping the Appeal function of the Supreme Court as Ms. MacKinnon is not appealing the certificate. There is no appeal, merely a question about one of its components. Also by proceeding, I am not usurping the judgment against Ms. MacKinnon in favour of the Law Society. The Assessment may vary the amount of the judgment or it may not.

7 Page: 5 ISSUE I saw no case law on point unless I have mislaid it. Pearlman v. Manitoba Law Society Judicial Committee was of no assistance unless I misread it. By Subsection 9(1) of the Ontario Solicitors Act a person not being chargeable as the principal party but who is liable to pay or has paid the bill may apply to the court for an order referring it to assessment in the same way as a client might have done. Such is the court s practice here except the 3rd party does not get a court order but goes straight to me. Likewise, beneficiaries of an estate are entitled to have the bill of costs of the estate solicitor assessed, even though it had been approved and paid by the executors. See Re Freeburne [1973] 1 O.R. 423 (H.C.J.). This has been done and is akin to the present situation. [15] The statement of the issue is framed somewhat differently by the applicant and the respondent. In my opinion the applicant s statement of the issue is more accurate; it poses the following question: ANALYSIS Does the Prothonotary of the Supreme Court of Prince Edward Island have jurisdiction to tax or assess a Certificate of Account of the expenses or costs of the Law Society incurred in connection with an investigation and hearing of the Law Society in a discipline matter, said costs being imposed pursuant to Section 38 of the Legal Profession Act? [16] In my opinion the question must be answered in the negative; the Prothonotary does not have the jurisdiction to tax or assess the Certificate of Account of the expenses incurred by the Law Society in connection with its inquiry and investigation relating to Ms. MacKinnon. [17] The first issue raised by Ms. MacKinnon is whether the Prothonotary is a Atribunal@ within the meaning of the Judicial Review Act. She submits he is not and, therefore, his decision to conduct the assessment is not subject to judicial review. [18] The Prothonotary is a creature of statute. Section 20(1) of the Supreme Court Act, R.S.P.E.I. 1988, Cap. S-10 provides: 20(1) The office of the Prothonotary is continued. [19] Section 20(3) of the Act establishes the Prothonotary as a corporation sole with all powers of a corporation necessary to enable him to carry out the purposes and directions of

8 Page: 6 the Acts and the court. According to s. 20(4) the Prothonotary is appointed under the Civil Service Act, R.S.P.E.I. 1988, Cap. C-8. His jurisdiction stems from s. 20(5) of the Supreme Court Act which reads: (5) The Prothonotary shall perform all such duties as may be imposed upon him under an Act or by a direction of the court, or as may be prescribed by the Rules and, without limiting the generality thereof, the Prothonotary, subject to the direction of the court, has power (a) to act as examiner in the court; (b) to tax costs respecting proceedings in the court; (c) to register orders for the sale, leasing or mortgaging of any lands in administration, partition, infant or mental incompetency proceedings; (d) to execute conveyances, transfers or mortgages ordered by the court; (e) to sell mortgaged premises under order of the court; (f) to inquire into the merits of an application to the court for an order for the sale or other disposition of the real or personal property seized, possessed or otherwise held by or for a minor or mentally incompetent person; (g) to issue a subpoena in aid of an inferior court or tribunal. [20] Section 1(h) of the Judicial Review Act, R.S.P.E.I. 1988, Cap.J-3 defines Atribunal@ as:...means a person or group of persons upon whom an enactment confers authority to make a decision, whether styled a board or a commission or by any other title... [21] The section specifically excludes from the definition the Provincial Court or a judge thereof, the Supreme Court or a judge thereof and the Lieutenant Governor in Council when not making a decision pursuant to authority conferred by an enactment. The Prothonotary does not fall within the exceptions and, in my opinion, is a tribunal as described in the Judicial Review Act whose decisions are subject to the Act. Therefore, I find no merit in Ms. MacKinnon s first submission. [22] Concerning the central issue of the Prothonotary s jurisdiction, Ms. MacKinnon s position is that the taxation or assessment of a legal account is within the ambit and expertise of the Prothonotary who is acting within the direction of the Chief Justices of the Court in their discretion to deal with costs. [23] I find this position impossible to accept. Simply put, the Prothonotary s jurisdiction to conduct the proposed assessment must be found either in statute or in the Rules of Civil Procedure of the Court. Clearly s. 20(5)(b) of the Supreme Court Act does not provide such authority since it limits his power to tax costs respecting Aproceedings in the court@. Surely an inquiry and investigation conducted by the Law Society into the discipline of one of its members is not such a proceeding.

