Discipline digest

Please find summaries with respect to:

Kenneth Joseph Spears
Lu Chan
Shawn Dickson Swail

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

Kenneth Joseph Spears

West Vancouver

Called to the bar: September 25, 1987

Discipline hearing: September 17, 2009

Panel: James Vilvang, QC, Chair, Haydn Acheson and Robert Brun, QC

Oral decision issued: September 17, 2009

Report issued: September 24, 2009 (2009 LSBC 28)

Counsel: Maureen Boyd for the Law Society and James L. Straith for Kenneth Joseph Spears


In September 2001, Kenneth Joseph Spears was referred to the Practice Standards Committee for a practice review. The review recommended Spears enter into a practice supervision agreement and that he undertake not to practise in the areas of wills and estates, personal injury law and WCB matters. Subsequent practice reviews occurred in April 2003 and June 2004.

Breaches of undertaking to the Law Society

On October 18, 2004 Spears signed an undertaking with the Law Society to conclude and/or transfer all outstanding non-Department of Justice files by December 5, 2004 (extended to January 15, 2005) and not to take on any new files, other than Department of Justice files or Government of Canada files, after that date. Spears breached this undertaking by acting on behalf of three non-government clients between January 2005 and June 2008.

Failure to include file in summary list

When Spears sought an extension of the effective date of the undertaking, the request was granted on the condition that he provide a status report on any remaining files by December 15, 2004. In that report, Spears excluded one client file.

Failure to include files in lists to practice supervisor

In entering into a practice supervision agreement, Spears was required to provide a written summary of all open files, updated monthly, to his practice supervisor. Spears failed to include information about the three above-mentioned clients in these summaries.

Untrue statements to the Law Society

In correspondence with the Law Society regarding his request to have his practice restrictions removed, Spears made a number of untrue statements to the Law Society. He stated that he was following the practice restrictions and that he had limited his practice to work for the Government of Canada when he knew both statements to be untrue.

The Panel expressed concern that, in the past, Spears demonstrated an unwillingness to comply with conditions imposed upon him by the Law Society. It is a fundamental requirement of anyone who wishes to have the privilege of practising law to accept that their conduct will be governed by the Law Society and that they must respect and abide by the rules that govern their conduct. If a lawyer consistently demonstrates an unwillingness or inability to fulfill these basic requirements of the privilege to practise, that lawyer can be characterized as “ungovernable” and cannot be permitted to continue to practise. All lawyers are expected to deal with the Law Society in an honest, open and forthright manner at all times.

Admission and penalty

The hearing panel accepted Spears’ admissions of professional misconduct and proposed penalty under Rule 4-22. Accordingly, the panel ordered that Spears:

1. be suspended for eight months commencing October 1, 2009;

2. practise only as an employee or associate of one or more other lawyers who are subject to the approval of the Practice Standards Committee, such condition to remain in effect unless released from it by that Committee; and

3. pay costs of $3,500 by March 30, 2011.

Lu Chan

Burnaby, BC

Called to the bar: November 19, 1993 (BC) and February 9, 1993 (Ontario)

Discipline hearings: August 27, 2008 (facts and verdict) and October 15, 2009 (penalty)

Panel: William Jackson, Chair, Leon Getz, QC and Meg Shaw, QC

Bencher review: April 3, 2009 (facts and verdict)

Benchers: Gordon Turriff, QC, Chair, Haydn Acheson, Joost Blom, QC, Carol Hickman, Barbara Levesque, David Mossop, QC, Thelma O’Grady, David Renwick, QC, Glen Ridgway, QC, Dr. Maelor Vallance and James Vilvang, QC

Reports issued: September 19, 2008 (2008 LSBC 30), June 25 (2009 LSBC 20) and October 21, 2009 (2009 LSBC 31)

Counsel: Eric Wredenhagen for the Law Society and William G. MacLeod for Lu Chan (facts and verdict); Henry Wood, QC for the Law Society and William G. MacLeod for Lu Chan (Bencher review); Eric Wredenhagen for the Law Society and Lu Chan on his own behalf (penalty)


Lu Chan is a sole practitioner whose preferred area of practice is immigration law. His clientele consists primarily of residents from the People’s Republic of China and Taiwan.

On May 31, 2006 Chan was retained by a client in China that he had known for a number of years. The client wanted to immigrate to Canada under Prince Edward Island’s “Business Partners” Program. The PEI government requires an applicant to deposit $100,000 in a designated escrow account, plus a $25,000 good faith residency deposit and a $25,000 language deposit. The retainer agreement specified that Chan would pay these funds to the PEI government directly, on behalf of the client.

As Canadian dollars are not a major currency in China, and cheques and wire transfers are also uncommon, the client remitted the funds in US dollars to Chan in trust, with the intention that Chan would then convert and submit payment.

On June 16, 2006 Chan received a payment of USD $60,000 in traveller’s cheques. On June 22, 2006, he received a further USD $40,000 in cash from the client.

On the day he received $40,000 in cash, Chan reviewed Chapter 4, Rule 6 of the Professional Conduct Handbook. After reviewing the client’s situation carefully, he was satisfied that the client was a legitimate business person and the source of the funds was legitimate.

