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Legal Services Commissioner v Kurschinsky[2020] QCAT 182

Legal Services Commissioner v Kurschinsky[2020] QCAT 182

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Legal Services Commissioner v Kurschinsky [2020] QCAT 182

PARTIES:

LEGAL SERVICES COMMISSIONER

(applicant)

v

ALEXANDER KURSCHINSKY

(respondent)

APPLICATION NO/S:

OCR092-16

MATTER TYPE:

Occupational regulation matters

DELIVERED ON:

3 June 2020

HEARING DATE:

10 October 2019

HEARD AT:

Brisbane

DECISION OF:

Justice Daubney, President

Assisted by:

Mr Geoffrey Sinclair, Legal Panel Member

Dr Margaret Steinberg AM, Lay Panel Member

ORDERS:

  1. It is recommended that the name of the respondent, Alexander Kurschinsky, be removed from the roll of legal practitioners in Queensland.
  2. The respondent shall pay the applicant’s costs of and incidental to this discipline application, such costs to be assessed on the standard basis in the manner in which costs would be assessed if the matter were in the Supreme Court of Queensland.
  3. Cassandra Lee Kimmins shall advise the Tribunal and the respondent as to whether she wishes to pursue her notice of intention to seek compensation order by 4.00pm on 24 June 2020.
  4. If Cassandra Lee Kimmins advises that she wishes to pursue a compensation order, then the matter will be listed for directions on a date to be advised by the Tribunal.

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – OTHER MATTERS –where the applicant Commissioner received a complaint that the respondent had not provided the complainant with proper costs disclosure – where the applicant sought a response to the matters raised in the complaint – where further correspondence was sent by the applicant to the respondent – where the respondent was mostly unresponsive to the correspondence – where the applicant issued and served a notice pursuant to s 543(1) of the Legal Profession Act 2007 (Qld) (“LPA”) to produce the client’s file – where the respondent was unable to provide the file for a number of reasons, including that there was an alleged lien over the file – where the applicant issued and served a notice pursuant to s 443(3) of the LPA – where the respondent did not respond to that notice – whether the respondent’s conduct in relation to each of the two notices amounts to professional misconduct

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – TRUST MONEY – where the respondent operated a legal practice and a tax practice – where both practices had individual trust accounts – where the respondent received monies into the law practice’s trust account as a consequence of a property sale the subject of dispute in family law proceedings – where the monies were held on trust for the respondent’s client and one of the complainants – where the respondent, solely on the instruction of his client, transferred the monies to the trust account of the tax practice – where other monies were transferred from the law practice trust account to the tax practice trust account – where no authorisation received to mix monies – where the applicant investigated the respondent’s trust account dealings – where the applicant issued and served a notice pursuant to s 443(3) of the LPA – where the respondent did not respond to that notice – whether the respondent’s conduct amounts to professional misconduct

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORYPROFESSIONAL CONDUCT – MISLEADING COURT AND PERVERTING THE COURSE OF JUSTICE – where a judge of the Federal Circuit Court ordered that monies held in the respondent’s law practice trust account be released to one of the complainants – where this order was not complied with – where the respondent sent emails to the judge’s Associate which were false and misleading – where a further hearing in respect of non-compliance with the orders took place – where the respondent provided misleading and inaccurate information under oath – whether the respondent’s conduct bespeaks unfitness to practice – whether the respondent’s conduct amounts to professional misconduct

Legal Profession Act 2007 (Qld) s 249, s 257, s 263, s 418, s 419, s 420, s 437, s 443, s 456, s 462, s 543

Adamson v Queensland Law Society Inc [1990] 1 Qd R 498

Attorney-General of the State of Queensland v Legal Services Commissioner & Anor; Legal Services

Commissioner v Shand [2018] QCA 66

Legal Services Commissioner v Madden (No 2) [2009] 1 Qd R 149

Legal Services Commissioner v Meehan [2019] QCAT 17 Legal Services Commissioner v Munt [2019] QCAT 160

Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320

Queensland Law Society Inc v Carberry [2000] QCA 450 Watts v Legal Services Commissioner [2016] QCA 224

Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279

APPEARANCES &

REPRESENTATION:

Applicant:

M Nicholson, instructed by the Legal Services Commission

Respondent:

No appearance

REASONS FOR DECISION

  1. [1]
    Under three discipline applications brought pursuant to the Legal Profession Act 2007 (Qld) (“LPA”), the applicant, the Legal Services Commissioner, has brought eight charges against the respondent, Alexander Kurschinsky. The respondent was admitted as a legal practitioner in January 2006, and practiced on his own account as a solicitor from March 2009 under the firm name “Kurschinsky Law”.
  2. [2]
    The eight charges are:
  1. (a)
    By the further amended discipline application filed 27 March 2017:
    1. (i)Charge 1 – failing to comply with a requirement under s 443(3) of the LPA. (ii)Charge 2 – failing to comply with a notice given under s 543(1) of the LPA.
  • (b)
    By the discipline application filed 22 January 2018:
    1. (i)Charge 3 – failing to comply with a requirement under s 443(3) of the LPA.
    2. (ii)Charge 4 – transferring trust funds without authority in breach of s 257 of the LPA.
    3. (iii)Charge 5 – in breach of s 249 of the LPA, transferring trust funds from the Kurschinsky Law Trust Account to the trust account of Kurschinsky Tax Pty Ltd without consent, authority or direction.
  • (c)
    By the discipline application filed 29 March 2019:
    1. (i)Charge 6 – engaging in conduct, namely the sending of emails to the Associate of a Federal Circuit Court Judge, which were false and misleading.
    2. (ii)Charge 7 – making false and misleading statements in the Federal Circuit Court.
    3. (iii)Charge 8 – engaging in conduct in the Federal Circuit Court proceedings that would justify a finding that the respondent is not a fit and proper person to engage in legal practice.
  1. [3]
    The respondent did not appear at the hearing of the discipline applications.
  2. [4]
    The applicant relied on the following affidavits:
  1. (a)
    Charges 1 and 2: affidavit of David John Edwards filed 25 January 2017;
  2. (b)
    Charges 3, 4 and 5: affidavit of Michael Leo Roessler filed 10 October 2019;
  3. (c)
    Charges 6, 7 and 8: affidavit of Michael Leo Roessler filed 14 May 2019.
  1. [5]
    None of these affidavits were challenged by the respondent. The Tribunal has reviewed each of those affidavits, and is satisfied that each affidavit satisfactorily proves to the requisite standard[1] the facts which support each of the charges. Those facts will be summarised below as they relate to each of the charges.

