A Passion For Horses
Allegations of misuse of estate funds has resulted in an interim suspension by the Law Society of Upper Canada
Mr. Stroud arranged to be appointed in February 2013 as Estate Trustee Without a Will for JM’s husband LM, who had been Mr. Stroud’s client. LM died in January 2013…
In December 2016, Mr. Stroud gave JM a statement of the estate’s receipts and disbursements to November 30, 2015. That statement contained no reference to $250,000 that appears, based on ledgers later produced in March 2017, to have been transferred from the estate to Mr. Stroud’s horse farm in Florida in August 2015.
In January 2017, Mr. Stroud gave JM a statement of the estate’s receipts and disbursements to December 31, 2016. That statement contained no reference to a total $643,140 that appears, based on ledgers later produced in March 2017, to have been transferred from the estate to Mr. Stroud’s horse farm in Florida in various amounts and on various occasions between August 2015 and February 2016. The statement shows a balance in trust of $1,374,057.64.
On March 22, 2017, Mr. Stroud gave JM a copy of the client trust ledger which revealed that a total of $643,140 had been transferred to the horse farm in Florida, and that $200,000 had been paid out of the trust in December 2015 as “principal payout” to an individual to whom Mr. Stroud owed a mortgage in the same amount (though the transfer post-dated the date of the mortgage discharge). The bank statements indicate that the funds in trust as at December 31, 2016 amounted to roughly $60,500.
JM attests that, before his death, LM told her that he had loaned $500,000 to Mr. Stroud. In a letter dated March 22, 2017, Mr. Stroud acknowledges having taken a no-interest loan from his client in an unspecified amount on an unspecified date to assist with the development of his horse farm in Florida. There was no formal loan agreement or mortgage and LM was to keep track of what was owed. Mr. Stroud asserts in his March 22, 2017 letter that JM had instructed him not to include in the estate anything that involved his dealings with LM.
The issue
It is common ground between the parties that the allegations in this matter provide reasonable grounds for believing that there is a significant risk of harm to members of the public or to the public interest in the administration of justice.
The Law Society takes the position that the public’s confidence in the legal profession and the administration of justice would be undermined if Mr. Stroud was permitted to continue to practise in circumstances where the allegations raise significant issues of integrity and honesty. The Law Society maintains that practice restrictions would not be sufficient to reduce the risks.
Thus
The evidence filed on the motion by the Law Society strongly supports an inference, in the absence of a defence or explanation, that Mr. Stroud was appropriating estate trust funds for his own use. In submissions, Mr. Stroud has suggested that the estate beneficiaries were aware that the estate was investing in Mr. Stroud’s Florida farm. There is no evidence of that before us, though JM attests to having been told by Mr. Stroud in 2016 that he had made investments on behalf of the estate that were secured against his personal property. Even if the estate beneficiaries were aware of these “investments”, such does not excuse the conduct. Just as borrowing from a lawyer’s clients is prohibited, a lawyer who is an estate trustee cannot borrow money from the estate. Furthermore, there is no suggestion at this point that any of these “loans” were secured or even documented at all.
There is also evidence to suggest that Mr. Stroud used the estate trust funds to pay off a mortgage on one of his properties, and he has provided no explanation or comment as to how that might have come about.
An interlocutory suspension is usually imposed where shortfalls are apparent in a lawyer’s trust fund and where serious concerns exist that the funds may have been misappropriated. In such a case, practice restrictions are not usually sufficient to reduce the risks of harm. If the allegations are later made out in a conduct hearing, the penalty will likely be a lengthy suspension or revocation of licence.
…as a result of the serious nature of the allegations and the degree to which they call into question Mr. Stroud’s honesty and integrity, an order ought to be made to reduce the significant risk of harm to members of the public and to the public interest in the administration of justice. Practice restrictions in the nature of financial controls are insufficient to reduce the risks. An interlocutory suspension is appropriate.
Information about the attorney’s horse farm is linked here.
Murray Stroud’s love and passion for horses began as a small child. Unlike many equine enthusiasts, Murray was not born on a farm nor did not even have a horse until later in life, yet his passion began early. He grew up in a modest, rural town outside of Ontario, Canada. A town so small that the road he grew up on was named after his family’s heritage, Stroud’s Lane. Fast-forward several decades later and Murray’s heritage continues with his latest business venture and the birth of Stroud’s Lane Farm, thousands of miles south right here in Central Florida. HERITAGE- INTEGRITY- SUCCESS make up the DNA of the farms mission and that passion for horses early on has proven to be a dream come true.
In his early years, Murray was a dedicated and successful athlete starting in high school and really made his mark in his college years. He started in track and field in high school and then became a decorated hockey player at York University in the late 1960’s and early 1970’s. He excelled and was recognized with his dedication as a successful hockey player receiving several awards including as an original inductee in the Sports Hall of Fame- in Hockey, the Yeoman of the Year Award for All Sports and 1969-1970-the Top College Player in Hockey. Although the awards meant a lot to Murray, his knowledge and dedication to teamwork is what he considers his true accomplishments during those years.
(Mike Frisch)