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Legal Services Commissioner v Hannant[2016] QCAT 30

Legal Services Commissioner v Hannant[2016] QCAT 30

CITATION:

Legal Services Commissioner v Hannant [2016] QCAT 30

PARTIES:

Legal Services Commissioner

(Applicant/Appellant)

v

Laura Hannant

(Respondent)

APPLICATION NUMBER:

OCR045-14

MATTER TYPE:

Occupational Regulation matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Justice DG Thomas, President

Assisted by:

Mrs Joanne Collins, Legal panel member

Ms Julie Cork, Lay panel member

DELIVERED ON:

2 February 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The respondent is publicly reprimanded.
  2. There be a pecuniary penalty in the sum of $750.00.
  3. The respondent is to pay the applicant’s costs assessed on the Supreme Court scale of costs.
  4. Lisa Macumber may make any further submissions which she wishes to make in relation to the Notice of Intention to Seek Compensation Order and serve a copy upon Laura Hannant, by:

4:00pm on 2 March 2016.

  1. Laura Hannant must file any response she wishes to make as to the claim for a Compensation Order, by:

4:00pm on 16 March 2016.

CATCHWORS:

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – PROFESSIONAL MISCONDUCT OR UNSATISFACTORY PROFESSIONAL CONDUCT – where the applicant brought 4 charges against the respondent – where charges 2-4 were withdrawn – where respondent failed to make adequate costs disclosure to her client under sections 308 and 310 of the Legal Profession Act 2007 (Qld) – where no costs agreement was ever signed – where statement of agreed facts filed – where mitigating circumstances said to exist – whether respondent’s conduct constitutes professional misconduct or unsatisfactory professional conduct – nature of appropriate penalty

Legal Profession Act 2007 (Qld) ss 308, 310, 418, 419, 420, 456

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

Legal Services Commissioner v Madden (no 2) [2008] QCA 301

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

Charges

  1. [1]
    The Commissioner filed an application for disciplinary proceedings on the 7 March 2014, containing 4 charges.  On 3 July 2015, Carmody J granted leave to withdraw charges 2, 3 and 4. 
  2. [2]
    The remaining, and only, charge against Laura Hannant is that between 28 July 2011 and 12 March 2012 she failed to make proper cost disclosure to her client, Lisa Macumber.

Background

  1. [3]
    The parties have filed an agreed statement of facts. 
  1. [4]
    In so far as charge 1 is concerned, the agreed statement of facts records:

At all material times the respondent was retained by Lisa Macumber (“Macumber”) to pursue a family law matter, namely the obtaining of consent orders in a property matter between Macumber and her former husband (“the matter”) and acted for Macumber in that matter.

On or about 28 July 2011, Macumber consulted the respondent about the matter.

The respondent acted on Macumber’s behalf in pursuing the matter until 14 March 2012, when it was finalised by consent orders filed in the Family Court of Australia at Brisbane on 12 March 2012 and a property transfer of the marital home into Lisa Macumber’s and Lisa Macumber’s mother, Jenny Benson, on 14 March 2012.

  1. [5]
    The assertion made by the Commissioner in the discipline application is that at no time between 28 July 2011 and 12 March 2012, did the respondent provide cost disclosure to Macumber as required by ss 308 and 310 of the Legal Profession Act 2007 (Qld) (‘The Act’).[1]
  2. [6]
    That paragraph is not admitted by Ms Hannant.  However, in submissions filed on 6 July 2015, Ms Hannant accepts that no formal costs agreement was in Ms Macumber’s possession throughout the course of the matter.[2]
  3. [7]
    The Legal Services Commissioner suggests that a useful summary of evidence in respect of the complaint by Ms Macumber is to be found in an investigation report by Mr David John Edwards.[3]
  4. [8]
    In the submissions on behalf of the respondent Ms Hannant takes no issue with the background section of the Legal Services Commissioner’s written submission – that is, paragraph 1.5 relating to the report from Mr Edwards.[4]
  5. [9]
    As to what was provided by Ms Hannant to Ms Macumber, Mr Edwards concludes:
    1. (a)
      There is no evidence on the file of Ms Hannant having provided to Ms Macumber a costs agreement.[5]
    2. (b)
      Ms Hannant’s file note of the first meeting with Ms Macumber makes no mention of a costs agreement nor does it record any discussion about costs.[6]
    3. (c)
      However, there must have been some discussion about costs because Ms Macumber and Ms Hannant agree that a figure of $2,500 was mentioned.[7]
    4. (d)
      There is no record of Ms Macumber attending at Ms Hannant’s office and collecting an introductory letter.[8]
    5. (e)
      The file note of the second meeting between Ms Macumber and Ms Hannant on 31 August 2011 makes no reference to any discussion concerning payment of any money.[9]
    6. (f)
      There is a strong circumstantial case that Ms Hannant did not provide either the costs agreement or an introductory letter to Ms Macumber.[10]
    7. (g)
      “It is a little more than curious” that in a matter where virtually all communications were by email neither the costs agreement nor the introductory letter were provided by email.[11]
    8. (h)
      There is no evidence of any signed costs agreement on the file.[12]
    9. (i)
      There was nothing in either of the costs agreement or the introductory letter (which may never have been provided to Ms Macumber in any event) to indicate that Ms Macumber was notified of the matters in ss 308(1)(b), (d), (e), (f), (g), (h), (i), (j) and (k) of the Act.[13]
    10. (j)
      It might reasonably be concluded that Ms Hannant has not given cost disclosure as required by s 308 of the Act.[14]
    11. (k)
      Even though the amount of the bill was within the range of estimates, there was no indication at all in either of the costs agreement or the introductory letter as to the factors that would influence where, in the broad range specified ($1,500.00 to $18,000.00) the final account was likely to be.[15]
    12. (l)
      It could not seriously be argued that the charges outlined in the costs agreement are, of themselves, excessive.[16] 
    13. (m)
      The rates set out are quite modest.[17]
  6. [10]
    Mr Edward’s affidavit exhibits the original online complaint form which was completed by Ms Macumber.[18] There was also other correspondence which was originated by both Ms Hannant and Ms Macumber which sets out differing versions of the various discussions which took place.
  7. [11]
    None of that evidence was tested in any way because of the fact that the parties opted for a hearing on the papers. 