Relevant provisions of the LPA

  1. [6]
    It is convenient first to recount the legislative provisions on which a number of the charges are founded.
  2. [7]
    Section 249, on which Charge 5 is founded, provides:

249 Holding, disbursing and accounting for trust money

  1. (1)
    A law practice must –
    1. (a)
      hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received; and
    2. (b)
      disburse the trust money only under a direction given by the person.

Maximum penalty – 50 penalty units.

  1. (2)
    Subsection (1) applies subject to an order of a court of competent jurisdiction, division 2A or as otherwise authorised by law.
  2. (3)
    Subject to division 2A, the law practice must account for the trust money in the way prescribed under a regulation.

Maximum penalty – 50 penalty units.

  1. [8]
    Section 257, on which Charge 4 is founded, provides:

257 Intermixing money

  1. (1)
    A law practice must not, otherwise than as permitted under subsection (2), mix trust money with other money.

Maximum penalty – 100 penalty units.

  1. (2)
    A law practice is permitted to mix trust money with other money to the extent only that is authorised by the law society and under any conditions imposed by the law society in relation to the authorisation.
  1. [9]
    Section 443 of the LPA, on which Charges 1 and 3 are founded, provides:

443 Powers for investigations

  1. (1)
    The entity carrying out an investigation as mentioned in section 435 or 436 may, for the investigation –
    1. (a)require an Australian legal practitioner who is the subject of the investigation –
      1. (i)to give the entity, in writing or personally, within a stated reasonable time a full explanation of the matter being investigated; or
  1. (ii)
    to appear before the entity at a stated reasonable time and place; or
  2. (iii)
    to produce to the entity within a stated reasonable time any document in the practitioner’s custody, possession or control that the practitioner is entitled at law to produce; or
  1. (b)
    engage a person, whom the entity considers is qualified because the person has the necessary expertise or experience, to report on the reasonableness of an Australian legal practitioner’s bill of costs.
  1. (2)
    Subject to subsection (6), the Australian legal practitioner must comply with a requirement under subsection (1)(a).

Maximum penalty – 50 penalty units.

  1. (3)
    If the practitioner fails to comply with the requirement, the entity may give the practitioner written notice that, if the failure continues for a further 14 days after the notice is given, the practitioner may be dealt with for professional misconduct.
  1. (4)
    If notice under subsection (3) is given and the failure continues for the 14 day period –
    1. (a)the Australian legal practitioner is taken to have committed professional misconduct, unless the practitioner has a reasonable excuse for not complying with the requirement within the period; and
    2. (b)the commissioner may apply to the tribunal for an order in relation to the charge that the practitioner has committed professional misconduct as stated in paragraph (a) as if the application were an application in relation to a complaint against the practitioner.
  1. (5)
    In a hearing before the tribunal about a charge of professional misconduct, a copy of the notice mentioned in subsection (3) and any enclosures with the notice are evidence of the matters in the notice and the enclosures.
  2. (6)
    An Australian legal practitioner may refuse to give the entity an explanation of a matter being investigated if –
    1. (a)the practitioner satisfies the entity that to give the explanation would contravene, or invalidate, a policy for professional indemnity insurance held by the practitioner; or
    2. (b)the explanation would tend to incriminate the practitioner.
  1. (7)
    A regulation may provide for how part 4.9 applies to an application to the tribunal for an order in relation to a charge that a legal practitioner has committed professional misconduct as stated in subsection (4)(a) and may be dealt with under that part as an application in relation to a complaint against the practitioner.
  1. [10]
    Section 543, relating to Charge 2, provides:

543 Requirements that may be imposed for investigations under ch 4(1)

  1. (1)
    For carrying out an investigation of a complaint or investigation matter in relation to an Australian lawyer, an investigator may, by notice served on the lawyer, require the lawyer to do any 1 or more of the following –
    1. (a)to produce, at or before a stated time and at a stated place, any stated document, or a copy of the document;
    2. (b)to produce, at a stated time and stated place, any stated document, or a copy of the document;
    3. (c)to provide written information on or before a stated date, verified by statutory declaration if the requirement so states;
    4. (d)to otherwise help in, or cooperate with, the investigation of the complaint in a stated way.
  2. (2)
    For carrying out an investigation of a complaint or investigation matter in relation to an Australian lawyer, the investigator may, on production of his or her identity card, require an associate or former associate of a law practice of which the lawyer is or was an associate, or any other person (but not including the lawyer) who has or has had control of documents relating to the affairs of the lawyer, to give the investigator either or both of the following –
    1. (a)access to the documents relating to the affairs of the lawyer the investigator reasonably requires;
    2. (b)information relating to the affairs of the lawyer the investigator reasonably requires, verified by statutory declaration if the requirement so states.

