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.


David Stephen Rulton Burgess

Kelowna, BC
Called to the bar: June 13, 1986
Discipline hearing: December 2, 2010;
Panel: David Renwick, QC, Chair, Patricia Bond and Benjimen Meisner
Oral reasons: December 2, 2010
Application for stay of penalty: January 28, 2011
Chamber Bencher (stay of penalty): Alan M. Ross
Reports issued: February 3 (2011 LSBC 03) and February 22, 2011 (2011 LSBC 07)
Counsel: Jaia Rai for the Law Society; Henry Wood, QC for David ­Stephen Rulton Burgess (discipline hearing) and Burgess on his own behalf (application for stay of penalty)

Facts

David Stephen Rulton Burgess acted for a client who had entered into a separation agreement with her husband. The agreement, dated June 27, 2007, provided that the husband would buy out the wife’s interest in a rental property by way of payments that were to take place over time.

The agreed purchase price was $180,000. Burgess was to hold the funds in trust until the final payment was made, at which time the property would be transferred into the husband’s name. Burgess was familiar with both the husband and the wife and knew their families.

During a meeting with his client and her husband in April 2008, the husband unexpectedly produced $50,000 cash. Although Burgess initially indicated he could not accept the cash, he deposited the funds into his trust account, pending registration of the transfer of the property and ultimate payout to his client.

Two days after Burgess deposited the cash into his trust account, he asked his assistant to contact the Law Society. She spoke with a practice advisor who advised that the circumstances did not fall within any exception to the Law Society’s no-cash rule. Burgess did not speak to the practice advisor, as requested, and did not report his acceptance of the cash until he filed his trust report in 2009.

Determination

Burgess argued that no breach occurred because there was virtually no risk that the husband was using laundered funds. As the husband had ­received the funds from a financial institution, an exception to the no-cash rule should be invoked.

The panel stated that Burgess would have to receive cash directly from a financial institution in order to fall within the rule. If the rule were to be interpreted as suggested by Burgess, the onus would be on a lawyer to determine where funds originate and whether they were legitimately gained. While there will be instances where that is readily done, the panel believed that there are many more instances in which it will be impossible for a lawyer to determine the source and legitimacy of funds.

The panel found that it was not acceptable to read into the rule further exceptions where a lawyer believes that no money laundering or fraud has occurred. The Law Society created this rule to secure an exception from federal legislation that would breach solicitor-client privilege and compromise the independence of the bar. While the rule may be inconvenient at times, it was invoked for good reason and should be enforced.

Accordingly, the panel determined that Burgess breached the Law Society’s no-cash rule.

While Burgess’ actions were deliberate, he was well-intentioned. He did not personally benefit from the receipt of the cash, and no one was harmed, nor were anyone’s interests compromised as a result of his actions. On the contrary, Burgess’ client was very appreciative of his legal services.

Burgess realized he was in breach of the no-cash rule, but he was not diligent in discussing the matter with the Law Society. However, he did report the breach in his trust report at the end of the year.

The panel also took into consideration that Burgess had no relevant ­conduct history and that the breach of the rule did not amount to professional misconduct.

Disciplinary action

The panel ordered that Burgess pay:

1. a $750 fine; and

2. $1,500 in costs.

Applications for review

In December 2010, Burgess filed a Notice of Review seeking to set aside the adverse determination made by the hearing panel as well as the costs.

In January 2011, Burgess applied for a stay of the fine until the Bencher review was complete. He submitted that he had suffered serious and significant financial hardship and a tremendous loss of time from his law practice addressing the no-cash rule issues with the Law Society.

The Chamber Bencher found no suggestion that harm would come to Burgess or to others if the fine was paid as ordered by the hearing panel, pending the outcome of the review. Burgess’ application for a stay of the imposition of the penalty was denied.

Burgess subsequently decided to abandon the Bencher review. 


