Graham v Legal Services Commissioner (No 1)
[2014] QCA 305
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- Notable Unreported Decision
- Appeal Determined (QCA)
- Graham v Legal Services Commissioner (No 1)[2014] QCA 305
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Graham v Legal Services Commissioner (No 1)[2014] QCA 305
Graham v Legal Services Commissioner (No 1)[2014] QCA 305
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | QCAT No 253 of 2011 |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 28 November 2014 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 12 June 2014 |
JUDGES: | Fraser and Gotterson JJA and Philippides J Separate reasons for judgment of each member of the Court, each concurring as to the order made |
ORDER: | Appeal dismissed with costs. |
CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – GENERALLY – where the appellant was retained by a law practice to prepare a costs statement to assist the law practice’s client recover costs – where the appellant conceded his conduct in failing to provide the costs statement fell short of the standard of competence and diligence expected of a legal practitioner – where the Tribunal found the appellant had engaged in “unsatisfactory professional conduct” under s 418 of the Legal Profession Act 2007 – where the appellant argues his conduct did not occur “in connection with the practice of law” under s 418 – where the respondent concedes the appellant himself did not engage in legal practice under his retainer, but argues his conduct was “in connection with the practice of law” by the law practice – whether the Tribunal erred in concluding the appellant’s conduct happened “in connection with the practice of law” Legal Profession Act 2007 (Qld), s 237(1), s 416, s 418, s 419 Uniform Civil Procedure Rules 1999 (Qld), r 702, r 703, r 705 A Solicitor v Council of Law Society (NSW) (2004) 216 CLR 253; [2004] HCA 1, cited Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55, cited Legal Services Commissioner v CBD (No 2) [2011] QCAT 446, considered New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284, considered New South Wales Bar Association v Osei (No 2) [2008] NSWADT 324, considered Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12, cited Ziems v Prothonotary of Supreme Court (NSW) (1957) 97 CLR 279; [1957] HCA 46, cited |
COUNSEL: | P K O'Higgins for the appellant J J Bell QC, with S L Lane, for the respondent |
SOLICITORS: | Bartley Cohen for the appellant Legal Services Commissioner for the respondent |
[1] FRASER JA: The Queensland Civil Administrative Tribunal, constituted by Alan Wilson J assisted by Mr Sinclair and Dr Steinberg AM, found that the appellant’s solicitor had engaged in “unsatisfactory professional conduct” as defined in s 418 of the Legal Profession Act 2007 (Qld) (“the LPA”). The Tribunal made orders publicly reprimanding the appellant and ordering him to pay a pecuniary penalty to the respondent in the sum of $1,500.00 within 30 days. The appellant has appealed against that decision pursuant to s 468 of the LPA.
[2] Chapter 4 of the LPA concerns complaints about and the discipline of members of the legal profession. In Pt 4.2, s 418 provides that “[u]nsatisfactory 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.” Section 419(1)(a) provides that “[p]rofessional misconduct includes… 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…”. Section 419(1)(b) brings within the definition of “professional misconduct” “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.”
[3] The appellant engaged in the relevant conduct in connection with his retainer by a law practice to prepare a costs statement to assist the law practice’s client to recover costs from the client’s opponent in litigation. The principal issue in the appeal is whether the Tribunal erred in concluding that the appellant’s conduct happened “in connection with the practice of law” in circumstances in which the respondent conceded that the appellant did not himself engage in legal practice under his retainer to prepare the costs statement.
Facts
[4] The Tribunal proceeded upon an agreed statement of facts. The appellant was an “Australian legal practitioner”.[1] He was the principal of the costs assessment firm “Grahamcosts”. In early March 2010 a law practice retained the appellant to prepare a costs statement in relation to costs recoverable by a client of the law practice pursuant to an order of the Supreme Court. The terms of the retainer included an estimate given by the appellant to the law practice that the costs statement “would be prepared within a period of approximately two months or 8 to 10 weeks from commencement of the work”. Three days after the retainer the law practice paid the appellant $28,600.00 in response to the appellant’s request for payment of that amount upon the footing that, when payment was received, he would contact the law practice to make arrangements to begin preparation of the costs statement.
