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- Unreported Judgment
Legal Services Commissioner v Fellows QCAT 337
Legal Services Commissioner v Fellows  QCAT 337
Legal Services Commissioner
Michael Arthur Fellows
Occupational Regulation Matters
On the papers
The Hon. Justice Martin Burns
Mr Thomas Bradley QC
Practitioner Panel Member
Dr Margaret Steinberg AM
Lay Panel Member
6 October 2017
The Tribunal, being satisfied that the respondent, Michael Arthur Fellows, engaged in professional misconduct, makes the following orders:
within 42 days.
PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – PROFESSIONAL MISCONDUCT – where the respondent was charged and convicted of various tax offences in 2001, 2006 and 2011 – where the respondent pleaded guilty to each such offence in the Magistrates Court at Townsville and was fined – where application for disciplinary orders against the respondent was subsequently brought by the applicant Commissioner pursuant to s 452 of the Legal Profession Act 2007 (Qld) – where three charges were preferred against the respondent by which it was alleged that he had engaged in unsatisfactory professional conduct or professional misconduct – where the conduct underlying the convictions and about which the charges were concerned consisted of omissions occurring over a period in excess of 12 years and across the successive disciplinary regimes established by the Queensland Law Society Act 1952 (Qld), the Legal Profession Act 2004 (Qld) and the Legal Profession Act 2007 (Qld) – whether the respondent engaged in unsatisfactory professional conduct or professional misconduct – whether disciplinary orders should be made pursuant to s 456 of the Legal Profession Act 2007 (Qld) – whether the respondent should be ordered to pay the Commissioner’s costs of the application
Queensland Law Society Act 1952 (Qld), s 3B, s 6A
Legal Profession Act 2004 (Qld), s 418, s 419, s 420
Legal Profession Act 2007 (Qld), s 244, s 245, s 246, s 456, s 462, s 724
Taxation Administration Act 1953 (Cth), s 8C
Allinson v General Council of Medical Education and Registration  1 QB 750, followed
Gee v General Medical Council  1 WLR 564, cited
In the matter of an application for admission as a legal practitioner by MCF  QCA 154, cited
Johnson v Miller (1937) 59 CLR 467, cited
Legal Services Commissioner v Cain  LPT 19, discussed
Legal Services Commissioner v Donnelly  QCAT 569, discussed
Legal Services Commissioner v Hewlett  2 Qd R 292, discussed
Legal Services Commissioner v Laurie  QCAT 335, discussed
Legal Services Commissioner v Lee  QCAT 447, discussed
R v General Medical Council, Ex parte Gee  1 WLR 226, cited
R v L; ex parte Attorney-General for Queensland  2 Qd R 63, cited
Walsh v Tattersall (1996) 188 CLR 77, cited
Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279, followed
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
Ms P Prasad for the Legal Services Commissioner
Mr Fellows acted on his own behalf
REASONS FOR DECISION
- This application for disciplinary orders against Michael Arthur Fellows, a legal practitioner, was brought by the Legal Services Commissioner pursuant to s 452 of the Legal Profession Act 2007 (Qld). It is founded on the respondent’s convictions for various tax offences in 2001, 2006 and 2011, and proceeded on a Statement of Agreed Facts.
- Three charges were alleged under cover of the discipline application (filed on 10 February 2014) and each was admitted by the respondent in his response (filed on 14 April 2014). The respondent also readily accepted in his response that his conduct had been “unprofessional”. Furthermore, in submissions (filed on 18 August 2014), the respondent did not cavil with the Commissioner’s submissions (filed on 18 July 2014) regarding the appropriate sanction or as to the question of costs.
- The respondent is a barrister in private practice in Townsville. He started in the profession as a solicitor, having been admitted as such on 5 February 1980. Then, on 20 September 1993, he was called to the bar. He is presently 61 years of age.
- Charge 1 was constituted by the respondent’s failure to lodge income tax returns for the 1998 and 1999 financial years in contravention of s 8C(1)(a) of the Taxation Administration Act 1953 (Cth). On 13 March 2001, he pleaded guilty in the Magistrates Court in Townsville to two offences of contravening that provision, and was convicted and fined the sum of $2,000. The fine was duly paid.
