Notice of Decisions

In the Matter of the Legal Profession Act R.S.N.W.T. 1988, c. L-2 and

In the Matter of an Inquiry into the Conduct of Garth Wallbridge

Arising from and in relation to Complaint #1901—0429

 

Reasons for Decision

Sole Inquirer: Alexander P. Godfrey

 

Formal Complaint

The member, Garth Wallbridge, a law society member practicing in Yellowknife, Northwest Territories is accused of conduct that is deserving of discipline. There are three separate allegations contained in the notice regarding matters that occurred in 2018.

The first allegation states that Mr. Wallbridge acted in a conflict of interest contrary to section 6 of the Code of Conduct between July 13th and November 28th, 2018 by:

1. Continuing to take instructions from his corporate client, AGL Flooring Ltd., after a dispute arose between its two directors, Dustin Lebrun and Teresa Lebrun; and their instructions to him differed;
2. Giving legal advice to, taking instructions from and/or implementing instructions from one director, Teresa Lebrun, contrary to the instructions of the other director, Dustin Lebrun.

The second allegation states that Mr. Wallbridge acted in a conflict of interest between himself/his firm and the corporate client, AGL Flooring Ltd. contrary to section 6 of the Code of Conduct on or about November 2nd, 2018 by:

1. Acting in his own self-interest in preparing and filing the discontinuance of action on the instructions of one of the directors which was commenced against him by the other director on behalf of the corporation to recover payment of the services and materials it rendered to him personally.

The third allegation states that Mr. Wallbridge failed to serve his client, AGL Flooring Ltd. contrary to section 4 of the Code of Conduct between July 13th and November 28th, 2018 by:

1. Failing to inform the Board of Directors of the company that he could only act with clear instructions from the Board of Directors of the company given the conflicting directions being received from the individual directors.

Evidence and Procedure

At the outset of the hearing counsel for each of the parties acknowledged the jurisdiction of the Law Society to hear this matter through a sole inquirer and my jurisdiction to act in this matter as that sole inquirer. This hearing was also held over video and all of the parties consented to have the hearing held in this manner. Having the hearing held in this manner was well-received by all of the parties and was a very convenient and expedient method of proceeding.

Prior to the hearing materials were filed by both parties and received by the Law Society and forwarded to the Sole Inquirer.

Counsel for the Law Society with the agreement of counsel for Mr. Wallbridge filed a statement of Agreed Facts with a number of exhibits attached. The salient facts agreed upon are as follows:

