B.C. lawyer resigns from law society, agrees not to reapply for 5 years after misconduct

A lawyer in B.C.‘s Interior has resigned from the provincial law society and agreed not to apply for reinstatement for five years after admitting to professional misconduct that began nearly two decades ago.

David Leslie Schaefer is 66 years old and has been practising law in Vernon, B.C., since 1986, according to an undertaking he made to the law society’s discipline committee in response to the misconduct allegations against him.

The oldest of those allegations dates back to 2007, when Schaefer provided legal services to a client referred to in the document only as “RM.”

According to the undertaking, Schaefer approached RM – described in the document as a “longtime friend” of the lawyer – and asked him to purchase a property that Schaefer himself was interested in acquiring.

The lawyer acted for RM during the purchase, despite his personal and “direct or indirect financial interest” in the property. RM did not have independent legal representation when buying the property, the undertaking indicates.

Schaefer’s undertaking acknowledges that this arrangement constituted a conflict of interest, and therefore professional misconduct.

The document also details several other conflicts of interest related to the property, the most recent of which occurred in 2015, when Schaefer finally purchased the property from RM.

In that transaction, Schaefer acted as his own legal representation, and RM once again did not have independent legal advice.

According to the undertaking, Schaefer purchased the property for just $65,000, which was half of its assessed value of $130,000 at the time. The purchase price was also well below the $126,000 that RM had paid for it in 2007.

“The respondent failed to ensure that his purchase of Lot 14 from RM was fair and reasonable to RM,” the undertaking reads.

‘False and misleading representations’

Schaefer also admitted to making “false or misleading representations” to Canadian Western Trust on two occasions, both of them relating to an $80,000 mortgage on the property that Schaefer provided to RM in 2013, using funds from his RRSP.

According to the document, Schaefer and RM had an agreement that Schaefer would provide the $80,000 as a “loan” to RM, who would keep $40,000 and apply it toward Shaefer’s future purchase of the property, then “immediately advance the other $40,000 back to” Schaefer.

Schaefer swore a declaration to Canadian Western that he was operating at “arm’s length” from RM, but that was not the case, according to the undertaking.

“The mortgage did not reflect ordinary commercial dealings between parties acting in their own separate interests,” it reads.

Schaefer again made “false or misleading representations” to Canadian Western in 2021, when he requested a payout statement regarding the mortgage, claiming he was acting on behalf of RM “in connection with the sale of the property,” the document reads.

In fact, he had already completed his purchase of the property from RM and was not re-selling it himself, according to the timeline of events detailed in the undertaking.

Schaefer had not received any instructions from RM regarding the mortgage, and the document indicates he told Canadian Western that the $87,666.91 he deposited into his RRSP as payment for the mortgage came from RM, which was not true.

In addition to resigning from the law society and agreeing not to apply for reinstatement for five years, Shaefer also undertook not to apply for membership in any other law society in Canada during that period, and not to do so after five years without first notifying the Law Society of B.C.

“Should the respondent apply for reinstatement in British Columbia, a mandatory credentials hearing would be held to consider his good character and fitness to practice law, with the respondent bearing the onus of demonstrating he meets the requisite test,” the undertaking reads.

“If the respondent were to be reinstated, he would have to comply with any ‘conditions on returning to practice’ that a credentials panel may impose. The Law Society of British Columbia would have the opportunity to seek appropriate conditions to address the protection of the public.”