- Charge 2 was constituted by three further contraventions of the same provision. These concerned the respondent’s failure to lodge income tax returns for the 2002, 2003 and 2004 financial years. On 27 February 2006, he pleaded guilty in the Magistrates Court in Townsville to each offence and was convicted and fined the sum of $5,000. Again, the fine was duly paid.
- Charge 3 also concerned three contraventions of the same provision although, in these instances, the respondent failed to lodge GST returns (which the Tribunal assumes is a shorthand reference to Business Activity Statements) for the September and December quarters in 2010 and the March quarter in 2011. On 5 September 2011, he pleaded guilty to each offence in Magistrates Court in Townsville and was convicted and fined the sum of $15,000. It, too, was duly paid.
The correct characterisation of the conduct making up the charges
- It is important to keep in mind for what immediately follows that the Commissioner relies on the conduct for which the respondent was convicted, as opposed to the convictions which followed, to ground each of the charges. Furthermore, it is that conduct which is admitted by the respondent in his response and it is that conduct which makes up each of the charges. As Fullagar J observed in a different context in Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279, 288, it is necessary to look behind the conviction for an offence in order to consider the “real facts of the case” (and see, to the same effect, In the matter of an application for admission as a legal practitioner by MCF  QCA 154,  - ).
- That made clear, the omissions underlying the respondent’s convictions occurred over a period in excess of 12 years and spanned three successive disciplinary regimes, that is to say, those established by the Queensland Law Society Act 1952 (Qld), the Legal Profession Act 2004 (Qld) and the Legal Profession Act 2007 (Qld).
- So far as Charge 1 and two of the three lodgment failures making up Charge 2 (being the income tax returns for the 2002 and 2003 financial years) are concerned, the relevant omissions occurred before the coming into effect on 1 July 2004 of the 2004 Act. As such, they fall to be assessed by reference to the definition of “unprofessional conduct or practice” in s 3B of the QLS Act and the common law definition of “professional misconduct”. That is because, although “professional misconduct” was an expression used in the QLS Act as a basis for a disciplinary charge (see, s 6A), it was not defined.
- Before its repeal, s 3B of the QLS Act was in these terms:
- (1)A practitioner commits ‘unprofessional conduct or practice’ if the practitioner, in relation to the practitioner’s practice, is guilty of—
- (a)serious neglect or undue delay; or
- (b)the charging of excessive fees or costs; or
- (c)failure to maintain reasonable standards of competence or diligence; or
- (d)conduct described, under another Act, as unprofessional conduct or practice.
- (2)Subsection (1) does not, by implication, limit the type of conduct or practice that may be regarded as unprofessional for this Act.
- At common law, “professional misconduct” will be constituted by conduct that would reasonably be regarded as disgraceful or dishonourable by fellow practitioners of good repute and competency: Allinson v General Council of Medical Education and Registration  1 QB 750, 768; Legal Services Commissioner v Lee  QCAT 447, .
- In the case of the remaining lodgment failure making up Charge 2 (being the income tax return for the 2004 financial year), the relevant omission occurred during the currency of the 2004 Act and before the commencement on 1 July 2007 of the 2007 Act; the relevant obligation (to lodge an income tax return) having arisen after the end of the financial year to which the return related. As such, even though that omission might be relevant to whether conduct occurring after the commencement of the 2007 Act amounts to “unsatisfactory professional conduct” or “professional misconduct” (2007 Act, s 724(2)), the failure to lodge the 2004 income tax return is something that must be considered in accordance with the definitions contained in the 2004 Act.
- Under the 2004 Act, “unsatisfactory professional conduct” was defined to include “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”: s 244. Section 245 then defined “professional misconduct in these terms:
- (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.
- In addition, by s 246(c)(ii) of the 2004 Act, “conduct for which there is a conviction for a tax offence” is “capable of constituting unsatisfactory professional conduct or professional misconduct”. The Dictionary (Schedule 5) defines “tax offence” to mean “an offence under the Taxation Administration Act 1953 (Cth), whether committed in or outside this jurisdiction”.
