Smith was disbarred after a routine audit in 2007 revealed that he had swindled clients out of thousands of dollars.
One client, a woman identified as C.B., designated Smith the sole executor and trustee of her estate, which included a house valued at $90,000. Her two sons and the Winnipeg Humane Society were named as beneficiaries.
Following C.B.’s death, her sons sought to distribute the estate’s cash. Smith informed them that he had found an investor who was willing to buy the house for $50,000. He told them that selling the house on the open market would be time-consuming and various fees and costs would reduce their profits. So the sons agreed to the private sale.
But Smith left out one major detail — the investor was his wife.
He also did not inform the Humane Society of the sale.
In the case of another estate — that of a man identified as J.T., C.B.’s common-law husband — there were unpaid students loans of $4,600 and the estate only held $2,200 in assets. In a letter to Social Development Canada, Smith claimed that the estate assets “were applied to final expenses,” when in fact the money was in his firm’s trust account.
Smith also used money from C.B.’s estate to retain counsel following the Law Society of Manitoba’s investigation.
The LSM discipline hearing panel found Smith guilty of seven counts of professional misconduct. He was disbarred and ordered to pay $24,500 to the law society. The Manitoba Court of Appeal upheld the penalty.
The law society found that Smith lacked integrity. “As the executor of the estate, Mr. Smith owed a fiduciary duty to the beneficiaries to act in their best interests. Instead, in his capacity as legal counsel to the estate, he wrote a letter that was misleading in order to obtain a financial benefit for his family,” the panel wrote.
“It is critical to recognize that Chapter 1 of the [professional code of conduct] demands of all lawyers a duty of absolute honesty, not only with justice system participants, but with the public at large,” states the ruling.
Throughout the proceedings, Smith maintained his innocence and insisted that his conduct was not improper. The Court of Appeal found this to be further justification for his disbarment.
“Had the appellant recognized that his conduct, especially regarding the sale of the property to his wife, was seriously improper and unprofessional, the sanction might well have been a suspension because the panel would not likely have had the concerns it expressed about future protection of the public,” Justice Martin Freedman wrote in Smith v. Law Society of Manitoba.
“But his insistence that his conduct was not improper, a position he maintained in argument before us, coupled with the finding of a pattern of dishonesty, led the panel to conclude that the public interest could only be protected in future by permanently removing the appellant from the practice of law.”