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Legal Services Commissioner v Richards[2018] QCAT 128

Legal Services Commissioner v Richards[2018] QCAT 128

CITATION:

Legal Services Commissioner v Richards [2018] QCAT 128

PARTIES:

Legal Services Commissioner

(Applicant)

v

Darryl William Richards

(Respondent)

APPLICATION NUMBER:

OCR234-16

MATTER TYPE:

Occupational regulation matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Hon J B Thomas, Judicial Member

Assisted by:

Mr Geoffrey Sinclair

Dr Margaret Steinberg

DELIVERED ON:

1 May 2018

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The Tribunal is satisfied that the respondent Darryl William Richards  engaged in unsatisfactory professional conduct;
  2. The respondent Darryl William Richards is publicly reprimanded;
  3. The respondent Darryl William Richards is to pay a penalty of $3,000 on or before 31 May 2018;
  4. The respondent Darryl William Richards is to pay to the Applicant the Applicant's costs fixed in the sum of $7,000 on or before 31 May 2018;
  5. The compensation claim of Adam Borland is dismissed.

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – MISLEADING COURT AND PERVERTING THE COURSE OF JUSTICE – where reckless misstatement within affidavit – where no deliberate deceit in misstating affidavit – where misstatement has been corrected – whether unsatisfactory professional conduct or professional misconduct

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – QUEENSLAND –  compensation - elements of claim - need for proof - status of original complainant to Commission - whether time spent by complainant in assisting commissioner in prosecution of disciplinary charge is compensable – need for some evidence of the nature of such assistance and of reasonableness of the quantum claimed

Legal Services Commissioner v Chadwick [2009] LPT 016

Legal Services Commissioner v Hackett [2006] LPT 015

Legal Services Commissioner v Ho [2017] QCAT 386

Legal Services Commissioner v Lim [2011] QCAT 291

Legal Services Commissioner v Ramsden [2006] LPT 10

Legal Services Commissioner v Richards [2017] QCAT 384

Legal Services Commissioner v Sorban [2009] LPT 005

Legal Services Commissioner v Thomson [2011] QCAT 127

Legal Profession Act 2007, s 452, s 464, s 465, s 429, s 448, s 451, s 462, s 463

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

  1. [1]
    This is the determination of a disciplinary proceeding under section 452 of the Legal Profession Act 2007 (“LPA”) and also of a claim for compensation under section 465 of that act.
  2. [2]
    The applicant in the disciplinary proceeding is the Legal Services Commissioner (“the Commissioner”).  The claimant for compensation, Mr Borland, is the original complainant who brought the misconduct of the respondent to the attention of the Commissioner.
  3. [3]
    This Tribunal assembled in September 2017 to decide the disciplinary application, but postponed further proceeding until directions were carried out which would enable the compensation claim to be pursued against  the legal respondent's legal practice.[1]

Relevant facts

  1. [4]
    The respondent (“Mr Richards”) is now 43 years of age and was admitted to practice as a solicitor in April 2013. At the time of the alleged conduct he held a practising certificate and practised in a firm of solicitors named Certus Legal Group Pty Ltd (“Certus”) of which he was a director.
  2. [5]
    Mr Richards has not previously been dealt with by a disciplinary body.
  3. [6]
    The disciplinary charge is that Mr Richards “recklessly misled the court by swearing an affidavit that was not true and correct”.
  4. [7]
    Initially Mr Borland gave instructions to Certus to act on behalf of his companies Trambe Pty Ltd and Boedry Pty Ltd which were involved in litigious claims. Following the provision of legal services to those companies Certus sued for its fees. In the course of the action for legal fees the incorrect affidavit was sworn by Mr Richards.
  5. [8]
    The conduct of the litigation in which Certus acted for Mr Borland's companies had been largely left in the hands of an employed solicitor, Mr Gelic.
  6. [9]
    On 6 July 2015, by which time heavy preparation seems to have been necessary, Mr Gelic took study leave and a week later advised his employer (through Mr Richards) that he would be unable to continue to work on Mr Borland’s cases.
  7. [10]
    On 15 July 2015, the firm sent an email to Mr Borland advising that Mr Gelic was away on study leave but did not mention that Mr Gelic would no longer be available to conduct his cases.
  8. [11]
    On the following day, 16 July 2015, Mr Borland was directly informed by Mr Gelic by telephone that he would no longer be available to conduct the cases.
  9. [12]
    A short time later, substantial fees were rendered by Certus. Disputes arose between the relevant parties in relation to those fees.
  10. [13]
    Eventually, on 2 November 2015, Magistrates Court actions were commenced by Certus claiming $34,207.50 plus interest and costs. Mr Borland's companies filed a defence and counterclaim for the return of fees already paid in the sum of $168,444.14.
  11. [14]
    In the course of that action, on 25 January 2016, Mr Richards swore an affidavit which included the following statement.