9 Page: 7 [24] Section 25(1) of the Supreme Court Act is the authority for the Rules Committee to make rules of court in relation to the practice and procedure of the court and to make rules, even though they alter or conform to the substantive law, in relation to certain specified matters including:...(i) jurisdiction of the Prothonotary or deputy prothonotary, including the conferral of any jurisdiction of the Supreme Court, including jurisdiction under an Act, but not including the trial of actions or jurisdiction conferred by an Act on a judge. [25] It is common ground that there is no civil procedure Rule which specifically confers jurisdiction to the Prothonotary to conduct the proposed assessment. He appears instead to rely by analogy on the authority contained in Rule which provides: Costs Payable Out of Trust Funds Costs payable out of or chargeable against any trust estate, trust fund or mortgaged property, shall not be so paid as against any person interested therein, unless (a) (b) (c) the costs have been assessed; any interested person is sui juris and has consented to the payment; or the court has fixed the amount of, and directed the payment or charge. [26] Not only does this Rule not apply to the instant situation, it cannot and does not confer any jurisdiction on the Prothonotary, by analogy or otherwise, to proceed as he proposes with respect to the Certificate of Account. Furthermore, a reading of s. 9(1) of the Ontario Solicitors Act, R.S.O. 1990, c. S.15, and of Re Freeburne, [1973] 1 O.R. 423 (H.C.J.), both of which the Prothonotary mentions in his Reasons for Ruling, provide insight into the situation in Ontario, but are of no assistance whatsoever in establishing the jurisdiction of the Prothonotary of this Court. Neither is s. 24 of the Legal Profession Act which only sets a time limit within which an account for legal fees and disbursements must be assessed but does not establish the jurisdiction to conduct such assessments. [27] In his Reasons for Ruling the Prothonotary comments he found Pearlman v. Manitoba Law Society Judicial Committee ( (1991), 130 N.R. 121, [1991] 2 S.C.R. 869) of no assistance. I do not agree entirely with that view. In that case Pearlman, a lawyer in Manitoba, attacked the feature of the internal disciplinary proceedings of the Law Society of Manitoba whereby the costs of an investigation into professional misconduct can be awarded against a lawyer if he or she is found guilty of professional misconduct by the

