The Divisional Court recently heard the appeal of a physician who had been suspended from practicing for eight months after he borrowed more than $600,000 from two patients and lost that money when he invested it in what turned out to be a scam.

What Happened?

The doctor at issue was a licensed family physician with a practice in Markham, Ontario. In 2006, he met an individual who offered him an investment opportunity. To participate in the opportunity, the physician asked to borrow money from two long-term patients, who provided him with the amounts he had requested ($448,000 and $289,096 respectively). He ultimately invested these funds, but lost all the money after it turned out that the investment opportunity was fraudulent. In 2011 the physician made a consumer proposal under the Bankruptcy and Insolvency Act, listing both his patients as unsecured creditors. The bankruptcy proposal expired in August 2017, at which point the two patients were still owed hundreds of thousands of dollars ($406,000 and $261,396 respectively). When the physician completed his annual College renewal in 2011 he answered “no” to the question of whether there had been any civil judgments against him in any lawsuits involving patients, despite the fact that there was such a judgment stemming from the loss of the loaned funds.

The Discipline Proceedings

The College of Physicians and Surgeons subsequently brought discipline proceedings against the appellant for committing “disgraceful, dishonourable, and unprofessional conduct” by borrowing money from patients, therefore committing a “boundary violation”. The Committee concluded that the appropriate sanctions against the physician were an eight-month suspension, an obligation that he complete an ethics course, a reprimand, and costs for a one-day hearing.

The Physician’s Position on Appeal

The physician appealed to the Divisional Court, arguing that the Committee’s penalty decision was unreasonable and should be reduced because:

The Committee wrongly relied on specific deterrence as a relevant policy objective

The physician argued that in the absence of any history of previous discipline proceedings that would indicate cause for legitimate concern, and given the financial and social consequences he had suffered as a result of his actions, there was no conceivable risk of any re-occurrence of similar conduct.

The Committee improperly took into account two considerations in the context of general deterrence

The physician, who is Iranian, argued that the Committee improperly considered his ethnic background to be an aggravating factor when determining the penalty, as the Committee had noted that the eight-month suspension would “serve as a general deterrent to physicians against taking advantage of the vulnerability of patients who trust them due to shared common ethnicity and ability to speak the same language, for their own personal gain.” While the physician acknowledged that it was not improper for the Committee to refer to the increased trust that his patients placed in him due to both shared ethnicity and language as well as due to the status of doctors in Iranian society, taking these factors into consideration of a penalty was racist.

The physician was wrongly penalized for availing himself of “bankruptcy protection” and seeking to make a fresh start of his financial affairs

The physician believed that the fact of his bankruptcy was incorrectly taken into consideration as an aggravating factor in the Committee’s penalty decision.

The penalty was clearly unfit based on the above factors as well as previous discipline decisions

The physician sought to distinguish his case from similar cases in the past by arguing that his actions had affected a smaller number of patients, that the patients were less vulnerable, and that he himself had also suffered financial losses due to the investment scam.

The Divisional Court Decision

The Divisional Court noted, with respect to each of the physician’s arguments, as follows:

The Committee wrongly relied on specific deterrence as a relevant policy objective

While the physician had no relevant prior disciplinary history, the Committee had evidence upon which to conclude that specific deterrence was an appropriate consideration. The physician had not been merely an “innocent victim”. Rather, he had actively deceived his patients in a variety of ways to obtain money from them:

• He failed to disclose the loss of a previous investment with the same individual;
• He failed to disclose concerns raised by a major Canadian bank regarding the investment opportunity; and
• He provided his patients with cheques with the full knowledge of the insufficiency of funds in his bank account.

This dishonesty, coupled with the abuse of his patients trust to meet his personal financial needs were sufficient to engage specific deterrence as an applicable principle.

The Committee wrongly relied on specific deterrence as a relevant policy objective

The Divisional Court disagreed that the Committee’s consideration of the physician’s ethnicity and language he shared with the two patients was racist. The physician’s own Statement of Facts and Admission of Liability specifically referred to his Iranian background to explain the level of trust the patients placed in him, which the physician ultimately manipulated for his personal gain. The Divisional Court saw nothing improper in the Committee’s concern that a vulnerability can arise from shared ethnicity and language between a physician and their patients, or from the status attached to the position of a physician in certain communities.

The physician was wrongly penalized for availing himself of “bankruptcy protection” and seeking to make a fresh start of his financial affairs

The Divisional Court noted that the complete facts of the physician’s insolvency proceedings did not appear to have been before the Committee. The only information that had been available was that the physician had liabilities totaling approximately $1.1 million and that he had made a consumer proposal. In the Court’s view, the Committee had not taken the fact of the physician’s consumer proposal into account as an aggravating factor, but did, correctly, consider other relevant aggravating factors including:

• the physician’s apparent lack of remorse;
• his failure to offer any partial restitution further to what was in his consumer proposal; and
• the financial impact of his actions on the two patients in the context of maintaining public confidence in the profession and in specific deterrence.

The penalty was clearly unfit based on the above factors as well as previous discipline decisions

The Divisional Court noted that in coming to its decision on the eight-month suspension, the Committee had carefully reviewed both the College’s proposal of a twelve-month suspension and the physician’s proposal of a two-month suspension. The Committee had also considered the principle of proportionality and had reviewed other penalty cases, ultimately balancing the considerations of general deterrence, which in and of itself called for a lengthy suspension, the specific deterrence needed, and off-setting the mitigating factor of the physician’s cooperation. The Divisional Court further noted that:

• it was not relevant that the loans were made to finance an investment intended to increase the physician’s wealth rather than be spent immediately to support his lifestyle;
• it was similarly irrelevant that the physician had also lost money;
• the fact that the physician was also a victim of the scam did not diminish the reality that he had used his position to take advantage of the two patients;
• the relevant act of misconduct was the taking of the loans, not the consequences of that.

The Divisional Court concluded that it was well within the College’s discretion to hand down an eight-month suspension and that penalty did not fall outside of the range of reasonable penalties for the actions of a physician in the circumstances. The appeal was dismissed. At Wise Health Law we have significant experience and expertise assisting physicians and other health professionals in the civil and regulatory contexts, including in appeals and judicial reviews. We have significant trial and appellate experience and are passionate about helping health professionals and healthcare organizations understand and protect their legal rights. Contact us online, or at 416-915-4234 for a consultation.

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