- So far as the conduct making up Charge 3 is concerned, it must be assessed by reference to the definitions contained in the 2007 Act. In that regard:
- (a)“unsatisfactory professional conduct” is defined by s 418 in terms that are identical to s 244 of the 2004 Act;
- (b)“professional misconduct” is defined by s 419 in terms that are materially the same as s 245 of the 2004 Act;
- (c)s 420(c)(ii) is expressed in terms that are materially the same as s 246(c)(ii) of the 2004 Act; and
- (d)“tax offence” is defined in the Dictionary (Schedule 2) in the same terms as it is defined in the Dictionary to the 2004 Act.
- It will be noticed that Charge 2 relies on conduct straddling the regimes under the 2004 Act and the 2007 Act and, for that reason, it might have been better for two separate charges to have been preferred even though the definitions are essentially the same. Although the rule against duplicity applicable to criminal charges (see Johnson v Miller (1937) 59 CLR 467, 489; Walsh v Tattersall (1996) 188 CLR 77, 84) does not necessarily apply to its full extent in disciplinary proceedings, the rule has been described as one of “elementary fairness” (R v General Medical Council, Ex parte Gee  1 WLR 226, 238-239 and, on appeal to the House of Lords, Gee v General Medical Council  1 WLR 564, 569-570), ensuring, as it does, that a person is not vexed with a compound charge alleging more than one offence. However, no point was taken by the respondent about this and nor can it be suggested that he was confused about what was being alleged against him.
- In the Tribunal’s view, the Commissioner’s submission is correct. Indeed, whether the lodgment failures are considered together or alone, each constituted a fundamental breach of the respondent’s civic obligations. Further, given the close relationship between his default in each instance and the income the respondent generated in his practice as a barrister, there could be little doubt that the respondent’s conduct is capable of constituting professional misconduct (see Legal Services Commissioner v Hewlett  2 Qd R 292, 296), and that will be the position regardless of whether his conduct is assessed by reference to the QLS Act, the 2004 Act or the 2007 Act. Of course, provisions such as s 246(c)(ii) of the 2004 Act and s 420(c)(ii) of the 2007 Act put that very proposition beyond doubt, but a practitioner’s neglect of his or her societal responsibilities in this way can hardly be viewed in any other way. The failure to comply with such an important statutory obligation, shared as it is by all income-earning members of society, comfortably meets the common law definition of conduct that may reasonably be regarded as disgraceful or dishonourable by fellow practitioners of good repute and competency. It also involved, in the language of the statutory tests, a substantial failure to maintain a reasonable standard of competence and diligence. The feature that the practitioner in this case was guilty of repeated defaults of the same type only reinforces the conclusion that he consistently failed to maintain that standard.
- It follows that the Tribunal is satisfied that the respondent engaged in professional misconduct.
- In contravention of s 8C(1)(a) of the Taxation Administration Act, the respondent failed to lodge income tax or GST returns on no less than eight separate occasions over the 12-year period under consideration. In total, he was fined $22,000. His conduct overall constitutes a default of substantial proportions. It was a persistent failure that went unchecked; despite the respondent being proceeded against to conviction in the Magistrates Court in 2001 and, again, in 2006, he continued to offend.
- No satisfactory explanation was advanced by the respondent for his repeated default. True it is that he was involved in a busy, regional practice (involving, as it did, much travel away from his chambers), but that affords no warrant for neglecting his statutory obligations on so many occasions. His failure to do so reflects very poorly on him and tarnishes the reputation of the wider profession.
- The sanctions imposed in the past for professional misconduct based on a failure to lodge income tax returns and the like vary as widely as the reasons for those failures. At one end of the spectrum are cases where the default was found to be purposeful in the sense that returns were not lodged to avoid disclosure of income and the consequent liability to pay income tax. In those cases, of which Legal Services Commissioner v Hewlett  2 Qd R 292 is but one example, the name of the practitioner was struck from the roll, and it will be a rare case where that does not follow almost as a matter of course from such proved dishonesty and fraud on the revenue. At the other end of the spectrum are cases where the practitioner’s default was explained by administrative breakdown (see, eg, Legal Services Commissioner v Cain  LPT 19), psychological issues (see, eg, Legal Services Commissioner v Donnelly  QCAT 569; Legal Services Commissioner v Laurie  QCAT 335) or a mix of extraneous factors (see, eg, Legal Services Commissioner v Lee  QCAT 447). In such cases, the sanction ranges from a public reprimand, with (eg, Donnelly, Laurie) or without (eg, Lee) a fine, to the placement of supervisory and/or limiting conditions on the practising certificate for the practitioner (eg, Cain, Lee).
