Focus On

BARRISTERS AND SOLICITORS - Relationship with client - Conflict of interest - Transactions with client

Friday, June 09, 2017 @ 8:34 AM  

Lexis Advance® Quicklaw®
Appeal by a former lawyer against a decision of the Disciplinary Committee of the Law society of New Brunswick finding he violated the Uniform Trust Account Rules and the Law Society Code of Professional Conduct by borrowing money from a client. In 2010, the Law Society received a complaint against the appellant. The complaint alleged that in 2005 the appellant had borrowed $150,000 from a client in return for a mortgage on the appellant’s home and a further $40,000 in August 2006 in exchange for a promissory note. The appellant had been suspended from the practice of law in July 2006 for non-payment of fees. The appellant defaulted on the payments owed to the client. The appellant and the client had begun a solicitor-client relationship in or about 1979. From time to time the appellant had done legal work for the client, but they were also friends. The appellant claimed that at the time that he borrowed the money, there was no solicitor-client relationship between him and the client. The Committee determined that the fact that there was no ongoing legal representation of the client by the appellant was not sufficient to find that there was no solicitor-client relationship at the time of the borrowings. The Committee found that a solicitor-client relationship existed when the $150,000 was lent, as well as when the $40,000 was lent, therefore the appellant was in violation of the Trust Account Rules. The Committee also found that the appellant was in breach of the Code of Professional Conduct. The appellant appealed the Committee’s decision, globally asserting that the Committee’s decision was unreasonable and lacked justification, transparency and intelligibility. The appellant specifically alleged that the Committee lacked jurisdiction, made incorrect and unreasonable interpretations of the law, failed to consider relevant evidence and erred in finding a solicitor-client relationship at the time he borrowed money from the complainant, among other things.

HELD: Appeal dismissed. The Committee had jurisdiction. It was reasonable for the Committee to conclude that while there was no ongoing legal representation of the client by the appellant, there was a solicitor-client relationship, having found that over a 26-year period, when the complainant required legal representation, he contacted the appellant to provide those legal services and considered the appellant to be "his lawyer". During that time period, a friendship developed between the complainant and appellant, and as a result, the complainant trusted him. While the complainant did not have the appellant under an exclusive and continuous retainer, he contacted the appellant when he considered legal representation necessary. The fact the appellant was not called upon to represent the complainant during the period from 2003 to May 2006 (at the time of the 2005 borrowing of $150,000 from the complainant) did not establish there was no solicitor-client relationship. With respect to the $40,000 loan in August 2006, the appellant had just completed and finalized the preparation of a will and powers of attorney for the complainant. Although there was no invoice for this latter service, this did not alter the fact that the complainant considered the appellant to be his lawyer. Accordingly, the Committee’s finding that the appellant breached the Rules and the Code was reasonable. The appellant breached the prohibition against borrowing funds from a client. He acted without integrity and failed to meet either the letter or spirit of the high standard of avoiding questionable conduct.

Weir v. Law Society of New Brunswick, [2017] N.B.J. No. 98, New Brunswick Court of Appeal, M.E.L. Larlee, B.V. Green and R.T. French JJ.A., May 4, 2017. TLD-June52017009