Discipline digest

Below are summaries with respect to:

For the full text of discipline decisions, visit the Hearings reports section of the Law Society website.


Karamgopal Paul Singh Lail

Surrey, BC
Called to the bar: June 12, 1987
Discipline hearing: September 20, 2012
Panel: Leon Getz, QC, Chair, Robert Smith and Gary Weatherill, QC
Oral reasons: September 20, 2012
Report issued: December 19, 2012 (2012 LSBC 32)
Counsel: Carolyn Gulabsingh for the Law Society; Robert Hunter for Karamgopal Paul Singh Lail

Facts

In November 2007, Karamgopal Paul Singh Lail notified his former firm of his intended resignation. In the process of winding up his practice, Lail issued and signed 24 accounts addressed to various clients of the firm.

In each of the 24 accounts, the amount of the invoice was equal to the balance held in trust for the client by the firm, and each authorized the withdrawal of funds from trust to satisfy the accounts.

Lail took no steps to deliver these accounts to the clients. None of the client files contained a retainer agreement, correspondence or notes indicating that the clients consented to Lail billing the files.

One of the 24 accounts Lail issued to a client was in the amount of $750; however, this client did not owe any money to the firm. Lail issued this account so that he could authorize the withdrawal of trust funds to partially satisfy an amount owing to the firm by another client, a corporate client that Lail understood was related to the first client. The first client did not consent to Lail withdrawing funds from trust to satisfy the account of the other client.

Admission and disciplinary action

Lail admitted that his conduct was contrary to Law Society rules and constituted professional misconduct.

In the panel’s view, Lail’s conduct clearly crossed the line between mere breach of the rules and professional misconduct. Trust accounting obligations go to the heart of confidence in the integrity of the legal profession, and there is a clear public interest in ensuring that they are performed meticulously and not, as in this case, nonchalantly.

The panel took into consideration that Lail had been a lawyer for more than 25 years. His professional conduct record consisted of a single conduct review in 2006. The panel believed that any similarity between that conduct and the present misconduct was, at best, superficial. Accordingly, it was determined that Lail’s professional conduct record should not play any significant role in determining an appropriate penalty.

The panel accepted Lail’s admission of professional misconduct and ordered that he pay:

1.  a $3,500 fine; and

2.  $2,000 in costs.


James Hu

Richmond, BC
Called to bar: May 19, 2000
Ceased membership: January 31, 2013
Admission accepted by Discipline Committee: January 24, 2013
Counsel: Maureen Boyd for the Law Society; Henry Wood, QC on behalf of James Hu

Facts

On September 13, 2010, a Law Society auditor attended the office of James Hu to conduct a scheduled compliance audit for the period from March 1, 2009 to September 13, 2010. The auditor was unable to complete the audit because Hu did not produce all the required records.

The Law Society wrote to Hu advising that his inability to produce required documents and provide explanations was not in compliance with Rule 3-79.

On September 30, 2010, Hu advised the Law Society that he had withdrawn a total of $7,802.86 from his trust account in a series of 19 withdrawals. He explained that he was left with many small balances in his trust account, and that he could not figure out why there was a balance. He could not identify any person to whom the funds were owing, so he thought it must be money owing to him.

The Law Society investigated Hu’s books, records and accounts and found that Hu did not have a system to diarize the obligations arising from his undertakings. He dealt with undertakings and with holdbacks upon receiving a request from the lawyer or notary representing the other party in the real estate transactions.

Amongst other findings, the dollar amounts of mortgage payout figures, property taxes, strata fees and other amounts were not recorded accurately by Hu’s practice.

Admissions and discipinary action

In submitting his resignation to the Discipline Committee, Hu agreed his behaviour constituted professional misconduct and he admitted to:

  • twenty-three instances of misappropriation of funds between 2007 and 2010;
  • four breaches of undertaking;
  • one hundred sixty-seven trust fund shortages between 2007 and 2010 that were not immediately eliminated, 29 of which were not reported to the Law Society as required;
  • failure to supervise staff;
  • failure to safeguard client confidentiality;
  • failure to maintain certain parts of his books, records and accounts;
  • twenty-one instances of withdrawing funds from trust to pay his fees without first preparing and delivering a bill to his client.