1. On March 7th, 2019, Mr. Dustin Lebrun made a complaint to the Law Society of the Northwest Territories concerning the conduct of Mr. Garth Wallbridge.
2. Mr. Wallbridge provided a written response to the Law Society’s investigator by letter dated April 2nd, 2019.
3. Mr. Wallbridge was retained by Theresa and Dustin Lebrun in 2014 to incorporate a company know as AGL Flooring Ltd (the “company”).
4. Mr. Lebrun is a flooring installer by trade and Ms. Lebrun is a nurse at the Stanton Territorial Hospital.
5. Mr. Lebrun was responsible for the operation of the company and Ms. Lebrun was not involved in the day-to-day operations of the company.
6. Ms. Lebrun is of Metis heritage and was able to access financing from the Metis Dene Development Fund (“MDDF”).
7. As a condition of financing for the company from MDDF, Ms. Lebrun was required to have majority ownership of the company and so the common shares in the company were issued to Ms. Lebrun holding 51 percent of the common shares and Mr. Lebrun holding 49 percent of the shares.
8. Mr. Lebrun and Ms. Lebrun were both directors of the company.
9. The financing from MDDF was to allow the company to purchase a franchise from Floors Now/End of the Roll.
10. Mr. Wallbridge acted as corporate solicitor from 2014 through the events leading to this citation.
11. On July 4th, 2018, Mr. and Ms. Lebrun met with Mr. Wallbridge and they advised him that they had separated.
12. Mr. Wallbridge then prepared an engagement letter for each of their signatures.
13. Ms. Lebrun signed and returned her copy dated July 13th, 2018.
14. Mr. Lebrun also signed and returned his copy, although he did not date it.
15. As part of the ongoing engagement of Mr. Wallbridge as the company’s lawyer, the company agreed to install flooring for Mr. Wallbridge’s cabin, the costs of which would be contraed against some legal services and some used construction material which Mr. Wallbridge had previously provided to the company.
16. The company provided an estimate for the flooring installation at Mr. Wallbridge’s cabin dated August 8th, 2018.
17. The company supplied and installed the flooring at Mr. Wallbridge’s cabin.
18. Mr. Lebrun sent an e-mail to Mr. Wallbridge on October 1st, 2018 with an invoice dated October 1st, 2018 for the flooring supplied and installed at Mr. Wallbridge’s cabin.
19. Mr. Lebrun, on behalf of the company, the filed a small claims action on behalf of the company against Mr. Wallbridge for the cost of the flooring supplied and installed.
20. Ms. Lebrun agreed with Mr. Wallbridge that the cost of the flooring and installation was to be contraed in a manner consistent with the engagement letter and instructed Mr. Wallbridge to prepare a notice of discontinuance of the lawsuit.
21. Mr. Wallbridge prepared and filed with the court, a Notice of Discontinuance of the lawsuit. Ms. Lebrun signed it as “majority shareholder, director and officer of the Plaintiff corporation”.
22. On November 6th, 2018, Ms. Lebrun, as majority shareholder of the company, called for a special shareholders meeting of the company for November 28th, 2018.
23. The shareholders meeting took place at Mr. Wallbridge’s office.
24. At the meeting, Mr. Lebrun agreed to resign as a director of the company and Ms. Lebrun remained the sole director of the company.

Counsel for the Law Society and Mr. Wallbridge confirmed, in writing and verbally in the hearing,  the facts as set out. Mr. Wallbridge confirmed his agreement with the facts in the hearing. There was no further evidence necessary to be called by either party on the substance of the matter.

The parties also filed an agreement regarding an admission of guilt and a joint submission agreement on sentence with respect to the citations stated earlier in this decision. The agreement and admission of guilt was confirmed verbally by Mr. Wallbridge and counsel in the hearing.

Joint Agreement of the Parties

The penalty in this case was jointly submitted to be an Order that stated the following:

1. Mr. Wallbridge shall be given a reprimand;
2. Mr. Wallbridge shall be ordered to pay of fine of $2000.00;
3. Mr. Wallbridge shall complete a course regarding professional ethics and provide written confirmation to the Discipline Chair;
4. Mr. Wallbridge should be ordered to pay a portion of the costs of the investigation and the hearing before the Sole Inquirer, but that the parties are not in agreement on the proportion and will ask the Sole Inquirer to determine that issue after having heard submissions from the parties: and
5. Mr. Wallbridge shall pay the costs as ordered by the Sole inquirer, by equal installments to be paid in full within 12 months from the date of the decision.

Discipline Hearings & Joint Recommendations

The purpose of disciplinary proceedings is comprehensively set out in Lawyers & Ethics: Professional Responsibility and Discipline, Gavin MacKenzie, Carswell 2012, Release 3 at p. 261: t’The purposes of law society discipline proceedings are not to punish offenders and exact retribution, but rather to protect the public, maintain high professional standards, and preserve public confidence in the profession.u

In considering whether or not to accept a joint recommendation as to penalty I am reminded that joint submissions contribute to a fair and efficient justice system, including law society proceedings. The pre-eminent case regarding joint submissions which has been accepted by other Law Society decisions in Canada is the Supreme Court of Canada in R. v. Anthony-Cook, 2016 SCC 43 which emphasized the very high threshold for rejecting a joint submission. Justice Moldaver writing for the court in Anthony-Cook at para. 32 ruled that a joint submission should only be rejected if “the proposed sentence would bring the administration of justice into disrepute or would otherwise be contrary to the public interest.”

