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Legal Services Commissioner v Kellahan[2016] QCAT 113

Legal Services Commissioner v Kellahan[2016] QCAT 113

CITATION:

Legal Services Commissioner v Kellahan [2016] QCAT 113

PARTIES:

Legal Services Commissioner

(Applicant/Appellant)

v

Drew Adrian Kellahan

(Respondent)

APPLICATION NUMBER:

OCR269-13

MATTER TYPE:

Occupational Regulation matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Justice DG Thomas, President

Assisted by:

Ms Joanne Collins, Legal panel member

Ms Julie Cork, Lay panel member

DELIVERED ON:

1 February 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The respondent is to be publicly reprimanded
  1. A fine in the sum of $1000.00 is imposed
  1. The respondent must not be issued with a Practising Certificate in the future unless and until:
  1. a)
    Payment of the sum of $75,000.00 be made to Alexander John Newitt
  1. b)
    Payment of the sum of $5,000.00 be made to the Legal Services Commissioner
  1. c)
    Payment of a fine in the sum of $1,000.00 be paid to the Legal Services Commissioner
  1. d)
    Payment of the costs in relation to these proceedings be paid to the Legal Services Commissioner

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – PROFESSIONAL MISCONDUCT OR UNSATISFACTORY PROFESSIONAL CONDUCT – where legal practitioner failed to comply with previous orders of a disciplinary body – where practitioner offered to pay compensation and costs in respect of previous disciplinary proceedings – where practitioner impecunious – where practitioner genuinely believed payment could be secured from third party – where practitioner failed to make payment – whether unsatisfactory professional conduct or professional misconduct – submissions as to sanction

Legal Profession Act 2007 (Qld) ss 418, 420, 456

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 32

Council of the Law Society of NSW v Tsalidis (No.4) [2012] NSWADT 230

Environment Protection Authority v Keogh [2000] NSWLEC 237

Legal Services Commissioner v Kellahan [2012] QCAT 263

Legal Services Commissioner v Rowell [2013] QCAT 397

Nelson v Cyran [2015] QCA 226

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’).

REASONS FOR DECISION

The charge

  1. [1]
    The Commissioner alleges that on 26 December 2012, 26 June 2013 and 26 December 2013 Mr Kellahan failed to comply with orders of a disciplinary body.

Background

  1. [2]
    On 25 June 2012 this Tribunal handed down its decision in the matter of Legal Services Commissioner v Kellahan.[1]
  2. [3]
    The orders of the Tribunal in that instance included that Mr Kellahan was to pay to Mr Newitt (‘the Complainant’) the sum of $75,000.00 and also to pay the Commissioner’s costs in the agreed sum of $5,000.00. Mr Kellahan failed to comply with either of those orders.
  3. [4]
    The context in which the matter came before the Tribunal for its determination included submissions as to sanction, due to Mr Kellahan’s non-compliance, filed on behalf of both parties. 
  4. [5]
    Mr Kellahan offered to pay compensation in the sum of $75,000.00 to Mr Newitt. This was acknowledged by the Legal Services Commissioner as being made in circumstances where it was unlikely he could have been ordered to pay that amount.[2] 
  5. [6]
    The Commissioner submits that, in light of the compensation offered by Mr Kellahan, they did not argue that a fine was appropriate and were prepared to allow 6 months for their costs to be paid.
  6. [7]
    The Commissioner’s position is that, had the offer as to compensation not been made, their submissions as to sanction may have been “quite different”.[3]
  7. [8]
    Mr Kellahan also relied upon the offer concerning compensation in his submissions as to sanction filed 5 October 2011. Mr Kellahan submitted that his offer and agreement to pay the sum of $75,000.00 was a matter of significant weight going to his credit.  He asserted that any debt owing to the complainant was that of Mr Kellahan’s former employer, not his personally. Nonetheless, Mr Kellahan submits that he has no wish to see the complainant out of pocket in respect of his prior disciplinary matter and therefore made the offer of restitution despite there being no suggestion of dishonesty or fraud on his part.[4]
  8. [9]
    Prior to the Tribunal handing down its decision, the Commissioner became aware that Mr Kellahan had been declared bankrupt. In response to an inquiry seeking assurances as to the capacity to pay the compensation, Mr Kellahan’s representative replied that he “remains confident of his ability to discharge any order for compensation in the terms previously offered”.[5] 
  9. [10]
    Mr Kellahan filed affidavits sworn by him and also sworn by his sister Ms Prudence Jane Kellahan, on 18 September 2015.
  10. [11]
    Mr Kellahan swears that his inability to comply with the orders constituting the charge is not borne out by a deliberate refusal.  At the time the orders were made, he swears that he genuinely believed and expected that the payment of such orders could be sourced from a third party,[6] being his sister, Prudence Kellahan.
  11. [12]
    However, unforeseen circumstances arose both personally and professionally which meant that Ms Kellahan has been unable to make the payments as originally expected.[7]
  12. [13]
    Ms Kellahan deposes to the following:
    1. (a)
      At the time the original order was made, she was aware that her brother was impecunious and unable to make payment.  She reasonably thought that she would be able to make payment on his behalf.  However, since the order, there have been some personal and business difficulties that have arisen which have made it impossible for her to assist her brother financially.[8]
    2. (b)
      After the date of the order, Ms Kellahan gave birth to her son who was diagnosed with cerebral palsy and is profoundly deaf in both ears.  This has involved Ms Kellahan in unexpected and substantial expenses.[9]
    3. (c)
      Moreover, Ms Kellahan’s business has suffered financially since the making of the Tribunal’s orders.[10]
    4. (d)
      Ms Kellahan refers to the sale of a roadhouse business at substantial loss and the closure of two fitness businesses which incurred significant losses, but one of which may be the subject of a compensation claim against the Cairns Regional Council.[11]
    5. (e)
      The proceeds of sale from the unprofitable fitness centre and the expected compensation from the Cairns Regional Council funds may become available to assist her brother in complying with the orders, although when this might occur is uncertain.[12]
  13. [14]
    None of this evidence is challenged by the Commissioner.