[5] The appellant did not provide the costs statement within the estimated period and the law practice eventually terminated the appellant’s retainer in late October 2010. The parties then agreed to the reinstatement of the retainer with new terms which required the appellant to provide the costs statement by 24 December 2010, in default of which the appellant would make refunds on a sliding scale at various dates, namely, 24 December 2010, and 18 and 31 January 2011. The appellant did not provide the costs statement by those dates or make the agreed refunds. The law practice cancelled the appellant’s retainer on 31 January 2011. The appellant did not refund any part of his fee. In May 2011 the law practice commenced proceedings against the appellant in the Magistrates Court for recovery of the fee, damages and interest. Some four months later the action was compromised by the appellant agreeing to pay the law practice $44,528.66 by instalments. The appellant made full payment of that amount by 23 January 2012.
The charges and the Tribunal’s decision
[6] The respondent brought five charges against the appellant in the Tribunal but subsequently abandoned one charge. Two other charges were struck out by the Tribunal at an interlocutory hearing. Those two charges were premised upon a view that the money which the appellant received from the law practice was “trust money” under s 237(1) of the LPA. That section defines “trust money” as meaning “money entrusted to a law practice in the course of or in connection with the provision of legal services by the practice…”. The striking out of those charges followed concessions by the respondent that the money received by the appellant was not within the definition of s 237(1) and, in particular, that in accepting an engagement to prepare a costs statement for the law practice, the appellant did not “engage in legal practice”. That expression is defined in the LPA as including “practise law”. The respondent did not seek to resile from those concessions in this appeal.
[7] Charge 1 alleged that the appellant failed to maintain reasonable standards of competence and diligence in relation to the preparation of the costs statement on behalf of the law practice. Charge 2 alleged that the appellant failed to comply with an undertaking to refund money to the law practice upon failing to provide the costs statement by nominated dates. Charge 3 made the alternative allegation that the appellant failed to abide by an agreement to refund money to the law practice upon failing to provide the costs statement by nominated dates. In each case the respondent alleged that the conduct amounted to unsatisfactory professional conduct or professional misconduct.
[8] Charge 2 failed because the Tribunal was not persuaded that the agreement between the appellant and the law practice which reinstated the retainer with additional terms involved an “undertaking”. In relation to charge 1, the Tribunal found that the appellant’s delays, which were aggravated both by the appellant’s continued failure to perform the new terms of the second agreement after his representations had led to that agreement and by his failure to provide a costs statement so that the client was required to commence proceedings to recover monies they had paid him nearly two years early, constituted conduct “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”. In relation to charge 3, the Tribunal concluded that the appellant’s failure or refusal to pay the agreed refunds in accordance with the second agreement, which was aggravated by his conduct which required the client of the law practice to bring legal proceedings to recover the money which the client was always entitled to recover, also constituted unsatisfactory professional conduct as defined in s 418. The Tribunal found that the conduct alleged in charges 1 and 3 did not amount to professional misconduct because it did not involve “a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence” or justify a finding that the appellant was “not a fit and proper person to engage in legal practice”.
[9] Consistently with the respondent’s concession at the interlocutory hearing, the respondent’s argument in the Tribunal, which the Tribunal accepted, was that the appellant’s misconduct happened “in connection with the practice of the law” by the law practice which had engaged the appellant to prepare the costs statement, rather than in connection with the practice of law by the appellant.
Consideration
[10] As the respondent argued, the work undertaken by the appellant – the preparation of a costs statement – is work of a kind which is ordinarily necessary in every case in which a party to litigation is ordered to pay the costs of another party. In relation to the assessment of costs other than under the Legal Profession Act 2007, r 705 of the Uniform Civil Procedure Rules 1999 provides that “[a] party entitled to be paid costs must serve a costs statement in the approved form on the party liable to pay the costs”. The person retained to prepare such a costs statement should have regard to the applicable basis of assessment of the costs. Under the standard basis (r 702) the costs assessor “must allow all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed”. Under the indemnity basis (r 703(3)) the costs assessor “must allow all costs reasonably incurred and of a reasonable amount” having regard to any prescribed scale of fees, any costs agreement and any “charges ordinarily payable by a client to a solicitor for the work”. Whilst legal practitioners may choose in some cases to engage a person who is not legally qualified to prepare a draft costs statement, the academic and professional qualifications and experience of a legal practitioner who practises in litigation should equip the practitioner with the capacity to comply with the requirement in r 705(2) that the costs statement “contain sufficient details to enable the party liable to pay the costs to understand the basis for the costs, prepare an objection to the costs statement and obtain advice about an offer to settle the costs”. Furthermore, in this case, although the appellant did not directly act for the client, the appellant was retained by the client’s solicitor to prepare the costs statement. Taking those matters into account, there was a very close connection between the conduct the subject of the charges and the practice of law.
