Minister for Justice & Attorney-General v Brown [1993] QCA 216

In March 1987, Moxlaw Pty. Ltd. (formerly Allied Floors Pty. Ltd.) commenced proceedings in the Supreme Court of Queensland against Godfrey Hirst (Australia) Pty. Ltd., which subsequently delivered a counter-claim against Moxlaw. On 15 March 1988, after a five day trial, Moxlaw's claim was dismissed and judgment was given for Godfrey Hirst on its counter-claim in the sum of $105,025.57, together with costs. The respondent did not act for any party in that litigation.

However, at about that time, the respondent prepared and permitted the execution of two agreements between Moxlaw and Queen of Diamonds Pty. Ltd., both of which were controlled by one Brian Anthony Ruffles. Both agreements were backdated to August 1987. By the agreements, Moxlaw sold its business, including all plant, equipment, stock and goodwill to Queen of Diamonds and transferred the lease of its business premises to Queen of Diamonds. The consideration for the sale and transfer was (1) the assumption by Queen of Diamonds of Moxlaw's liability in respect of loans by Mr Ruffles and his wife to Moxlaw in the sum of $87,000.00, (2) the issue by Queen of Diamonds to Moxlaw of 99,000 $1.00 dividend shares (B class non-voting) and (3) the sum of $150,000.00 which was to be paid by half-yearly payments over 25 years commencing on 1 August 1988. A principal purpose of the transactions was to remove the business and assets of Moxlaw from the reach of Godfrey Hirst. The scheme was devised by an accountant, not the respondent, but the respondent knowingly participated.

Moxlaw was subsequently placed in liquidation and, in August 1987, the liquidators brought proceedings to set aside the transaction between Moxlaw and Queen of Diamonds as a preference and also on the ground that it was entered into with the intention to defeat or to defraud a creditor. On or shortly before 28 November 1988, the respondent prepared affidavits to be sworn by Ruffles and two other persons which stated that the agreement for sale of the business from Moxlaw to Queen of Diamonds was executed on 3 August 1987, which the respondent knew to be false. Further, the affidavit stated that the agreement was signed by Queen of Diamonds pursuant to resolutions passed at a meeting of its directors on 3 August 1987, the minutes of which were exhibited to the affidavits. To the knowledge of the respondent, no such resolutions were passed on 3 August 1987. The respondent permitted each deponent to swear his or her affidavit containing the false information and caused each affidavit to be filed in the Supreme Court of Queensland and served on the liquidators.

In determining that suspension was the appropriate penalty, the statutory committee said that it had regard "... to the Solicitor's 28 years of unblemished practice, and the strong testimonials produced to the Committee, .. ". However, the respondent has submitted in this Court that the Statutory Committee also had other facts before it which had a direct bearing on the penalty, namely:

"(a) The fact that the respondent co-operated fully with the enquires of the Queensland Law society;

(b) That the Accountant, Mr Gavan, and not the Appellant, was the author of the scheme to transfer the assets to the related company;

(c) That the Respondent's former client Mr Ruffles, selectively gave information to the Appellant as and when it suited Mr Ruffles;

(d) That the Appellant was not privy to any scheme by Mr Ruffles to defraud Godfrey Hirst (Australia) Pty. Ltd.;

(e) That the Respondent was not privy to the existence of the Supreme Court action between Allied Floors Pty. Ltd. and Godfrey Hurst (Australia) Pty. Ltd. (referred to at paragraph 5 of the Appellant's Submissions). This action was conducted on behalf of Allied Floors Pty. Ltd. and/or Mr Ruffles by another firm of solicitors, without any involvement whatsoever by the Respondent.

(f) That the Respondent refused to commit perjury for Mr Ruffles (refer letter Keller Nall and Brown to Mr Ruffles dated 3rd day of April 1989);

(g) That the Respondent refused to act further for the client Ruffles upon being asked in April 1989 to assist Mr Ruffles to defraud his creditors;

(h) That the Respondent practitioner had nothing to gain personally from his professional misconduct in misleading the Court;

(i) That the complainant Godfrey Hirst (Australia) Pty. Ltd. suffered no financial loss whatsoever in relation to the conduct of the Respondent;

(j) That the Respondent was a married man, 51 years of age, who had raised 13 children, three of which were still living at his home and were being supported by him;

(k) The severe financial hardship that the twenty months suspension would have on his already precarious financial situation;

(l) That whilst there may have been an intention to "mislead", there was no intention to defraud ... ."