The position of each party

  1. [15]
    Mr Kellahan admits that he did not comply with the orders of the Tribunal made on 25 June 2012.[13] 
  2. [16]
    Pursuant to s 420(1)(f) of the Legal Profession Act 2007 (Qld) (‘the Act’), conduct of an Australian legal practitioner in failing to comply with an order of a disciplinary body is capable of constituting unsatisfactory professional conduct or professional misconduct. 
  3. [17]
    The Legal Services Commissioner has referred to the case of Tsalidis,[14] where a legal practitioner failed to comply with an order requiring production of a report.  In that case it was concluded by the Tribunal that an insufficiently explained delay of the magnitude involved in complying with an order, which itself followed a finding of professional misconduct, must also be regarded as professional misconduct.[15]
  4. [18]
    The Legal Services Commissioner submitted that, following the decision of 25 June 2012, Mr Kellahan made no attempts to pay the compensation or the Commissioner’s costs, nor to contact the applicant or the Tribunal to explain this failure. Rather, he simply ignored the orders entirely.[16]
  5. [19]
    In Tsalidis, the Tribunal made a number of orders imposing conditions on the practitioner’s Practising Certificate.[17]
  6. [20]
    The Commissioner notes that in the current case, Mr Kellahan has, by his own choice, ceased to practice as a solicitor so that the option of imposing conditions on the Practising Certificate is not open to the Tribunal.
  7. [21]
    The Commissioner refers to the decision in LSC v Rowell[18] where the practitioner’s name was removed from the Roll in circumstances where the practitioner committed 4 counts of professional misconduct. In that case, the practitioner had ceased responding to the QLS during its investigations, closed his practice without informing the QLS, failed to respond to the discipline application and had effectively disappeared without seeking to address the matter in any way.[19]
  8. [22]
    In Rowell, the Tribunal accepted the applicant’s submission that the practitioner’s conduct constituted an admission that he no longer intended to adhere to professional standards.
  9. [23]
    The Legal Services Commissioner submits that in this case, the Tribunal may make the same finding and so the “only order appropriate in the circumstances is that the respondent be removed from the Roll of Practitioners”.[20]
  10. [24]
    Finally, the Legal Services Commissioner submits that Mr Kellahan’s conduct in effectively ignoring the orders of the Tribunal for more than 2 years, coupled with a failure to offer any explanation or to participate in the proceedings is a clear indication that Mr Kellahan is not a fit and proper person to be entrusted with the grave responsibilities of a solicitor – responsibilities which include respectful adherence to the orders of disciplinary bodies.[21]
  11. [25]
    On the other hand, Mr Kellahan, whilst admitting that he failed to make payments ordered by the Tribunal, submits that he should not be held responsible for failing to comply with the orders as he had a reasonable excuse.[22] Mr Kellahan submits that he reasonably expected to be able to satisfy payment of the amounts ordered by obtaining funds from a third party. However, for reasons beyond his control and which were not reasonably foreseen at the time, the funding has not been able to be made available to him.[23]
  12. [26]
    Based upon Mr Kellahan’s past and present impecuniosity, he submits that compliance with the Tribunal’s order has been a “practical impossibility”.[24] However, his inability to pay the amounts is not borne out by a deliberate refusal to comply with the orders of the Tribunal - rather, it is simply impossible for him to comply with these orders and therefore he has a reasonable excuse.[25]
  13. [27]
    Mr Kellahan has not engaged in work as a legal practitioner for some years and does not intend to return to the profession.  As a result, the protective aims of this jurisdiction can be adequately met by the recognition of Mr Kellahan’s departure from the profession.[26] 
  14. [28]
    Indicating that it is his intention to make payment to comply with the orders, Mr Kellahan submits that an order be made which prevents him from being issued with a practising certificate in the future unless and until payment of the amount ordered by the Tribunal is made.[27] If any additional sanction is thought necessary, then Mr Kellahan submits that he should also be publicly reprimanded.[28] 

