Friday, April 24, 2009

Another lawyer for Sandy Huthchens loses his license:

Another lawyer for Sandy Huthchens loses his license:

Citation: Law Society of Upper Canada v. Ian Stuart Hennessey, 2008 ONLSHP 0096
Date: August 29, 2008
Docket: 2006-00028
File No.: CN30/06


The Law Society of Upper Canada, Applicant


Ian Stuart Hennessey,Respondent

of the City of Toronto

Before: Gerald A. Swaye, Q.C. (chair)
Anne Marie Doyle
J. James Wardlaw, Q.C. (author)

Heard: July 4, 2008, in Toronto, Ontario

Counsel: Naomi Overend and Catherine Braid, for the applicant
Nadia Liva, for the respondent

Reasons for Decision on Penalty

[1] Rule 2.02(5) of the Rules of Professional Conduct states that a lawyer shall not knowingly assist in or encourage any dishonesty, fraud, crime or illegal conduct. The Panel has determined [Law Society of Upper Canada v. Ian Stuart Hennessey, 2008 ONLSHP 35 (CanLII), 2008 ONLSHP 35] that the member has violated this and other rules of professional conduct by:
(a) advancing $137,812.94 to one Sandy Hutchens (Hutchens) from mortgage proceeds on a mortgage given on the security of a home owned by Giuseppe (Joe) and Shirley Teresi to assist them in the purchase of a property in Fort Erie when:

(i) he had actual knowledge that the money being advanced was part of a value fraud in connection with the Fort Erie property,

(ii) title to the property had not yet been transferred to Joe and Shirley (which in fact was never transferred to them),

(iii) knowing there was no lawyer representing Joe and Shirley other than himself;

(b) assisted Hutchens to perpetrate a fraud on Marie Jirkova in his attempt to acquire three Muskoka properties owned by her for an amount equal to the mortgages owing on them plus $100 knowing that she was vulnerable due to financial difficulty and was not independently represented;

(c) after being advised by a fellow solicitor that his lender client required that the member meet personally with Carmine Janetta to give Mr. Jannetta independent legal advice with respect to a mortgage arranged by Hutchens to be placed on his home to assist in the purchase from Hutchens of one of the Muskoka properties referred to above, to witness his signature on the mortgage and to commission two statutory declarations, misleading such fellow solicitor into believing he had done so by signing a certificate of independent legal advice that he had given such advice, by signing (although not swearing) an affidavit of subscribing witness that he had seen Mr. Jannetta sign such mortgage, and by commissioning the two statutory declarations when he had not in fact met with Mr. Jannetta for that purpose, Mr. Jannetta’s signature on the documents having been forged;

(d) causing the Jannetta family, the members of which had limited facility in the English language and limited education, to become involved in litigation to clear the title to their home from the said mortgage; and

(e) causing loss to the title insurance company which had insured the mortgage.

[2] Counsel for the Society argued that while no two cases are identical, they are almost unanimous in holding that when a lawyer has been involved in assisting the commission of a fraud, in the absence of significant mitigating circumstances, the only appropriate penalty is disbarment and in support of that position referred the Panel to the decision Law Society of Upper Canada v. Wayne Valentine Colin De Landro,2006 ONLSHP 5 (CanLII), 2006 ONLSHP 5,para. 141and the cases noted in support.
[3] Counsel for the member submitted that based on the evidence of mitigating circumstances submitted to the Panel in the penalty phase, consisting of a letter from Dr. Sam Ozersky,[1] the Senior Psychiatric Consultant to the Mood Disorders Clinic at University Health Network (TGH division), and letters from the member’s wife from whom he is separated, his son, and from several colleagues, it was open to the Panel to allow the member to resign.
[4] Dr. Ozersky wrote, at p. 6:
I believe that this man has been suffering and is currently still suffering from long standing alcohol abuse and likely dependency. In addition, he has had long standing dysthymia. Dysthymia is a form of mood disorder of depression characterized by a lack of enjoyment/pleasure in life that continues for at least two years. It differs from clinical depression in the severity of symptoms. Dysthymia can, though it does not always, prevent a person from functioning or affect sleep patterns and daily activities.

