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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Legal Services Commissioner v Brown  QCAT 423
Legal Services Commissioner
Katherine Ann Brown aka Katherine Ann Cox
Occupational regulation matters
19 November 2020
17 November 2020
Hon. Duncan McMeekin QC, Judicial Member
Dr John de Groot, Legal Panel Member
Dr Susan Dann, Lay Panel Member
PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – CRIMINAL OFFENCES – where the respondent was convicted on her own plea of guilty of one count of dishonestly obtaining property from another, subject to a trust, direction or condition, contrary to s 408C(1)(b) and (2)(c) of the Criminal Code – where the applicant Commissioner has brought two charges against the respondent for the conviction of a serious offence and for engaging in conduct which was likely, to a material degree, to bring the profession into disrepute – where the respondent has not responded to or engaged with the discipline application – where the respondent did not appear at the hearing of the application – whether the respondent’s conduct amounts to professional misconduct
PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – QUEENSLAND – ORDERS – where the Tribunal’s orders in this jurisdiction are protective and not punitive – where the applicant seeks an order recommending that the name of the respondent be removed from the Roll – where such orders should only be made when the probability is that the practitioner is permanently unfit to practise – where the respondent persisted in the fraud over three years – where the respondent has not advanced any evidence in support of her being likely to become a person who is fit to be a legal practitioner – whether the probability is that the respondent is permanently unfit to practice so that her name should be removed from the Roll
Criminal Code Act 1899 (Qld) sch 1 s 408C
Legal Profession Act 2007 (Qld) s 5, s 417, s 418, s 419, s 452, s 453, s 456, s 462, s 656C
Adamson v Queensland Law Society Incorporated (1990) 1 Qd R 498
Allinson v General Council of Medical Education and Registration  1 QB 750
Attorney-General of the State of Queensland v Legal Services Commissioner; Legal Services Commissioner v Shand  QCA 66
Barristers’ Board v Darveniza  QCA 253
Law Society of NSW v Jones  NSWCA 333
Legal Services Commissioner v Madden (No 2)  QCA 301
Legal Services Commissioner v Quinn  QCAT 618
Legal Services Commissioner v Quinn  QCAT 196
NSW Bar Association v Cummins (2001) 52 NSWLR 279
Prothonotary v Del Castillo  NSWCA 75
Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279
M Lester, legal officer for the Legal Services Commission
REASONS FOR DECISION
- This is a discipline application brought pursuant to s 452 of the Legal Profession Act 2007 (Qld) (“the Act”). The Legal Services Commissioner alleges that the respondent is guilty of professional misconduct and seeks a disciplinary order pursuant to s 456(2)(a) of the Act recommending that the name of the respondent be removed from the local roll. The respondent, despite being served with the material, has made no response to it and did not appear at the hearing.
- The facts that follow appear in the Affidavit of Kathryn Keogh, complaints officer with the Legal Services Commission, or in the exhibits thereto.
- In April 2004, the respondent was admitted to practice in Queensland. Her name was entered on the local roll of practitioners. Thereafter, the respondent practised as an employed solicitor at various firms, and more recently as a director of legal firms and as a sole practitioner. She is presently 53 years of age.
- On 23 September 2019, the respondent was convicted on her own plea of guilty in the Magistrates Court at Kingaroy of one count of dishonestly obtaining property from another, subject to a trust, direction or condition, contrary to s 408C(1)(b) and 2(c) of Schedule 1 to the Criminal Code Act 1899 (Qld).
- The offending conduct involved the taking of $8,000 from the trust account of her firm, which was transferred there (on 25 October 2016) by a third-party buyer as a deposit on a sale of a business by the respondent’s client. Despite numerous requests by the client, the respondent failed to pay the monies over to the client, and ultimately the client made a complaint to the police. The respondent refused to engage in a formal interview with the investigating officers. Eventually, a schedule of facts was agreed, involving admissions, and tendered on sentence.
- Following her plea, the respondent was convicted and sentenced to imprisonment for a period of 15 months and released on parole on the same day. In arriving at that sentence, the learned acting Magistrate noted that the respondent had made an offer to repay the monies in these terms: “There is an offer to pay … Your plea expresses remorse as do (sic) your offer to make good compensation”. The respondent was ordered to pay to the Court the sum of $8,000 in compensation within 28 days of sentencing. That sum was not paid by the respondent, but eventually the client’s loss was met from the fidelity fund.