Examples of another person –

auditor, external examiner, external intervener, liquidator.

Maximum penalty—100 penalty units.

  1. (3)
    A person who is subject to a requirement under subsection (1) or (2) must comply with the requirement unless the person has a reasonable excuse for not complying with it.

Maximum penalty—100 penalty units.

  1. (4)
    A requirement imposed on a person under this section is to be notified in writing to the person and is to state a reasonable time for compliance.

The charges

Charge 1

  1. [11]
    The respondent was engaged by Ms Cassandra Kimmins to act for her in a family law matter. On 19 February 2015, Ms Kimmins made a complaint to the applicant. Her complaint related to the respondent failing to provide her with a proper costs disclosure, as required by Part 3.4 of the
  1. [12]
    On 31 March 2015, the applicant emailed a copy of Ms Kimmins’ complaint to the respondent, and requested a response from him to the matters raised in the complaint. The respondent did not respond. On 21 April 2015, the applicant then wrote a formal letter to the respondent giving him notice under s 437 of the LPA of the complaint having been made, and asking him to provide a full explanation of his conduct by no later than 1 May 2015. It seems that on 30 April 2015, the respondent told the Legal Services Commission that the relevant file was with a costs assessor, and that he would provide a response within 14 days of the return of the file.[2] On 3 July 2015, the respondent wrote to the applicant saying that the costs assessor had advised that he was away in the next week, but would deliver the file to the respondent on the following Tuesday or Wednesday. The applicant then sent follow up emails to the respondent on 21 July, 6 August and 10 August 2015. On 13 August 2015, the respondent finally responded by a letter, in which he said that he had been away from the office and also “away due to illness”. He confirmed that he had now received the file back from the costs assessor. The respondent also averred that he had lodged a complaint about the conduct of the applicant’s investigator with the Queensland Ombudsman, and had also raised issues with the Crime and Corruption Commission and the Attorney-General. On 19 August 2015, the Deputy Commissioner of the applicant, Mr Robert Brittan, sent an email to the respondent asking him to advise by 27 August 2015 whether he intended to provide a response to the complaint. On 20 August 2015, the respondent’s secretary wrote to Mr Brittan saying that the respondent was interstate until 31 August 2015 and would provide a reply by 4 September 2015.
  1. [13]
    On 7 September 2015, there having been no further correspondence from the respondent, the applicant issued and served on the respondent a notice under s 543(1)(c) of the LPA, requiring the respondent to produce a copy of the complete file he held for Ms Kimmins.
  1. [14]
    On 16 September 2015, the respondent wrote directly to the then Legal Services Commissioner, Mr Clauson, complaining about the conduct of the Deputy Commissioner and investigator. Notably, the respondent did not respond to the notice he had been given requiring production of the file.
  1. [15]
    On 19 October 2015, the applicant’s principal legal officer, Mr Edwards, wrote to the respondent noting that the respondent had not provided the client file by 21 September 2015. By this same letter, the applicant allowed the respondent until 6 November 2015 to produce the file.
  1. [16]
    On 6 November 2015, the respondent wrote to Mr Clauson saying that he was “unable to provide” the file for a number of reasons, including on the basis that, because the client had not paid the firm’s fees, the respondent held a lien over the file under r 15 of the Australian Solicitors’ Conduct Rules (“ASCR”).
  1. [17]
    The Tribunal observes parenthetically that this claim by the respondent to avoid production of the file to the applicant on the basis of an asserted lien for costs was clearly unsustainable. Rule 15 of the ASCR allows a solicitor to claim a lien over documents which are essential to the client’s defence or prosecution of current proceedings, and assert that lien against another solicitor who is acting for the client. Rule 15 clearly had no application in the present case, because the applicant was a regulator investigating the conduct of the respondent.
  1. [18]
    On 17 November 2015, the applicant wrote again to the respondent. The applicant reminded the respondent of his obligations under r 43 of the ASCR.[3] The applicant also noted that the respondent had still not complied with the notice under s 543 that was issued on 7 September 2015. By the letter of 17 November 2015, the applicant gave the respondent formal notice pursuant to s 443(3) of the LPA (“s 443 notice”) that he may be dealt with for professional misconduct if his failure to comply with the request for the client file continued for 14 days, i.e. beyond 4 December 2015.
  1. [19]
    The respondent did not respond to that notice.
  1. [20]
    Charge 1 is particularised in the further amended discipline application filed 27 March 2017. Relevantly, the particulars provide:

1.8 By letter dated 17 November 2015, the applicant gave the respondent notice pursuant to s 443(3) of the Act (‘the s 443 notice’) that:

  1. (a)
    he had not provided the client file which had been required twice previously; and
  2. (b)
    he might be dealt with for professional misconduct if his failure to comply with that requirement continued for a further 14 days (i.e. beyond 4 December 2015) without reasonable excuse;
  3. (c)
    requested that the respondent forward to the Commission a full explanation of his conduct subject to the investigation by 4 December 2015.