Vivian Chiang

Vancouver, BC
Called to the bar: May 17, 1996
Bencher review: September 30, 2010
Benchers: Glen Ridgway, QC, Chair, Joost Blom, QC, Leon Getz, QC, Benjimen Meisner, Lee Ongman, Gregory Petrisor and Catherine Sas, QC
Report issued: December 20, 2010 (2010 LSBC 29)
Counsel: Henry Wood, QC for the Law Society; Vivian Chiang appearing on her own behalf
BC Court of Appeal decision: January 15, 2013 (2013 BCCA 8)

Background

The Law Society issued a citation to Vivian Chiang alleging four counts of professional misconduct. One allegation was withdrawn, and the October 2008 hearing proceeded on three allegations of acting contrary to the duty of an officer of the court or misleading the court.

The hearing panel issued its decision, dismissing the remaining three allegations on June 17, 2009 (facts and verdict: 2009 LSBC 19; discipline digest: 2009 No. 3 Fall).

The Discipline Committee sought a review of the decision to determine if the panel was correct in dismissing the allegations and not finding that Chiang’s conduct constituted professional misconduct.

Decision of the Benchers on review
Allegation 1

Allegation 1 asserted that Chiang failed to advise the court on March 11, 2005 that she was appearing as counsel or was a member of the Law Society.

The Benchers agreed with the conclusion of the panel that Chiang was under no obligation as an officer of the court to disclose her status as a member of the Law Society. There was no evidence that Chiang, by reason of her omission to disclose her status, could or did obtain any material advantage or that, if the judge was under a misapprehension about her status, that misapprehension was material to anything that transpired in court.

However, it seemed to the Benchers that the panel grounded its conclusion, at least in part, on the absence of any authority. When the question to be decided requires a fact-specific inquiry as to whether a given pattern of conduct constituted a “marked departure from the conduct the Law Society expects of its members,” the absence of prior authority on the point cannot be determinative of anything.

Allegation 2

Allegation 2 asserted that, while appearing in court on March 15, 2005, Chiang proceeded to seek relief in respect of a portion of the Notice of Motion for which short leave had not been granted and while there was a specific order to the contrary.

A majority of the panel concluded that the evidence did not justify a finding of professional misconduct.

In the minority’s view, however, Chiang allowed her personal financial interest in her client’s business to overcome her professional judgment. As a result of that lapse, she attempted to obtain an order which she knew she did not have approval to seek. Misleading the court in this manner represented a marked departure from behaviour that the Law Society expects of its members, and, therefore, the minority would have found that Chiang had committed professional misconduct.

The Benchers agreed with the minority’s analysis and conclusions. The Benchers determined that Chiang had committed professional misconduct and referred the matter back to the panel to consider appropriate sanctions.

Allegation 4

Allegation 4 asserted that, when Chiang appeared in court on June 16, 2005 on behalf of her client, she advised the court that counsel for one of the defendants had consented to an adjournment when he had not, which may or did have the effect of misleading the court.

The Benchers agreed with the unanimous view of the panel that Chiang’s conduct in allegation 4 did not amount to professional misconduct.

Court of Appeal

On her appeal to the Court of Appeal, Chiang alleged that the review panel misapprehended the facts. In the court’s view, the review panel had accepted the facts as found by the hearing panel, but determined, as they were entitled to do, that stress and inexperience did not excuse Chiang’s deliberate and misleading conduct.

Chiang did not persuade the Court of Appeal that the decision of the ­review panel was unreasonable and her appeal was dismissed.


Vivian Chiang has applied to the Supreme Court of Canada for leave to ­appeal the decision of the Court of Appeal.


Crystal Irene Buchan

Victoria, BC
Called to the bar: May 15, 1992
Discipline hearing: February 13, 2013
Panel: Leon Getz, QC, Chair, Paula Cayley and William Sundhu
Oral reasons: February 13, 2013
Report issued: March 6, 2013 (2013 LSBC 08)
Counsel: Carolyn Gulabsingh for the Law Society; Mary Clare Baillie for Crystal Irene Buchan

Facts

In July 2012, the Law Society received a complaint about several aspects of Crystal Irene Buchan’s quality of service on a client file, specifically failure to reply to communications from the client or to do so on a timely basis. The Law Society advised Buchan of the complaint and sent her a letter soliciting a written response.