- On 6 December 2018, the Executive Committee of the Council of the Queensland Law Society determined that the respondent was not a fit and proper person to continue to hold a practising certificate. As a consequence, the Queensland Law Society cancelled the respondent’s practising certificate effective immediately. As well, on 27 February 2019, the Executive Committee passed several resolutions concerning the respondent’s legal practice, KB Law, including that receivers be appointed. The respondent did not seek a review of the various findings and recommendations made. The respondent ceased to hold a practising certificate from 5 March 2019, and her practise is in receivership.
The Discipline Application
- The discipline application alleges two charges:
- (a)That on 23 September 2019, the respondent was convicted in the Magistrates Court of Kingaroy of a serious offence, which was also an offence of dishonesty; and
- (b)That between 24 October 2016 and 24 October 2019, the respondent engaged in conduct which was likely, to a material degree, to bring the profession into disrepute, contrary to r 5 of the Australian Solicitors Conduct Rules 2012 (“ASCR”).
- It is the duty of this Tribunal to hear and determine each of the allegations set out in the application, and the Tribunal may only act on an allegation that is not admitted if satisfied on the balance of probabilities that it is true, the degree of satisfaction required depending on the consequences for the respondent.
The first charge
- The Commissioner relies on the previously mentioned Affidavit of Kathryn Keogh. Exhibited to that affidavit is the certified copy of the Verdict and Judgment Record recording the plea of guilty entered by the respondent as mentioned earlier. A transcript of the hearing before the Acting Magistrate and the sentencing remarks are also exhibited. None of this material is disputed.
- There is no doubt that the respondent was convicted of a serious offence and one which was an offence of dishonesty, as alleged.
The second charge
- The Commissioner submits that the respondent engaged in conduct which was likely to a material degree to bring the profession into disrepute, contrary to r 5 of the ASCR, in the following ways:
- (a)Failing to account to her client for monies received on the client’s behalf into her trust account, despite numerous requests from the client and in complete disregard of her legal obligations;
- (b)Abusing her trusted position as a solicitor, thereby demonstrating a lack of integrity;
- (c)Being charged, convicted and sentenced to a period of imprisonment for a serious offence, and being ordered to pay restitution, demonstrating dishonest, deceitful or fraudulent conduct; and
- (d)Breaching the restitution order by not paying the sum of $8,000 to the client, thereby showing defiance of the Court order, the rule of law and the process of justice.
- As to the last of those submissions, there may be other reasons why the monies were not paid; but only the respondent can know that, and she has refused to engage in the process. An adverse inference can, in the circumstances, be more comfortably drawn.
- As to the first three submissions, the necessary factual basis for the submissions appears in the affidavit mentioned and exhibits thereto.
- It can hardly be seriously contended that the taking of trust monies in a substantial amount, and refusing to repay them, would not constitute conduct that was likely in a material degree to bring the profession into disrepute.
Characterisation of the Conduct
- It is necessary next to characterise the conduct – is it merely unsatisfactory professional conduct or professional misconduct? The relevant definitions are set out in ss 418 and 419 of the Act:
418 Meaning of unsatisfactory professional conduct
Unsatisfactory professional conduct includes conduct of an Australian legal practitioner happening in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
419 Meaning of professional misconduct
- (1)Professional misconduct includes–
- (a)unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence; and
- (b)conduct of an Australian legal practitioner, whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.
- (2)For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate.
- The Commissioner submits that s 419(1)(a) is relevant here; that is, that the taking, and permanently depriving a client, of monies placed with a solicitor on trust is “conduct [which] involves a substantial … failure to reach or keep a reasonable standard of competence and diligence”.
- Reliance is placed on the common law test as described by Thomas J in Adamson v Queensland Law Society Incorporated:
The test to be applied is whether the conduct violates or falls short of, to a substantial degree, the standard of professional conduct observed or approved by members of the profession of good repute and competency.
- As well, the Commissioner refers to Allinson v General Council of Medical Education and Registration, which stands for the proposition that to substantiate a charge of professional misconduct requires proof of conduct which “would be reasonably regarded as disgraceful or dishonourable by [the practitioner’s] professional brethren of good repute and competency”.