Justice Moldaver added at paragraph 34 that “rejection denotes a submission so unhinged from the circumstances of the offence and the offender that its acceptance would lead reasonable and informed persons, aware of all of the relevant circumstances, including the importance of promoting certainty in resolution discussions, to believe that the proper functioning of the justice system had broken down. This is an undeniably high threshold — and for good reason.”

In looking at the relevant principles to consider in imposing a penalty, there can be a number of factors. Some, but not all, of these factors were set out in Law Society v. Ogilvy [1999] L.S.D.D. No. 45, [1999] LSBC 17 at P. 10:

(a) the nature and gravity of the conduct proven; (b) the age and experience of the respondent; (c) the previous character of the respondent, including details of prior disciplines; (d) the impact on the victim; (e) the advantage gained or to be gained, by the respondent; (f) the number of times the offending conduct occurred; (g) whether the respondent has acknowledged the misconduct and taken steps to disclose and redress the wrong and the presence or absence of other mitigating circumstances; (h) the possibility of remediating or rehabilitating the respondent; (i) the impact on the respondent of criminal or other sanctions or penalties; (j) the impact of the proposed penalty on the respondent; (k) the need for specific and general deterrence; (l) the need to ensure the public’s confidence in the integrity of the profession; and (m) the range of penalties imposed in similar cases.

Applying the Ogilvy factors to this case, there are obviously some concerns that need to be emphasized. Members of the legal profession in general and Mr. Wallbridge, specifically, have to be aware that misconduct of this kind will be treated seriously. Mr. Lebrun feels that he has been negatively disadvantaged by the situation which has occurred here. In his favour, Mr. Wallbridge has acknowledged his misconduct and takes responsibility for it. Mr. Wallbridge however, does have a formal discipline history with the Law Society which was placed before me in the hearing. There was also advantage gained for Mr. Wallbridge through his behaviour of avoiding a small claims court action against himself.

To his credit Mr. Wallbridge has agreed that he would complete a professional development course.  It is my hope, and I do believe through the hearing, that Mr. Wallbridge recognizes and appreciates the seriousness of his obligations to all clients and parties of the legal system and that he will strive to maintain a high professional standard and to help in maintaining the public confidence in the justice system generally and specifically with respect to Mr. Lebrun.

With respect to the Law Society I would note that with this joint submission there is a certainty of a resolution in the matter while still maintaining its’ duty to protect the public.

I took the time to review the previous decisions regarding Mr. Wallbridge as well as reviewing case law from other jurisdictions regarding similar instances of this type of behavior for this hearing.  The penalties in these types of situations can range widely but the jointly recommended disposition in this case falls within the framework of the decisions I reviewed. I would also add that there were experienced counsel for the Law Society and for Mr. Wallbridge who provided this recommendation after a significant amount of thought and contemplation.

In this case I accept the joint submission as I find that it meets the test as set out by the Supreme Court of Canada in R. v. Anthony-Cook, 2016 SCC 43 and find that:

1. Mr. Wallbridge acted in a conflict of interest contrary to section 6 of the Code of Conduct between July 13th and November 28th, 2018 by:

1. Continuing to take instructions from his corporate client, AGL Flooring Ltd., after a dispute arose between its two directors, Dustin Lebrun and Teresa Lebrun; and their instructions to him differed;
2. Giving legal advice to, taking instructions from and/or implementing instructions from one director, Teresa Lebrun, contrary to the instructions of the other director, Dustin Lebrun.

1. Mr. Wallbridge acted in a conflict of interest between himself/his firm and the corporate client, AGL Flooring Ltd. contrary to section 6 of the Code of Conduct on or about November 2nd, 2018 by:

1. Acting in his own self-interest in preparing and filing the discontinuance of action on the instructions of one of the directors which was commenced against him by the other director on behalf of the corporation to recover payment of the services and materials it rendered to him personally.

