Discipline digest

Please find summaries with respect to:

Michael Curt Scholz
Eric Kai Chesterley
Gerhard Ernst Schauble
Andrew James Liggett
Robert John Palkowski
Lawyer 10

For the full text of discipline decisions, visit the Regulation & Insurance / Regulatory Hearings section of the Law Society website.

Michael Curt Scholz

Vancouver, BC
Called to the bar:  May 14, 1979
Ceased membership:  July 3, 2008
Bencher review:  September 9, 2009
Benchers:  Bruce LeRose, QC, Chair, Leon Getz, QC, David Mossop, QC, Thelma O’Grady, David Renwick, QC, Meg Shaw, QC, Herman Van Ommen
Report issued: November 24, 2009 (2009 LSBC 33); corrigenda issued:  November 26, 2009 (2009 LSBC 34)
Counsel: Henry Wood, QC for the Law Society and George Gregory for Michael Curt Scholz


In the decision of the hearing panel (facts and verdict: 2008 LSBC 02; penalty: 2008 LSBC 16; Discipline Digest: 2008 No. 3 July), Michael Curt Scholz was found in breach of a court order governing trust funds, in contravention of Law Society Rule 3-51. The panel also found Scholz acted in circumstances that had the potential for divided loyalties and a conflict of interest. The panel found Scholz’s conduct in both these circumstances amounted to professional misconduct. The panel ordered that he be suspended for one month and pay costs of $26,437.50.

Scholz challenged the findings of the hearing panel, the verdicts of professional misconduct and the penalty. He argued that his conduct must be viewed through his eyes, this was not the case of a fully practising lawyer acting in conflict, he was nearing retirement and he had stopped thinking like a lawyer.


The review panel upheld the findings of the hearing panel.

The panel stated that a lawyer’s conduct must be viewed objectively, and a belief to the contrary is irrelevant as to whether the impugned conduct is within the standards that govern lawyers’ behaviour. As long as Scholz continued to act as a lawyer, including charging fees for his services, he was obliged to continue to think and act as a lawyer.

The review panel upheld the hearing panel’s decision on penalty that a one-month suspension and the payment of costs was an appropriate penalty. The review panel further ordered Scholz to pay the costs of the review.

Eric Kai Chesterley

Courtenay, BC
Called to the bar: June 30, 1976
Discipline hearing: September 30, 2009
Panel: James Vilvang, QC, Chair, Haydn Acheson and David Mossop, QC
Oral decision issued: September 30, 2009
Report issued: October 6, 2009 (2009 LSBC 29)
Counsel: Eric Wredenhagen for the Law Society and Gerald Cuttler on behalf of Eric Kai Chesterley


A client retained Eric Kai Chesterley to claim an interest in land registered in the name of the client’s father. Chesterley advised that the client’s mother was the proper party to make the claim.

The client told Chesterley that his mother agreed to be a party to the action, but Chesterley did not contact the mother to confirm her consent. He later sought information from the mother but did not inform her that she would be named as a plaintiff in the action.

When the mother learned she had been named as plaintiff, she agreed to let the action stand. Chesterley did not advise her of the risk that she might be required to pay the defendant’s costs.

In October 2003, the mother retained Chesterley to defend her in an action started by her daughter against the father.  The original client was later added as a plaintiff in that same action, and the father also sued the original client.

Chesterley did not fulfill the requirements for acting for two parties, as outlined in the Professional Conduct Handbook. Specifically, he did not explain to the clients the principle of undivided loyalty; advise them that no information received from one client could be treated as confidential as between them; or secure the informed consent of the clients as to the course of action to be followed if a conflict arose between them.

On instructions from the clients, Chesterley filed a Notice of Discontinuance of the Action. Special costs were awarded at $25,783.05.

Admission and penalty

Chesterley admitted that he commenced a civil action in the name of the mother before she actually retained him and that he commenced such action without proper instructions, which constitutes professional misconduct.

Chesterley further admitted that, in acting jointly for the clients, he failed to comply with the requirements of the Professional Conduct Handbook, which constitutes professional misconduct.

The hearing panel accepted Chesterley’s admissions and proposed penalty. The panel ordered that he pay:

1.  a $3,000 fine; and
2.  $1,500 in costs .

Gerhard Ernst Schauble

Kelowna, BC
Called to the Bar:  July 21, 1989 (BC); June 19, 1981 (Alberta)
Discipline hearings:  July 22, 23, 24 and December 10, 2008 (facts and verdict); October 2, 2009 (penalty)
Panel: James D. Vilvang, QC, Chair, William F.M. Jackson and Brian J. Wallace, QC
Reports issued: April 16 (2009 LSBC 11) and October 23, 2009 (2009 LSBC 32)
Counsel:  Jaia Rai for the Law Society; David W. Donohoe for Gerhard Ernst Schauble


In June 2001, Gerhard Ernst Schauble moved his practice, Schauble & Company, from Westbank to join a Kelowna firm. Schauble claimed he was assured he would be referred all of the firm’s personal injury work and have other lawyers available to provide backup while he was engaged in other activities.