[11] The appellant argued, however, that s 418, stigmatised as unsatisfactory professional conduct only the conduct of an Australian legal practitioner happening in connection with that practitioner’s practice of law. The appellant argued that this construction was consistent with the purposes of the LPA, that it was required to enable the application of the prescribed “standard of competence and diligence” in s 418, that it was consistent with authority, and that it left the public with the protection provided in s 419 in the case of a practitioner who was not a fit and proper person to practise law.
[12] In Federal Commissioner of Taxation v Consolidated Media Holdings Pty Ltd[2] French CJ, Hayne, Crennan, Bell and Gageler JJ referred to the many statements by the High Court that “the task of statutory construction must begin with the consideration of the [statutory] text” and observed that “[s]o must the task of statutory construction end”. Their Honours also reaffirmed the established principle that the context of the statutory text, including legislative history and extrinsic materials, must be taken into account to the extent that it assists in fixing the meaning of the statutory text. It was not submitted that legislative history or extrinsic materials were of assistance in ascertaining the meaning of the statutory text in this case.
[13] As to the statutory text, the definition of unsatisfactory professional conduct does not include any words which are apt to require the alleged conduct of the practitioner to occur in connection with that practitioner’s practice of law. In this respect, s 418 may be contrasted with the presence in the definition of “trust money” in s 237(1) of the LPA of the phrase “by the practice” (see [6] of these reasons). That s 418 was not intended to be confined in the way for which the appellant contends is also suggested by the presence of the words “connection with”. Had those words been omitted, the section would have stigmatised only conduct of an Australian legal practitioner happening “in” the practice of law, which might more readily have been confined to conduct occurring in the course of the practitioner’s legal practice. As it is, the definition does not refer to a connection between the legal practitioner’s conduct and any law practice. Rather, the required connection is between the legal practitioner’s conduct and an activity (“the practice of law”) which is described at a high level of generality and which comprehends conduct carried on by legal practitioners, unqualified employees of a law practice, and even unlawful operators.[3] The expression “the practice of law” is evidently not intended to be confined to the particular conduct engaged in by the legal practitioner who is alleged to be guilty of unsatisfactory professional conduct. In short, the text of s 418 requires a connection between the conduct of the legal practitioner and the practice of law but it does not require a connection between the conduct of the legal practitioner and the practice of law by that legal practitioner.
[14] The appellant’s construction requires an implication in the statute that the latter connection is required. Such an implication would produce the consequence that the appellant legal practitioner – who evidently specialised in work of this kind - could not be found guilty of unsatisfactory professional conduct even though a legal practitioner who engaged in precisely the same conduct in the course of that practitioner’s practice on the instructions of the same client would be guilty of unsatisfactory professional conduct. The oddity of that result is a reason for rejecting the implication.
[15] Another reason for rejecting it is to be found in the expressed purposes of the directly relevant chapter of the LPA. In Thiess v Collector of Customs,[4] French CJ, Hayne, Kiefel, Gageler and Keane JJ observed that “[o]bjective discernment of statutory purpose is integral to contextual construction”. Section 416 of the LPA describes the main purposes of Ch 4 as being “to provide for the discipline of the legal profession”, “to promote and enforce the professional standards, competence and honesty of the legal profession”, “to provide a means of a redress for complaints about lawyers”, and “to otherwise protect members of the public from unlawful operators”. The literal meaning of s 418 allows greater scope for the fulfilment of those statutory purposes than does the appellant’s construction and it was not submitted that the literal meaning was inimical to any other purpose of the LPA. It may therefore be said that the respondent’s interpretation is required by the provision in s 14A(1) of the Acts Interpretation Act 1954 (Qld) that “the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation”.