“Mr Gelic told me that before commencing leave of absence he informed Mr Borland that he was taking leave of absence and that others would manage the case."

  1. [15]
    In fact Mr Gelic had commenced his leave of absence on 6 July, but had not informed Mr Borland that he was doing so until 16 July.
  2. [16]
    Mr Richards' error was in relation to the timing of the conversation between Mr Gelic and Mr Borland.  The affidavit stated that it took place before 6 July when in fact it did not take place until 16 July.
  3. [17]
    The question of materiality of the misstatement will be later discussed.
  4. [18]
    A summary judgment application was heard and determined by Magistrate Cosgrove on 28 January 2016 in favour of the plaintiff solicitors.
  5. [19]
    After obtaining judgment, the solicitors served statutory demands on the defendant companies.  Those companies then filed applications in the Supreme Court to set aside the statutory demands.
  6. [20]
    Mr Richards received notice from the Legal Services Commissioner on 10 March 2016, that Mr Borland had complained about his actions.
  7. [21]
    On 11 March 2016, Mr Richards filed an affidavit of correction in the Supreme Court proceedings before Byrne SJA (as he was then known), concerning the setting aside of the statutory demands.
  8. [22]
    The applications to set aside the statutory demands were dismissed.
  9. [23]
    Mr Richards has asserted that “both Magistrate Cosgrove and Byrne SJA considered and gave no weight to the issue of the timing of Mr Gelic’s notice to Mr Borland”,[2] and the Commissioner has not suggested otherwise.

Discussion

  1. [24]
    The charge is “recklessly misleading the court by swearing an affidavit that was not true and correct”.
  2. [25]
    The substance of the error lies in the timing of a conversation between third parties, by alleging that it took place ten days earlier than it in fact did.
  3. [26]
    The materiality of the misstatement and, more specifically, the materiality of the time when the statement was made, is difficult to identify. It fell within an area of potential relevance but in the end it did not become a material issue.
  4. [27]
    The defence and counterclaim did however allege “incompetence, misrepresentation and failure to act in the best interests of the defendants." The particular issue of delayed notification of Mr Gelic's availability was raised in a fashion in paragraph 2(iii) of the defence of Mr Boland's's companies which alleged that Certus:

“Failed to advise of change in person handling the mater (sic) as set out in the letter of offer which forms part of the cost agreement.  Not only were we not informed that our acting solicitor had left the firm, the plaintiff also lied about the circumstances of this departure and absences in an email of 15 July 2015 stating he was on study leave.  This was after repeated requested (sic) to the plaintiff on when he would be returning to the firm.”

