Council of the Law Society of New South Wales v Duncan

Judgment (7 paragraphs)

[1]

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[2]

JUDGMENT

THE COURT: On 1 November 2019, the practitioner, Nigel Ian Duncan, was convicted in the District Court on two counts of dishonestly obtaining a financial advantage by deception, under s 192E(1)(b) of the Crimes Act 1900 (NSW). He was sentenced to a period of imprisonment for 3 years and 9 months, commencing on 1 November 2019, with a non-parole period of two years. [1] He is no longer in custody.
By summons filed on 21 November 2023, the Council of the Law Society of New South Wales (Law Society), sought a declaration that the practitioner is not a fit and proper person to remain on the Roll of Australian Lawyers (the Roll) and an order that his name be removed from the Roll. This application engaged the disciplinary powers of this Court under s 264 of the Legal Profession Uniform Law (NSW) (the Uniform Law). The Law Society relied on the sentencing judgment, a certificate of conviction, four affidavits and a summary statement of facts which it had prepared based upon the evidence.

Basis of application

The practitioner was born in 1954 and admitted as a solicitor of the Supreme Court of New South Wales on 21 December 1988. In November 2010, he commenced employment with Maguire & McInerney Lawyers (M&M), primarily with the firm's Wollongong and Shellharbour offices, and mainly in the fields of property, business, and wills and estates.
After receiving a complaint from a client about the practitioner's handling of her matter, M&M conducted a review. This review revealed irregularities, leading to a review of other matters handled by the practitioner, which discovered a misappropriation of funds from the estate of one client to pay a costs order made against another client and the practitioner personally. On 3 October 2017, Brendan Pearce, a partner of M&M, wrote to the Law Society advising of the practitioner's misconduct. The practitioner's employment with M&M was terminated on 17 November 2017. On 21 November 2017, he voluntarily surrendered his practising certificate.
In response to Mr Pearce's letter, the Law Society appointed Ronald Dunlop to investigate potential misappropriations of trust money by the practitioner. Initially Mr Dunlop's investigation was limited to the matter referred to in the letter, but during the course of his investigation Mr Dunlop uncovered further misappropriations by the practitioner. The investigation identified more than 120 instances of misappropriation from 23 deceased's estates over a period of more than six years. Mr Dunlop prepared a report dated 22 March 2018 (the Dunlop Report).
Particulars of the funds identified by Mr Dunlop as misappropriated by the practitioner were outlined in two Schedules annexed to its summary of the facts. The nature of the misappropriations was confined to two main categories. The first category involved the practitioner using funds from deceased estates for his personal expenses. There were over 100 transactions such instances, the total being $757,993.84. The second category related to transactions where the practitioner used moneys held on behalf of one deceased estate to cover up prior misappropriations from another, described as "robbing Peter to pay Paul".
The matters raised in the Dunlop Report were referred to the police. In December 2018 the practitioner was charged with two counts of dishonestly obtaining financial advantage by deception for misappropriating funds and making fraudulent transactions between 1 January 2011 and 16 November 2017. The first charge related to misappropriating funds from 23 deceased's estates and obtaining a financial advantage in the amount of $730,010.06. The second charge related to fraudulent transfers from various estates to cover up money which had been taken, resulting in a financial gain to the practitioner of $1,584.811.45, an amount later amended to $1,390,442.93.
The practitioner entered pleas of guilty in the Local Court and was committed for sentence to the District Court. He was sentenced by Judge Haesler SC (the sentencing judge) on 1 November 2019. In accordance with authority in this Court, and notwithstanding the terms of s 91 of the Evidence Act 1995 (NSW) the Court may have regard to the sentencing judgment. [4]
The deficit in the trust account was made good by M&M, who then commenced recovery proceedings against the practitioner in the Supreme Court. Property held by the practitioner and his wife was sold. The sentencing judge recorded: [5] "Ultimately over $400,000 came from the property with the balance coming from family members amounting to $812,213.28. It is accepted however, that his employers also incurred other incidental costs."
