Complaints, Lawyer Discipline and Public Hearings

Summary of the Decision of the Hearing Panel

Ian David Reith

Whistler, BC

Called to the bar: May 19, 1989

Discipline hearing: March 2, 2016

Panel: Phil Riddell, Chair, Donald Amos and Richard Lindsay, QC

Decision issued: May 30, 2016 (2016 LSBC 19)

Counsel: Patrick McGowan for the Law Society; Ian David Reith on his own behalf

FACTS

Between January and September 2013, Ian David Reith provided legal services in the transfer of shares of a company between two registered shareholders and to the purchaser. The two vendors saw Reith listed on the company’ s website in January and contacted him to provide legal services, to which he agreed. The company’ s director had previously advised Reith in October 2012 that the company was to change counsel to another law firm. Reith did not discuss the change in counsel with the two vendors or the purchaser.

Reith acted for both the vendors and the purchaser and both parties knew this. Reith failed to comply with rule 3.4-5 of the Code of Professional Conduct for British Columbia by not advising the parties that the information could not be treated as confidential and, if a conflict developed, Reith could not continue to act for both parties and may have to withdraw completely. A conflict almost did develop when the vendors threatened to withdraw due to delays in closing the transaction.

Reith failed to explain to his clients the nature of his retainer, including the tasks he would perform and the fees he would charge. Reith also agreed on his clients’ behalf to pay the transfer fee of $504 to the company’ s new counsel without discussing the fee with the clients. Reith left it to his clients to determine the purchaser’ s share of the property tax and the company’ s assessment.

Reith failed to advise the clients he was taking vacation in the summer of 2013 and how this might affect his ability to complete the transaction. He was aware the clients wished the transaction to complete that summer.

Reith prepared for his clients statements of adjustments that were incomplete and inaccurate. In August 2013, Reith sent the purchaser the Purchaser’ s Statement of Adjustments. The purchaser expressed concerns including the inaccurate completion, possession and adjustment dates, a higher transfer fee and legal fees payable to Reith that he had not previously been discussed. He did not sign the statement, and as a result, there is no signed Purchaser’ s Statement of Adjustments in respect of the transaction.

The vendors signed the Vendors’ Statement of Adjustments and returned it to Reith. The statement referenced legal fees and disbursements payable to Reith and the same completion, possession and adjustment dates as the Purchaser’ s Statement of Adjustments. The closing date had passed, and the statements did not reflect the clients’ agreement as to who would pay the transfer fees. Reith’ s legal fees were not as agreed between the clients.

ADMISSION AND DISCIPLINARY ACTION

Reith admitted to committing professional misconduct by failing to provide a quality of service that would be expected of a competent lawyer. The panel accepted his admission.

The panel considered Reith’ s professional conduct record. Reith had previously committed similar professional misconduct when he acted for multiple parties without complying with the rules and failed to serve his clients in a conscientious, diligent and efficient manner. He was the subject of another conduct review for failing to provide his clients notice of his holiday plans and failing to make provisions to allow his clients to complete their real estate transaction.

The panel ordered Reith to pay:

  1. a fine of $7,500; and
  2. $5,636.25 in costs.

Reith has applied for a review of this decision by a Law Society review board.

2016 LSBC 19 Decision of the Hearing Panel