  1. [28]
    In the context of a claim by a solicitor against a client for fees, this issue may be seen as a part of an overall discontent expressed by the client in relation to the services provided. Mr Richards' error was made in the course of attempting to refute that list of dissatisfactions.
  2. [29]
    The defence however was rambling and embarrassing. The defendant companies at no stage identified a sufficient case to defeat the claim of the solicitors to their fees. The defence failed to spell out the relevant terms of the retainer and the manner in which those terms were said to have been breached so that the solicitors were disentitled to be paid for their work.
  3. [30]
    There was however, a degree of potential relevance in the complaints contained in the defence which might possibly have been made good by clarification and amendment. Mr Richards saw fit to refute one of the allegations in paragraph 2(iii) of the defence. In attempting to refute it he misstated the position.
  4. [31]
    Mr Richards asserts in his submissions that Mr Borland raised this issue with the Magistrate and that the Magistrate found this issue to be irrelevant to the claim.[3]  He further asserts that in the subsequent proceedings before Byrne SJA His Honour referred to Mr Richards’ affidavit of correction but did not identify it as relevant to the issues in the case.
  5. [32]
    The Commissioner has not contested these assertions.
  6. [33]
    Even so, it is clear that Mr Richards was seeking to obtain an advantage in the litigation and adopted a cavalier approach in the preparation of his affidavit.
  7. [34]
    Deliberate deceit is not alleged. This is a “loose practice” case in which the fault element is recklessness.
  8. [35]
    The best explanation of the misstatement is one of faulty recollection and complete failure to check the facts in relation to a conversation between third parties. It satisfies the "reckless" allegation in the charge, bearing in mind that considerable care is expected of solicitors in swearing an affidavit, particularly if it concerns an area of contention in adversarial litigation in which solicitors have chosen to act for themselves. The rights of adverse parties were intended to be affected by the sworn evidence.
  9. [36]
    The first question is whether this conduct should be characterised as unsatisfactory professional conduct or as professional misconduct.
  10. [37]
    Both parties have submitted that it should fall into the former category.
  11. [38]
    In view of the “one off” nature of the conduct, the fairly prompt and open correction of the error through the filing of the affidavit of correction, and the fact that this is a “loose practice” case rather than one of intentional deceit,  I am prepared to accept the characterisation of unsatisfactory professional conduct.  The conduct was directly involved in connection with the practice of law, and it 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.
  12. [39]
    The parties are also of like mind as to the appropriate sanction.  They suggest that the orders should be:
    1. A public reprimand;
    2. A fine in the order of $2,000 - $3,000; and
    3. That the respondent pay the applicant’s costs fixed in the amount of $7,000.
  13. [40]
    Such a response is in my view on the light side for such conduct.  The importance of courts being able to trust their officers cannot be overstated, and misconduct in the swearing of information for forensic advantage is not to be tolerated.
  14. [41]
    In the present circumstances, the proposed sanction is however within range of some past decisions[4] concerning practitioners misinforming courts. With the benefit of advice from the members of the Panel I am prepared to make the order that has been sought, and will adopt the higher of the suggested figures for the financial penalty.

Compensation

  1. [42]
    Mr Boland's initial claim for compensation before this tribunal was for $337,138.77, based upon losses allegedly incurred by reason of  his unsatisfactory dealings with Certus. It sought the return of all fees paid to Certus (including those the subject of the Magistrates Court judgment) and further costs incurred by Mr Borland or his companies for "statutory demand legal costs", "appeal costs" and "other costs".
  2. [43]
    When giving directions for the proceedings in relation to the claim[5] this Tribunal pointed out that such a claim was effectively capped by statute to the sum of $7,500. We also noted some apparent difficulties involved in the claim but thought it desirable that Mr Borland "be given one final opportunity to file a claim and provide material substantiating it if he is so minded."[6]
  3. [44]
    The eventual claim has been completely reformulated. It is now for $7,550 to compensate him for time spent in relation to his complaint to the Legal Services Commission and in his dealings with the Commission, with QCAT and with a solicitor from Minter Ellison, all of which he claims relate to the proceedings against Mr Richards.
  4. [45]
    The basis of the claim is a "time costing sheet" containing items such as reading, reviewing and responding, totalling 75.5 hours. He seeks reimbursement for that time at $100 per hour.
  5. [46]
    The basis of the rate claimed ($100 per hour) is not stated. It is simply said that this time could have been spent in the management and running of his business.
  6. [47]
    Mr Boland’s submissions contain much hyperbole and expression of outrage. They refer, inter alia, to “immeasurable monetary losses”, “catastrophic effect”, Certus's lack of regard “to the financial, emotional and physical costs to us without a single tangible benefit to us”, “outrageous deceptions”, descriptions of Mr Richards as “greedy and unreasonable”, and to his having been left “disenfranchised, financially insecure and nearly mentally broken”.
  7. [48]
    The central grievance in the submissions is that Mr Richards did not promptly advise him of Mr Gelic’s departure and that this deprived him of the opportunity of conferring with the newly appointed lawyer and determining whether that person had the ability to handle the matter. That failure, he claims, had catastrophic effects.
  8. [49]
    Late notification of Mr Gelic's departure however was not charged as misconduct. Nor was Mr Richards's failure to make immediate notification of it to Mr Borland. Quite apart from any difficulty in quantification, any loss because of late notification simply is not "pecuniary loss because of the conduct concerned".[7] The "conduct concerned" was recklessly misleading the court.
  9. [50]
    Section 464(d) of the LPA renders a law practice liable for:

