Citation issued: June 8, 2020
Hong Guo
Citations are authorized by the Law Society of BC's Discipline Committee and list allegations against a lawyer that will be considered at a discipline hearing. Please note that allegations in a citation are unproven until a discipline hearing panel has determined their validity.
Nature of conduct to be inquired into:
1. Between approximately May 2013 and April 2016, you acted in a conflict of interest while representing two or more of your clients QY, KY, XX, XL, C Inc., V Ltd., HZ, and [numbered company] BC Ltd. in connection with the purchase of a real estate development project in the Lower Mainland, British Columbia (the “M Project”), and in particular you:
(a) acted for two or more of your clients QY, KY, XX, XL, and C Inc. in connection with a joint venture agreement between C Inc. and KY through V Ltd. without first obtaining their written informed consent to the joint representation, contrary to rules 3.4-1 or 3.4-7 of the Code of Professional Conduct for British Columbia (the “BC Code”) and your fiduciary duties;
(b) continued to represent two or more of your clients QY, KY, Xong PX, XL, C Inc., and V Ltd., when a contentious issue arose with respect to C Inc.’s contribution to the joint venture, contrary to rules 3.4-1 or 3.4-8 of the BC Code and your fiduciary duties;
(c) acted for two or more of your clients QY, KY, HZ, and [numbered company] BC Ltd. in connection with the sale of KU’s shares in V Ltd. to [numbered company] BC Ltd. without first obtaining their written informed consent to the joint representation, contrary to rules 3.4-1 or 3.4-7 of the BC Code and your fiduciary duties;
(d) preferred the interests of XX, XL, C Inc., HZ, and [numbered company] BC Ltd. over those of QY and KY in connection with the sale of KU’s interest in V Ltd. to [numbered company] BC Ltd., contrary to section 3.4 of the BC Code and your fiduciary duties;
(e) preferred the interests of XX, XL, C Inc., HZ, and [numbered company BC Ltd. over those of QY and KY in connection with a mortgage loan by V Ltd., contrary to section 3.4 of the BC Code and your fiduciary duties; and
(f) continued to represent your clients KY, C Inc., V Ltd., and [numbered company] BC Ltd. when a contentious issue arose between KY and [numbered company] BC Ltd. in connection with the share transfer agreement between KY and [numbered company] BC Ltd., contrary to rules 3.4-1 or 3.4-8 of the BC Code and your fiduciary duties.
This conduct constitutes professional misconduct, pursuant to section 38(4) of the Legal Profession Act.
2. Commencing on or about September 10, 2018, in the course of an investigation into your conduct arising from a complaint made by QY, you failed to respond substantially and fully to the Law Society, or you made representations to the Law Society that you knew or ought to have known were false or misleading, or both, contrary to one or both of Rule 3-5(7) of the Law Society Rules and rule 7.1-1 of the Code of Professional Conduct for British Columbia. In particular, in a letter delivered September 10, 2018, you denied:
(a) acting for QY and KY after September 2012 in connection with their applications to the BC Provincial Nominee Program;
(b) knowing the principals of [numbered company] BC Ltd.;
(c) communicating with HZ about V Ltd.; and
(d) drafting the share transfer agreement between KY and [numbered company] BC Ltd.
This conduct constitutes professional misconduct, pursuant to s. 38(4) of the Legal Profession Act.
3. Between approximately May 2013 and April 2016, you failed to serve one or more of your clients QY, KY, XX, XL, C Inc., V Ltd., HZ, and [numbered company] BC Ltd. in a conscientious, diligent and efficient manner so as to provide a quality of service at least equal to that which would be expected of a competent lawyer in a similar situation, contrary to one or both of rules 3.1-2 and 3.2-1 of the Code of Professional Conduct of British Columbia, by doing one or more of the following:
(a) failing to recommend that the loan agreement between your clients QY and KY and your clients XX, XL, and C Inc. relating to C Inc.’s contribution to the joint venture agreement and any associate security interests or obligations, be clarified and reduced to writing;
(b) failing to advise your clients QY and KY about the risks associated with becoming a minority shareholder;
(c) failing to advise your clients QY and KY about the desirability of negotiating a shareholders’ agreement;
(d) failing to ensure that KY’s shares in V Ltd. were appropriately secured pending receipt of the purchase price from [numbered company] BC Ltd.;
(e) transferring KY’s shares in V Ltd. to [numbered company] BC Ltd. and filing a Notice of Change of Directors prior to receipt of any funds;
(f) failing to ensure that any short term loan agreement between your clients QY or KY and your friend TC was reduced to writing;
(g) failing to disclose to your clients QY and KY the source of the approximately $1 million which you caused to be paid to them on October 2, 2015; and
(h) failing to advise your clients QY and KY that sometime before October 2, 2015, [numbered company] BC Ltd. had disputed its obligation to proceed with the share transfer agreement with KY and refused to make any payment to KY pursuant to that agreement; and
(i) failing to disclose to your clients QY and KY information about financing activity which you facilitated on behalf of V Ltd. after KY had been removed as shareholder and director of the company.
This conduct constitutes professional misconduct, pursuant to s. 38(4) of the Legal Profession Act.