- Whether the common law or statutory tests be applied it is satisfied here. The respondent’s conduct violated the standards of professional conduct observed by members of the profession of good repute. Her dealings with the trust monies, and the misleading of her client in response to the subsequent enquiries by her client seeking repayment of those monies, involved a course of conduct which fell well short of the standards expected. It is conduct which well merits the epithets “disgraceful and dishonourable”.
- While not relied on, s 419(1)(b) is also plainly engaged. Stealing monies, particularly those held on trust in one’s capacity as a solicitor, would, without doubt, justify a finding that “the practitioner is not a fit and proper person to engage in legal practice”.
- Further aggravating features include: the amount involved was substantial; the dishonesty was perpetuated by a course of conduct over three years; and no compensation has yet been made by the respondent.
- The conduct here plainly amounts to professional misconduct.
Should the respondent’s name be removed from the roll?
- There remains the question of sanction.
- The following general principles apply:
- (a)All relevant matters must be brought into account;
- (b)Public protection and the maintenance of proper standards, not punishment, is the guiding consideration;
- (d)The highest standards of integrity are expected of a legal practitioner. That is because of four interrelated interests: clients must have confidence in their lawyers; fellow practitioners must be able to depend on the word and integrity of the practitioner; the judiciary must have confidence in persons who appear before them; and the public must have confidence in the legal profession; and
- (e)It follows that conduct which undermines the trustworthiness of the practitioner, or suggests a lack of integrity, or that the practitioner cannot be trusted to deal fairly within the system is most likely to result in a striking off.
- Here, relevant matters include:
- (a)The impugned conduct involves an offence of dishonesty;
- (b)The amount stolen was not insignificant;
- (c)Monies were taken from a trust account. Such monies have a “sacrosanct character”;
- (d)Reliability and integrity in the handling of trust accounts are fundamental prerequisites in determining whether an individual is a fit and proper person to be trusted with the responsibilities attaching to a solicitor;
- (e)The monies were not repaid despite an undertaking given to a Court in September 2019 to do so;
- (f)The respondent persisted in the fraud for years;
- (g)The respondent is of mature age and considerable experience; and
- (h)The respondent was, with respect, rightly sentenced to a term of imprisonment and indeed remains on parole under that sentence.
- The impugned conduct here falls into that category identified by Kitto J in Ziems v The Prothonotary of the Supreme Court of New South Wales at 288:
… it is not difficult to see in some forms of conduct, or in convictions of some kinds of offences, instant demonstration of unfitness for the Bar. Conduct may show a defect in character incompatible with membership of a self-respecting profession.
- That being so, it is evident that at the time of the offending conduct the respondent was plainly unfit to practise. The question for this Tribunal is whether that unfitness continues and is probably permanent.
- In considering that issue, the observations of McMurdo JA in Attorney-General of the State of Queensland v Legal Services Commissioner; Legal Services Commissioner v Shand (“Shand”) at  are relevant and helpful: “the character of the respondent was revealed by the offence … there had to be some persuasive evidence which showed that the position was now different”.
- No evidence has been provided to this Tribunal of any mitigating circumstances. However, it appears from the transcript of proceedings before the Acting Magistrate on sentence that a number of matters in mitigation were pressed by the solicitor who appeared for the respondent. They included that the respondent was then being treated for depression and anxiety; that her husband had suffered various medical conditions and a reference was made to six separate surgeries for amputations, a five way bypass, and undefined mental health issues; that over some years her husband had become angry, violent, aggressive and uncommunicative; that her husband inflicted domestic violence on her; that the monies were taken from the trust account at the husband’s demand and to pay for items purchased by the husband that were of no use to the family and which they could not afford; that the respondent did not profit personally from the monies taken; that the taking was opportunistic and unplanned and to stop threats; and that the respondent had suffered significantly already in that she had lost her home, her marriage, continued to live in fear of her husband, and had become a bankrupt.
