Legal Services Commissioner v Devery
[2017] QCAT 155
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Legal Services Commissioner v Devery[2017] QCAT 155
- Add to List
Legal Services Commissioner v Devery[2017] QCAT 155
Legal Services Commissioner v Devery[2017] QCAT 155
CITATION: | Legal Services Commissioner v Devery [2017] QCAT 155 |
PARTIES: | Legal Services Commissioner (Applicant) v Julie Theresa Devery (Respondent) |
APPLICATION NUMBER: | OCR178-16 |
MATTER TYPE: | Occupational regulation matters |
HEARING DATE: | 2 May 2017 |
HEARD AT: | Brisbane |
DECISION OF: | Justice DG Thomas, President Assisted by: Dr John de Groot (Legal panel member) Ms Julie Cork (Lay panel member) |
DELIVERED ON: | 10 May 2017 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – UNSATISFACTORY PROFESSIONAL CONDUCT – where respondent acted on behalf of two clients who purchased property as tenants in common in equal shares – where respondent prepared and held a deed between the clients for an unregistered transfer in favour of one client until the other client paid the balance of the purchase price – where respondent then acted for the other client in the sale of his interest in the property to a third party – where respondent admits to all facts and characterisation as unsatisfactory professional conduct – whether conflict of duty and duty – whether professional misconduct or unsatisfactory professional conduct – whether fine an appropriate penalty Legal Profession Act 2007 (Qld) ss 418, 419, 423, 456, 462 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 32 Adamson v Queensland Law Society Incorporated [1990] 1 Qd R 498 Legal Services Commissioner v Hinschen [2015] QCAT 122 Legal Services Commissioner v Madden (No 2) [2008] QCA 301 |
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’).
REASONS FOR DECISION
- [1]The Commissioner alleges that in August 2001, Ms Devery committed unsatisfactory professional conduct or professional misconduct by failing to act with the competence and diligence expected by a member of the public from a reasonably competent legal practitioner.
- [2]An application for referral – disciplinary proceedings was filed on 4 October 2016.
- [3]A statement of agreed facts was filed on 6 October 2016.
- [4]At a directions hearing on 13 December 2016, an order was made by consent of each party that the matter be heard on the papers after 1 March 2017.
Background
- [5]From the statement of agreed facts, the Tribunal makes the findings set out in the following paragraphs (6 to 15).
- [6]Ms Devery acted on behalf of Mr Kandetzki and Mr Ball, concerning the purchase of a property.
- [7]The clients purchased the property as tenants in common in equal shares.
- [8]A deposit of $10,000 was paid, with each client being required to pay $20,000 to settle the contract.
- [9]Mr Kandetzki advanced $20,000 to Mr Ball to enable him to complete the purchase of his half share in the property. Mr Ball executed an unregistered transfer in favour of Mr Kandetzki of Mr Ball’s half share in the property.
- [10]It was agreed that Ms Devery would hold the unregistered transfer in safe custody pending Mr Ball’s repayment of the sum of $20,000 to Mr Kandetzki.
- [11]Ms Devery prepared a Deed dated 30 July 2001 between Mr Kandetzki and Mr Ball, incorporating the agreed terms. The Deed, and the unregistered transfer, were held in safe custody by Ms Devery.
- [12]In or about July 2003, Ms Devery prepared a contract for sale of Mr Ball’s interest in the property to Mr Blackburn, along with a transfer.
- [13]Ms Devery acted for Mr Ball in the transaction, and the half share was transferred.
- [14]Ms Devery knew or ought to have known that Mr Kandetzki held an equitable interest, mortgage or charge over Mr Ball’s half share of the property.
- [15]Ms Devery did not inform Mr Kandetzki that Mr Ball had sold his half share in the property.
- [16]The parties have also agreed that:
- Ms Devery breached her fiduciary duty to Mr Kandetzki by preparing a transfer of Mr Ball’s held interest in the property without the knowledge or consent of Mr Kandetzki;
- Ms Devery preferred the interests of Mr Ball over the interests of Mr Kandetzki by acting for Mr Ball in the sale of his half share;
- Ms Devery failed to act in the best interests on Mr Kandetzki by either withdrawing from acting for Mr Ball or referring Mr Ball to independent legal advice when she knew or ought to have known that Mr Kandetzki had an equitable interest over Mr Ball’s half share in the property.