1.9 As at 30 June 2016, the respondent:

  1. (a)
    had not complied with that notice; and
  2. (b)
    had not provided any reasonable excuse to the Commission or to the applicant for his non-compliance.
  1. [21]
    Charge 1, therefore, expressly invokes the s 443 notice contained in the letter of 17 November 2015 as the relevant notice for the purposes of that charge.
  1. [22]
    It is clear, and the Tribunal finds, that the respondent failed to comply with the requirement set out in the s 443 notice of 17 November 2015, and thereby rendered himself liable to be dealt with for professional misconduct.

Charge 2

  1. [23]
    Charge 2 turns on the respondent’s failure to comply with the notice given to him pursuant to s 543(1) to deliver up the client file. It is quite clear that he failed to deliver up the file. For the reasons referred to above, the respondent’s invocation of a solicitor’s lien over the file was not a reasonable excuse for his failure to comply with the notice.
  1. [24]
    The Tribunal is satisfied that it has been established that the respondent failed to comply with a lawful notice given to him under s 543(1) of the LPA.

Charges 3, 4 and 5

  1. [25]
    On 22 March 2017, the applicant received information from the Queensland Law Society (“QLS”) following an investigation which had been conducted under s 263 of the LPA into the trust account records of the respondent’s legal practice, Kurschinsky Law.
  2. [26]
    Following receipt of that information, the applicant decided to commence an investigation into the conduct of the respondent in respect of the matters outlined in the QLS investigation.
  3. [27]
    On 28 March 2017, the applicant sent a letter to the respondent by which the applicant published the investigation material to the respondent and requested a written response by 21 April 2017.
  1. [28]
    On 27 April 2017, the applicant’s investigator, Mr Roessler, sent an email to the respondent noting that the letter of 28 March 2017 had been returned to the applicant with the envelope marked “not here”. That email of 27 April 2017 also enclosed a copy of the investigation material, and requested a response by 19 May 2017. The respondent did not reply to that email.
  1. [29]
    On 23 May 2017, the applicant sent the respondent an email containing a notice pursuant to s 443(1) of the LPA, requiring the respondent to provide a response by 31 May 2017.
  1. [30]
    On 2 June 2017, with no response having been received from the respondent, the applicant sent to the respondent a notice pursuant to s 443(3) of the LPA, requiring him to provide a response by 16 June 2017. That notice was sent by prepaid post to the address of the respondent’s practice at Hillcrest, by email, and by facsimile transmission. The respondent did not respond to the s 443(3) notice.
  1. [31]
    Charge 3 concerns the respondent’s failure to comply with the requirements stipulated in a s 443 notice; the particulars of the charge in the discipline application of 22 January 2018 specify that the notice of 2 June 2017 is the relevant notice.
  1. [32]
    The Tribunal is satisfied that no response was provided by the respondent to the notice of 2 June 2017, and accordingly Charge 3 is made out.
  1. [33]
    Charges 4 and 5 relate to trust account dealings uncovered by the QLS investigation and reported on in the QLS investigation report.
  1. [34]
    In addition to being a legal practitioner, the respondent was a registered tax agent practicing under a corporate entity, Kurschinsky Tax Pty Ltd, which also operated a trust account for that business.
  1. [35]
    Sometime in 2015, the respondent closed the law practice’s trust account.
  1. [36]
    In December 2015, the Queensland Law Society conducted an investigation of the respondent’s trust account. Those investigations, which are detailed in the QLS report, revealed that funds totalling $147,238.48 which had been held in the trust account of the law practice, had been transferred to the tax agent trust account in order to facilitate the closure of the law practice trust account. No authorisation had been given by the QLS for the mixing of that money from the law practice trust account with the tax practice trust account. The conduct of the respondent in inter-mixing that money from the law practice trust account into the tax practice trust account was clearly in breach of s 257 of the LPA. The complaint under Charge 4 is therefore made out.
  1. [37]
    Charge 5 relates to the transfer of monies totalling $197,266.77 from the law practice trust account to the tax practice trust account without the consent, authority or direction of the persons on whose behalf the funds were held.
  1. [38]
    The funds in question were monies that had been received into the respondent’s law practice trust account as a consequence of the sale of a property which was the subject of dispute in family law proceedings between a Ms Worthington and a Mr Henry. The proceeds of sale were deposited into the law practice trust account by Ms Worthington, and were obviously held on trust for both Ms Worthington and Mr Henry pending resolution of the family law proceeding and a decision as to the disposition of the money. Despite the funds being impressed with that trust, the respondent, solely on the instructions of Mr Henry, transferred or caused those monies to be transferred out of the law practice trust account and into the trust account of the tax practice.
  1. [39]
    At no time did Ms Worthington give her consent to the withdrawal of that trust account money.
  1. [40]
    By causing that money to be withdrawn from the law practice trust account without Ms Worthington’s authority, the respondent breached the requirements of s 249 of the LPA. Accordingly, Charge 5 is made out.