Disposition of the matter

  1. [29]
    The question which is influential on the disposition of this application is whether the requirement contained in s 420(1)(f) of the Act is an absolute requirement which imposes strict liability for failure to comply with an order of the disciplinary body, regardless of the circumstances which led to that failure.
  2. [30]
    On its face, the wording does not obviously lead to that outcome.  For example, the opening words read “the following conduct is capable of constituting …” rather than “the following conduct constitutes …”
  3. [31]
    Use of these words must suggest that it is necessary to consider the background which led to the conduct to which s 420(1)(f) of the Act is said to apply. 
  4. [32]
    The principles which relate to applications for contempt may be of assistance when considering this position.
  5. [33]
    Non-compliance with the order of a Court is a common species of contempt.  However, a finding of contempt, on proof of the fact, is not necessarily inevitable.  For example, it is not possible to be in contempt of an order in the absence of knowledge of the order.  There can be no disobedience of an order that is insufficiently precise.  A finding of contempt predicates a reasonable conclusion that non-compliance is wilful, not merely casual, accidental or non-intentional.  Courts tend to treat evidence explaining non-compliance as being very relevant.
  6. [34]
    This excuse was inadequate in Environment Protection Authority v Keogh,[29] where the Court found that the claim for financial incapacity was not supported by any financial records and that the defendant informally admitted that compliance was “not a big operation”.
  7. [35]
    On the other hand, in Nelson v Cyran[30] the primary Judge, and the Court of Appeal, were satisfied that impecuniosity and other difficulties made it impossible for the respondent to take the action in question. Morrison JA observed, “as there was no challenge to those explanations, and (the party) was not cross examined, it is not surprising that they were accepted by the learned primary Judge”.[31]
  8. [36]
    In this case, the evidence of Mr Kellahan and his sister, Ms Kellahan have not been questioned.
  9. [37]
    In the circumstances, I am satisfied that there is a reasonable explanation for the conduct, being circumstances which, I find, were unexpected, not able to be predicted, and completely out of the control of the respondent.
  10. [38]
    The position would be entirely different were there any suggestion that the respondent had made the submissions concerning sanction, and undertaken the obligation, at a time when he was aware or even suspected that he may not be able to comply with the orders made.  As to that issue, he has sworn that, at the time the orders were made, he genuinely believed and expected that the payment of such orders could be sourced from a third party and, on that basis, provided the advice to the Legal Services Commissioner.[32]  Ms Kellahan had deposed to matters which were clearly unexpected and not able to be predicted and out of the control of the respondent. This evidence has not been the subject of challenge by the Legal Services Commissioner and so the finding of the Tribunal is that Mr Kellahan did have a genuine belief and expectation that he would be in a position to comply with the orders made. 
  11. [39]
    In other circumstances, a failure to comply with an order of a disciplinary body may lead to findings of either unsatisfactory professional conduct or professional misconduct. 
  12. [40]
    The other matter which has been raised by the Legal Services Commissioner relates to Mr Kellahan’s conduct in not contacting the Commissioner or the Tribunal or, indeed, the complainant to explain the failure. It appeared as if the respondent was simply ignoring the orders entirely.[33]
  13. [41]
    In these circumstances, when completely unexpected circumstances occur which are beyond the control of the practitioner, the practitioner should make contact with the Legal Services Commissioner and the person to whom the monies are to be paid to explain the failure.
  14. [42]
    Failure to do this represents a departure from the standard which is expected of an Australian legal practitioner.  It is a failure which relates to one particular matter and so is not a consistent or repeated failure to reach the standard expected.
  15. [43]
    On that basis, such failure is unsatisfactory professional conduct as that term is used in s 418 of the Act.