“pecuniary loss suffered because of conduct that has been found to be...unsatisfactory professional conduct or professional misconduct of an Australian legal practitioner involved in the relevant practice; or…of a law practice employee in relation to the relevant practice.”[8]

  1. [51]
    That requirement is repeated and emphasised in section 465, which provides that such an order must not be made unless the disciplinary body is satisfied “that the complainant has suffered pecuniary loss because of the conduct concerned”.
  2. [52]
    The central grievance[9]  in any event appears to be at odds with the claim that has now actually been brought, which is quantified by reference to time lost in the course of assisting the Commissioner with preparation of the misconduct case.
  3. [53]
    The present claim is misconceived in a number of respects.
  4. [54]
    Firstly, it fails to show that the alleged pecuniary loss was suffered because of any relevant unsatisfactory professional conduct by Mr Richards, namely that specified in the charge.
  5. [55]
    Secondly, the essence of the present claim is contained in the following statement:

“Over the course of the last two years I have spent many hours on this matter that has taken me away from the management and running of my business.  I included a time costing sheet breaking down the considerable time I have spent corresponding and collating information for the Legal Services Commission to bring this matter to a conclusion.  It is my expectation that I be compensated for this valuable time lost that could have been utilised in the management and running of my business.”[10]

  1. [56]
    The status and rights of a complainant are recognised in the LPA, notably in sections 429 et seq, including sections 448, 451, 462, 464 and 465. These impose a duty on the part of the Commission to keep a complainant informed at specified points of the process. But the starting of  proceedings, and their maintenance, are strictly the province of the Commission.[11]
  2. [57]
    The claim as formulated assumes a general entitlement by complainants  to be remunerated for time spent in providing information to the Commissioner with respect to a practitioner against whom they have lodged a complaint.
  3. [58]
    No such general entitlement exists. However, in my view, a complainant might successfully maintain a claim for compensation based on time reasonably spent assisting the Commission in relation to a disciplinary proceeding, to the extent to which the complainant's time assists the sustaining of a charge of professional misconduct or unsatisfactory professional conduct, and to the extent to which loss or detriment was reasonably incurred in the course of rendering such assistance. Satisfactory evidence would be necessary to support such conclusions.
  4. [59]
    The reasonableness of the quantum of such a claim would also be a distinct issue, and I am by no means satisfied that a lay person may demand $100 per hour for such time without providing a satisfactory basis for such a claim.
  5. [60]
    These observations are consistent with the allowance of a compensation claim in Legal Services Commissioner v Ho,[12] where a modest claim founded upon a reference to daily wages of the kind earned by the complainant was allowed with reference to time spent in pursuing legal proceedings that had been made necessary by the misconduct of the respondent’s solicitor.
  6. [61]
    However, a point that is fatal to both the original claim and also the present claim for compensation is that the misconduct which was charged (swearing an affidavit that misled the court on a collateral issue) is not shown to have caused the alleged loss.  Mr Borland’s complaints were concerned with  far wider bases of grievance, although it is true that they included the swearing of the relevant affidavit. But no attempt was made to identify the nature, relevance or reasonableness of his assistance to the Commission on that point.
  7. [62]
    On the available material, I am unable to find that the claim for 75 hours at $100 per hour constitutes “pecuniary loss suffered because of the conduct that has been found to be unsatisfactory professional conduct or professional misconduct.”[13]
  8. [63]
    I do not identify the present claim as one for costs under section 462(1) of the LPA, which is concerned with the ordering of legal costs following disciplinary proceedings.  If such costs are incurred by a complainant  they could be included in the relevant order for costs.  However, the present complainant is not legally qualified and has not claimed to have incurred any particular professional legal costs or outlays. Nor is any claim maintained for witness fees or any other recognised component in the assessment of legal fees.
  9. [64]
    It was submitted on behalf of the respondent, Certus, that the compensation claim should have been made on behalf of the companies Trambe Pty Ltd or Boedry Pty Ltd, but that; “being generous to Mr Borland, this submission proceeds on the basis that he has an authority to make the claim on behalf of Trambe Pty Ltd or Boedry Pty Ltd”.  In short, Certus was prepared to concede that Mr Borland should be treated as the controlling entity of the two companies, and that any loss incurred by either company is to be treated as his loss.
  10. [65]
    I do not think that this submission comprehends the claim that has actually been brought.  The claim which Mr Borland has made is not now for any loss by his companies; it is on his own behalf for loss of his own time.  Apart from failure to prove quantum, it fails upon absence of causation between the "conduct concerned" and his alleged loss.  The loss of time attributable to the conduct concerned is unidentified and unquantifiable.
  11. [66]
    The compensation claim will therefore be dismissed.

