David Leslie Schaefer.

Image Credit: FACEBOOK: The Greater Vernon Chamber of Commerce

A Vernon lawyer and past president of the Greater Vernon Chamber of Commerce has been barred from practicing law for five years following a real estate dispute dating back almost 20 years.

According to a Feb. 13 BC Law Society decision, lawyer David Leslie Schaefer acted in a conflict of interest over a property deal that started in 2007.

The Law Society also said Schaefer made false statements to a mortgage lender and filed misleading information with the Land Title Office.

Schaefer didn't fight the allegations against him and admitted to multiple counts of professional misconduct.

This is the second disciplinary hearing the Vernon-based lawyer has been through in recent years.

Last year, the 66-year-old was suspended for one month after he "inadvertently" withdrew $9,000 from an elderly couple's account, for which he had power of attorney.

The regulator also fined him $1,000 after Schaefer said he'd accidentally used the card for 33 withdrawals because his business account was from the same bank and had the same colour debit card with the same pin number.

He'd paid the money before the investigation began, which was triggered by his former partner telling the regulator.

His behaviour was described as "cavalier and sloppy" by the Law Society.

Schaefer's latest disciplinary action started in 2007 when he asked a long-time client of his to purchase a property, referred to as Lot 14, that he couldn't afford to buy.

The decision said Schaefer knew his client had available funds as he had just helped him sell his business.

The client agreed to buy Lot 14 for $126,000 and Schaefer verbally agreed to buy it for $140,000 some time later when he could afford it.

"(Schaefer) acted for (the client) on his purchase of Lot 14 despite having a personal and direct or indirect financial interest in Lot 14," the Law Society said. "(The client) did not have independent legal representation with respect to his purchase of Lot 14."

Over the following years, the lawyer paid the property tax for Lot 14 but he was never able to complete the purchase.

The decision gave no indication of who lived at the property during this time.

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Six years later, Schaefer approached Canadian Western Trust to discuss lending $80,000 to his client from his self-directed RRSP and a mortgage would be secured against Lot 14.

"(Schaefer) swore a declaration to Canadian Western Trust that he was 'arm’s length' from (the client) for the purposes of the Income Tax Act. He also swore that he would not obtain any advantage from the mortgage, other than allowed under the Income Tax Act. (Schaefer) represented to Canadian Western Trust that the mortgage was bona fide," the decision read. "These representations were false or misleading."

The regulator said the mortgage "did not reflect ordinary commercial dealings" between the two acting in their own separate interests.

The lawyer obtained an advantage from the mortgage which the Law Society says was not "bona fide."

Later on in 2013, Schaefer entered into a Letter of Intent that he would take $80,000 out of his RRSP as a "loan" to the client.

"(The client) would keep $40,000 and apply it towards the (Schaefer's) future purchase of Lot 14. (The client) would then immediately advance the other $40,000 back to the (Schaefer). They agreed that the (lawyer) would pay all interest payments under the Mortgage and pay the property taxes on Lot 14," the decision read.

The regulator said this was a conflict of interest.

"In June 2013, Canadian Western Trust funded the mortgage. (Schaefer) signed the trust cheque issuing $80,000 to (the client) on account of the mortgage. (The client) deposited the mortgage funds and then provided a cheque to the (lawyer) for $40,000, which the lawyer cashed," the Law Society said.

Schaefer then filed "false or misleading" documents with the Land Title Office with respect to the Mortgage.

The decision said that in 2015 Schaefer finally agreed that he would purchase Lot 14 for $65,000 and gave his client $25,000 towards it.

He then listed the value of the property as $65,000 on the paperwork, whereas BC Assessment valued it at $130,000. 

"(Schaefer) obtained a benefit by purchasing Lot 14 from (the client) at a price lower than the 2007 purchase price and below the assessed value for 2015," the Law Society said. "(He) failed to ensure that his purchase of Lot 14 from (the client) was fair and reasonable."

In 2021, Schaefer then paid $87,666 to clear the mortgage and represented to the lender that the money had come from his client when it hadn't.

In January 2022, he transferred Lot 14 into joint tenancy with his new wife and listed the value at $256,000.

Ultimately, the Law Society suspended the 66-year-old's licence for five years and also barred him from practicing elsewhere in Canada.

The lawyer is a past president of the Greater Vernon Chamber of Commerce and has been involved with the Downtown Vernon Association and the Vernon Bar Association and has served as a director with the Funtastic Sports Society.

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