The Conduct
- [17]Section 418 of the Legal Profession Act 2007 (Qld) (‘LPA’) provides that unsatisfactory professional conduct includes 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.
- [18]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.[1]
- [19]Thomas J formulated the test for professional misconduct as follows:
“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”.[2]
- [20]The LPA came into force on 1 July 2007. The Commissioner submitted that the relevant conduct occurred after the commencement of the Act and so should be assessed by reference to the statutory definitions provided in sections 418 and 419 LPA.
- [21]That is incorrect. The conduct occurred in 2003.
- [22]Section 423 LPA provides that the relevant chapter applies to “conduct of an Australian legal practitioner happening in this jurisdiction whether before or after the commencement of this section.”
- [23]The conduct, therefore, is caught by the provisions of the LPA.
- [24]The Commissioner submits that the charge arose from Ms Devery’s failure to consider the interests of her client Mr Kandetzki, when she transferred Mr Ball’s half share in the jointly owned property in circumstances where she knew or ought to have known that Mr Kandetzki held an equitable interest, mortgage or charge over Mr Ball’s half share.[3]
- [25]The Commissioner asserts that, in effecting the transfer, the respondent:
- Did not seek confirmation from Mr Kandetzki as to whether his loan had been satisfied;
- Failed to inform Mr Kandetzki that Mr Ball had sold his half share;
- Breached her fiduciary duty to Mr Kandetzki by preparing the transfer without the knowledge or consent of Mr Kandetzki; and
- Failed to act in the best interest of Mr Kandetzki.
- [26]The Commissioner submits that, having regard to previous decisions of the Tribunal,[4] the practitioner’s conduct falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent practitioner, and so should be regarded as unsatisfactory professional conduct.[5]
- [27]Ms Devery accepts the submissions made by the Commissioner and submits:
- An employee was engaged by Ms Devery to cross-reference safe custody packets, and she relied upon that cross-referencing;
- Ms Devery was not aware of any other matters that were inadequately cross-referenced;
- Ms Devery’s records for safe custody are held by the Queensland Law Society;
- Mr Kandetzki entered judgment against Ms Devery for a sum of money which totalled significantly more than the amount owning by Mr Ball to Mr Kandetzki.
- [28]The facts of this case demonstrate the dangers associated with a legal practitioner acting on behalf of more than one party to any transaction, even commercial transactions where, at the time the lawyer acts, the interests of the two clients are not in conflict.
- [29]As a result of acting in such transactions, the lawyer will obtain information about both sides which, in the event of a dispute, the lawyer may be under a duty to disclose to the other party. The lawyer therefore potentially places himself or herself in a position of conflict of duty and duty.
- [30]At the least, a lawyer should, if there is no alternative other than to act for parties in a non-contentious transaction, define what will happen in the event that the position between the parties becomes contentious. It is essential to define what the lawyer will do in those circumstances so that neither of the clients is at a disadvantage or in any way confused about what will happen. For example, the retainer might be on the basis that any information provided to the practitioner will be communicated to all clients, for whom the practitioner is acing in the matter. The retainer might also define, in advance, the circumstances in which the practitioner will withdraw from acting.
- [31]There is no evidence that Ms Devery took any steps in this respect. The document which was prepared endeavoured to define what Ms Devery would do under certain circumstances in relation to repayment of the sum of $20,000.[6] However, even in that situation, an essential date was omitted from the document so that Ms Devery’s instructions, as to the limited aspect to which the Deed related, were not clear or defined.
- [32]When asked to convey the property on behalf of Mr Ball, Ms Devery did not inform Mr Kandetzki, or attempt to give him any advice. Of course, this may have conflicted with the duty owed to Mr Ball, but not doing so was in breach of her duty to Mr Kandetzki.
- [33]Ms Devery placed herself in an impossible position of conflict of duty and duty as a result of her having acted in the transaction and not defined the extent of her continuing retainer.
- [34]As a result, her client Mr Kandetzki, suffered a loss.
- [35]The conduct of Ms Devery fell short of the standard of competence and diligence that a member of the public is entitled to expect of reasonably competent Australian legal practitioners and therefore amounts to unsatisfactory professional conduct.