The position of each of the parties

  1. [12]
    The Commissioner submits that Ms Hannant failed to provide costs disclosure to Ms Macumber as required by ss 308 and 310 of the Act and that the intention of the legislature in this regard is to provide a mechanism by which clients are fully informed, at the earliest opportunity, about how costs are to be calculated and remedies available to the client in the event of a dispute about costs.[19]
  2. [13]
    The Commissioner submits that Ms Hannant’s lack of compliance with the Act 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, and so should be regarded as unsatisfactory professional conduct. 
  3. [14]
    The Commissioner submits that the respondent should be publicly reprimanded and ordered to pay a fine.
  4. [15]
    The Commissioner notes that a compensation order has been sought by Ms Lisa Macumber. 
  5. [16]
    In response, Ms Hannant accepts charge 1 on the basis that it amounts to unsatisfactory professional conduct.[20]
  6. [17]
    Ms Hannant submits that, whilst no formal cost agreement was in Ms Macumber’s possession throughout the course of the matter there are important matters of mitigation to be considered.[21]
  7. [18]
    Those important matters of mitigation, as asserted by Ms Hannant, are:
    1. (a)
      There was never any intention on the part of Ms Hannant to make anything other than full disclosure to her client.  An introductory letter to Ms Macumber enclosing the costs agreement and relevant disclosure materials was prepared immediately following the consultation on 28 July 2011.  The letter was marked “to be collected”.  Contrary to Ms Hannant’s understanding it seems that the letter was not collected by Ms Macumber.  In that respect, Ms Hannant accepts that she should have taken proactive steps to ensure Ms Macumber was in receipt of the letter and the costs agreement and not merely assumed that they had been collected.[22]
    2. (b)
      It is accepted in the investigation report (which is exhibited DJE8 to Mr Edwards affidavit) at paragraph 27 that costs were discussed between the respondent and Ms Macumber at the first appointment because each confirms that the figure of $2,500.00 was mentioned.
    3. (c)
      Ms Hannant’s conduct was not borne out of any deliberate intent or misconduct.  Rather it was an oversight; a mistake and assumption that the cost material prepared had been collected by the client.  At all material times Ms Hannant believed that her client was in possession of full disclosure material.[23]
    4. (d)
      There is no aspect of dishonesty alleged, or evident, in the conduct in question.[24]
    5. (e)
      There is no suggestion of her overcharging.  Indeed the investigation report suggests that rates charged are quite modest.[25]
    6. (f)
      The conduct in question goes no further than the fact that proper cost disclosure was not made.  The charge is unaccompanied by any suggestion of overcharging, deliberate misconduct or dishonesty, taking advantage of a vulnerable client, or such other matters of aggravation.[26]
  8. [19]
    The respondent accepts that her conduct, on this one occasion, fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner. However, asserts that it was not a substantial or consistent failure to reach such a standard, with the result that the conduct amounts to unsatisfactory professional conduct but not professional misconduct.[27] 
  9. [20]
    The respondent accepts that a public reprimand is appropriate but submits that the imposition of a fine is unnecessary.[28] 
  10. [21]
    The respondent refers to a number of cases, which although not relating to cost agreement issues related to more serious conduct, including dishonesty, and which resulted in a public reprimand but not a fine.[29]
  11. [22]
    The respondent points to the factors that:
    1. (a)
      The respondent has practised as a solicitor since 2004 with no previous disciplinary findings.[30]
    2. (b)
      The respondent has learned from the experience and has instituted revised procedures and policies as a means of avoiding similar issues in the future.[31]
    3. (c)
      The respondent has endured the stress and anxiety of the applicant’s investigation and the proceedings over a number of years.[32]
    4. (d)
      The respondent has expended her own funds in retaining representation to respond to the proceedings.[33] 