Dysthymia may seem a paradoxical disorder in that sufferers exhibit fairly mild symptoms on a day-to-day basis; however, over a lifetime it can have severe effects, such as high rates of suicide, work impairment, and social isolation. The symptoms of patients with dysthymic disorder are not as severe as those associated with major depression, but the duration of these symptoms is much longer. When a major depressive episode occurs on top of dysthymia, clinicians may refer to the resultant condition as double depression.

[5] The member told Dr. Ozersky that “he believes he has always been depressed in a minor way” who found that he showed symptoms of sadness, pessimism, guilt, and anhedonia.
[6] Counsel for the member also argued:
(a) letters from colleagues showed him to be a good mentor in the training of young lawyers,

(b) the member was a good lawyer motivated to help people, who was never in trouble in 30 years of practice until Hutchens came along,

(c) other people, including judges have been deceived by Hutchens,

(d) the member had no part in the planning of the various frauds, everything having been put in place before the member was instructed, all occurred within a five month period of time, each fraud was different, each was complicated, and the time pressure can lead one to understand why more care was not taken,

(e) the member took only reasonable fees,

(f) there have been no problems with the member in the seven years that have elapsed since all of this came to light,

(g) the member has been involved in giving pro bono community service,

(h) the member has co-operated with the Society,

(i) the member has been realistic in his understanding of what was happening and offered to resign several years ago when these matters came to light.

[7] The member gave evidence in which he expressed remorse for failing to live up to the standards of the profession, and acknowledged that he should have done more at the time.
[8] The Panel has considered these arguments and makes the following observations with respect to some of them.
Offer to Resign

[9] Counsel for the Society acknowledged that the member had offered to resign but was not willing to give his resignation based on an acknowledgment that he had done anything wrong. The Panel notes that if he had been allowed to resign without such acknowledgement, nothing would have prevented a later application for reinstatement without any requirement of a good character hearing. If there were to be such a hearing, the Panel might well conclude that since the member had been allowed to resign, the matters in question were relatively minor in nature.

[10] While the member has co-operated with the Society, (indeed much of the evidence came from the member’s files), the Panel notes that the member, at least at the beginning, failed to co-operate with LawPro with respect to a complaint made against him by Dins Brik.
[11] Counsel for the Society argued, and the Panel agrees, that co-operation came too late for the injured parties. The damage had already been done and the member’s co-operation should not result in his avoiding the most severe penalty.
[12] The same reasoning applies to the argument that he has since practised for several years without fault. A lawyer under investigation is unlikely to re-offend during the period of investigation.
Others have Been Deceived

[13] The fact that others have been deceived by Hutchens is not a defence. Those others were either clients or persons who knew Hutchens on a semi-formal basis and who had no knowledge of his activities. The member was intimately aware of what Hutchens was doing and rather than taking steps to prevent it, assisted in his schemes.
Mitigating Circumstances

[14] In the opinion of the Panel, the mitigating circumstances outlined in Dr. Ozersky’s letter and in the other letters received by the Panel are not sufficient to either excuse the member for his actions in assisting Hutchens or in reducing the penalty sought by the Society.
[15] Dr. Ozersky’s letter and the other letters written in support of the member were not submitted in evidence at the hearing before the Panel made its finding of professional misconduct. Even if they had been, they would not have made any difference. As was pointed out in Law Society of Manitoba v. MacIver,[2003] L.S.D.D. No. 29, at paragraph 25, mitigating circumstances are of value only if they can explain why the misconduct occurred – why, in other words, the member might be able to make a plea of reduced responsibility. As indicated, the information in the letters is not sufficient, especially when considered against the other evidence the Panel heard and read, to allow the Panel to reach such a conclusion.

[16] The Panel agrees with the submission made by counsel for the Society that the appropriate penalty is disbarment and therefore orders that the member’s licence to practice be revoked.

[17] Counsel for the Society asked for costs in the amount of $89,257.39 indicating that such costs were on a partial indemnity basis only.
[18] Counsel for the member indicated that the member’s practice was not a lucrative one – he only earned about $25,000 a year.
[19] The Panel awarded the full costs requested by the Society.
Compensation Fund

[20] The Panel also ordered that he be required to repay to the Compensation Fund any amount that it is required to pay arising out of his actions.

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