On September 19, 2012, Buchan wrote a letter to the Law Society apologizing for any distress that she may have caused her client. However, she did not address six particular matters in the Law Society’s letter.

On October 17, the Law Society sent another letter to Buchan requesting a reply, and reminded her that a failure to respond may be referred to the Discipline Committee.

On December 10, the Law Society issued a citation to Buchan. On February 1, 2013, two months after the issuance of the citation and about two weeks before the hearing, Buchan provided a response to the Law Society’s letters.

Admission and disciplinary action

The Law Society submitted that Buchan had committed professional misconduct, which Buchan did not dispute. The panel agreed.

Failure to respond to the Law Society has consistently been regarded by hearing panels as a serious breach of a lawyer’s professional obligations. The panel took into account a number of considerations in determining disciplinary action.

In recent years, Buchan experienced significant personal pressures as a result of serious disabilities or illnesses of family members. Further, around the time she received the first letter from the Law Society, she learned that her elderly mother was terminally ill.

Buchan claimed these circumstances rendered her almost incapable of responding appropriately to the Law Society’s request. She also misunderstood the importance of responding to the Law Society’s letters and the possibility of a citation if she did not.

The panel accepted that Buchan’s personal circumstances were a source of great stress. On the other hand, the pressures did not prevent her from dealing with correspondence and other matters in her practice during the period in question. In the panel’s opinion, Buchan did not provide any specific, meaningful explanation for why she failed to respond to the Law Society.

Buchan eventually sought counselling and legal advice but, as the panel noted, not until after the citation was issued.

The panel also considered Buchan’s professional conduct history, which includes a conduct review in 2011 arising from another complaint about delay and quality of service issues and failure to respond to the Law ­Society.

The panel accepted Buchan’s admission that she committed professional misconduct and ordered that she pay:

1. a $3,000 fine; and

2. $1,000 in costs.


Roger Dwight Batchelor

Victoria, BC
Called to the bar: September 21, 2005
Discipline hearing: February 15, 2013
Panel: David Mossop, QC, Chair, Satwinder Bains and James E. Dorsey, QC
Oral reasons: February 15, 2013
Report issued: March 18, 2013 (2013 LSBC 09)
Counsel: Alison Kirby for the Law Society; Roger Dwight Batchelor ­appearing on his own behalf

Facts

In May 2009, Roger Dwight Batchelor was retained by a client in ­regards to a family law matter. In March 2011, the Law Society received a ­complaint from the client about the fees charged by Batchelor and the quality of service provided. The Law Society exchanged correspondence with Batchelor regarding the complaint.

In December 2011, Batchelor and his client entered into a written agreement. Under the terms, he would provide approximately $11,000 to his client and, in exchange, she would withdraw the complaint against him with the Law Society and provide a release of all claims.

Batchelor issued the first cheque to his client in the amount of $2,000. He then informed the Law Society that he had reached a settlement with his client and that she was going to withdraw her complaint.

On January 18, 2012, the Law Society wrote to Batchelor’s client to ask whether she wished to withdraw or pursue her complaint. In the absence of receiving any further information from the client to support her allegations, the Law Society did not have sufficient evidence to support disciplinary action against Batchelor.

The client, however, informed the Law Society about the conditions in the agreement with Batchelor, which raised a new professional misconduct concern. It is improper for a lawyer to make it a requirement of a civil settlement that a person refrain from making or proceeding with a complaint to the Law Society. The Law Society asked the client for a copy of the agreement.

After being notified by his client that the Law Society requested a copy of the agreement, Batchelor forwarded a revised agreement to his client for execution and removed the reference to the complaint. He subsequently provided his client with cheques for the balance owing.

