The Council of the Law Society of New South Wales v Lundy

Court of Appeal (NSW)|2013-02-20

INTRODUCTION: 1In this case the Respondent Solicitor, John Lundy, admitted the misconduct alleged against him in a Disciplinary Application filed by the Applicant, the Council of the Law Society of New South Wales ("the Law Society") on 2 November 2012. The Respondent also consented to all the Orders sought by the Law Society against him which were to the following effect: A. That the solicitor be publicly reprimanded. B. That the solicitor be fined. C. That the solicitor not be issued with a practising certificate in New South Wales until such time as he satisfies The Manager, Professional Standards Department by statutory declaration as to the reasons why he is unable to comply with the Notices personally served on him under Section 659 of the Act or completes to a satisfactory standard suitable courses approved by the Law Society of New South Wales in trust accounting, practice management and ethics. D. Pay the costs of the Applicant as agreed or assessed. 2Originally, the Applicant had sought an Order that the Respondent not be issued with a practising certificate until such time as he complied with the Section 659 Notices and completed the courses referred to in the preceding paragraph. However, at the commencement of the proceedings, the Applicant sought to amend that Order on the basis that the Respondent would not be able to satisfy the Order given that he did not hold any of the records the subject of the Notices. 3The Tribunal granted the necessary leave and the proceedings were heard and determined on this basis.

The Solicitor's Reply 11The Solicitor filed a Reply dated 15 January 2012 which admitted the essential facts and circumstances of the offences.

The Evidence 12The evidence adduced by the Law Society comprised an Affidavit sworn on 24 October 2012 by Anne-Marie Foord, Manager, Professional Standards Department, Affidavit sworn on 31 October 2012 by Garry Terrence Napper, Trust Account Investigator and Affidavit sworn 19 February 2013 by John Ernest Mitchell, Chief Trust Account Investigator and Supervisor. Ms. Foord's evidence was directed to the investigation of the complaints following the Report of Mr. Napper who carried out the trust account inspection. The evidence of Mr. Mitchell went to the costs of external examinations of trust accounts, the point being made by the Applicant that the Solicitor had gained a benefit from not having to incur this expense. 13The Solicitor filed an Affidavit on 18 January 2013 which had been sworn by him on 14 January 2013. In that document he swears, 'I do not dispute any of the grounds of the application. I do not seek to excuse my conduct for which I am deeply contrite. However, I seek to explain some of the circumstances in the following paragraphs...' He then goes on to state 'shortly after becoming a sole practitioner (in August, 2005) I realised I was ill-equipped for the bookkeeping and administrative tasks involved in working on my own. With the benefit of hindsight, I would not have opened a trust account. It became quickly obvious that I was overwhelmed by the administrative side of the practice. I again stress that I am not seeking to diminish my responsibility to maintain the bookkeeping side of the practice. Around this time and the subsequent four years a number of personal and family issues were weighing upon me heavily. These contributed further to my neglect of my responsibilities to the administrative part of my practice. Again, I should have dealt with matters differently and I accept responsibility for this.' 14In a frank admission at paragraph 8 of his Affidavit the Solicitor states, 'I made false declarations by untruthfully ticking a box claiming that I did not have a trust account for the years 2006, 2007 and 2008. I did this because I had not kept proper accounting records and was embarrassed at the thought of my poor bookkeeping being examined.' 15In addition to his Affidavit evidence, the Respondent made an oral statement to the Tribunal expressing his deep regret at the conduct complained of. The Tribunal was left in no doubt that the expressions of contrition were genuine.

The Tribunal's Conclusions regarding the Respondent's Conduct 16The Tribunal notes that the Respondent admitted his guilt early following the initial letter from the Applicant to the Respondent dated 12 December 2011 formally advising him of the complaints. 17The Tribunal further notes that the offences complained of are not client based nor has any member of the public complained that money is missing. However, as was pointed out by the Applicant, there is an obligation on members of the profession who are entrusted with other people's money to be absolutely transparent in their dealings with such moneys and the Regulations provide the mechanism for the record keeping. 18The Respondent's failure to comply with having his trust records finally externally examined of itself would not have resulted in him being bought before this Tribunal. It is the making of the false declarations to hide his inaction and the failure to comply with the three Notices served pursuant to S. 659 of the Act that elevated his conduct, resulting in the current proceedings being bought against him. 19The common law test of whether a legal practitioner has been guilty of professional misconduct is that promulgated in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750, namely conduct which 'would be reasonably regarded as disgraceful or dishonourable' by 'professional brethren of good repute and competency'. 20The onus of proving misconduct lies with the applicant: Stanoevski v Council of the Law Society of New South Wales [2008] NSWCA 93, while the standard of proof to be applied by the Tribunal is the civil standard, on the balance of probabilities. The degree of satisfaction for which the civil standard of proof calls in professional discipline matters may vary according to the gravity of the fact to be proved: see Briginshaw v Briginshaw (1938) 60 CLR 368 and Rejfek v McElroy (1965) 112 CLR 517 at 521. See also Riley Solicitors Manual at 34,145.10. 21The Tribunal is satisfied that the evidence sufficiently establishes the conduct of the Respondent that was alleged and particularised in the Disciplinary Application. Applying the 'Allinson' test, the Tribunal is satisfied to the requisite standard that the Respondent is guilty of professional misconduct.

Penalty 22The Applicant does not seek a 'strike off' order nor would such an order be appropriate in the circumstances. 23However, the penalty must reflect the seriousness of the conduct. The breaches of the Act and Regulation directed towards the protection of client moneys are serious and affect the confidence which the public might otherwise have in the regulation of trust accounts. The making of a false declaration by a legal practitioner is also a serious matter. Having regard to the submissions made by the Applicant, the Tribunal is satisfied that the order for a public reprimand as sought is appropriate in the circumstances. 24The Applicant also seeks orders for a fine and its costs. In regard to the latter, the Respondent consented to an Order for costs in the sum of $4,500.00 to be paid over a set period of time as set out in the Orders below. 25In relation to the imposition of a fine, the Tribunal agrees that it is appropriate in the circumstances, the only question being the quantum of such fine. The Respondent submitted in a letter he wrote to the Society on 12 July 2012, 'My only other submission is in regard to the proposed fine. I am not a wealthy man, I have three children still at school and currently have little in the way of income. (I am engaged in a couple of writing projects which will not bring in money for sometime)'. The Respondent gave oral evidence that he estimated his writing projects would earn him approximately $85,000.00 over a two (2) year period. These facts have been taken into account in relation to the Tribunal's determination as to penalty.

Orders The Tribunal makes the following Orders:

The Solicitor be publicly reprimanded.
The Solicitor be fined in the sum of $3,000.
The Solicitor not be issued with a practising certificate in New South Wales until such time as he: (a) has satisfied The Manager, Professional Standards Department by statutory declaration as to reasons why he is unable to comply with notices personally served on him under Section 659 of the Act; or (b) completes to a satisfactory standard suitable courses approved by the Law Society of New South Wales in: (i) trust accounting, (ii) Practice Management and (iii) Ethics.
The Solicitor pay the costs of the Society in the sum of $4,500 in monthly instalments of $200 for 22 months and the final instalment to be $100 to commence at the beginning of the calendar month after the Tribunal hands down its Orders. 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: 14 May 2013

At a glance

Court

Decision date

Source

Judgment (7 paragraphs)

Parties

Cases Cited (2)