On January 31, 2003, the Kelowna firm partnership was terminated, and effective the next day, Schauble and one of the Kelowna firm partners entered into an agreement in essentially the same terms as in 2001.

While practising with the Kelowna firm, Schauble rendered accounts to three clients for fees and accepted payment of those fees without the knowledge or authority of the firm. If undetected, this misappropriation would have cost the firm approximately $45,000 in revenue.

On January 8, 2004, the principal of the Kelowna firm commenced an action in the BC Supreme Court against Schauble and also made a complaint to the Law Society.

Schauble’s position is that these clients were not clients of the firm, but rather were clients in his separate practice, which was contemplated by the Agreements. He claimed that a former partner of the Kelowna firm confirmed his right to retain the fees in respect of these clients.

The former partner denied this and stated that Schauble was entitled to keep any fees billed on the files he brought with him from Westbank. However, after disbursements were paid, fees would be shared 50/50 for work done on new files or any files that were turned over to Schauble. It was also the former partner’s understanding that Schauble was not entitled to carry on a practice outside the firm.

In the alternative, Schauble said that he was entitled to retain the fees in question as a set-off for earnings lost as a result of the Kelowna firm’s breach of the Agreements. He claimed the firm’s principal breached their Agreements by diverting clients and refusing to refer personal injury files to Schauble. The former partner and the firm’s former assistants confirmed this was true.


At the hearing, Schauble was asked what he would have done differently. He responded that his biggest mistake was entering a professional association agreement with the Kelowna firm. He added that his second biggest mistake was in not leaving the relationship when he had an earlier opportunity. The panel concluded that Schauble did not acknowledge any misconduct, and stated that he had sufficient experience to realize that what he did was wrong.

The panel determined that Schauble was not entitled to keep the fees from client files for himself rather than split them with the firm, and that he did not honestly believe he was entitled to do so. Rather, he knowingly and intentionally misappropriated the funds. The panel found Schauble guilty of professional misconduct.


The panel is satisfied that a period of suspension is the appropriate penalty. The panel considered Schauble’s belief that he had been provoked by the actions of the Kelowna firm’s principal. While provocation does not justify Schauble’s actions, it does mitigate the penalty.

The panel ordered that Schauble:

1.  be suspended for three months; and
2.  pay $32,000 in costs.

Andrew James Liggett

Burnaby, BC
Called to the Bar:  May 17, 1991
Discipline hearing:  April 29 and November 12, 2009
Panel: Gavin Hume, QC, Chair, David Mossop, QC and David Renwick, QC
Reports issued: July 14 (2009 LSBC 21) and December 14, 2009 (2009 LSBC 36)
Counsel:  Maureen Boyd for the Law Society; David Taylor for Andrew Liggett


An audit conducted between September 2006 and April 2009 found numerous problems with Andrew James Liggett’s records in his own firm, Sea to Sky Law Corporation.

Liggett was administratively suspended from July 24 to August 24, 2006 for failing to submit his Trust Report. During this two-month period, there was little or no effort by Liggett to get his books and records in order. The Practice Standards Committee subsequently made a number of recommendations and follow-up practice reviews. In September 2008, Liggett was directed to provide a debt reduction plan to the Law Society.

In May 2009, a review of Liggett’s records from August 2008 to February 2009 showed that the trust reconciliations were completed on time and were balanced. The GST, PST and employee withholding accounts and the accounts payable ledgers were all current and the accounts receivable ledgers were being maintained. Further, the accounting deficiencies for the period February 2004 to January 2008 had been rectified.

Liggett’s lawyer stated that the records were previously not in order due to a difficulty in hiring and retaining competent staff, difficulties in keeping the PC Law and computer system operational, cash flow problems, an inability to hire a replacement bookkeeper when the accountant quit in March 2006, as well as issues in Liggett’s personal life.

To bring his books and records in compliance with the Law Society Rules and help meet his financial responsibilities, Liggett spent approximately $50,000 in accounting fees, restructured his practice, moved to an office space-sharing arrangement, hired a full-time accountant, and sold a number of assets. 


The panel found that Liggett’s conduct constituted professional misconduct for numerous breaches of the Law Society Rules relating to accounting records and failure to comply with requests from the Law Society. 