Under Rule 4-21, the Discipline Committee accepted Hu’s admissions and his undertakings:

1.  not to apply for reinstatement to the Law Society for seven years;

2.  not to apply for membership in any other law society without first advising the Law Society; and

3.  not to permit his name to appear on the letterhead of, or otherwise work in any capacity for, any lawyer or law firm in BC, without obtaining the prior written consent of the Law Society.


Alexander John Markham-Zantvoort

Vancouver, BC
Called to bar: August 27, 2003 (BC); February 7, 1996 (Ontario)
Ceased membership: January 1, 2013
Admission accepted: January 24, 2013
Counsel: Carolyn Gulabsingh for the Law Society; Alexander John Markham-Zantvoort on his own behalf

Facts

In March 2012, the Law Society conducted a compliance audit of Alexander John Markham-Zantvoort’s practice.

Upon completion of the compliance audit, the Law Society wrote on three occasions to Markham-Zantvoort about concerns that arose during the audit. He did not reply to any of these letters. On July 27, 2012, he was suspended from practice for failing to provide explanations to the Law Society.

The Law Society wrote to Markham-Zantvoort on September 1, 2012 and asked him to address concerns identified during the audit. On September 7, 2012, Markham-Zantvoort emailed the Law Society, stating that it was his understanding that it would be inappropriate to respond to the Law Society’s correspondence as his practice was under custodianship of the Law Society. He believed that the Law Society’s custodianship department would respond to any issues on his behalf.

On September 17, 2012, the Law Society explained, in writing, that Markham-Zantvoort must have misunderstood and that he was obligated to respond to the Law Society’s letters.

The Law Society wrote to Markham-Zantvoort again on October 1, 2012 to seek his response to the audit. On October 19, 2012, the Law Society again wrote to Markham-Zantvoort and informed him that, if he did not reply by October 29, the matter would be referred for possible disciplinary action. No response was received.

Admission

Markham-Zantvoort admitted he failed to provide a substantive response to communications from the Law Society concerning its investigation into issues arising from the compliance audit. He admitted that his conduct constituted professional misconduct.

Under Rule 4-21, the Discipline Committee accepted Markham-Zantvoort’s admission. There was no disciplinary action ordered as Markham-Zantvoort ceased membership with the Law Society and was no longer a practising lawyer.


Thomas John Johnston

Summerland, BC
Called to the bar: May 10, 1983
Discipline hearing: November 14, 2012
Panel: Gregory Petrisor, Chair, Dennis Day and David Layton
Oral reasons: November 14, 2012
Report issued: January 25, 2013 (2013 LSBC 04)
Counsel: Jaia Rai for the Law Society; J. Grant Hardwick for Thomas John Johnston

Facts

When Thomas John Johnston was retained by clients in December 2008, he knew that the trial was scheduled to commence on February 23, 2009. Examinations for discovery still had to be conducted and his clients’ instructions were to proceed to trial expeditiously. He also knew that the clients’ previous lawyer withdrew because they were not willing to follow his advice to settle the action on the basis that the outcome was uncertain and the trial would be uneconomical.

Examinations for discovery were not completed before February 23, 2009, a trial certificate was not filed on time, and the scheduled trial dates were lost.

On April 3, 2009, Johnston forwarded a counter-offer to opposing counsel. After one of the clients saw the counter-offer, the clients instructed Johnston to withdraw it because its terms did not match their instructions. Johnston did not withdraw the counter-offer.

Based on Johnston’s advice, the clients wrongly believed that the court could impose a settlement and that the settlement would not be in their favour. Johnston continued trying to persuade his clients to accept the settlement offer. He took no steps to schedule a trial date.

On July 16, 2009, during the hearing of a summary judgment application, Johnston agreed that his clients would provide a general release as a term of settlement. He did so without instructions from his clients.

After the hearing, Johnston prepared a form of release for the clients to sign. Despite what was said at the hearing, Johnston drafted a limited release that applied only to claims arising out of or in relation to the action. The clients did not understand that Johnston had already agreed to a general release as he had not clearly explained this.

In August 2009, the clients retained new counsel. Johnston was requested on a number of occasions to release the client’s file. He provided some of the file contents in November and turned over the remainder in December.

Admission and disciplinary action

Johnston admitted to failing to serve his clients properly and to misleading them. He admitted that his conduct constituted professional misconduct.