Orders

  1. [67]
    It will be ordered that:
  1. The Tribunal is satisfied that the respondent Darryl William Richards  engaged in unsatisfactory professional conduct;
  1. The respondent Darryl William Richards is publicly reprimanded;
  2. The respondent Darryl William Richards is to pay a penalty of $3,000 on or before 31 May 2018;
  3. The respondent Darryl William Richards is to pay to the Applicant the Applicant's costs fixed in the sum of $7,000 on or before 31 May 2018;
  4. The compensation claim of Adam Borland is dismissed.

Footnotes

[1]Legal Services Commissioner v Richards [2017] QCAT 384.

[2]Respondent’s submissions filed 14 September 2017, paragraph 28.

[3]Supplementary submissions for the respondent, filed 14 September 2017, paragraphs 19, 25 & 28.

[4]Legal Services Commissioner v Hackett [2006] LPT 015; Legal Services Commissioner v Ramsden [2006] LPT 10; Legal Services Commissioner v Sorban [2009] LPT 005; Legal Services Commissioner v Chadwick [2009] LPT 016; Legal Services Commissioner v Thomson [2011] QCAT 127; Legal Services Commissioner v Lim [2011] QCAT 291.

[5]Legal Services Commissioner v Richards [2017] QCAT 384 [8].

[6]Op cite [11].

[7]Section 465(1), LPA.

[8]Section 463(d), LPA.

[9]See [48] above.

[10]Mr Borland’s compensation submissions filed 14 December 2017, page 3.

[11]Section 452 ET SEQ, LPA.

[12][2017] QCAT 386.

[13]Section 464(d)(i), LPA.

Close

Editorial Notes

  • Published Case Name:

    Legal Services Commissioner v Darryl William Richards

  • Shortened Case Name:

    Legal Services Commissioner v Richards

  • MNC:

    [2018] QCAT 128

  • Court:

    QCAT

  • Judge(s):

    Member Thomas

  • Date:

    01 May 2018

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Legal Service Commissioner v Richards [2017] QCAT 384
3 citations
Jump To
Cite 1 - [2017] QCAT 384
Cite 2 - [2017] QCAT 384
Cite 3 - [2017] QCAT 384
Legal Services Commissioner v Chadwick [2009] LPT 16
2 citations
Jump To
Cite 1 - [2009] LPT 16
Cite 2 - [2009] LPT 16
Legal Services Commissioner v Hackett [2006] LPT 15
2 citations
Jump To
Cite 1 - [2006] LPT 15
Cite 2 - [2006] LPT 15
Legal Services Commissioner v Ho [2017] QCAT 386
2 citations
Jump To
Cite 1 - [2017] QCAT 386
Cite 2 - [2017] QCAT 386
Legal Services Commissioner v Lim [2011] QCAT 291
2 citations
Jump To
Cite 1 - [2011] QCAT 291
Cite 2 - [2011] QCAT 291
Legal Services Commissioner v Ramsden [2006] LPT 10
2 citations
Jump To
Cite 1 - [2006] LPT 10
Cite 2 - [2006] LPT 10
Legal Services Commissioner v Sorban [2009] LPT 5
2 citations
Jump To
Cite 1 - [2009] LPT 5
Cite 2 - [2009] LPT 5
Legal Services Commissioner v Thomson [2011] QCAT 127
2 citations
Jump To
Cite 1 - [2011] QCAT 127
Cite 2 - [2011] QCAT 127

Cases Citing

Case NameFull CitationFrequency
Legal Services Commissioner v Hallam [2024] QCAT 3863 citations
Legal Services Commissioner v O'Brien [2025] QCAT 1901 citation
Legal Services Commissioner v Richards [2024] QCAT 3552 citations
1

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