An aggravating factor in this case is that the books and records were out of compliance for three years. In spite of the number of factors playing on Liggett’s practice and personal life, the panel was concerned specifically about the length of time taken to rectify the transgressions; the failure to follow through with the two action plans; the notice given to Liggett of the problems as early as May 2006; and the failure to produce any meaningful compliance during the period of Liggett’s suspension.

The panel recognized that there was no misappropriation of client trust funds, nor was there any evidence of harm to any person arising from this misconduct. Nevertheless, the panel noted that the administrative side of the practice of law is important. The Law Society rules were instituted to ensure that the public interest is protected and these rules must be adhered to. 


The panel ordered that Liggett:

1.  pay a $3,000 fine;

2.  retain a Chartered Accountant or Certified General Accountant to review his books and records every six months for three years and to report in writing to the Law Society whether the books and records of Liggett’s practice are in compliance and, if not, provide a detailed listing of the items of non-compliance; and

3.  pay $18,000 in costs.

Robert John Palkowski

Vancouver, BC
Called to the bar: January 10, 1978
Discipline hearing: November 27, 2009
Panel:  G. Glen Ridgway, QC, Chair, Barbara Levesque, Ronald Tindale
Report issued: December 1, 2009 (2009 LSBC 35)
Counsel: Eric Wredenhagen for the Law Society; Donald Muldoon for Robert John Palkowski


On the evening of February 26, 2006, Robert John Palkowski was driving his vehicle over the Lions Gate Bridge when he crossed the centre double solid yellow lines. He hit one vehicle and then continued to drive into oncoming traffic and collided head on with another vehicle. The driver of the second vehicle was seriously injured.

The officer at the accident scene had reasonable grounds to believe that Palkowski’s ability to drive was affected by alcohol. The officer was unable to obtain a suitable breath sample after three attempts at the roadside, and Palkowski subsequently refused to blow into the handheld screening device. A blood sample taken at the hospital later showed that Palkowski’s blood alcohol level at the time of the accident was approximately three times the legal limit.

Palkowski was charged with dangerous operation of a vehicle causing bodily harm; impaired driving causing bodily harm; failure or refusal to comply with a demand made by a peace officer and failure or refusal to provide a breath sample.

Palkowski’s lawyer wrote the Law Society to advise that his client had been involved in a motor vehicle accident and was facing criminal charges. The Discipline Committee placed the matter in abeyance until conclusion of the criminal proceedings.

Palkowski entered a guilty plea to the charge of impaired driving causing bodily harm. On January 15, 2009, he was given a 12-month conditional jail sentence and a 12-month driving prohibition.  

Palkowski’s lawyer wrote to the Law Society on February 11, 2009 stating that his client accepted full responsibility for his conduct and acknowledged that he drank too much on the date in question and then decided to drive home.

Admission and penalty

Palkowski admitted that he operated a motor vehicle while impaired by alcohol and was involved in a collision that caused bodily harm to another person. He admitted that his conduct constituted conduct unbecoming a lawyer.

The hearing panel accepted Palkowski’s admission and ordered that he:

1.  be suspended for one-month; and

2.  pay $1,500 in costs.

Lawyer 10

Discipline hearings: September 18, 2008 (facts and verdict) and May 15, 2009 (penalty and application for anonymous publication);
Panel: Glen Ridgway QC, Chair, William Jackson and Richard Stewart, QC
Bencher review: December 10, 2009
Benchers:  Majority decision: James Vilvang, QC, Chair, Carol Hickman, Ronald Tindale and Herman Van Ommen; Minority decision: Barbara Levesque, Peter Lloyd and David Renwick, QC
Reports issued: February 11 (2009 LSBC 06) and September 9, 2009 (2009 LSBC 27), and January 5, 2010 (2010 LSBC 02)
Counsel: Eric Wredenhagen for the Law Society and Craig Dennis for Lawyer 10 (facts and verdict, penalty and application for anonymous publication); Gerald Cuttler for the Law Society and George Macintosh, QC and Craig Dennis for Lawyer 10 (review)


In 1993, Lawyer 10’s firm was retained by a client who was a shareholder involved in a foreclosure action. The mortgage proceeds in dispute were being held in trust by another law firm. The shareholders’ dispute was settled in July 1993. Lawyer 10’s firm was instructed by the client to review the other law firm’s accounts in this matter.

In 1992, the other law firm had obtained a court order that directed the land sale proceeds in dispute be paid into its trust account. In March 1993, a second order granted the clients judgment in the amount of $554,879.34. In July 1993, the law firm obtained a third order directing this payment plus interest to their clients. In January 1994, a fourth order directed payment of the remaining funds in the amount of $551,858.60 into court.