It was common ground that, under sub-section 6(3)(a) of the Queensland Law Society Act, 1952, the Statutory Committee had a discretion to strike the respondent off the Roll or suspend him from practice and that, by sub-section 6(4) of the Act, the Attorney-General is entitled to appeal to this Court. Although the appeal is by way of re-hearing, the Court will only interfere if the Statutory Committee was clearly wrong.

Submissions made on behalf of the Attorney-General sought to emphasise the reference by the Statutory Committee to the respondent's "... 28 years of unblemished practice, and the strong testimonials produced to the Committee, ...". However, the Court is not satisfied that these were the only matters relied on by the Committee in determining the penalty to be imposed. Rather, the matter should be approached on the footing that the Statutory Committee also took account of the matters referred to on behalf of the respondent and set out above, and that the professional misconduct proved against the respondent involved a deliberate and sustained course of grave misconduct. The question, such circumstances is whether, although no error appears in the Statutory Committee's reasoning, its decision was so plainly wrong that it cannot have exercised its discretion properly.

That conclusion was urged upon the Court on behalf of the Attorney-General on the basis of the serious nature of the misconduct which, partially, at least, "was, in a real sense, directed at misleading the court. It was a dereliction of the duty of a Solicitor to the Court of a most serious kind." Reference was made to "the primary need to protect the public from professional misconduct of this type", and it was argued that the respondent was shown not to be "a fit and proper person to be entrusted with the important duties and grave responsibilities of a Solicitor." It was further submitted that:

"The Respondent's failure to accept that what he did was wrong in the circumstances denies his fitness as an officer of the Court."

It was submitted that striking off was the appropriate course, because the "Court's duty is to ensure that ... standards of the profession are fully maintained particularly in relation to the proper relationship of practitioner with practitioner, practitioner with the Court and practitioner with the members of the public who find need to use the services of the profession.": Harvey v. Law Society of New South Wales (1975) 49 ALJR 362, 364.

Counsel for the respondent argued that the Statutory Committee's discretion had not miscarried, and emphasised the qualifications of the members of the Statutory Committee "to know what standards are required of a legal practitioner in Queensland." Further, it was submitted that:

"(m) Given that the primary role of the statutory committee is to protect both the public and the profession, the members of the statutory committee were best able to judge, after assessing the whole of the evidence and the demeanour of the witness, the appropriate penalty in order to ensure the appropriate protection for the public and the profession.

(n) That the statutory committee have conducted the disciplinary proceedings in an exemplary manner, have given appropriate weight to all relevant considerations, and, in imposing the period of suspension, have acted entirely properly in the exercise of their discretion;

(o) That the statutory committee have not erred in law with respect to their duties under the Queensland Law Society Act 1952, and there is no basis upon which the Court should overrule the decision of the statutory committee".

Reference was also made to the Statutory Committee's order for costs against the respondent, with the "... practical effect ... that the Respondent has already incurred an immense penalty ...".

Against the background of the various factors referred to, the essential issue is whether any order but striking off could have been adequate in all the circumstances.

The matters proved against the respondent involved a deliberate and sustained course of grave misconduct which, partially at least, was directly aimed at misleading the Court.

Further, the respondent displayed absolutely no remorse. On the contrary, he gave evidence before the Statutory Committee which it did not accept, which attempted an elaborate explanation of what had occurred in an effort to diminish his culpability.

The inescapable conclusion is that the respondent is not "a fit and proper person to be entrusted with the important duties and grave responsibilities which belong to a solicitor". In Re Weare; In Re The Solicitors Act 1888 (1893) 2 Q.B. 439, 448; Southern Law Society v. Westbrook [1910] HCA 31; (1910) 10 CLR 609, 612, 619. It is, in our opinion, impossible to conclude that a period of suspension affords adequate protection to the public from such serious dereliction of duty as is evident in the respondent's behaviour.

The appeal is allowed. The order of the Statutory Committee suspending the respondent from practice until 30 June 1994 is set aside, and in lieu it is ordered that the respondent be struck off the Roll of Solicitors. The respondent must pay the costs of and incidental to the appeal to be taxed.