Council of the Law Society of New South Wales v Downie

reasons for decision 1In April of 2014 the Applicant ("the Law Society ") filed an application in the Tribunal seeking disciplinary orders against the Respondent ("Mr Downie"). The Application alleged that in a variety of ways Mr Downie's conduct constituted professional misconduct warranting the removal of his name from the roll of solicitors. 2Mr Downie promptly lodged a Reply admitting the conduct alleged against him and accepted that his conduct constituted professional misconduct. He admitted each particular alleged to constitute the conduct. 3Pursuant to the provisions of s.564(4) of the Legal Profession Act 2004 ("the Act"),the Law Society, the Legal Services Commissioner and Mr Downie entered into an Instrument of Consent. Under the terms of the Instrument the parties consented to the Tribunal making orders whereby findings would be made as to the professional misconduct of Mr Downie, that his name be removed from the roll and that he pay the costs of the Applicant as agreed or assessed. 4At the hearing the Legal Services Commissioner appeared as a party as of right in accordance with the various provisions of Schedule 5 to the Civil and Administrative Tribunal Act 2013 (CATA). The Law Society, as Applicant, assumed the carriage of the case but there was no appearance for Mr Downie. The Tribunal was informed that the Law Society had contacted Mr Downie and had urged him to file any evidence, especially regarding his health and financial position, as may be relevant to the proceedings. No evidence or written submission was received from Mr Downie. 5The conduct accepted by Mr Downie to constitute professional misconduct may be briefly described as follows: (a)misappropriation - between June 2011 and March 2012 on approximately 47 occasions he withdrew amounts of $500 or $1000 totalling $36,000 from the Trust Account. These amounts were intentionally withdrawn without authority and applied to his personal use. An amount of $35,000 was subsequently deposited into the Trust Account to rectify the deficiencies but only after Mr Downie was confronted with his unlawful conduct by the Law Society. (b)breach of s264 of the Act - Mr Downie failed to keep the Trust records in a way that at all times disclosed the true position in relation to trust monies received for or on behalf of any person. (c)breach of s.255 of the Act - Mr Downie failed to hold trust money deposited into the Trust Account exclusively for the person on whose behalf it was received and disbursed entrusted monies without authority. (d)causing a deficiency in the Trust Account - by Mr Downie withdrawing costs and disbursements prior to receiving funds from clients in the files of 12 separate clients. (e)breach of Rule 12 of the Revised Professional Conduct and Practice Rules 1995 for solicitors - Mr Downie borrowed sums of $32,000 and $20,000 from two separate clients in breach of the rules. In securing these loans he dealt with the funds of these clients in a manner which did not disclose the true position in the Trust Account. (f)failed to pay superannuation - Mr Downie employed a legal secretary but made no superannuation contributions in relation to this employee between June 2007 and June 2012. 6In submissions it was accepted that the Tribunal was not bound by the agreements of the parties and possessed a discretion whether or not to make the orders sought. In Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 the Tribunal noted that its task was not to act as a mere "rubber stamp", however, the consent of the parties deserved " significant weight". That approach has long been accepted by the Tribunal in matters of this nature. 7The material before the Tribunal in this matter discloses a complete disregard for the financial affairs of Mr Downie's clients and a fundamental failure to maintain professional standards. Apparently his personal financial circumstances led Mr Downie to dishonestly deal with his clients money .He then manipulated the Trust records to disguise his many breaches of professional standards and obligations. 8The Agreed facts state that Mr Downie is now 77 years of age having been admitted to practice in 1959. From 1986 until June 2012 he was the principal of the law practice known as Downie & Co. operating from offices in George Street Sydney. Mr Downie did not renew his practising certificate for the period commencing July 2012. It seems apparent from the terms of the Instrument of Consent that Mr Downie does not intend to practice again: his age and the nature of his misconduct are obvious barriers to a return to the profession. 9The material before the Tribunal compels the finding that Mr Downie's conduct can be "...reasonably regarded as disgraceful or dishonourable by professional brethren of good repute and competency" (Allison v General Council for Medical Education and Registration [1894] 1 QB 750. The misappropriation of client's money, alone, in this case would constitute professional misconduct warranting removal from the roll. As Kirby P. noted in Dupal v Law Society of New South Wales (unreported decision of the Court of Appeal, 26 April 1990): "... (the) normal consequence of the misuse of entrusted funds by a Solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is the removal of the name of the Solicitor from the roll". Mr Downie placed nothing before the Tribunal, by way of evidence or submissions, that would suggest other than the normal course of removal from the roll: indeed he accepted the appropriateness of such an order. In addition the Tribunal takes into account the steps taken by Mr Downie to falsify the Trust account records to cover up his dishonesty. 10There are a number of decisions of the Tribunal now that accept that a failure to pay superannuation is capable of constituting professional misconduct. Some of those cases are helpfully gathered in Council of the Law Society v Dalla [2011] NSWADT 130. In this case, over a number of years, Mr Downie failed to pay superannuation contributions in what appears to be a pattern of financial abuse in the operation of his practice directed to improperly supporting his own financial interests. 11The entirety of Mr Downie' conduct satisfies the Tribunal that it is proper in this case to order the removal of his name from the roll in recognition of his professional misconduct. That order is justified in the protection of the public and as a deterrent to other practitioners who may be tempted to act in a similar manner (Wentworth v New South Wales Bar Association (1992)176 CLR 239 at 250,251; Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 411; New South Wales Bar Association v Hamman [1999] NSWCA 404 at [21]). 12The Law Society also seeks an order for the payment of its costs. The Tribunal was informed that Mr Downie is an undischarged bankrupt, however, he chose to place no detail of his financial circumstances before the Tribunal. The statutory provisions governing these proceedings require the Respondent to pay the costs of the applicant where there has been a finding of professional misconduct unless exceptional circumstances are established (clause 23(1), Schedule 5 CATA): there is no material before the Tribunal to support a finding of exceptional circumstances that may allow Mr Downie to escape the consequences of a costs order. The Tribunal notes that bankruptcy alone will not constitute exceptional circumstances (Council of the New South Wales Bar Association v Miller (No.2) [2012] NSWADT 129 at [44]). 13Having regard to these findings, the Tribunal makes the following orders: 1. The name of Daniel McGregor Downie be removed from the local roll. 2. Daniel McGregor Downie shall pay the costs of the applicant as agreed or assessed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 June 2014