Sanction

  1. [44]
    Upon a finding that an Australian legal practitioner has engaged in unsatisfactory professional conduct, the Tribunal may make any order it thinks fit including any one or more of the orders set out in s 456 of the Act.[34]
  2. [45]
    The Commissioner has submitted that an order should be made recommending that Mr Kellahan’s name be removed from the local Roll of Practitioners.
  3. [46]
    This was put on the basis that Mr Kellahan’s failure to comply with the orders of the Tribunal amounted to professional misconduct and that the respondent had failed to file any evidence in the proceedings.
  4. [47]
    In the circumstances, given the explanation which has been provided by the practitioner, the Tribunal does not believe it warranted that the practitioner’s name be removed from the local Roll.
  5. [48]
    However, the Tribunal has found that the practitioner’s conduct in failing to make contact with the Legal Services Commissioner and the complainant did amount to unsatisfactory professional conduct.
  6. [49]
    The practitioner should be publically reprimanded and a fine should be imposed.

Costs

  1. [50]
    Upon a finding of unsatisfactory professional conduct, the Tribunal must make an order requiring the respondent to pay costs, including the costs of the Commissioner, unless the Tribunal is satisfied that exceptional circumstances exist.
  2. [51]
    In this case, the Tribunal does not believe that exceptional circumstances exist.  The Commissioner has sought an order that Mr Kellahan pay the Commissioner’s costs. 
  3. [52]
    It is ordered that Mr Kellahan pay the Commissioner’s costs assessed on the Supreme Court scale of costs.

Order

  1. [53]
    In the circumstances, the Tribunal orders that:
    1. Mr Kellahan be publicly reprimanded.
    2. A fine in the sum of $1,000.00 be imposed.
    3. Mr Kellahan not be issued with a Practising Certificate in the future unless and until:
      1. a)Payment of the sum of $75,000.00 be made to Alexander John Newitt.
      2. b)Payment of the sum of $5,000.00 be made to the Legal Services Commissioner.
      3. c)Payment of the fine in the sum of $1,000.00 be paid to the Legal Services Commissioner.
      4. d)Payment of the costs in relation to these proceedings be paid to the Legal Services Commissioner.

Footnotes

[1][2012] QCAT 263.

[2]Submissions of the Applicant as to sanction, filed 29 September 2011, at [32].

[3]Submissions of the Applicant, filed 18 September 2014 at [17].

[4]Submissions of the Respondent (attached to Submissions of the Applicant, filed 18 September 2014).

[5]Submissions of the Applicant, filed 18 September 2014, Exhibit C.

[6]Affidavit of Drew Adrian Kellahan sworn 17 September 2015 at [15].

[7]Ibid at [16].

[8]Affidavit of Prudence Jane Kellahan sworn 17 September 2015 at [5].

[9]Ibid at [6].

[10]Ibid at [7].

[11]Ibid at [8]-[21].

[12]Ibid at [22].

[13]Submissions of the Respondent filed 18 September 2015, at [2].

[14]Council of the Law Society of NSW v Tsalidis (No.4) [2012] NSWADT 230.

[15]Ibid at [86]-[90].

[16]Submissions of the Applicant, filed 18 September 2014 at [22].

[17]Ibid at [29].

[18][2013] QCAT 397 at [24].

[19]Legal Services Commissioner v Rowell [2013] QCAT 397 at [24].

[20]Submissions of the Applicant, filed 18 September 2014 at [32].

[21]Ibid, at [34].

[22]Submissions of the Respondent, filed 18 September 2015 at [3].

[23]Ibid at [4].

[24]Ibid at [5].

[25]Ibid at [7].

[26]Ibid at [8].

[27]Ibid at [10].

[28]Ibid at [11].

[29][2000] NSWLEC 237.

[30][2015] QCA 226.

[31]Ibid at [34].

[32]Affidavit of Drew Adrian Kellahan filed 18 September 2015 at [15].

[33]Submissions of the applicant, filed 18 September 2014 at [22].

[34]Legal Profession Act 2007 (Qld) s 456.

Close

Editorial Notes

  • Published Case Name:

    Legal Services Commissioner v Drew Adrian Kellahan

  • Shortened Case Name:

    Legal Services Commissioner v Kellahan

  • MNC:

    [2016] QCAT 113

  • Court:

    QCAT

  • Judge(s):

    Thomas P

  • Date:

    01 Feb 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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