1. Mr. Wallbridge failed to serve his client, AGL Flooring Ltd. contrary to section 4 of the Code of Conduct between July 13th and November 28th, 2018 by:

1. Failing to inform the Board of Directors of the company that he could only act with clear instructions from the Board of Directors of the company given the conflicting directions being received from the individual directors.

Outstanding Issue on Discipline – Costs

Once the joint submission is accepted there is one issue outstanding which is costs. Under the Legal Profession Act of the Northwest Territories certain authority rests in the sole inquirer with respect to disposition. The Act restricts the Sole Inquirer to a limited amount of outcomes, comparatively, if a matter is sent to a Committee of Inquiry the result of a negative finding is much more serious under the Act. All of the stipulations listed within the joint agreement of the parties are permitted under the Act and are within the discretion of the Sole Inquirer to impose upon Mr. Wallbridge.

The following part of the Legal Profession Act defines the discipline measures which can be imposed by a Sole Inquirer:

29.1. (1) Where a member is found by a Sole Inquirer member by to be guilty of unprofessional conduct, the Sole Inquirer shall reprimand the member.

(2) In addition to reprimanding a member, the Sole Inquirer may

(a) impose one or more conditions on the member’s practice, including but not limited to a condition that the member practise under supervision or report on matters specified in the order to the Discipline Committee or another body or person;

(b) impose one or more other conditions or requirements permitted by the rules;

(c) order the member to pay to the Society, within the time fixed by the order, a fine not exceeding $2,000 for each act or matter regarding the member’s conduct in respect of which the Sole Inquirer has made a finding of guilt; and

(d) order the member to pay the costs of the inquiry in an amount and within the time fixed by the order.

Position of the Parties

The parties filed a number of cases before me regarding costs. Seemingly, one would think that with the parties having narrowed the issues and the Sole Inquirer accepting the joint submission then a decision would easily be arrived at in this case. Unfortunately, as is sometimes the situation, the smallest issues can open up into some of the most complex problems.

The parties provided cases that were in relation to law society cases and others were with respect to other professional bodies.

The total quantum to be discussed was clarified during the hearing and the parties agreed that the costs were to be a maximum of $12,000.00. The positions of the parties as to the amount to be paid of that $12,000.00 are quite far apart.

Counsel for the Law Society submitted that Mr. Wallbridge should be responsible for the full amount of $12,000.00.

Counsel for Mr. Wallbridge put forward in his written and oral submissions that Mr. Wallbridge should be responsible for a much smaller amount than $12,000.00. He provided case law in a broad range from less than $1000.00 to approximately $6000.00. Counsel submitted that the amounts he put forward were more reasonable in the circumstances.

Case Law on Costs

Both counsel discussed the notion that there is a “default rule” regarding costs. There does not appear to be a settled consensus as to whether there actually is a rule or not. The Act and Regulations of the Northwest Territories do not provide guidance on the issue of costs.

Both Counsel ably provided the Sole Inquirer with case law on this issue. Some of this case law I have outlined here which provides some context as to what factors are to be considered in coming to a decision on costs.

In the case of Jaswal v. Medical Board (Nfld.), 1996 CanLII 11630 (NL SC), the court found the following factors at Para 50:

It is necessary, therefore, to determine the factors appropriate to the proper exercise of the judicial discretion to make an order for payment or partial payment of expenses. In my view, based on the submissions of counsel, the following is a non-exhaustive list of factors which ought to be considered in a given case before deciding to impose an order for payment of expenses:

1. the degree of success, if any, of the physician in resisting any or all of the charges

2. the necessity for calling all of the witnesses who gave evidence or for incurring other expenses associated with the hearing

3. whether the persons presenting the case against the doctor could reasonably have anticipated the result based upon what they knew prior to the hearing

4. whether those presenting the case against the doctor could reasonably have anticipated the lack of need for certain witnesses or incurring certain expenses in light of what they knew prior to the hearing

5. whether the doctor cooperated with respect to the investigation and offered to facilitate proof by admissions, etc.

6. the financial circumstances of the doctor and the degree to which his financial position has already been affected by other aspects of any penalty that has been imposed.