- Here, it was not submitted that the respondent’s omissions were deliberate or that he was in some way motivated to avoid his income tax responsibilities. Rather, the Commissioner submitted, this case is “more akin to Cain, Donnelly, Laurie and Lee” than it is to Hewlett. Reference was also made to the factors in mitigation (to be discussed below) before submitting that appropriate disciplinary orders pursuant to s 456 of the 2007 Act would be for the respondent to be publicly reprimanded, ordered to pay a pecuniary penalty of “at least $5,000” and made subject by the imposition of conditions on his practising certificate to supervision by his professional body for a period of three years (to 30 June 2017). The Commissioner also seeks an order that his costs be paid by the respondent, fixed in the sum of $4,000.
- Before considering these submissions, it is necessary to discuss three factors that arise in this case and which operate, in one way or another, on the question of the appropriate sanction: (1) delay in the prosecution of the application; (2) the period the respondent has already served under supervision; and (3) the respondent’s previous disciplinary history.
- The material before the Tribunal does not disclose why disciplinary proceedings were not commenced against the respondent in the immediate aftermath of his convictions in 2001, 2006 or 2011, but the fact is that no proceedings were taken against the respondent until the filing of the subject discipline application on 10 February 2014. The respondent filed a response two months later in which he effectively signalled that the charges would not be contested and, a few months later, there was agreement on the facts.
- Despite that, the application did not come before the Tribunal until this year. Again, why there was such extraordinary delay is not apparent, although difficulties constituting the Tribunal for this case were the cause of some of it. None of the delay in the application, once filed, coming before the Tribunal can be attributed to the parties, let alone to the respondent.
- There has in consequence been substantial delay both before and after the commencement of the application, none of which can be blamed on the respondent. The true significance of delay as a mitigating feature is not so much that the respondent has been under a cloud for so long as the application remained unresolved, it is that the Tribunal is afforded an opportunity to see what the practitioner has done (or not done) to modify his or her professional behaviour over the intervening period (see the discussion on this point in the context of sentencing for criminal offences in R v L; Ex parte Attorney-General for Queensland  2 Qd R 63). To the point, the practitioner’s behaviour over the period of the delay may serve to aggravate, mitigate or have no effect on the end sanction. Here, for the reasons that immediately follow, the delay operates in his favour.
The conditions placed on the respondent’s practising certificate
- As a consequence of the respondent’s convictions for the tax offences, on 22 December 2011 his professional body, the Bar Association of Queensland, imposed a number of conditions on the issue of his practising certificate. Among them, were conditions requiring the respondent to:
- submit to the Chief Executive of the Association, within 14 days of the issuing of his conditional practising certificate, a statutory declaration confirming by its terms that he had complied in all respects with his taxation obligations;
- submit to the Chief Executive, within 14 days of the date upon which he was required to lodge any Business Activity Statements, a statutory declaration in terms confirming that he had complied in all respects with his obligations in that regard;
- engage a chartered or certificate practising accountant, and advise the Chief Executive within 14 days of the issue of his conditional practising certificate, the name and contact details of the accountant so engaged;
- authorise and instruct the accountant, in writing, to report in writing to the Chief Executive any concerns the accountant perceived in the respondent’s ability to comply with his taxation obligations; and
- report immediately to the Chief Executive, in writing, any non-compliance with his taxation obligations and the steps taken to rectify the breach.
- The conditions took effect in January 2012 and were intended to remain in force until 30 June 2014. However, after the commencement of the discipline application on 10 February 2014, Mr Fellows invited the Bar Association to continue the regime of conditions until the application was determined. That was an entirely proper position for Mr Fellows to take, and it reflects well on him, but it also means that he has now been subject to that regime for over five years.