A couple of weeks later, the client decided not to proceed with the application for immigration to PEI. Chan had not done any work on the file and decided to close it without charging a fee. The client provided Chan with the name of a relative/friend and instructed him to make a trust cheque, in the full amount, payable to this person.

Chan reported the cash on his trust report submitted in March 2007.

Decision of the hearing panel

Chan stated he was unaware of the “no cash” rule, but was aware of his obligations to guard against money laundering. Chan admitted he breached Rule 3-51.1 by accepting cash in an aggregate amount of $7,500 or more.

A breach of the “no cash” rule may, depending on the circumstances, rise to the level of professional misconduct. The panel accepted Chan’s account that he did make an effort to consider his professional obligations in the circumstances and to comply with them. The panel found Chan had breached the Law Society rules; however, he had not committed professional misconduct.

Decision of the Benchers on review

The Discipline Committee referred the decision on Facts and Verdict to the Benchers for review under section 47 of the Legal Profession Act.

Majority (Acheson, Hickman, Mossop, O’Grady, Ridgway, Vallance)

The Law Society argued that, due to the importance of the “no cash” rule and Chan’s ignorance of it, there is a presumption of prima facie professional misconduct.

Upon review, the majority concluded that the facts did not warrant a finding of professional misconduct. The panel found that, while in no way lessening the importance of this Rule for public safety and independence of the profession, the facts in this case did not warrant a finding of professional misconduct. While it is important to the Law Society to ensure that lawyers do not inadvertently assist in money laundering transactions, the facts of each case must be examined.

Minority (Turriff, Blom, Levesque, Renwick, Vilvang)

In June of 2006, the “no cash” rule had been in place for about two years. When it was enacted it had received extensive and repeated publicity in the Law Society’s communications with the profession.

Chan was ignorant of the no cash rule and failed to acquire adequate knowledge of some of the fundamental information he needed. He also failed to seek guidance or even consider that he might be proceeding in error.

The minority concluded that Chan’s failure to ascertain and observe the “no cash” rule was a marked departure from the standard of conduct that the society expects of its members and is therefore professional misconduct.


The panel ordered that Chan pay a fine in the amount of $1,000.

Shawn Dickson Swail

Kelowna, BC

Called to Bar: May 15, 1992

Ceased membership: November 21, 2009

Admission accepted: October 29, 2009

Counsel: Eric Wredenhagen for the Law Society and Henry Wood, QC for Shawn Dickson Swail


From May 1992 to June 1994 Shawn Dickson Swail practised law with the firm Salloum Doak, and thereafter practised as a sole practitioner in Kelowna under the name Swail & Company. He practised primarily in the areas of real estate and civil litigation.

On April 24, 2003, the Law Society ordered an investigation of Swail’s books, records and accounts as a result of a complaint to the Law Society made by one of his former clients.

Breach of Court Order

In 1999 a Supreme Court Order required that Swail not release funds held in trust in a client’s matrimonial matter without a further court order or written agreement. Swail breached the Order by paying himself $4,809 in fees from trust.

Breach of undertaking

In February 2000 Swail filed for bankruptcy and provided an undertaking to the Law Society that he would appoint a co-signatory on all of his trust accounts. Swail breached the undertaking by transferring funds electronically from his trust account to his general account. Swail stated that he didn’t realize the undertaking included Internet transfers.

Breach of trust accounting rules

At various times between 2000 and 2005, Swail breached accounting rules and failed to maintain accounting books and records as required by the Law Society Rules.


In 2001 and 2002, Swail withdrew funds from his pooled trust account where his clients did not have any funds in trust, or did not have sufficient funds in trust to cover the withdrawal. He later deposited funds into client trust accounts to either reduce the trust deficit or bring the trust balance for the client back up to its original amount. The withdrawal transactions were not recorded until after those deposits were made.

Swail also withdrew client funds from trust and paid those funds to his general account before performance or completion of work. In some instances, he retained a “back-dated” office copy of the account rendered to a client, dated the same date as the withdrawal of funds from trust.

Tax evasion and false tax returns

A client retained Swail in a sexual abuse claim. When the matter settled in August 2001, Swail was forwarded the sum of $61,000 in trust for his client. Swail directed his client to pay a portion of the fees owed to him to a third party, with the intent of evading tax. The client paid the sum of $12,800 to a company controlled by Swail and ultimately complained to the Law Society about this billing.

As a result of directing his client to pay $12,800 in fees to a third party, Swail filed false and misleading GST, PST and income tax returns for 2001.

False and misleading information

In May 2001, Swail transferred $920 from his trust account to his general account on a “miscellaneous” matter. At that time, there were no funds in trust for this matter. Swail generated a false invoice in the amount of $920 to mislead the Law Society during its investigation.

Swail also prepared falsely back-dated and dual-dated client invoices in an attempt to conceal from clients and from the Law Society his improper withdrawals from trust accounts.

Admission and penalty

Swail admitted to all 11 allegations and agreed that his conduct constitutes professional misconduct. Under Rule 4-21, the Discipline Committee accepted Swail’s admission and undertakings:

1. to terminate his membership in the Law Society effective November 21, 2009, and not apply for reinstatement to the Law Society for a period of eight years from that date;

2. not to apply for admission to the law society of any other province or territory in Canada without first providing written notification to the Law Society of BC; and

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