The panel agreed that Johnston was acting in the best interests of his clients as he perceived them. However, he clearly contradicted his clients’ instructions and, at times, misled them. He left his clients with no choice but to agree to a settlement they did not want. On the other hand, the result obtained at the end of proceedings was arguably as good as could ever have been achieved at trial.

The panel found it was not acceptable for Johnston to simply disregard his clients’ instructions, even if he considered his actions to be in his clients’ best interests. Clients are entitled to expect that a lawyer will follow their instructions, within the bounds of the lawyer’s professional responsibilities. As a senior lawyer, Johnston should have known the importance of being truthful to his clients, following his clients’ instructions and obtaining reasonable instructions.

An aggravating factor was that the conduct in question was not a single incident, but a course of action that took place over almost a year.

The panel considered the 15 letters of reference submitted in support of Johnston’s character and the fact that he did not have a relevant prior discipline history.

The panel accepted Johnston’s admission and ordered that he:

1.  be suspended from the practice of law for one month, and

2.  pay $6,448 in costs.


Nathan Richard Bauder

Fort Nelson, BC
Called to the bar: May 8, 2002
Reports issued: April 26, 2012 (2012 LSBC 13) and February 13, 2013 (2013 LSBC 07)
Disciplinary hearings: December 22, 2011 and November 8, 2012
Panel: Leon Getz, QC, Chair, Jan Lindsay, QC and David Renwick, QC
Counsel: Jaia Rai for the Law Society; Richard Gibbs for Nathan Richard Bauder

Facts

In September 2008, Nathan Richard Bauder, through his law corporation, entered into an agreement for the purchase of property for $350,000. Under the terms of the agreement for sale, he made a $10,000 deposit and agreed to make monthly payments until the completion date in September 2010. However, in the spring of 2010, he was approached by the vendor who wanted to advance the completion date to May 2010.

Bauder was unable to find lenders willing to provide funding on an unregistered agreement for sale. As the property had increased in value, he prepared a false contract of purchase and sale with an increased purchase price of $450,000, not $350,000, and a deposit of $100,000, not $10,000.

In addition to preparing the documents, Bauder kept the vendor away from the vendor’s lawyer so that the deception would not be found out. He told the vendor that he “would take care of all the paperwork and look after everything” and had the vendor sign the false document.

Bauder then obtained financing from a mortgage broker and was approved for a mortgage in the amount of $350,000 based on false representations.

Admission and disciplinary action

Bauder and counsel for the Law Society submitted that, by attempting to fraudulently obtain mortgage financing contrary to the Professional Conduct Handbook, Bauder’s actions constituted conduct unbecoming a lawyer.

The panel was not satisfied that this case amounted to conduct unbecoming. It asked counsel for further written submissions so it could determine whether Bauder’s conduct amounted to professional misconduct or conduct unbecoming. In the panel’s view, conduct in a lawyer’s personal or private capacity that brings discredit upon the legal community is appropriately dealt with as conduct unbecoming, whereas professional misconduct arises from conduct that occurs in a lawyer’s professional capacity.

The panel found that Bauder had committed professional misconduct.

Bauder acknowledged that he knew it was dishonest to prepare the false documents. He recognized that, notwithstanding the property had increased in value, it did not have the value stated in the false documents and, therefore, there was a risk of loss to the lending institution.

Letters of support attested to Bauder’s ongoing integrity and professionalism. The letters also provided some insight into the lack of legal representation in northern BC, particularly in Fort Nelson, where Bauder is the only lawyer. However, the panel was of the view that the public, including the citizens of Fort Nelson, needed to be assured that they were protected from unscrupulous conduct, even if this resulted in the loss to them, temporarily, of their only local legal representation.

Bauder’s lawyer submitted that the consequences of Bauder’s actions had already been felt. A financial institution terminated his services and another chartered bank no longer allows him to do their work. He has lost friends, been shunned by the legal community, lost his esteem within the legal profession, is no longer able to pursue a political career, and has absented himself from community and from provincial boards.

Although Bauder had no prior discipline history and this was a single transaction that occurred over a very short period of time, the panel found that the seriousness of the misconduct and the need for general deterrence required a suspension. Bauder deliberately engaged in dishonest and fraudulent conduct for personal gain, and any sanction imposed must send a message that this type of behaviour will attract significant disciplinary consequences.

The panel ordered that Bauder:

1.  be suspended for four months; and

2.  pay $10,000 in costs.


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