Tuesday, November 6, 2018

No Exceptional Circumstances For Grave Misconduct

An attorney admitted in 1969 should have his license revoked rather than be permitted to resign per a decision of the Tribunal Hearing Division of the Upper Canada Law Society.

The misconduct was indeed grave

The Lawyer was an active volunteer with the Catholic Church. In 2003, he was asked to serve as Chair of the Cemetery Committee for the St. Patrick’s Roman Catholic Cemetery of the Archdiocese of Ottawa.

The Committee had two other members. All belonged to the parish and performed this role as volunteers. Collectively they were responsible for managing the day-to-day operations of the cemetery.

Mr. Houlahan, as Chair, had specific financial duties.  These included ensuring payments were made into a perpetual care account, filing tax returns and otherwise ensuring annual financial, auditing and reporting requirements were met. 

In 2011 the Director of Cemeteries for the Archdiocese became concerned about compliance with these requirements and requested that Mr. Houlahan turn over the financial records for the cemetery. The Lawyer did so.

Mr. Houlahan was subsequently removed from his position. The Roman Catholic Episcopal Corporation of Ottawa (the “Complainant”) filed a complaint against him with the Law Society. It also initiated a civil suit claiming damages for deceit, conversion, negligence, and breach of fiduciary duties.

Deloitte & Touche was retained by the Complainant to conduct an audit. Their report was completed in 2012. It concluded that a considerable amount of cemetery money ($365,871) appeared to have been mishandled during the Lawyer’s tenure. Roughly $250,000 of this amount went to the Lawyer, apparently for his personal benefit.

The audit revealed

Mr. Houlahan was paid honorariums even though he was serving as a volunteer.

Mr. Houlahan failed to make deposits of approximately $173,695 into a cemetery care and maintenance trust fund as required by the Funeral, Burial and Cremation Services Act, 2002, SO 2002, c. 33.

 Mr. Houlahan had not filed annual income tax, audit or other financial reports for the cemetery.

Portions of the unsupported payments to Mr. Houlahan had been allocated to the operating expenses of his legal practice. These payments included phone and cell phone, internet, insurance, cable, personal credit cards, accounting services and wages for his legal assistants.

Sanction

Mr. Houlahan has engaged in theft over many years. This was not an isolated incident or singular act of human frailty. It started in 2003 and did not conclude until 2011. That was when Mr. Houlahan was removed from his position.

Mr. Houlahan took for his personal benefit $173,695 that was required by law to be placed in a trust fund. That fund was meant to pay for the perpetual care and maintenance of the cemetery for which he was responsible.

Mr. Houlahan did this while acting on behalf of the Catholic Church. He did this from his law offices. He did this while serving as a Deputy Small Claims Court Judge.

   This conduct eventually came to the attention of the police and criminal charges resulted in 2014. Mr. Houlahan did not advise the Law Society, even though he was aware he was required to do so. He retained his status as a practising lawyer until 2016.

His actions were egregious. They were planned, calculated, deliberate and ongoing over the course of years. There is no compelling medical evidence explaining why this may have occurred. There is no evidence of duress or mitigating financial distress of the sort described in Bishop.

By any measure the nature and extent of such serious dishonesty call for the presumptive penalty of revocation, absent exceptional circumstances. This is compelled by the need to ensure public confidence in the legal profession and promote general deterrence.

Mr. Houlahan has argued that exceptional circumstances exist, which should allow him to resign. He has been a good lawyer for 48 years as reflected by his character references. He pled guilty and made some restitution. His health is poor. He has been ruined financially. He has retired and has no intention of working as a lawyer again.

We have sympathy for Mr. Houlahan’s current medical difficulties. We appreciated receiving his character references. We acknowledge his acceptance of guilt and attempt to make some restitution. However, to our minds, none of these go beyond normal mitigating factors so as to establish exceptional circumstances that could lead to a deviation from the presumptive penalty.

Mr. Houlahan’s current unfortunate situation is a direct result of his own appalling actions. He cannot avoid the consequences. The public interest and the need for public confidence in the legal profession demand that the Lawyer’s licence be revoked.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2018/11/an-attorney-admitted-in-1967-by-the-tribunal-hearing-division-of-the-upper-canada-law-society-the-misconduct-was-grave-the.html

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