Estevan lawyer Jonathan Goby is facing disciplinary action from the Law Society of Saskatchewan and is scheduled for a hearing in front of a three-member committee of his peers in Regina this Friday, Feb. 11.
Goby, who has been practising law in Estevan for several years, has agreed to a statement of facts and admissions of guilt based on a report issued by the hearing committee that convened Nov. 24, 2010 during a telephone conference between the committee, chaired by Victor Dietz, Q.C. along with Nicholas Cann and Greg Stevens who were represented by Timothy Huber as counsel for the Law Society and Goby, who represented himself.
The formal complaint states that Goby prepared or caused to be prepared and did commission false affidavits of value in relation to certain real estate transactions handled by his office and that he misled Information Services Corporation of Saskatchewan (ISC) by submitting affidavits of value which did not reflect the actual value of titles being transferred in the real estate transactions that, in turn, deprived ISC of their entitled fees.
The complaint noted that Goby did, by submitting affidavits of value to ISC reflecting values less than the actual value of titles, reduce the amount of fees paid to ISC and therefore obtained an unfair competitive advantage in the marketplace and that he withdrew funds from his trust account prior to the funds becoming properly payable to him in respect of a liability of his clients for fees, disbursements or other expenses.
Goby waived reading of the counts and entered guilty pleas to all counts.
The Law Society began an investigation into Goby's practice after it became aware of anomalies in relation to his real estate practice which led to the Law Society's auditor paying him a number of visits beginning May 28, 2009. The first two meetings revealed that Goby had a practice of submitting affidavits of value to ISC which were less than the sale price of the properties in question. In some cases the reduction reflected was as high as $95,000, or 31 per cent of the valuation.
The Law Society noted in their statement of facts that Goby had started this practice of under evaluation around May of 2007 and changes in values were always downward and on many occasions Goby discarded affidavits of value from vendors or their counsel that reflected actual sale prices in favour of the reduced affadavit of value sworn by his wife and commissioned by himself. Most of the time Goby's clients were not aware of his preparation and filing of a reduced value affidavit.
The Law Society noted that "the practice of filing artificially reduced affidavits of value had the effect of lowering the total or all inclusive charge for his services which allowed his prices to be lower than those of his competitors for the same transaction. This represented an unfair advantage from which Goby likely benefitted financially."
The Society also pointed out that Goby did not provide invoices to clients that broke out individual disbursements on real estate files including ISC fees. Only large lump sum amounts for disbursements (including copying, courier and ISC fees) was disclosed on his legal accounts. This practice rendered it impossible to determine whether Goby retained any savings for himself or passed savings on to his clients.
The investigator noted that 47 sample real estate transactions made between May 2007 and May 2009 were reviewed, which represented about one-quarter of the total transactions handled by Goby based on the ISC packet verification notices available. The actual value of the 47 transactions totalled about $8.18 million. The registration value as reported by Goby was approximately $6.2 million, a difference of about $1.98 million. The ISC fees were therefore reduced by just under $6,000 and the average reduction of value in the sample files was approximately $42,137, or 24 per cent.
Allen also noted that during his research it became evident that Goby frequently withdrew his fees from trust prior to the work being complete or substantially complete, contrary to the Law Society's rules. In some instances the fees were withdrawn on the same day as the first monies were received into the trust account.
The Law Society also noted that Goby had no prior findings of misconduct regarding his law practice.
It is expected the Law Society will make their disciplinary actions known shortly after the Friday hearing is concluded.