Charges 6, 7 and 8

  1. [41]
    These charges arise out of the respondent’s conduct in the course of the proceedings in the Federal Circuit Court between Ms Worthington and Mr Henry. The application before the Federal Circuit Court sought that orders be made in respect of the alteration of property interests between Mr Henry and Ms Worthington on the basis of an alleged de facto relationship between them. By the application, Mr Henry sought, amongst other things, to receive approximately $190,000 held in the respondent’s trust account from the sale of a property which had been owned by Ms Worthington.
  1. [42]
    On 2 November 2016, his Honour Judge Vasta declared that Mr Henry was not the de facto partner of Ms Worthington, and ordered that the sum of $197,266.77 held in the trust account of Kurschinsky Law be released to Ms Worthington within seven days. The respondent represented Mr Henry in this application.
  1. [43]
    On 3 November 2016, the respondent sent two emails to Judge Vasta’s Associate. The first email read:

Dear Associate

We refer to the following hearing for this matter and to the final orders proposed by his Honour. After reviewing the file, we note the amount provided by the applicant [Henry] to his Honour is incorrect. The amount held in the third party trust account and to be paid to the respondent is $199,673.97. This practice does not operate a trust account and did not have the correct information from the third party until today. The applicant deposited the funds into the Kurschinsky Tax Pty Ltd trust account. Could you please correct his Honour’s final orders to reflect this.

We apologise for the inconvenience and thank you for your assistance.

  1. [44]
    The “third party” referred to in that email was, in fact, Kurschinsky Tax Pty Ltd, being the entity through which the respondent ran his tax agent practice. The respondent was the sole shareholder and director of Kurschinsky Tax Pty Ltd.
  1. [45]
    The statement that “the applicant [Mr Henry] deposited the funds into the Kurschinsky Tax Pty Ltd trust account” was misleading by omission. In fact, it was Ms Worthington who had caused the proceeds of sale to be deposited into the trust account of Kurschinsky Law. The money was then moved from the Kurschinsky Law trust account into the account of Kurschinsky Tax Pty Ltd with the apparent authorisation of Mr Henry but without any authorisation or consent by Ms Worthington.
  1. [46]
    Later on the same day, the respondent sent a further email to the judge’s Associate which was identical in all respects to the first email, but “corrected” the amount said to be held in the “third party” trust account, to $184,673.97. Otherwise, that email suffers from the same defects as the first email.
  1. [47]
    The Tribunal is satisfied, for the purposes of Charge 6, that these emails were objectively false and misleading. It is clear from the orders made by Judge Vasta, and from the ex tempore reasons he gave at the time, that his Honour was under the impression that the funds were being held in the law practice’s trust account. The correspondence falsely sought to convey the existence of an arm’s length relationship between the law practice and the tax agent’s business. It misleadingly omitted to mention that the money which Ms Worthington had deposited into the law practice’s trust account had been transferred out of that account and into the tax agency’s trust account without her consent or authorisation.
  1. [48]
    Turning to the facts underpinning Charge 7, on 2 November 2016 the judge made a declaration that Mr Henry was not the de facto partner of Ms Worthington, and ordered that the sum of $197,266.77 held in the trust account of Kurschinsky Law be released to Worthington within seven days. That latter order prompted the emails referred to under Charge 6.
  1. [49]
    By 8 November 2016, the trust funds had not been released to Ms Worthington. Indeed, what happened was that on 8 November 2016 Mr Henry gave a written instruction to Kurschinsky Tax Pty Ltd by which he stated that he wished to “redeem all funds held in your trust account in my name”. He was then paid the entirety of the monies.
  1. [50]
    On 20 January 2017, a further hearing in respect of the non-compliance with the orders took place before Judge Vasta. On that date, the respondent gave oral evidence. The respondent had affirmed an affidavit on 18 January 2017, in which he said:
  1. On or about 8th of May 2015 Ms Worthington sold 3 Cranberry Way, and the sale proceeds of $197,133.17 were paid into the trust account of Kurschinsky Law on 13th of May 2015.
  2. Attempts were made to resolve the property matter with Ms Worthington, but without success. …
  3. About 18 months ago, this practice decided to close its trust account due to the high costs of compliance (e.g. staff and accountant costs).
  4. Mr Henry agreed with Kurschinsky Tax Pty Ltd to place the redeemed funds from Kurschinsky Law trust account into that company’s trust account, until finalisation of the matter.
  5. Kurschinsky Tax Pty Ltd is an accounting company independent of Kurschinsky Law and does not do any legal work. Its trust account is administered by a non lawyer director and an accountant.
  6. On the 2nd of November 2016, Judge Vasta made orders dismissing Mr Henry’s application of the 18th of May 2016, on the basis that no de facto existed and that Ms Worthington be paid the funds held in (the non existent) Kurschinsky Law trust account.
  7. Mr Henry was present at that hearing of the 2nd of November 2016, and was aware of the nature of the orders.
  8. On or about 8th of November 2016 Mr Henry instructed this practice to commence proceedings against Ms Worthington in the District Court of Queensland, seeking recovery of the monies advanced to her. A claim has been filed in that court.
  9. On or about the 8th of November 2016, Mr Henry terminated instructions to this practice to act.
  10. On or about 8th of November 2016 Mr Henry withdrew funds from Kurschinsky Tax Pty Ltd trust account. …
  1. [51]
    In evidence before Judge Vasta, the respondent affirmed that the contents of his affidavit were true and correct.
  1. [52]
    Initially in the course of his oral evidence, he confirmed that the $197,133.17 which had been paid to the Kurschinsky Law trust account was held on trust for Ms Worthington and Mr Henry, and the monies were to be held pending resolution of the family law dispute between those parties.
  1. [53]
    Under questioning from his Honour, however, the respondent soon departed from that simple proposition and was reluctant to accept that the money paid into the law firm’s trust account had been identified as being held on trust for Ms Worthington. He said:

It was just simply money that was held and we redeemed it and Mr Henry had it placed into the other trust account.