In February 1994, Lawyer 10’s firm, on the client’s instructions, applied for payment out of the balance of funds in court. The basis of this ex parte application was that the former law firm had never paid the client the sum of $554,879.34 as ordered in July 1993. 

A junior lawyer, working under the guidance of another lawyer at Lawyer 10’s firm, prepared the affidavit. When Lawyer 10 swore the affidavit, he was told by the client that the funds had not been paid. The lawyer in his firm who was acting for the client also stated that, after a review of the file and court orders, it appeared that the funds had not been paid to the client.

In March 1996, Lawyer 10 swore an affidavit and the statement “the funds were not paid to the Petitioners” was sworn to be on personal knowledge, not information and belief. This statement proved to be false as the funds had been paid to the client in 1993.

In 1999, some of the claimants to the lands discovered the funds they believed to be held in court, as per the first court order, had been paid out. They complained to the Law Society, and also advised of ongoing civil proceedings with respect to these funds, which had been commenced in August 1996.

In 1999, Lawyer 10’s lawyer requested an abeyance of the Law Society’s investigation, which was granted subject to undertakings. Between 2000 and 2006, the Law Society received updates on the status of the civil proceedings, and was advised that proceeding with a discipline investigation would risk stirring up civil proceedings. The Law Society’s investigation into Lawyer 10 was reactivated on November 9, 2006.

The investigation at Lawyer 10’s firm found a memo dated March 1994 from an associate to the client’s lawyer, stating that the funds had been paid. There is no evidence that Lawyer 10 was ever aware of this memo.

It was also not known whether the client’s lawyer was aware that he was asking Lawyer 10 to swear a false affidavit or that he had forgotten the memo from a year earlier. This lawyer ceased to be a member of the Law Society in 2003 and was believed to be residing outside of Canada.

Decision of the hearing panel

Although Lawyer 10 did not draft the affidavit, this factor should have made him more diligent in ascertaining the true facts. If Lawyer 10 had made the appropriate enquiries, he would have found that the funds had been paid to the client three years earlier.

A lawyer is an officer of the court and when that lawyer is the deponent to an affidavit that will be relied on in court, the lawyer must conform to the highest standard of care, accuracy and thoroughness in ensuring the accuracy of the sworn statements that the lawyer makes.

The hearing panel found that Lawyer 10’s conduct in swearing the affidavit constituted professional misconduct. Lawyer 10 was ordered to pay a fine of $1,500 plus costs. Further, the panel dismissed his application for anonymous publication.

Lawyer 10 sought a review of the finding of professional misconduct, the penalty imposed, and the refusal to order anonymous publication. 

Decision of the Benchers on review

The initial question to be determined on the review was whether the conduct of Lawyer 10 met the professional standards required by the Law Society. The second question was, if Lawyer 10 did not meet the standard expected, was the conduct sufficiently deviant to be considered professional misconduct. 

Majority (Vilvang, Hickman, Tindale and Van Ommen)

The majority noted that it was clear that the inaccurate statement was made by mistake and not with any intent to mislead. At the time Lawyer 10 swore the affidavit, he was aware of the distinction between facts and matters based on personal knowledge and facts and matters based on information and belief. That a finding of professional misconduct does not require proof of a dishonest intent is settled law in Law Society decisions. What is not settled is whether a mistake, without dishonest intent, is sufficient to find professional misconduct. 

Although Lawyer 10’s conduct fell short of what should be expected of a lawyer, the panel concluded that the conduct was not such a marked departure from the norm that it should be held to be professional misconduct. It would be impossible to present a comprehensive list of the features of conduct that could convert an innocent mistake into a culpable mistake, but the complete absence in this case of features such as gross neglect, recklessness, and any element of dishonesty, led the majority to conclude that this lawyer’s conduct was not professional misconduct. The majority therefore dismissed the citation.

As a result of the majority’s findings, it was unnecessary to deal with the application regarding anonymous publication.

Minority (Levesque, Lloyd and Renwick)

The minority found that Lawyer 10 made two mistakes; first, he provided false information to the court; and second, he failed to provide the source of his information. When Lawyer 10 chose to swear the affidavit on personal knowledge, he should have personally made all of the inquiries that were available to him in order to be able to make this statement. He should not have relied exclusively on the inquiries of, or the information supplied by, other third parties, particularly those with a financial interest in the result of the application.

The minority was satisfied that Lawyer 10’s failure to properly frame the affidavit (on information and belief), which resulted in the client getting paid twice, was culpable neglect. It was his responsibility to ensure that the court was aware of the true state of affairs, particularly in an ex parte application. 

The minority concluded that the hearing panel did not err in finding that Lawyer 10’s conduct was professional misconduct and did not err in not ordering anonymous publication.