[16] In relation to the suggested consistency of the appellant’s construction with the general law, the appellant referred to Ziems v Prothonotary of the Supreme Court (NSW),[5] New South Wales Bar Association v Cummins,[6] and A Solicitor v Council of the Law Society of NSW.[7] The cited passages concerned “professional misconduct” under the general law which was not so serious as to justify suspension or striking off from the Roll.[8] As the appellant argued, those cases demonstrate that under the general law there is a dichotomy between conduct which has a sufficient connection with the practice of law and conduct which is outside the practice of law but which nonetheless reveals unfitness to practice. In the passage which the appellant cited from New South Wales Bar Association v Cummins, Spigelman CJ analysed earlier cases and identified two kinds of relationships that justified applying the terminology “professional misconduct” to acts not occurring directly in the course of professional practice, namely, “acts may be sufficiently closely connected with actual practice, albeit not occurring in the course of such practice” and “conduct outside the course of practice may manifest the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice”. Both aspects of professional misconduct may be contrasted with conduct which occurs directly in the course of professional practice, which amounts to professional misconduct even upon the narrowest connotation of that term.[9]
[17] The cited cases do not establish that the general law conception of professional misconduct was confined to the conduct of a practitioner in connection with that practitioner’s own practice of law. Furthermore, in New South Wales Bar Association v Cummins[10] Spigelman CJ noticed the lack of precision in the general law conceptions of “professional misconduct” and “unsatisfactory professional conduct”; the general proposition that the text of the legislation must be the surest guide to the legislative intention[11] must apply with particular force where the relevant context comprises aspects of the general law expressed only in broad and imprecise terms which are effectively replaced by statutory definitions. It also cannot be assumed that the relevant aspect of the inclusive statutory definition of unsatisfactory professional conduct is confined to conduct of the kind which falls within the general law’s conception of such conduct. The general law forms part of the context to be considered but, as I have indicated, context has utility only “if, and in so far as, it assists in fixing the meaning of the statutory text” and it “cannot displace the meaning of the statutory text”.[12] Reference to the general law does not assist in resolving the issue in this appeal. The statutory definition should be given effect according to its terms.[13]
[18] As the appellant argued, where a charge is based upon lack of competence and diligence, the definition of unsatisfactory professional conduct requires a comparison to be made between the charged practitioner’s competence or diligence and the competence or diligence to be expected of a reasonably competent legal practitioner engaging in conduct of the same kind. It might prove difficult to make a meaningful comparison if the conduct is altogether outside the scope of work done by legal practitioners, but that supplies no support for an implication that the conduct must be done by the practitioner in connection with the practice of law by that practitioner. Where, as is the case here, the conduct occurs in the course of activities of a kind which are done by legal practitioners in the course of legal practice, there can be no inseparable difficulty in making the comparison required by the definition.
[19] It is correct that upon the appellant’s construction the public would be left some recourse because of the potential applicability of s 419, but that would be confined to a case in which the conduct of the practitioner was so serious as to justify a finding that the practitioner was not a fit and proper person to engage in legal practice. There would be no protection in less serious cases. That suggests, as I have indicated, that the respondent’s construction better meets the statutory purposes.
[20] The appellant relied upon a statement by Alan Wilson J in Legal Services Commissioner v CBD (No 2)[14] that certain conduct did not fall within the definition of unsatisfactory professional conduct because it had no connection with the practitioner’s practice of the law and no apparent connection with the practitioner’s standards of competence and diligence in that respect. The relevant conduct constituted a serious offence which happened otherwise than in connection with the practice of the law. On any view it did not fall within the definition of unsatisfactory professional conduct. The point in issue in this appeal was not litigated. Contrary to a submission for the appellant, the statement by Muir JA in Legal Services Commissioner v CBD[15] that the Tribunal made a finding that the offending constituted professional misconduct did not endorse the appellant’s construction.