The sentencing judge also recorded that the practitioner attended Dubbo Police Station on 10 December 2018 and was arrested. In considering the objective seriousness of the offending, the sentencing judge stated: "18 Each of the transactions resulted from, and formed part of, a course of deceitful conduct that might not have been discovered absent the initial complaint and the subsequent audit. The offences individually and collectively were undertaken by the offender using his position in the community as a solicitor and his prior good standing in the community. It was a profession he served, it appears faithfully, until he broke trust with it in 2011. Duncan acted in breach of his duty to his employer's clients and a breach of duty and trust shown in him by his employer. As a senior solicitor it would be expected that he would not be supervised to the extent one might expect for a junior employee. 19 The offences ultimately became systematic and planned, obviously premeditated and of some sophistication. Duncan's plan relied on his firm treating and trusting him as a senior and very experienced professional. They were entitled to do so. That finding means that I do not accept the criticisms implicit in his counsel's submissions about negligence by the firm."
The sentencing judge noted that, although exposed annually to compulsory continuing education courses, which included an ethics component, "[n]othing said in any of those mandatory professional development courses caused [the practitioner] to pause in his criminal activity": at [20]. The judge also noted that there was "some delay before ultimately he gave his cooperation or lack of any opposition to the recovery process". He described the results as "inevitable": at [21].
The evidence of delay in cooperation should be recorded. On 20 October 2017, less than three weeks after Mr Pearce's letter to the Law Society, the practitioner met with Mr Duncan at the premises of M&M in Wollongong. The process was explained, together with the statutory powers of compulsion being exercised by Mr Duncan. [6] Over the period of one hour, a number of relatively small amounts were identified and discussed. The final question and answer were as follows: [7] "Q. Has there been any other occasion where you have misused trust money of Maguire & McInerney? A. No, nor in previous firms or in 30 years of practice." Q. Is there anything further you wish to say about any of the matters that we have discussed here today? A. I've stuffed up. Have let myself, family and Maguire & McInerney down."
These last answers revealed an unwillingness to cooperate frankly and fully with the investigator. On 17 November 2017, Mr Pearce and another partner met the practitioner and sought further information as to how much money he had misappropriated and where the money had gone. The practitioner initially insisted that there were only four "problem files" and that the amount taken was "maybe $180,000". [8] Mr Pearce noted that throughout the meeting the practitioner "only ever confirmed what I put to him and he would not volunteer any further information". By the end of the meeting, the amount was estimated at $330,000. The practitioner was handed a notice of termination at the meeting. There followed a second meeting between the practitioner and Mr Duncan.
The next day, 18 November 2017, there was a further meeting between the practitioner and members of the firm in the course of which it was suggested that Mr Duncan had been given a figure of $380,000 for the misappropriations. By the end of the meeting, the practitioner agreed that the likely loss was $400,000 but that there were further undisclosed amounts. [9] As recorded above, the true figure was very much higher.
The seriousness of the misconduct is self-evident, not only from the amounts misappropriated, but also from the lengthy period over which the defalcations took place. The various transfers between estates were no doubt intended to postpone, if not prevent, discovery of the amounts taken for the personal benefit of the practitioner. That behaviour continued through the early stages of the investigation.

Findings

The principles governing the removal of legal practitioners from the roll are well- established. The Court has an inherent disciplinary jurisdiction over local lawyers preserved by s 264 of the Legal Profession Uniform Law (NSW). The dispositive twofold consideration is whether the practitioner is demonstrated at the time of the hearing (i) not to be a fit and proper person to be held out as entitled to practise law, [10] and (ii) likely to remain unfit to practise for the indefinite future. [11]
The evidence summarised above established that the practitioner used his position as a solicitor to engage in serious dishonest conduct for an extended period of time. For over six years the practitioner misappropriated funds from clients' estates to meet his own financial obligations and living expenses and those of his late mother.
The sentencing judge in the District Court, who had the benefit of a psychologist's report and evidence from the practitioner himself, was at a loss to explain how an experienced solicitor could have descended into the level of criminality he had undertaken as a legal practitioner. Whatever the explanation of the misconduct, there can be no doubt that the practitioner is not a fit and proper person to be entrusted with the duties and responsibilities of a solicitor. Given that the misconduct occurred when he was an established practitioner with over 20 years professional experience, the inevitable conclusion is that he will remain unfit to practice for the indefinite future.

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Judgment (7 paragraphs)

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Legislation Cited (2)

Cases Cited (12)

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