- Over that period, the respondent complied in all respects with the conditions, and that is a significant mitigating feature in this case. In addition, the completion of such a long period under supervision without blemish supports the conclusion that there is no longer any need for conditions to be imposed on his practising certificate, and the Tribunal is satisfied that this is the case.
Prior disciplinary history
- The respondent has previously been the subject of a disciplinary proceeding, although that proceeding concerned events that took place some 30 years ago.
- On 25 September 1989, the respondent appeared before the Statutory Committee of the Council of the Queensland Law Society to plead guilty to five charges of misappropriation. He was found guilty of unprofessional conduct (the reasons signed by the Acting Chairman, Mr Byrne, record that finding whereas the coversheet erroneously records a finding of professional misconduct), suspended from practice for six months and ordered to provide an undertaking (when reapplying for a practising certificate) not to practise as a sole practitioner for a further period of six months.
- It should be immediately made clear that, at the time when the application at hand was filed, the Commissioner was quite unaware of this previous disciplinary proceeding but, much to his credit, the respondent made full disclosure about it in his response to the application. Furthermore, not only did the charges concern events that took place three decades ago, the circumstances giving rise to those charges were not such as would typically be associated with charges of misappropriation. To explain, at the relevant time, Mr Fellows was employed by the Queensland Law Society as its director of Law Claims. He paid various outlays incurred in connection with particular law claims from funds received from the professional indemnity insurers with respect to unrelated law claims and from funds held by a service company, QLS Services Pty Ltd. He did not act for personal gain; instead, the individual charges appear to be instances of maladministration more than anything else. There was no finding of dishonesty.
- It will therefore be seen that the respondent’s prior disciplinary history is of no great relevance to the present charges. The only possible relevance might be that the previous charges are revealing of a person who is a poor administrator and, if so, that may go some of the way towards an explanation for the lodgement failures here. But, the prior conduct is so dated that it is impossible to draw any conclusions from it. It only remains to say that the respondent made full disclosure of the earlier disciplinary proceedings in the material he filed in support of his application to be admitted as a barrister on 20 September 1993, and no objection to his admission was raised.
- As already observed, the respondent’s repeated default in the lodgement of income tax and GST returns, over such a long period, is most concerning. Indeed, but for the factors in mitigation of sanction that are seen to be present in this case, a suspension of the respondent’s practising certificate may well have been called for. Given those mitigating factors, the Tribunal is satisfied that the submissions made by the Commissioner as to sanction should, so far as they are now relevant, be accepted.
- By s 462(1) of the 2007 Act, the Tribunal must order the respondent to pay the Commissioner’s costs unless “exceptional circumstances exist”. None do. As such, an order should be made that the respondent pay the amount sought ($4,000) unless there is some issue about quantum, but the respondent consents to an order in that amount. There will accordingly be an order to that effect.
- There is now no need for further supervision. The respondent has been subject to the regime of conditions imposed by the Association (and then continued with his consent) for a continuous period of over five years. He has complied with each of the conditions over that time. There is no further need for supervision.
- However, the gravity of the conduct underlying the charges is such as to require the respondent to be publicly reprimanded and ordered to pay a pecuniary penalty. The latter is necessary, in addition to the reprimand, so as to mark the Tribunal’s denunciation of the conduct and to act as a personal deterrent. Of course, it must be kept in mind that the respondent has already been fined a total of $22,000 in the Magistrates Court and will be ordered to pay another $4,000 for the Commissioner’s costs. Nevertheless, the Tribunal is satisfied that a pecuniary penalty in the sum of $6,000 is appropriate.
- That will mean of course that, in addition to a public reprimand, the financial consequence for the respondent of this proceeding will be $10,000 inclusive of costs. That is, in the view of the Tribunal, a sufficiently weighty impost to send a clear reminder to all practitioners that primacy must be given at all times to the fulfilment of their individual income tax obligations.
- For these reasons, the Tribunal is satisfied that Mr Fellows engaged in professional misconduct. He will be publicly reprimanded, fined the sum of $6,000 and ordered to pay the Commissioner’s costs fixed in the sum of $4,000.
- Published Case Name:
Legal Services Commissioner v Michael Arthur Fellows
- Shortened Case Name:
Legal Services Commissioner v Fellows
 QCAT 337
06 Oct 2017