  1. [54]
    The respondent was then asked what it was that he thought gave anyone other than Ms Worthington and Mr Henry power over that money, to which the respondent said that they had tried to contact Ms Worthington and were unable to; they had no forwarding address.
  1. [55]
    The respondent then told his Honour that even though the monies had been moved from the Kurschinsky Law trust account to the Kurschinsky Tax Pty Ltd trust account, the nature of the money in trust “didn’t change”:

It was still in trust, and it’s stayed in another trust account.

  1. [56]
    He agreed that the money in the Kurschinsky Tax Pty Ltd trust account was held, for all intents and purposes, on the same terms and conditions as in the Kurschinsky Law trust account. Despite that, the respondent gave no sensible answer as to how it was that the funds were paid out of the Kurschinsky Tax Pty Ltd trust account to Mr Henry without authority from Ms Worthington. Eventually, he resorted to saying:

Well, we had no forwarding address [for Ms Worthington]. We had no contact. When Women’s Legal Service were acting, we asked and they never provided any details.

  1. [57]
    This evidence by the respondent was unsatisfactory and gravely concerning on a number of levels. First, in numerous respects it was simply misleading and inaccurate. The respondent sought to paint Kurschinsky Tax Pty Ltd as being an independent entity, without properly disclosing to the judge that he was, in fact, the company’s sole director and shareholder.
  1. [58]
    Moreover, his evidence in relation to the justification for permitting the monies to be paid to Mr Henry lacked any proper rationale. Despite acknowledging that the monies were held on trust for both Ms Worthington and Mr Henry, the respondent avoided providing any sensible answer to the judge’s questions concerning the payment out of the monies to Mr Henry.
  1. [59]
    In addition, the respondent’s assertion that attempts to contact Ms Worthington through the Women’s Legal Service about the proposed transfer of funds was patently false. It is clear on the material that the Women’s Legal Service only became involved in acting for Ms Worthington on or around 17 November 2016, which was after the hearing and, indeed, after the monies had been paid out to Mr Henry from Kurschinsky Tax Pty Ltd.
  1. [60]
    This highly unsatisfactory and, in part, patently false evidence is the basis for Charge 7. The Tribunal is satisfied that, for the purposes of Charge 7, the respondent made false and misleading statements to Judge Vasta when giving evidence on 20 January 2016.
  1. [61]
    For Charge 8, the applicant relies on the facts underpinning Charges 6 and 7 to support a finding that the respondent is not a fit and proper person to engage in legal practice. The applicant also submitted that the respondent failed to comply with Judge Vasta’s order of 2 November 2016 by failing to release funds under his control to Ms Worthington. In that regard, it was obvious that the order required the refund to Ms Worthington of the monies she had originally deposited into the law practice’s trust account. Those funds remained under the respondent’s control as at 2 November 2016, albeit in the tax agency trust account. The respondent has given no explanation for his failure to comply with the order made on 2 November 2016.
  1. [62]
    For completeness, the Tribunal, at the hearing, asked the applicant to provide further evidence concerning the outcome of certain Magistrates Court proceedings between the respondent and Ms Kimmins by which he was pursuing her for payment of legal costs, and also whether Ms Worthington had been paid any of the monies originally deposited into the respondent’s trust account. That evidence was provided in the form of two further affidavits by Mr Roessler, and was to the following effect:
  1. (a)
    Enquiries with Ms Kimmins revealed that the Magistrates Court proceedings had been dormant for more than three years;
  2. (b)
    Ms Worthington had not recovered the monies she originally deposited into the respondent’s trust account. However, pursuant to orders of the Full Family Court made on 21 December 2017, Ms Worthington’s new solicitors received into their trust account an amount of $50,000.00 (which the Tribunal infers was an amount paid by Mr Henry into the Full Family Court by way of security for an appeal) and a further sum of $13,272 paid to them by the respondent “representing moneys that [the respondent] says he received back from Mr

Henry into his trust account”. Some of those monies were disbursed to pay costs and expenses, and Ms Worthington herself had received some $57,000.00. Her new solicitors also advised that they were aware that a trustee had been appointed for the sale of property owned by the respondent and Mr Henry, that Mr Henry’s property had been sold, and that a nett amount of $90,000.00 – $95,000.00 was held by the trustee to be paid to Ms Worthington. On that basis, Mr Worthington stands to recoup about $150,000.00, which will still leave her short by some $47,000.00 in respect of the monies she deposited into the respondent’s trust account.

Characterisation of the conduct

  1. [63]
    The applicant submits that the conduct under each and all of the charges amounts to professional misconduct.
  1. [64]
    It is appropriate here to note the statutory definitions of “unsatisfactory professional conduct” and “professional misconduct” in the LPA

418 Meaning of unsatisfactory professional conduct

Unsatisfactory professional conduct includes 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.

419 Meaning of professional misconduct

  1. (1)
    Professional misconduct includes –
    1. (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
    2. (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. (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.
  1. [65]
    Those provisions are complemented by s 420, which provides:
  1. 420Conduct capable of constituting unsatisfactory professional conduct or professional misconduct
  1. (1)
    The following conduct is capable of constituting unsatisfactory professional conduct or professional misconduct –
    1. (a)conduct consisting of a contravention of a relevant law, whether the conduct happened before or after the commencement of this section;

      Note –

      Under the Acts Interpretation Act 1954, section 7, and the Statutory Instruments Act 1992, section 7, a contravention in relation to this Act would include a contravention of a regulation or legal profession rules and a contravention in relation to a previous Act would include a contravention of a legal profession rule under the Legal Profession Act 2004.