[21] The appellant also referred to New South Wales Bar Association v Osei (No 2)[16] in which the New South Wales Administrative Tribunal observed of the relevantly indistinguishable definition of unsatisfactory professional conduct in s 127(2) of the Legal Profession Act 1987 (NSW) that the required connection “must be between the conduct of the lawyer and the lawyer’s legal practice” and that it was “not sufficient that the nature of the conduct in question is such that it is of a type that might be engaged in by a lawyer in legal practice”. I would, with respect, endorse the second proposition to the extent that the definition requires that there be a connection between the conduct and the practice of law. In that case a barrister appeared in his capacity as a migration agent in the Refugee Review Tribunal in which a barrister was prohibited from appearing but a migration agent was permitted to appear. In holding that there must be a connection between the lawyer’s conduct and that lawyer’s legal practice, the Tribunal may not have had in mind the issue which has arisen in this case. I would respectfully not regard Osei as persuasive authority for the proposition that the connection identified in s 418 of the LPA must be between the conduct of the legal practitioner and that practitioner’s practice of the law.
[22] For these reasons, the definition of “unsatisfactory professional conduct” in s 418 should not be construed as requiring that the relevant conduct of the Australian legal practitioner happened in connection with the practice of law by that practitioner.
[23] Three further points should be mentioned.
[24] First, the appellant argued that the Tribunal erred in finding that the appellant’s conduct involved the work of assessing costs recoverable by the client of the solicitor who retained the appellant because the appellant was not engaged in such work but was instead engaged to prepare a costs statement. Whilst the Tribunal made some statements to the effect described by the appellant, that did not falsify the Tribunal’s conclusion that it was “compelling that the work [the appellant] was performing was within the contemplation of the phrase ‘…happening in connection with the practice of law’ as that phrase is used in the relevant provisions: ss 418, and 419(1)(b).”[17]
[25] The second point, which is related to the first, is that it was common ground in this appeal that the appellant was not engaged in the work of a costs assessor. It is therefore not necessary to discuss the appellant’s alternative ground of appeal that, if the judge was correct in finding that the appellant was engaged in the work of a costs assessor, the appellant ought to have the benefit of the immunity and protection granted under s 93LA of the Supreme Court of Queensland Act 1991 or s 77(1) of the Civil Proceedings Act 2011. That topic is considered in the Court’s judgment on a reference involving the same parties which is published contemporaneously with this judgment.
[26] Thirdly, the appellant did not argue that, upon the construction of s 418 preferred by the Tribunal, which I would respectfully endorse, the connection between the appellant’s conduct and the practice of law was insufficiently close to justify a finding of unsatisfactory professional conduct. It is therefore appropriate merely to record that the connection was a very close one and I see no reason to doubt that it was sufficient.
Proposed order
[27] The appeal should be dismissed with costs.
[28] GOTTERSON JA: I agree with the order proposed by Fraser JA and with the reasons given by his Honour.
[29] PHILIPPIDES J: I agree with the reasons of Fraser JA and the order proposed.
Footnotes
[1] That term is defined in s 6(1) of the LPA to mean “an Australian lawyer who holds a current local practising certificate or a current interstate practising certificate”. The term “Australian lawyer” is defined in s 5(1) to mean “a person who is admitted to the legal profession under this Act or a corresponding law”.
[2] (2012) 250 CLR 503 at 519 [39].
[3] See the definition “respondent” in s 421(b), (c), the definitions of “law practice” and “law practice employee” in Sch 2, and ss 24, 25 and 427 of the LPA.
[4] (2014) 250 CLR 664 at 672 [23].
[5] (1957) 97 CLR 279 at 290 (Fullagar J).
[6] (2001) 52 NSWLR 279 at 289 [56] (Spigelman CJ; Mason P and Handley JA agreeing).
[7] (2004) 216 CLR 253 at 268 [21] (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
[8] A Solicitor v Council of the Law Society of NSW (2004) 216 CLR 253 at 265 – 266 [15].
[9] See the authorities discussed by Spigelman CJ at (2001) 52 NSWLR 279 at 287 – 289 [40] – [52].
[10] (2001) 52 NSWLR 279 at 288 – 289 [50].
[11] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27 at 46 – 47 [47].
[12] Federal Commissioner of Taxation v Consolidated Media Holdings Pty Ltd (2012) 250 CLR 503 at 519 [39].
[13] See A Solicitor v Council of the Law Society of NSW (2004) 216 CLR 253 at 268 [21].
[14] [2011] QCAT 446 at [8].
[15] [2012] QCA 69 at [7].
[16] [2008] NSWADT 324 at [87].
[17] Legal Services Commissioner v Graham [2013] QCAT 552 at [52].