Disposition of the matter

  1. [23]
    From the information which is common ground between the parties, the Tribunal finds that the respondent failed to disclose to her client the information which was required to be disclosed pursuant to s 308(1) of the Act.
  2. [24]
    Section 420 of the Act provides that conduct which constitutes a contravention of a relevant law is conduct which is capable of constituting unsatisfactory professional conduct or professional misconduct.
  3. [25]
    The Legal Profession Act 2007 is a relevant law.
  4. [26]
    Section 418 of the Act provides that unsatisfactory professional conduct includes conduct which 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.
  5. [27]
    Section 419 of the Act provides that professional misconduct includes unsatisfactory professional conduct if the conduct involves a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence. 
  6. [28]
    The conduct of Ms Hannant fell 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 and so amounts to unsatisfactory professional conduct.
  7. [29]
    Upon a finding that conduct amounts to unsatisfactory professional conduct the Tribunal may make any order it thinks fit including one or more of the orders outlined in s 456 of the Act.
  8. [30]
    The Commissioner has sought orders that the practitioner be publicly reprimanded and also that a fine be imposed.
  9. [31]
    Ms Hannant submits that the penalty should be limited to a public reprimand and raises matters said to be in mitigation. 
  10. [32]
    From the online complaint and the correspondence exhibited to the affidavit of Mr Edwards, it seems that there is some dispute regarding the practitioner’s right to charge and also whether there exists any element of overcharging.  In any event, on the evidence which was filed and tested it is not possible to make any finding about those issues.  Moreover, because charges 2, 3 and 4 were withdrawn and the Commissioner proceeded just with respect to charge 1, it is not necessary or appropriate for the Tribunal to consider the issues such as overcharging, and no finding is made about that issue.
  11. [33]
    The Tribunal notes that other avenues would be available to the client with respect to those issues. 
  12. [34]
    As to the sanction, it is relevant that the practitioner did prepare the relevant documents which, as a result of what appears to be a misunderstanding, were never collected by Ms Macumber.
  13. [35]
    Of course, the report from Mr Edwards suggests that, even if the documents had been collected by Ms Macumber, they may not have fully complied with the obligations under s 308 of the Act.
  14. [36]
    Again, it is not necessary to make specific findings about those matters because, of course, the documents were never delivered and the costs agreements were never signed.
  15. [37]
    The Tribunal also takes into account that the respondent has been in practice since 2004 with no disciplinary allegations against her, that she has cooperated with the Legal Services Commissioner in relation to these proceedings and has instituted revised procedures and practices as a means of avoiding similar issues in the future.
  16. [38]
    That said, requirements such as those outlined in s 308 of the Act are a very important mechanism by which clients are fully informed, in a timely way, about their rights concerning cost issues.  The legal profession must clearly understand that strict compliance with obligations such as those contained in s 308 of the Act is of utmost importance.
  17. [39]
    Disciplinary penalties are not imposed as punishment but rather in the interest of protection of the community.[34] The aspect of protection of the community includes deterring practitioners from being involved in similar conduct. 
  18. [40]
    With that deterrent effect in mind, the Tribunal considers that a fine is appropriate but, in assessing the level of a fine, has taken into account the matters outlined above.
  19. [41]
    It is ordered that:
    1. The practitioner be publicly reprimanded.
    2. There be a fine in the sum of $750.00.

Costs

  1. [42]
    The Commissioner seeks an order for costs assessed pursuant to s 462(5) of the Act.
  2. [43]
    Upon a finding that the practitioner’s conduct amounts to unsatisfactory professional conduct, the Tribunal must make an order that the practitioner pay costs including the costs of the Commissioner and the complainant unless the Tribunal is satisfied that exceptional circumstances exist.[35]
  3. [44]
    No exceptional circumstances exist in this case. 
  4. [45]
    Pursuant to s 462(5) of the Act, an order for costs may be made for a stated amount[36] or if for unstated amount must state the basis upon which the amount must be decided.[37]
  5. [46]
    No information has been provided to enable the Tribunal to make an order for payment of a stated amount.
  6. [47]
    The Tribunal orders that the respondent pay the applicant’s costs assessed on the Supreme Court scale of costs.