    2. (b)charging of excessive legal costs in connection with the practice of law;
    3. (c)conduct for which there is a conviction for –
      1. (i)a serious offence; or
      2. (ii)a tax offence; or
      3. (iii)an offence involving dishonesty;
    4. (d)conduct of an Australian legal practitioner as or in becoming an insolvent under administration;
    5. (e)conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act;
    6. (f)conduct of an Australian legal practitioner in failing to comply with an order of a disciplinary body made under this Act or an order of a corresponding disciplinary body made under a corresponding law, including a failure to pay wholly or partly a fine imposed under this Act or a corresponding law;
    7. (g)conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law.
  2. (2)
    Also, conduct that happened before the commencement of this subsection that, at the time it happened, consisted of a contravention of a relevant law or a corresponding law is capable of constituting unsatisfactory professional conduct or professional misconduct.
  3. (3)
    This section does not limit section 418 or 419.
  1. [66]
    It is evident from the narrative above that the respondent:
  1. (a)
    Repeatedly failed to respond to and comply with lawful requests from the applicant for the provision of information and documents. In that regard, it is relevant to note for the purposes of Charges 1 and 3 that the LPA expressly provides that a practitioner who fails to comply with a requirement made under s 443 may be dealt with for professional misconduct;[4]
  2. (b)
    Allowed monies deposited to his law firm’s trust account by Ms Worthington, and obviously held on trust for her, to be transferred, without her authority or consent and only on the instruction of her protagonist Mr Henry, to the tax agency’s trust account and ultimately to Mr Henry personally;
  3. (c)
    Lacked candour in his dealings with and evidence before the Federal Circuit Court, and failed to observe the terms of the order made on 2 November 2016.
  1. [67]
    Each of these categories, on their own, constituted conduct which violated or fell short of, “to a substantial degree, the standard of professional conduct observed or approved by members of the profession in good repute and competency”.[5]
  1. [68]
    The Tribunal considers that the conduct under each of Charges 1 to 7 was sufficiently serious, and involved such substantial failures to keep reasonable standards of competence and diligence as to constitute professional misconduct. In respect of Charge 8, the respondent’s conduct in connection with his dealings with the regulator, his mismanagement of trust monies, and his dealings with the Federal Circuit Court compel a finding that he lacks the necessary qualities of fitness and propriety to engage in legal practice, and thereby should be regarded as having engaged in professional misconduct. The Tribunal therefore makes a finding on each charge that the respondent engaged in professional misconduct.

Orders

  1. [69]
    Having made those findings, the Tribunal’s discretion under s 456 of the LPA is enlivened. The Tribunal has a wide discretion as to the orders it may make upon a finding that a practitioner has engaged in professional misconduct. The most serious of those is an order recommending that a practitioner’s name be removed from the local roll.
  1. [70]
    In Legal Services Commissioner v Munt,[6]this Tribunal noted the following relevant principles:

In approaching the question as to the orders which ought be made as a consequence of that finding, the following propositions are well-established:

  1. (a)
    In this disciplinary jurisdiction, orders are shaped in the interests of the protection of the community from unsuitable practitioners, and in determining what orders should be made “regard should primarily be had to the protection of the public under the maintenance of proper professional standards”.[7]
  2. (b)
    An order removing a practitioner’s name from the roll should only be made when the probability is that the practitioner is permanently unfit to practice.[8]
  3. (c)
    The determination is as to present fitness, not fitness at the time of the offending conduct.[9]
  1. [71]
    In Queensland Law Society Inc v Carberry,[10] Moynihan SJA and Atkinson J, with whom Pincus JA agreed, said:
  1. [38]
    It is now trite to say that the primary role of proceedings such as those before the Tribunal is to protect the public from persons not fit to be held out as officers of the court and as a proper person to be entrusted with the duties and responsibilities of the solicitor: Harvey v Law Society of New South Wales (1975) 49 ALJR 362 at 364; Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279; Clyne v New South Wales Bar Association (1960) 104 CLR 186; Adamson v Queensland Law Society Incorporated [1990] 1 QdR 498. As was pointed out in Attorney-General v Bax [1999] 2 QdR 9 at 21 by Pincus JA, there is a subsidiary purpose in the public interest and that is to deter other practitioners who might otherwise engage in professional misconduct.
  2. [39]
    It would be inconsistent with the court’s duties to preserve the standards of professional practice not to conclude that what has been found against the respondent demonstrates unfitness to practice.
  1. [72]
    The conduct engaged in by the respondent involved grave departures from the fundamental standards of practice which are expected of members of the legal profession.
  2. [73]
    There is a fundamental obligation on legal practitioners to assist the regulator in its enquiries and comply appropriately with its requests for information. That fundamental obligation is entrenched and reinforced by the ASCR.
  3. [74]
    There is a fundamental obligation on legal practitioners to deal honestly and appropriately with monies held in their trust accounts.
  4. [75]
    It is fundamental to membership of the legal profession that a practitioner faithfully observe the paramount duty to the administration of justice, which incorporates the duty of honesty and probity in dealings with the court.
  5. [76]
    By his conduct, the respondent departed significantly from each of these fundamentals, and thereby provided “instant demonstration of unfitness”. [11] The public should be protected from a person who has such disregard for the fundamental standards of the profession. Such a person is not one who deserves ongoing endorsement of fitness to practice by inclusion on the roll of legal practitioners.[12] Nothing has been put before this Tribunal which would gainsay a present conclusion that the probability is that the respondent is permanently unfit to practice.
  6. [77]
    Accordingly, it is the recommendation of the Tribunal that the Respondent’s name be removed from the roll.
  7. [78]
    There are no exceptional circumstances such as to allow a departure from the general rule as to costs prescribed by s 462(1) of the LPA.
  8. [79]
    Accordingly, the orders of the Tribunal are as follows:
    1. It is recommended that the name of the respondent, Alexander Kurschinsky, be removed from the roll of legal practitioners in Queensland;
    2. The respondent shall pay the applicant’s costs of and incidental to this discipline application, such costs to be assessed on the standard basis in the manner in which costs would be assessed if the matter were in the Supreme Court of Queensland;
    3. Cassandra Lee Kimmins shall advise the Tribunal and the respondent as to whether she wishes to pursue her notice of intention to seek compensation order by 4.00 pm on 24 June 2020; and
    4. If Cassandra Lee Kimmins advises that she wishes to pursue a compensation order, then the matter will be listed for directions on a date to be advised by the Tribunal.

