What are the limits on the powers of self-governing professional
bodies? The question raises both administrative law issues and the
commercial effect of decisions taken by administrative bodies.
This matter involved a successful action by the FCT Insurance
Company, a provider of title insurance policies, to have declared
invalid the provision in the New Brunswick Law Society standards
for the practice of real property lawyers. The FCT succeeded at
trial and on appeal.
The crux of the matter at both levels of court was whether the
impugned provision truly existed to protect the public interests in
some way, or whether the FCT had proven it to be a manifestation of
an improper purpose, and therefore outside the broad ambit of the
Law Society's powers.
The FCT Insurance Company is a corporation that offers title
insurance policies to, among other customers, residential home
owners and financial institutions involved with re-financings for
mortgages of residential home owners. The company offers its
services in all provinces of the country.
In November 2001, the Law Society of New Brunswick added a
provision to its standards for the practice of real property law
such that lawyers submitting certain electronic documents
(necessary for appropriate registration of title and mortgage
interests) are now required to obtain an affidavit of the owner
sworn before a notary, and an accompanying notarial certificate. No
such requirement for notarial involvement exists in the New
Brunswick Land Titles Act. In New Brunswick, only lawyers
The FCT sought a declaration that the provision was invalid, and
aimed directly at the FCT's business model; the affidavits
provided by the title insurer's customers were sworn before a
commissioner for taking oaths. In other words, the impugned
provision injected extra lawyer costs into the process.
The FCT alleged that the impugned provision was inconsistent
with the Land Titles Act, ultra vires the Law
Society's powers, and had a predominant purpose of stifling
competition for lawyers arising from the customer option of title
insurance (as opposed to the traditional lawyer-driven method of
residential real estate transactions).
McCarthy Tétrault Notes:
In reasons released on October 19, 2007, Riordon, J. struck down
the provision as inconsistent with the Land Titles Act,
and ultra vires the Law Society. Notably, in finding that
the primary purpose of the impugned provision was to stifle
competition, Riordon, J. was clear that the motivations of the
then-President of the Law Society and the committee he headed in
drafting the impugned provision could be imputed to the Law Society
as a body.
On May 8, 2009, the Court of Appeal affirmed that the trial
judge had sufficient evidence to support his findings and that the
practice standard conflicted with the province's Land
Titles Act. The Appeal Court also affirmed that the Law
Society had adopted the impugned provision for the "improper
purpose" of protecting its members against competition from
The Court of Appeal also rejected the Law Society's
counter-claim that the FCT had been engaged in the unauthorized
practice of law, finding that the FCT's lawyers provided legal
services only to the company and not to its customers.
This decision represents a significant limitation on the power
of law societies, or other self-governing bodies, to take improper
steps that benefit their members under the guise of serving their
mandate to protect the public interest. Further, it is an important
example of the obstacles and aggressive approach that a private
entity may face when challenging the authority of a governmentally
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).