10 Page: 8 Judicial Committee of the Law Society. Pearlman based his attack on ss. 7 and 11(b) of the Canadian Charter of Rights and Freedoms and the Court dealt specifically with those grounds. In upholding the impugned feature of the disciplinary proceedings, however, Iacobucci J., who delivered the judgment of a unanimous Court, made certain comments by way of obiter dicta which appear to support the Law Society s right to be reimbursed the expenses incurred in connection with an inquiry and investigation relating to one of its members. At p. 891 (2 S.C.R.) we read the following: First, it is important to remember that the costs which stand to be recouped under s. 52(4) are in no sense profits or gains. These costs are a direct reimbursement for expenses previously incurred in an investigation which, ex hypothesi, has uncovered legitimate grounds for the imposition of sanctions. The Legislature considered it appropriate that, in addition to the sanctions that might be imposed, the lawyer found guilty of misconduct may also have to bear the costs of the investigation into his or her own questionable conduct. [28] There is in legislation governing various professional groups authority to require anyone found to have committed an act of professional misconduct to reimburse the society or council the expenses incurred in relation to the disciplinary investigation and proceedings. Implicit in such legislation, as is the case for the Legal Profession Act of this Province, is responsibility for a budget. The cost of investigations and hearings in disciplinary proceedings can be substantial and affects the budget. In such circumstances, the Legislature of this Province has seen fit to include in the Legal Profession Act authorization for the Council of the Law Society or a Discipline Committee to include as a sanction against a member found guilty of unprofessional conduct an order that those expenses be paid by the member. It has not seen fit to provide for the assessment of the legal costs incurred. The Prothonotary cannot take upon himself, in the absence of specific statutory or written authority, the jurisdiction to amend or diminish that legislative authoriity. [29] Furthermore, the Prothonotary s contention that by proceeding he is not usurping the judgment against Ms. MacKinnon in favour of the Law Society is problematic. As noted earlier, s. 57(3) of the Legal Profession Act provides that a certificate produced by the Secretary-Treasurer pursuant to s. 57(2) and filed with the Registrar of the Supreme Court and sealed with the seal of the Court, becomes an order of the Supreme Court (emphasis added). The Prothonotary has no jurisdiction to embark upon a course of conduct the result of which, to use his words A...may vary the amount of the in other words, may vary the order of the Supreme Court. If the Prothonotary cannot vary an order of the Supreme Court (which must be accepted), one wonders what could be the possible purpose of his now conducting the proposed assessment. The judgment stands; the Prothonotary cannot vary it. [30] This application comes down to one simple, unequivocal and unavoidable conclusion: the Prothonotary does not have jurisdiction to conduct an assessment of the

11 Page: 9 Certificate of Account issued by the Law Society pursuant to s-ss. 38(1)(f) and 57(2) of the Legal Profession Act. The Prothonotary s decision in that connection was incorrect. The question in issue here concerns jurisdiction to hear an application and, therefore, a simple error is sufficient and correctness, rather than reasonableness, is the standard (see Benson v. Labourers International Union of North America et al. (1996), 142 Nfld. & P.E.I.R. 81 (P.E.I.S.C.-A.D.) ). [31] Had Ms. MacKinnon been dissatisfied with the resolution of the Council of the Law Society or of the Discipline Committee she had the right, pursuant to s. 43 of the Legal Profession Act, to appeal to the Appeal Division of this Court. She did not do so, and the time within which such an appeal must be filed now has expired. [32] Having reached the conclusion the Prothonotary does not have jurisdiction to assess or tax the Certificate of Account issued by the Secretary-Treasurer of the Law Society, I am not at all convinced he ought not to have such authority. It is clear from the account rendered in this case that of the $30, total, $26, are in respect of ACounsel Fees and Disbursements@. I find it troubling that, other than launching an appeal under s. 43 of the Legal Profession Act (which would be unusual in a case such as this where the member has, in effect, Apleaded guilty@), a member of the Law Society found to have committed professional misconduct has no ability to have at least the legal costs of the inquiry and investigation assessed in order to ensure they were reasonably incurred and are reasonable in amount. It seems to me that s. 36 of the Medical Act, R.S.P.E.I. 1988, Cap. M-5, as amended, which provides, in part, that costs payable by a member as the result of disciplinary proceedings may be taxed by the Prothonotary as between solicitor and client and judgment may be entered for such taxed costs, strikes an appropriate balance. [33] Having said that, however, in the present circumstances I must grant the application for judicial review. The Prothonotary s decision of December 20, 1997 is nullified pursuant to s-s. 3(3)(a) of the Judicial Review Act. Furthermore, the Prothonotary is prohibited pursuant to s-s. 3(3)(b) of the Judicial Review Act from conducting an assessment of the Certificate of Account of the expenses incurred by the Law Society in connection with its inquiry and investigation relating to Ms. MacKinnon. [34] The applicant is entitled to have its costs of this application. In the circumstances, I would fix those costs at $1, plus disbursements and applicable GST and PST. May 14, 1998 J.