Saturday, September 25, 2021
The Law Society of Alberta Hearing Committee has found misconduct in an attorney's assistance in her client's dishonesty
Margaret Wheat (Wheat) is an experienced senior Alberta lawyer practicing in Vermillion, Alberta. She represented her client, RM, respecting estate planning and matrimonial matters in 2018 and 2019. As at November 2018, RM had been married to his wife, MM, for over thirty years; however, their relationship was deteriorating. RM had a brain tumour and a physical disability. In late 2018, RM sought advice and representation from Wheat. RM wanted to preserve for himself and his eldest son, JM, farmland jointly owned by the couple, including the matrimonial home. After exploring options with Wheat, RM instructed Wheat to prepare a lease agreement to lease the farmland to JM.
Wheat knew by February 2019 that MM would not consent to the lease of lands she owned jointly with her husband to their son. Wheat also knew that MM’s agreement and consent was required to lawfully make the disposition. Wheat’s initial draft of the lease agreement had a blank signature line for MM as a party to the lease. RM did not sign that version of the agreement. Instead, he instructed Wheat to revise the agreement drafted to remove MM’s signature line and to show that RM was signing the lease agreement on MM’s behalf. Despite multiple documented concerns on executing the agreement without MM’s involvement or knowledge, Wheat changed the draft agreement to show that RM was signing the lease to JM on his own behalf and on MM’s behalf as well.
Wheat then acted as witness while JM and RM executed the agreement. Wheat, RM, and JM knew well that MM had not agreed to the lease and would not agree to the lease. They likewise knew that MM had given RM no authority to sign any such document on her behalf.
Notably in aid of understanding the story and the attorney's role
Wheat’s legal practice style included the commendable practice habit of papering her file with memoranda to document instructions from her client, thoughts on the file, and instructions to her staff. Her counsel described the memo style as “stream of consciousness” dictation.
The report sets out the attorney's various efforts to achieve the client's objective
Throughout this time, MM did not know that RM was taking steps to lease the Farmland to JM without MM’s consent.
On or around March 19, 2019, MM saw an envelope from Wheat’s law firm at the matrimonial home. She asked her husband what it was. He said it was nothing. She recognized the “LLP” from Wheat’s firm as a legal term. The next morning, MM saw the open letter on a stool and opened it. She confronted her husband on the contents and he asserted to MM that he had leased the Farmland to their son JM.
MM immediately disputed the validity of the document. MM’s evidence was that she told her husband there’s no way a lease could be done without her being present. She said his response was, “Yeah, it can be.” He said, “A lawyer did it, so it's done."
Wishful thinking on RM's part
After the events of March 2019, MM and RM proceeded to litigation. MM stated that she lost significant sums because, although both actions ultimately settled, she incurred $139,000 in legal fees, including $74,000 in fees for the action against Wheat, RM, and JM. The $74,000 was separate and apart from her fees in the divorce itself. MM’s view was that she was financially compromised both because of the divorce and because of the conduct of Wheat, her husband, and her son. She testified she had mental distress, physical fatigue, and financial distress.
It must be noted that relations between MM and her husband and son were unravelling before Wheat was ever retained. MM stated that JM prevented his children from seeing their grandmother in 2018. MM said that JM was not attending to proper payment of a loan from his parents and that, as early as 2017, JM redirected funds payable to his parents for himself. She said that after the lease agreement was signed, JM stopped repayment of the loan from his parents altogether. Neither RM nor JM gave evidence at the hearing. Wheat’s understanding from RM and JM was that the marriage was beyond repair prior to the preparation of the lease agreement. Her understanding preceded any issue with the matter under consideration for this hearing.
As to the attorney's lawful options presented to the client
Unfortunately, Wheat’s client instructed none of these options. At the critical moment of execution on March 11, 2019, the client instructed something Wheat knew he had no authority to do, something that would render the putative executed agreement to be a misrepresentation at its core. Unfortunately, Wheat capitulated to her client’s request. She put in place an agreement that she knew was false on its face to advance her client’s dishonest intent.
We agree with Wheat that the memos reflect her intent leading up to the execution of the agreement on March 11, 2019. Unfortunately, her actions on March 11, 2019 betrayed and contradicted that intent. Her intent was no longer to find an ethical solution to a thorny problem. Wheat’s file history showed she was aware of multiple legitimate paths forward, and instead, at her client’s insistence, she took the path that facilitated dishonesty on the face of the agreement to her certain knowledge.
A hearing on sanction will follow
In revising the agreement to ostensibly depict an agreement that Wheat knew did not exist, in falsely reflecting that RM had MM’s authority to execute the agreement, and then in executing it as witness with RM and JM, she assisted her client in dishonest conduct. It is not necessary to consider the continuum of misconduct in this matter as was considered in Shah. The Committee finds Wheat had actual knowledge of her client’s dishonest conduct. We find the LSA has proven the citation on a balance of probabilities. Dishonest conduct and deprivation have been established as has been Wheat’s integrity breach in assisting it. Wheat’s conduct is worthy of sanction.