Vancouver real estate lawyer suspended 6 weeks for professional misconduct

Scales of justice. (Shutterstock)

A Vancouver lawyer has agreed to a six-week suspension for committing several instances of professional misconduct.

The consent agreement between Gary (Kin Ip) Lo and the Law Society of B.C. was approved on Sept. 15, but posted online last week.

The agreement details a variety of misconduct that occurred between 2019 and 2021, including repeatedly failing to disclose that a client had not provided sufficient funds for a real estate transaction, failing to adequately inform clients of a conflict of interest and failing to ensure he collected required client identification information on four occasions.

FAILURE TO DISCLOSE

In May 2019, Lo was contacted by a corporate client's real estate agent, who asked if he had received cheques totalling $988,000, which were meant to be held in his trust account as deposits for the purchase of properties in Vancouver.

The real estate agent included images of bank drafts made out to Lo's law corporation "purporting to represent that (the client) had provided (the deposits)," according to the consent agreement.

Lo told the agent he had not received them, and was provided with a bank draft for $150,000 later that day.

"The lawyer did not ask (his client) why there appeared to be bank drafts payable to the law corporation for the (deposits) that had not been provided to him, or if the vendors of the (properties) were aware the (deposits) … had not been provided," the agreement reads.

In June 2019, Lo was provided with additional bank drafts, bringing the total he held in trust for his client to $458,000. The client's principal advised that he could provide the remaining $530,000 if the sellers' lawyer demanded it, but that "he would like more time so that he did not have to draw funds from other sources," according to the consent agreement.

"The lawyer admits that in hindsight, he should have stayed away from the real estate transaction once it appeared that (his client) might have made inaccurate representations to the vendors," the agreement reads.

Instead, when the lawyer for the sellers contacted Lo claiming that his client had defaulted on the sales agreements and demanding the forfeiture of the deposits, Lo did not disclose that the full amount of the deposits was not in his possession.

Nor did he disclose this information when his firm was drafting a response to a lawsuit filed by the sellers seeking to force him to turn over the deposits.

"The lawyer admits that he should have, but did not, turn his mind to the allegations in the notice of civil claim," the agreement reads. "Had the lawyer done so, he would have immediately disclosed that he did not hold all the (deposits)."

The agreement goes on to note that Lo told the law society his failure to notify the court that he didn't have all of the money he was supposed to was unintentional. The law society accepted this explanation.

Ultimately, the court ruled against the client and ordered Lo to turn over the $988,000 to the sellers. He provided all of the money he had held in trust, and his client eventually paid the outstanding $530,000.

CONFLICT OF INTEREST

In an unrelated case, Lo represented a corporate client that was the lender of a $10 million mortgage to another company that he had previously represented.

In fact, according to the consent agreement, Lo had represented the loanee or another company owned by the same person on "at least 13 different matters" between 2016 and 2021.

While Lo's retainer letter to his new client advised that he had worked for the other company in the past and would not be advising the lender on matters related to repayment of the loan, the consent agreement indicates he did so anyway.

Moreover, though he was legally obligated to disclose the potential conflict of interest to all parties and obtain informed consent before representing them, he did not do so.

"The lawyer did not obtain consent from the parties to act despite the conflict, did not recommend or require either party to obtain independent legal advice and knew that they had not received such advice, and did he not disclose and explain … the nature of the conflicting interests, or how or why a potential conflict might develop," the agreement reads.

CLIENT IDENTIFICATION

Finally, the consent agreement identifies four instances in which Lo did not obtain identification documents he was required to from companies and individuals he was representing.

The agreement indicates that Lo "has taken steps to improve his office procedures to ensure that the client identification and verification requirements are met."

Lo's six-week suspension begins Monday.

In deciding to accept Lo's consent agreement proposal, the law society considered the lawyer's previous professional conduct record, which included a variety of other entries, including an administrative suspension and conditions placed on his practice.