Footnotes

[1]See LPA, s 649.

[2]Email from Deputy Commissioner Robert Brittan to Kurschinsky Law, dated 19 August 2015.

[3]Rule 43 of the ASCR states:

Dealing with the regulatory authority 43.1 Subject only to his or her duty to the client, a solicitor must be open and frank in his or her dealing with a regulatory authority. 43.2 A solicitor must respond within a reasonable time and in any event within 14 days (or such extended time as the regulatory authority may allow) to any requirement of the regulatory authority for comments or information in relation to the solicitor’s conduct or professional behaviour in the course of the regulatory authority investigating conduct which may be unsatisfactory professional conduct or professional misconduct and in doing so the solicitor must furnish in writing a full and accurate account of his or her conduct in relation to the matter.

[4]LPA, s 443(3).

[5]Adamson v Queensland Law Society Inc [1990] 1 Qd R 498, 507 (Thomas J).

[6][2019] QCAT 160, [43].

[7]Legal Services Commissioner v Madden (No 2) [2009] 1 Qd R 149, [122]; see also Legal Services Commissioner v Meehan [2019] QCAT 17, [31].

[8]Watts v Legal Services Commissioner [2016] QCA 224, [46].

[9]Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320, [17].

[10][2000] QCA 450.

[11] Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279, 298 (Kitto J).

[12]See Attorney-General of the State of Queensland v Legal Services Commissioner & Anor; Legal Services Commissioner v Shand [2018] QCA 66.

Close

Editorial Notes

  • Published Case Name:

    Legal Services Commissioner v Kurschinsky

  • Shortened Case Name:

    Legal Services Commissioner v Kurschinsky

  • MNC:

    [2020] QCAT 182

  • Court:

    QCAT

  • Judge(s):

    Daubney, Mr Geoffrey Sinclair, Dr Margaret Steinberg AM

  • Date:

    03 Jun 2020

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
Adamson v Queensland Law Society Incorporated[1990] 1 Qd R 498; [1989] QSCFC 145
3 citations
Jump To
Cite 1 - [1990] 1 Qd R 498
Cite 2 - [1990] 1 Qd R 498
Cite 3 - [1990] 1 Qd R 498
Attorney-General v Bax [1999] 2 Qd R 9
1 citation
Jump To
Cite 1 - [1999] 2 Qd R 9
Attorney-General v Legal Services Commissioner [2018] QCA 66
2 citations
Jump To
Cite 1 - [2018] QCA 66
Cite 2 - [2018] QCA 66
Clyne v NSW Bar Association (1960) 104 CLR 186
1 citation
Jump To
Cite 1 - (1960) 104 CLR 186
Harvey v The Law Society of New South Wales (1975) 49 ALJR 362
1 citation
Jump To
Cite 1 - (1975) 49 ALJR 362
Legal Services Commissioner v Madden (No 2)[2009] 1 Qd R 149; [2008] QCA 301
2 citations
Jump To
Cite 1 - [2009] 1 Qd R 149
Cite 2 - [2009] 1 Qd R 149
Legal Services Commissioner v Meehan [2019] QCAT 17
2 citations
Jump To
Cite 1 - [2019] QCAT 17
Cite 2 - [2019] QCAT 17
Legal Services Commissioner v Munt [2019] QCAT 160
2 citations
Jump To
Cite 1 - [2019] QCAT 160
Cite 2 - [2019] QCAT 160
Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320
2 citations
Jump To
Cite 1 - [2003] NSWCA 320
Cite 2 - [2003] NSWCA 320
Queensland Law Society Inc v Carberry; A-G v Carberry [2000] QCA 450
2 citations
Jump To
Cite 1 - [2000] QCA 450
Cite 2 - [2000] QCA 450
Watts v Legal Services Commissioner [2016] QCA 224
2 citations
Jump To
Cite 1 - [2016] QCA 224
Cite 2 - [2016] QCA 224
Ziems v Prothonotary of the Supreme Court of N.S.W. (1957) 97 CLR 279
3 citations
Jump To
Cite 1 - (1957) 97 CLR 279
Cite 2 - (1957) 97 CLR 279
Cite 3 - (1957) 97 CLR 279

Cases Citing

Case NameFull CitationFrequency
Legal Services Commissioner v Munt [2023] QCAT 4793 citations
1

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