Compensation orders

  1. [48]
    The Legal Services Commissioner has indicated that a compensation order is sought by Ms Macumber.
  2. [49]
    The claim which has been lodged by Ms Macumber indicates that Ms Macumber wishes ‘to be compensated for all monies Ms Hannant has received from me including direct transfer payments and the money held in trust as at the date which the disciplinary proceedings are concluded.  The specific amount will depend upon the date as to how much further monies I have paid.[38]  Ms Macumber continues ‘I have therefore decided that I wish to be compensated the entire amount of all monies paid to and held by Ms Laura Hannant relating to this matter’.[39] 
  3. [50]
    Section 464 of the Act defines a compensation order as including an order that a law practice cannot recover or must repay the whole or a stated part of the amount that the law practice charged a complainant for stated legal services.[40]  Section 464 is contained in the part of the Act dealing with complaints and discipline.
  4. [51]
    The Notice of Intention to Seek Compensation Order was given at a time before the Commissioner discontinued charges 2, 3 and 4 which related more expansively to the practitioner’s conduct than charge 1 which was limited to failing to make costs disclosure.
  5. [52]
    The claim for a Compensation Order must be framed by reference to the charge.
  6. [53]
    Ms Hannant has not yet responded to the Notice of Intention to Seek Compensation Order.  Ms Macumber may wish to make further submissions based upon the charge which was actually the subject of the proceedings and the decision which has been made by this Tribunal.
  7. [54]
    In those circumstances, the Tribunal will allow the complainant and the respondent to make whatever further submissions they wish to make before considering the claim for a Compensation Order.
  8. [55]
    The Tribunal therefore orders that:
    1. Lisa Macumber make any further submissions which she wishes to make in relation to Notice of Intention to Seek Compensation Order and serve a copy upon Laura Hannant, by:

4:00pm on 2 March 2016.

  1. Laura Hannant must file any response she wishes to make as to the claim for a Compensation Order, by:

4:00pm on 16 March 2016.

  1. [56]
    If either of Ms Macumber or Ms Hannant require further time to make those submissions they are invited to approach the Tribunal.

Footnotes

[1]Application or referral – disciplinary proceedings filed 7 March 2014, paragraph 1.4.

[2]Submissions on behalf of the respondent filed 6 July 2015, paragraph 8.

[3]Applicant’s submissions in reply filed 22 July 2015, exhibit DJE8, affidavit of David John Edwards, paragraph 1.5 page 2.

[4]Submissions on behalf of the respondent filed 6 July 2015, paragraph 5.

[5]Investigation report of David Edwards dated 8 August 2013, paragraph 34.

[6]Ibid, paragraph 27.

[7]Ibid, paragraph 27.

[8]Ibid, paragraph 28.

[9]Ibid, paragraph 29.

[10]Ibid. paragraph 35.

[11]Ibid, paragraph 36.

[12]Ibid, paragraph 38.

[13]Ibid, paragraph 50.

[14]Ibid, paragraph 51.

[15]Ibid, paragraph 47 & 54.

[16]Ibid, paragraph 93.

[17]Investigation report of David Edwards dated 8 August 2013, paragraph 94.

[18]Affidavit of David John Edwards sworn 18 March 2015, exhibit DJE1.

[19]Applicant’s submissions in reply filed 22 July 2015, page 5 paragraph 2.

[20]Submissions on behalf of the respondent filed 6 July 2015, paragraph 2.

[21]Ibid, paragraphs 7 & 8.

[22]Submissions on behalf of the respondent filed 6 July 2015, paragraph 8.

[23]Ibid, paragraph 10.

[24]Ibid, paragraph 11.

[25]Ibid paragraph 12.

[26]Ibid, paragraph 14.

[27]Ibid, paragraph 15.

[28]Ibid, paragraph 17.

[29]Ibid, paragraph 18.

[30]Submissions on behalf of the respondent filed 6 July 2015, paragraph 19(a).

[31]Ibid, paragraph 19(b).

[32]Ibid, paragraph 19(c).

[33]Ibid, paragraph 19(d).

[34]Legal Services Commissioner v Madden (no 2) [2008] QCA 301.

[35]Legal Profession Act 2007 (Qld) s 462(1).

[36]Ibid, s 462(5)(a).

[37]Ibid, s 462(5)(b).

[38]Notice of Intention to Seek Compensation Order filed on 6 June 2014, page 1.

[39]Ibid, page 2.

[40]Legal Profession Act 2007 (Qld) s 464(a).

Close

Editorial Notes

  • Published Case Name:

    Legal Services Commissioner v Laura Hannant

  • Shortened Case Name:

    Legal Services Commissioner v Hannant

  • MNC:

    [2016] QCAT 30

  • Court:

    QCAT

  • Judge(s):

    Thomas P

  • Date:

    02 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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