The following case of Hoff v. Pharmaceutical Association (Alberta), 1994 CanLII 8950 (AB QB) at Para 22 provided some further background regarding self-governing professions and the member’s responsibility to their respective professional body:

3. The imposition of an obligation on the appellant to pay the respondent’s costs of the proceedings is substantial – something in excess of $22,000 – and the appellant asks that this sum be cancelled or reduced. Of this amount legal fees account for about one-half. The respondent’s out of pocket expenses for transcripts, travelling costs, etc. make up the balance. As a member of the pharmacy profession the appellant enjoys many privileges. One of them is being part of a self-governing profession. Proceedings like this must be conducted by the respondent association as part of its public mandate to assure to the public competent and ethical pharmacists. Its costs in so doing may properly be borne by the member whose conduct is at issue and has been found wanting. Appellant’s request for cancellation or reduction is accordingly refused.

Counsel for the Law Society also relied upon the following case to support its’ position: Law Society of Alberta v. Torske, 2016 ABLS 27 (CanLII)

37.         Mr. Torske and Law Society counsel agreed on the default rule that, in the ordinary course, the member found guilty of conduct deserving of sanction should be required to pay the actual costs of the proceedings that led to the finding of guilt.  We agree.

38.         In her submissions, Ms. Heine frequently referred to that default rule and noted that it arose from something in the nature of a self-regulating profession.  In our view, that “something” is this:  the conduct process is paid for entirely and exclusively by its members, who are not only self-regulated (that is, independently-regulated) but also self-funded.  No taxpayer funds are contributed to the revenues of the Law Society; its members pay entirely for the costs of their own regulation, including the costs of investigation and prosecution, all done in the public interest.  That is one of the costs (and only one) of independent regulation for the lawyers of Alberta. 

39.         Once a member has been found guilty of conduct deserving of sanction by a Hearing Committee, however, section 72 of the Legal Profession Act permits the Law Society, essentially on behalf of its members, to try to recover the costs incurred in investigating and proving that member’s guilt, and to recover them from that member specifically.

and

67.         The default rule regarding costs in a Law Society conduct hearing is that, in the normal course, a member found guilty of conduct deserving of sanction after a contested hearing ought to pay the actual costs of the hearing.

68.         The burden of persuasion to cause a hearing committee to alter that default rule falls to the member.

69.         The discretion to alter the default rule is an open one, not limited by any particular factors, lists, legislation, rules, or guidelines.  The discretion must be exercised judiciously, by reference to principles of analysis that flow from the facts and circumstances of the actual case before the hearing committee.

The Law Society’s position is that given the prior discipline proceedings and the minimal orders of costs in those proceedings that Mr. Wallbridge should be responsible for the full amount of the costs which would be $12,000.00. This position took into consideration the co-operation of Mr. Wallbridge in reaching the admission of guilt and the joint submission. Counsel also took into account the lack of necessity to call witnesses which the Law Society states Mr. Wallbridge benefits from as it reduces the costs of the whole proceedings.

Mr. Wallbridge’s position is that there is no rule or binding authority on the Sole Inquirer which requires that costs be equated with the legal bills of prosecuting counsel. He also states that judicial reviews of costs decisions simply reviewed the reasonableness of the costs and any failure at the judicial review stage does not imply an acceptance that costs are equated to the legal bills of the administrative tribunal. He also states that the tribunal decisions cited are inconsistent with each other and that if a default rule exists that it runs contrary to the principle that costs are discretionary and makes Alberta an outlier in how costs should be awarded in disciplinary matters. Counsel also mentioned the pandemic and the effects on Mr. Wallbridge’s income.

Turning back to the joint submission and agreement to the parties there is the following with respect to the issue of costs:

Mr. Wallbridge should be ordered to pay a portion of the costs of the investigation and the hearing before the Sole Inquirer, but that the parties are not in agreement on the proportion and will ask the Sole Inquirer to determine that issue after having heard submissions from the parties;

“All” of the Costs

Law Society counsel’s position is that Mr. Wallbridge should be responsible for all of the costs, that being $12,000.00. When I questioned counsel regarding the language used in the agreement between the parties stated as being “a portion of the costs of the investigation and the hearing…” counsel’s position was that a portion could refer to all of the costs of the investigation and the hearing.

