Complaints, Lawyer Discipline and Public Hearings

Decision on Facts and Determination and Decision on Disciplinary Action

DOUGLAS EDWARD DENT

100 Mile House, BC

Called to the bar: September 14, 1976

Discipline hearing: March 23 to 25 and December 21, 2015

Panel: David Mossop, QC, Chair, Bruce LeRose, QC and Clayton G. Shultz

Decisions issued: July 24, 2015 (2015 LSBC 37) and February 12, 2016 (2016 LSBC 05)

Counsel: Kieron Grady for the Law Society; Ravi Hira, QC and Jason Jaffer for Douglas Edward Dent

FACTS

On February 1, 2011, the vendor and the purchaser of a large tract of land in interior British Columbia showed up unannounced at Douglas Edward Dent’ s office without an appointment. The vendor and purchaser wanted the deal to go through as quickly and cheaply as possible and wanted Dent to act for both parties. The agreement included an easement as one of a number of provisions. The deal went through and no one suffered loss or harm.

The purchasing corporation was owned 50/50 by a female partner and a male partner. The female purchaser was not satisfied with the accounting of monies paid for the purchase of the property and sought an accounting from Dent. Dent stated that he represented the vendor only and she was not entitled to his accounting records. The vendor wrote a letter of complaint to the Law Society. Following an investigation, the substance of the original complaint did not result in any citation. However, the investigation revealed three matters that led to a citation: Dent acted for both parties, contrary to the Professional Conduct Handbook then in force; Dent did not advise the purchasers he was not protecting their interests; and Dent breached an undertaking.

Dent claimed that he agreed at the meeting in February 2011 to act only for the vendor, a long-standing client of his, and he could not act for both parties as the sale had a commercial component; however, he also agreed to prepare documents normally prepared by the solicitor for the purchaser. Letters sent or drafted by Dent between February and June 2011 indicated he believed he was only acting for the vendor. Between the original meeting and the closing date, the vendor and the purchaser agreed to an option to sell the property at a reduced price. Dent prepared documents for the option for the vendor, which was used to ensure that, if the deal did not go through, the vendor would keep the amount paid for the option. Dent did not give legal advice to either the female purchaser or the male purchaser, though he did have option papers signed by them in his office.

In late May or early June 2011, the female purchaser asked Dent to represent her in a separate matter regarding a mortgage on another property owned by another corporation she owned. She arranged on her own that the mortgage to be taken out on this property would be used for the purchase of the property in question, which Dent had no knowledge of at the time. In early June 2011, the female purchaser said something to Dent’ s assistant that indicated she believed Dent was her lawyer on the purchase of the property in question. Dent insisted she get her own lawyer and referred her to another lawyer.

There was a mortgage on the property, which had to be removed in order for the sale to proceed. The purchaser’ s lawyer had put Dent on an undertaking that he would not pay out the existing charge to the holding companies until he had a mortgage discharge. Dent breached the undertaking and paid out the charge holders before he had the discharge in hand. The discharge was eventually provided to Dent within four days.

DETERMINATION

The panel dismissed all allegations except for Dent’ s failure to advise the unrepresented parties he was not protecting their interest.

No notes were taken of the meeting on February 1, 2011. The female purchaser had suffered a concussion recently and had trouble remembering events that took place during the meeting. The panel determined she was not a reliable witness. Dent believed he told the female purchaser to seek counsel at the meeting, but he did not remember his exact words. The panel considered his subsequent actions to determine if he was acting for the purchaser. The female purchaser’ s funds were put into his trust account, but if she was unrepresented, the funds would sooner or later end up in Dent’ s account. Dent prepared an option to purchase for the property, but he did so under the instruction of the vendor, and he did not negotiate the option. He gave no legal advice to the purchaser. Dent drafted three different easements, but on the instructions of the vendor. The panel determined there was not enough convincing evidence to show Dent was acting for the purchaser in this matter.

Although Dent asked the purchasers to get their own lawyer, he did not specifically tell them he was not protecting their interests. The panel also considered other factors that happened following the meeting that may have led the purchasers to believe Dent was protecting their interests. The purchasing money went through Dent’ s account. He prepared an option document and an extension of the option. He also represented the female purchaser for the mortgage of another property, proceeds of which were going to this property. In considering the cumulative effect of Dent’ s actions, the panel determined that Dent committed professional misconduct in failing to inform the purchasers he was not protecting their interests.

Dent admits he breached the undertaking to the female purchaser’ s lawyer because he forgot about the undertaking. He believes there was no professional misconduct because there was no loss as a result of the breach. The panel made it clear that forgetting an undertaking and no harm resulting is not a defence to a finding of professional misconduct. The panel considered the facts that there was a secondary undertaking as an alternative protection to the purchaser, that no one complained to the Law Society and that no one had learned of the breach until the Law Society reviewed the file. The breach only existed for six days. The panel declared this an exceptional case and dismissed this allegation.

DISCIPLINARY ACTION

While considering Dent’ s actions, three main factors stood out. First, no harm was done, and the deal went through. Second, Dent did refer the purchaser to retain her own lawyer, though it was four months later. Third, Dent has changed his practice, and he now has written retainers for all his clients and sends out letters of disengagement. The panel also took into account the fact that Dent has a significant professional conduct record.

The panel ordered that Dent pay:

  1. a fine of $5,000; and
  2. costs of $5,000.

 

2015 LSBC 37 Decision on Facts and Determination

2016 LSBC 05 Decision on Disciplinary Action and Cost