Admission and disciplinary action

Batchelor admitted that he attempted to resolve the complaint made by his client to the Law Society by preparing and entering into a written agreement with her. The terms of this agreement included that he would pay her $11,000 and she would withdraw the complaint. He admitted that his conduct constituted professional misconduct.

The investigation and proper treatment of complaints are at the core of the Law Society’s work in the fulfillment of its regulatory function. The panel recognized the need for a clear message to be sent to the legal profession that there will be no tolerance of lawyers attempting to undermine the Law Society’s investigation of complaints by negotiating a withdrawal of the complaint.

Batchelor’s prior disciplinary record was an aggravating factor. His professional conduct history consists of a conduct review for failure to comply with accounting rules and provide accurate responses in two trust reports, as well as practice standards referrals for failure to clarify service expectations to clients, failure in duties to clients and opposing counsel, excessive delegation to staff and poor file documentation.

Batchelor considered two points to be mitigating factors: he was cleared of the original complaint, and he does a great deal of pro bono work. In the panel’s opinion, Batchelor knew of these factors before he entered into the proposed disciplinary action and, even if they accepted the points he raised, the proposed disciplinary action was still fair and reasonable.

The panel noted, however, that Batchelor acknowledged his misconduct and took immediate steps to amend the agreement to remove the requirement that his client withdraw the complaint. These actions demonstrated Batchelor’s new understanding of his regulatory compliance obligations to the Law Society and a willingness to rehabilitate.

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

1. a fine of $3,000; and

2. $1,000 in costs


Milan Matt Uzelac 

Vancouver, BC
Called to the bar: June 26, 1975
Discipline hearing: January 30, 2013
Panel: Barry Zacharias, Chair, Woody Hayes and John Waddell, QC
Oral reasons: January 30, 2013
Report issued: March 26, 2013 (2013 LSBC 11)
Counsel: Alison Kirby for the Law Society; Milan Matt Uzelac appearing on his own behalf

Facts

In January 2008, Milan Matt Uzelac was retained by a client in connection with an asset purchase of a business. Part of the broader transaction involved refinancing a residential property owned by the client.

Uzelac received mortgage instructions from the bank to register a new mortgage in the amount of $700,000 in favour of the bank. The new mortgage was to form a first charge on the residential property. At the time of the refinancing, there were two pre-existing mortgages on the residential property, a first mortgage to the same bank and a second mortgage to a different bank.

On February 1, 2008, Uzelac registered the new mortgage and released funds to the client. The new mortgage was registered behind the first and second mortgages. The bank held back funds to pay out its own mortgage, but Uzelac did not pay out or deal with the second mortgage. His actions were contrary to his undertaking involving the bank’s instructions.

Uzelac failed to report to the bank on the status of the registration of the mortgage within 90 days, contrary to his undertakings. He also failed to advise the bank that he had released the funds advanced by the bank on February 1, 2008, without first obtaining and registering the new mortgage as a first charge against the property.

The bank wrote to Uzelac on several occasions between January 2009 and January 2011. Uzelac failed to provide a substantive response to any of these letters. In-house counsel for the bank made a complaint to the Law Society in June 2011.

In subsequent correspondence to the Law Society, Uzelac noted that the pay out of funds contrary to the bank’s instructions was inadvertent. In particular, there may have been confusion in the priority of mortgages because there was already a first mortgage on title in favour of the same bank.

Admission and disciplinary action

The Discipline Committee authorized a citation against Uzelac for breach of undertaking by releasing mortgage funds without registering the mortgage as a first charge as instructed and failing to report to the bank on the status of the registration of the mortgage, failing to report to the bank that he had released the mortgage funds without securing its position as instructed and failing to answer communications from the bank.

Uzelac admitted that his conduct amounted to professional misconduct.

While the offending conduct related to only one transaction, it continued over time as the details of the initial error became known to Uzelac. The bank suffered no economic loss, but was left without a first priority for the full funds secured, and the discharge of the first mortgage cannot be registered without seriously undermining its priority position.

The panel acknowledged that Uzelac gained no personal advantage from the transaction.