Counsel did not provide any case law to support that position. Since the date of the hearing I have researched and looked at many decisions/legislation and definitions that could support or debunk the submission that all of the costs would be payable when a portion of the costs is contemplated. I could find no support for this proposition but many references of a portion being a part or a piece of a whole.

I have looked at various definitions and they have all had similar wording to each other but in looking at the Oxford Dictionary it states that the definition of a portion is: “a part of a whole”. This equates with what my own experience has been with respect to this word. If a person were sitting at the dinner table at the end of a meal and was offered a portion of apple pie or if they asked for “a portion of pie” I would scarcely believe or expect that the whole pie would be then placed in front of him or her.

Theoretically, should I accept this argument, then I would seemingly also have to accept that the agreement contemplated that a portion of the costs could refer to Mr. Wallbridge bearing no costs in this matter. This theoretical point was not argued by counsel for Mr. Wallbridge or Law Society counsel during the hearing but it would be the logical conclusion of accepting counsel’s argument in my opinion. However, I refer back to the ordinary meaning of the words and I would expect that if a person were to ask for a portion of apple pie that they would not be expecting to see an empty pie server arrive at their plate and that at the very least there would be a sliver of pie for them to eat.

Therefore, I cannot find that Mr. Wallbridge is responsible for all of the costs. While there may or may not be a “default rule” that in the ordinary course the offending party is responsible for the costs of the hearing I do not feel that it is necessary to address this due to the wording of the agreement of the parties. I would pause to note that in the Torske case the comments of this being a default rule seem to revolve around a “contested hearing” rather than an agreement to discipline as is the case here. Therefore, I am not sure that any default rule would exist in the present case as the choice of the parties was to resolve the matter without a contested hearing.

Summary

Having rejected the proposition that Mr. Wallbridge should pay all of the costs the question then becomes what is an appropriate portion between $1.00 and $11,999.00. It was clear from the submissions of Mr. Wallbridge’s counsel that a portion did not mean zero costs. Again, this question of how costs are decided in self-regulated professional hearings is a much contemplated issue across the country in all professional bodies. I thank counsel for their submissions on this point and on this issue I did review the case law from this and other jurisdictions to see how similar matters were treated. Unlike the Court system where substantial or partial indemnity costs are clearly expressed there is not the same guidance on this issue in Law Society matters in this jurisdiction.

The Act gives latitude with respect to the awarding of costs under the order. The parties positions are clear with respect to this matter. I agree with the comments in the case law regarding self-regulated professions where they state that the conduct of a person whose behaviour is found wanting should be responsible for the costs. I also am reminded of the submissions of Mr. Wallbridge’s counsel when coming to a conclusion regarding an appropriate amount. In reviewing the Northwest Territories Law Society decisions it is clear to me that there is no set criteria to determine costs when it is left to the discretion of the Sole Inquirer.

Conclusion

Taking into consideration the positions of the parties, the previous discipline decisions of Mr. Wallbridge, the case law presented by the parties and all of the factors that were enunciated here in this decision I order the following:

1. That Mr. Wallbridge be and is hereby reprimanded;
2. That Mr. Wallbridge shall pay a fine of $2000.00;
3. That Mr. Wallbridge shall complete a course regarding professional ethics (which course is referenced in the Joint Submission Agreement between the parties) and provide written confirmation to the Discipline Chair by April 30th, 2021;
4. That Mr. Wallbridge shall pay a portion of the costs of the inquiry in the amount of $5400.00; and
5. That Mr. Wallbridge shall pay the costs as ordered by equal monthly installments of $450.00 and to be paid in full within 12 months from the date of the decision.

Dated at the City of Yellowknife in the Northwest Territories this 25th day of March, 2021.