- [36]The conduct occurred on just one occasion and in the context of one matter. It cannot be described as substantial or a consistent failure, and under those circumstances does not amount to professional misconduct.
Sanction
- [37]The Tribunal has found that Ms Devery’s conduct amounted to unsatisfactory professional conduct. In those circumstances, the Tribunal may, pursuant to section 456 LPA, make any order it thinks fit, including the orders listed in section 456 LPA.
- [38]It is uncontroversial that sanctions imposed by the Tribunal in disciplinary matters are not imposed as punishment of the practitioner, but rather imposed in the interests of the protection of the public and the maintenance of the proper professional standards.[7]
- [39]The Commissioner has submitted that the following orders should be made;
- Public reprimand;
- A pecuniary fine between $2,000 and $3,000.
- [40]Ms Devery has submitted that:
- Ms Devery has no assets;
- Ms Devery is employed on a contract basis;
- Ms Devery’s weekly income for the last financial year amounted to $400, paid sporadically, when clients paid invoices.
- [41]Ms Devery submitted that the Tribunal should consider the financial impact of a pecuniary fine on the respondent and, regardless of the amount of fine imposed, Ms Devery requested time to pay.
- [42]Ms Devery was admitted to practice as a solicitor of the Supreme Court of Queensland in March 1984.
- [43]Ms Devery has a previous finding by a disciplinary body. In 2011, she admitted five charges, two of which involved failing to act with competence and diligence. The conduct which led to that matter occurred in 2009, six years after the occurrence of the conduct in this matter.
- [44]In terms of sanction, a significant factor in this case is the maintenance of proper professional standards in the legal profession. Other practitioners must be deterred from being involved in similar conduct which involves acting for both sides in a transaction and not taking adequate steps to manage the conflicts and in that context accurately defining the role of the legal practitioner.
- [45]For that reason, the Tribunal believes that a public reprimand and a fine are necessary.
- [46]In the case referred to by the Legal Services Commissioner,[8] the Tribunal imposed a fine in the sum of $1,500, in circumstances where the practitioner failed to maintain reasonable standards of competence and diligence.
- [47]The Tribunal orders that:
- The practitioner be publically reprimanded;
- A pecuniary fine in the sum of $1,500 be paid by the practitioner, such sum to be paid by equal monthly payments over a period of 18 months from the date of this order.
Costs
- [48]The Commissioner seeks an order for costs to be assessed pursuant to section 462(5) LPA.
- [49]Ms Devery accepts the submissions made by the Commissioner but requests that the Tribunal takes into account the financial impact of the costs order on the respondent.[9] Regardless of the costs order imposed, Ms Devery requests time to pay the costs.
- [50]When the Tribunal makes a finding of unsatisfactory professional conduct, the Tribunal must make an order requiring the practitioner to pay the costs, unless the Tribunal is satisfied that exceptional circumstances exist.[10]
- [51]The ability of the respondent to pay is not an exceptional circumstance as that term is used in section 462(1) LPA.
- [52]The Tribunal finds that there are no exceptional circumstances which are relevant.
- [53]On that basis, the Tribunal orders that the respondent pay the applicant’s costs assessed.
- [54]The respondent is to 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.
- [55]The Tribunal orders that the costs be paid by equal monthly instalments over a period of 24 months from the date the costs are assessed in accordance with the QCAT Rules, and the amount of the assessment is notified to the respondent.
Footnotes
[1]Legal Profession Act 2007 (Qld) s 419.
[2]Adamson v Queensland Law Society Incorporated [1990] 1 Qd R 498 at 507.
[3]Submissions on Behalf of the Applicant, filed 6 February 2017 at [18].
[4]For example, Legal Services Commissioner v Hinschen [2015] QCAT 122.
[5]Submissions on Behalf of the Applicant, filed 6 February 2017 at [20] – [21].
[6]Statement of Agreed Facts, filed 6 February 2017, Annexure 2: Deed of Transfer dated 30 July 2001.
[7]Legal Services Commissioner v Madden (No 2) [2008] QCA 301.
[8]Legal Services Commissioner v Hinschen [2015] QCAT 122.
[9] Submissions on Behalf of the Respondent, filed 27 February 2017, Part F: Costs (a).
[10]Legal Profession Act 2007 (Qld) s 462(1).