- While these matters, assuming in the respondent’s favour that they are all true, elicit sympathy for her plight, and no doubt influenced the Acting Magistrate in arriving at a just sentence, they are of only marginal assistance on the essential question here. That the respondent gave in to her husband’s demands reveals her character and her attitude to her responsibilities. It is worth noting that the evidence before the Acting Magistrate shows that the removal of monies from the account was not a single, impetuous action. On the day the $8,000 was deposited in the trust account, $3,000 was taken out by the respondent; six days later, another $500 was taken; three days after that, another $1,000; and on 7 November, two weeks after the initial deposit, the balance of $3,500 was taken.
- Three things might be said of these various circumstances. First, no evidence supporting these various claims is now advanced by the respondent. Assertions of alleged facts from the Bar table are acceptable on sentence in this State, but hold no weight on a hearing of this nature. Secondly, the taking of monies on four separate occasions does not sit well with some of the submissions made. Thirdly, and of particular note, is that no evidence is now proffered that any psychiatric condition, now resolved and unlikely to recur, impacted on the respondent’s understanding or judgement at the time of the offending conduct.
- As the Commissioner submits, the summary by McMurdo JA in Shand at  to  of the principles relevant to an order removing the name of a respondent solicitor from the Roll of Solicitors in Queensland are pertinent here:
… The community needs to have confidence that only fit and proper persons are able to practise as lawyers and if that standing, and thereby that confidence, is diminished, the effectiveness of the legal profession, in the service of clients, the courts, and the public is prejudiced. The Court’s Roll of practitioners is an endorsement of the fitness of those who are enrolled.
Consequently, the respondent’s disavowal of any intention to engage in legal practice was not the end of the matter. If he was not a fit and proper person to engage in legal practice, all of the purposes which I have described required that his name be removed from the Roll, absent something which indicated that he was likely to become a person who was fit to be a legal practitioner.
In this way, the test of probable permanent unfitness is, as the Attorney-General submits, a way of identifying that the character of the practitioner is so indelibly marked by the misconduct that he cannot be regarded as a fit and proper person to be upon the Roll.
- So here, in the absence of any evidence to show that the respondent was ever likely to become a person who was fit to be a legal practitioner, her character is indelibly marked by her misconduct.
- The proper order should be as the Commissioner seeks. The Commissioner also seeks an order for costs. Such an order is required unless the Tribunal is satisfied that exceptional circumstances exist. No such circumstances have been shown and there is no opposition to the order. As to its terms, see s 462(5)(b) of the LPA.
- The Tribunal raised with the applicant the possibility of fixing costs as opposed to ordering that they be assessed. Given the circumstances here – the respondent being a bankrupt – it was thought that avoiding the expense of assessment might save monies and provide certainty. Upon the applicant advising that the estimate of costs would be in the order of $12,000 plus outlays, the Tribunal determined that the respondent’s right to contest the assessment, if so minded, should be preserved.
- The orders are:
- Pursuant to s 456(2)(a) of the Legal Profession Act 2007 (Qld), it is recommended that the name of the respondent be removed from the local Roll.
- The respondent shall pay the applicant’s costs to be assessed on the standard basis on the Supreme Court scale under the Uniform Civil Procedure Rules 1999 (Qld) in the manner that the costs would be assessed were the matter in the Supreme Court of Queensland.
See Legal Profession Act 2007 (Qld) s 5(1) (“LPA”).
See LPA s 417.
LPA s 453.
LPA s 656C(1).
LPA s 656C(2).
(1990) 1 Qd R 498, 507.
 1 QB 750.
Legal Services Commissioner v Madden (No 2)  QCA 301.
Prothonotary v Del Castillo  NSWCA 75, .
Attorney-General of the State of Queensland v Legal Services Commissioner; Legal Services Commissioner v Shand  QCA 66.
See NSW Bar Association v Cummins (2001) 52 NSWLR 279.
Barristers’ Board v Darveniza  QCA 253.
See Legal Services Commissioner v Quinn  QCAT 618, ; Legal Services Commissioner v Quinn  QCAT 196,  (Daubney J).
Law Society of NSW v Jones  NSWCA 333, 10 (Street CJ).
(1957) 97 CLR 279.
 QCA 66.
See LPA s 462(1).
- Published Case Name:
Legal Services Commissioner v Brown
- Shortened Case Name:
Legal Services Commissioner v Brown
 QCAT 423
Member Duncan McMeekin QC, Member Dr John de Groot, Member Dr Susan Dann
19 Nov 2020