Complaints, Lawyer Discipline and Public Hearings

Summary of Decision of the Hearing Panel

Gregory Neil Harney

Victoria, BC

Called to the bar: May 10, 1983

Discipline hearing: July 17, 2018

Panel: Craig Ferris, QC (chair); Laura Nashman; Sandra Weafer

Decision issued: September 21, 2018 (2018 LSBC 25)

Counsel: J. Kenneth McEwan, QC for the Law Society; Henry C. Wood, QC for Gregory Neil Harney

AGREED FACTS

In 2010 Gregory Neil Harney was retained by a stock broker who was in an employment dispute with her former employer. The former employer had agreed to pay the broker $1 million in three instalments, the first two of which had been paid when the broker retained Harney.

The employment agreement included a provision that, if there were claims against the former employer arising from her employment with the firm, the instalment would be made to counsel for the broker in trust until the claims were resolved.

Pursuant to the settlement agreement, the June 2010 instalment was paid to Harney subject to the trust condition that it not be disbursed until claims were settled.

Settlement of a dispute between the client and her former employer went to arbitration, and the arbitrator issued a decision confirming that there were outstanding claims relating to the client’ s former employment. The parties could not agree on whether and to what extent the funds could be paid out, and the matter once again went to arbitration, which resulted in an agreement that funds that were held back from the settlement be transferred to an unregistered brokerage account in the name of the client at a firm acceptable to both parties.

After the agreement was reached but before any paperwork had been finalized, or even drafted, Harney sent his client an email saying, “ I will have the cheque ready Monday,” and indicating he believed the matter to be resolved.

Two days later Harney sent the client two cheques payable to the client personally, equalling the amount held in trust by Harney.

The following day the client’ s former employer sent Harney an email outlining the terms of the agreement as the former employer saw them. Harney responded that he disagreed with some of the details. He did not disclose that he had already disbursed the money to his client.

A few days later Harney wrote to the former employer saying that the funds “ will be moved” from trust to a brokerage account in the name of his client. Harney and counsel for the former employer could not come to agreement on the details of the settlement, and the matter again went to arbitration. The matter was resolved contrary to Harney’ s position.

Between January and June 2011 Harney and counsel for the former employer exchanged correspondence, including draft orders to move the holdback monies out of trust and into the brokerage account. At no time prior to June 2011 did Harney tell either the arbitrator or opposing counsel that he no longer held the funds in his trust account.

In October 2012 the successor company of the former employer asked Harney for a current statement of account for the trust monies, and Harney admitted that the monies had not been in his trust account since November 15, 2010.

ADMISSION AND DETERMINATION

Harney admitted that disbursing the monies to his client contrary to the trust condition constituted professional misconduct. He further admitted that he failed to disclose to the arbitrator or to opposing counsel that he had already disbursed the funds when he knew that that information was material, and that that constituted professional misconduct.

The panel found that this conduct amounted to professional misconduct. The panel considered that no loss was suffered because of the breach of undertaking, and that Harney did not receive a benefit from taking the monies out of trust. It concluded, however, that this did not change the fact that his actions constituted professional misconduct.

DISCIPLINARY ACTION

The Law Society sought, and Harney agreed to, a 30-day suspension.

In considering whether this was the appropriate disciplinary action, the panel considered that Harney had a lengthy practice history and by all accounts a good reputation within the bar and that, although he had two unrelated conduct reviews earlier in his career, he had no related professional conduct record.

The panel ordered that Harney:

  • be suspended for 30 days; and
  • pay the Law Society’ s costs, to be determined at a later date.

2018 LSBC 25 Decision of the Hearing Panel