The panel also considered Uzelac’s discipline history. In 2003, he was subject to three citations related to failures of accounting and record-keeping obligations; breach of three practice conditions regarding trust accounting; and a rules breach for failure to report unsatisfied judgments. Uzelac voluntarily withdrew from practice for nine months as a result of these citations.

While there was no pattern of related misconduct, the panel agreed that Uzelac’s prior conduct history meant a strong sanction must be applied to provide deterrence as well as ensure the public’s confidence in the integrity of the legal profession.

The panel accepted Uzelac’s admission that he had committed professional misconduct and ordered that he:

1. be suspended from practice for six weeks; and

2. pay $2,000 in costs.


William Ralph Southward

Victoria, BC
Called to the bar: September 13, 1973
Retired membership: December 31, 2011
Ceased membership: January 1, 2013
Admission accepted by Discipline Committee: May 9, 2013
Counsel: Carolyn Gulabsingh for the Law Society; Henry Wood, QC for William Ralph Southward

Facts

On December 17, 2010, William Ralph Southward was retained by a client to obtain a committeeship of the person of his mother. The mother and sister of Southward’s client owned a condominium together in joint tenancy.

On March 11, 2011, Southward filed a petition seeking an order appointing his client as the committee of the person and the estate of his mother.

On April 4, Southward’s assistant received a call from the client stating that he was not particularly interested in obtaining a committeeship of the person of his mother, but he understood he needed to obtain this to sell the condo. Southward later spoke to his client who agreed to pursue the application for committeeship of the person.

On May 24, Southward received a letter from the lawyer representing his client’s sister setting out the terms under which the sister would consent to the committeeship application. Southward’s client did not accept these terms.

On June 1, Southward wrote to the sister’s lawyer and the Public Guardian and Trustee and advised that, because the mother had been admitted to hospital and her health was deteriorating, he would proceed with an application to have his client appointed as the committee of the person only.

The client’s sister was opposed to her brother being appointed as committee of the estate of their mother, but was not opposed to him being appointed as committee of the person of their mother. On June 1, 2011, Southward stated in a letter to the sister’s lawyer that he was applying for an order for committee of the person only. As a result, the sister instructed her lawyer not to attend the hearing.

On June 9, the court made an order for Southward’s client to be appointed as committee of the person of his mother.

Southward drafted the order and submitted it for entry. The entered order contained ambiguous terms as one clause contained wording granting committeeship of the estate and person and a second clause adjourned generally the application for committeeship of the estate.

On June 28, Southward instructed his legal assistant to make an application to sever the joint tenancy of the condo and to submit a copy of the order with the application. The assistant expressed her concern in using the order to sever the joint tenancy because the order was for committee “of the person” and not for committee “of the estate.” Southward instructed his assistant to proceed with the application, despite her ­concern.

On June 30, Southward wrote to the sister’s lawyer in response to her settlement proposal but did not mention that the joint tenancy of the condo was being severed.

On July 4, the joint tenancy of the condo was severed.

On September 8, the client’s mother passed away. On September 13, the sister applied to the Land Title Office to have the condo transferred to herself as sole owner and discovered that the joint tenancy had been severed. The sister then made a complaint to the Law Society.

In November, Southward attempted to rectify the situation; however, the Land Title Office refused to reverse the severance of the joint tenancy.

On December 30, Southward filed an application to the court to have the condo transferred into the sister’s name. In support of the application, he swore an affidavit stating that he had applied to sever the joint tenancy in error.

On January 5, 2012, the court granted an order transferring the mother’s interest in the condo to the sister by consent.

Admission and disciplinary action

Southward admitted that, in the course of representing his client regarding the committeeship of his mother, he engaged in questionable conduct that cast doubt on his professional integrity and was in breach of the Professional Conduct Handbook rules.

Under Rule 4-21, the Discipline Committee accepted Southward’s admission on his undertakings:

1. not to apply for reinstatement to the Law Society until released of this condition by the Discipline Committee;

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

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


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