A lawyer (“Luk”) lost her appeal from a professional misconduct conviction by the Law Society of Manitoba (the “Law Society”) for failing to notify her insurer after becoming aware of facts giving rise to a potential claim

Administrative law – Decisions of administrative tribunals – Law Societies – Barristers and solicitors – Professional misconduct / conduct unbecoming – Judicial review – Compliance with legislation

Eva Yee-Wah Luk v. Law Society of Manitoba, [2011] M.J. No. 313, 2011 MBCA 78, Manitoba Court of Appeal, September 23, 2011, M.H. Freedman, R.J.F. Chartier and M.M. Monnin JJ.A.

Luk had registered land in the name of a company owned by her clients and a third party, when the land should have been registered to the clients’ other company, owned by them alone. The clients notified Luk of her error in February 2007. In April 2007, the clients attended on Luk and asked her to fix the problem. Luk prepared a transfer, but failed to register it until January 2008, when she was notified that a Law Society complaint had been lodged against her.

The Law Society’s Rule 5-34 provides that a member must notify the Law Society of any potential professional liability claim as soon as practicable after becoming aware of the relevant acts or omissions. Failure to comply with the rule without reasonable excuse may constitute professional misconduct.

Luk testified that she decided not to notify the Law Society of the potential claim because the amount of the claim would not exceed her deductible, and she felt she could correct the problem. As justification for her delay in filing the transfer, Luk claimed not to have the funds necessary for filing fees to make the second land transfer at the time that she was asked to fix the mistake.

The Panel found Luk guilty of professional misconduct. The Court held that the finding was reasonable, as was the associated penalty (a modest fine). The Panel’s reasons made it clear that Luk’s excuses for failing to report the potential claim were considered. However, the reasons contained intertwined content about Luk’s conviction on other counts of professional misconduct. While the same evidence can support separate professional misconduct convictions, it would have been preferable for the Panel to deal with its conclusions on a separate, charge-by-charge basis, indicating which evidence supported each conclusion. Despite this organizational issue, the reasons were sufficiently clear to meet the Dunsmuir standards as to reasoning process and outcome.

Luk argued that a finding of professional misconduct must be predicated on impugned conduct that was dishonourable or disgraceful. While it was the traditional view that an element of moral turpitude, rather than mere negligence, was required to convict a lawyer of professional misconduct, a violation of regulatory requirements or rules of conduct imposing specific duties is now sufficient. (Dunne v. Law Society of Newfoundland (2000), 191 Nfld. & P.E.I.R. 129 (S.C. (T.D.)))

Luk’s appeal was dismissed, with costs.

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