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[2012] QCAT 274
General information, not legal advice.
Queensland Civil and Administrative Tribunal
2012-06-29
Alan Wilson J
Original judgment source is linked above.
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 ("QCAT Act").
[1] Mr Quinn is a solicitor and an "Australian legal practitioner" under the Legal Profession Act 2007 ("LPA"). On 26 April 2012 the Queensland Law Society ("the Society") resolved to cancel his practicing certificate, with effect from 4 May 2012. Mr Quinn has applied to the Queensland Civil and Administrative Tribunal ("QCAT") for review of that decision and, also, that its operation be stayed pending determination of the review.
[2] The Tribunal directed that, unless any party objected, his application for a stay would be determined on the papers following an exchange of written submissions, which has now occurred. Neither party objected to the matter being decided on the papers.
[3] Between 1 July 2006 and 31 March 2009, Mr Quinn was the sole principal of the law practice, Q5 Law. After 1 April 2009, he was the sole legal practitioner director of an incorporated legal practice, Q5 Law Pty Ltd, practicing as Q5 Law.
[4] Following investigations into Mr Quinn's trust account, the Society came to the view that between September 2008 and October 2009 he had misapplied trust account funds in 22 matters, involving an amount of $63,698.28.
[5] In general terms, Mr Quinn's alleged misconduct involved the transfer of trust account funds to his own account for legal costs, notwithstanding that in each case there was no existing entitlement to the costs, or all of them; all the costs were transferred from the account of a person not liable for them; or, a deficiency was thereby created in the trust account.
[6] These events, the Society concluded, amounted to breaches of s 249(1) of the LPA, which dictates that a law practice must hold trust money deposited in the general trust account of the practice exclusively for the person on whose behalf it is received, and disperse the trust money only under a direction given by that person.
[7] The alleged contraventions were discovered, the Society says, following a series of investigations on its behalf, and reconstructions and reconciliations of the trust account in the period commencing 9 August 2009 and ending in December 2011.
[8] In his application to review the Society's decision, Mr Quinn asserts that in 2007 he engaged the services of an external consultant to perform record keeping functions in relation to his trust account but discovered, in 2008, that the records had not been properly maintained. He then engaged a professional auditor, and, on 26 September 2008, wrote to the Society explaining the circumstances and citing them as the reason for his failure to lodge a statutory audit report within time.
[9] He says he discovered further discrepancies in the trust account records in the audit year ending 2009, and asked the external consultant to repair them, but that could not be effected.
[10] Then, on 19 August 2009, the Society commenced an investigation, and, at the end of January 2010, issued a report which, Mr Quinn says, was based on inaccurate and incomplete information; did not reflect the true position of his trust account; and, was not prepared in accordance with applicable standards.
[11] Nevertheless, the Society issued a notice to him on 23 February 2011 to show cause why his practicing certificate should not be cancelled, and he subsequently made three submissions in response in March, April and June 2011.
[12] In the third of these, Mr Quinn again denied the allegations the Society had made in the show cause notice; asserted that the information it had relied upon in compiling the report was incomplete and inaccurate; and, also asserted that certain transactions that were the subject of the investigation leading to the report had not been conducted by Mr Quinn. Following this, the Society resolved on 4 July 2011 to take no further action in respect of that show cause notice - but, also, to require that Mr Quinn cause his trust accounts to be reconstructed so that the Society might investigate.
[13] Mr Quinn says he instructed accountants to perform the reconstruction, but that work was delayed by events beyond his control, and was not submitted to the Society until September 2011.
[14] That construction was, Mr Quinn says, prepared in compliance with applicable standards; reviewed each and every trust account transaction; reflected the true position of the trust account; and, showed that there were no breaches or irregularities of the kind the Society alleged.
[15] The Society determined, however, not to rely on the reconstruction by Mr Quinn's accountant and undertook its own investigations which, Mr Quinn says, was again wrong and repeated the errors in the first report and, again, wrongly concluded that numerous breach and irregularities had, in fact, occurred.
[16] The Society's own report was issued in late December 2011, and on 14 February 2012 the Society again issued a notice to Mr Quinn to show cause why his practicing certificate should not be cancelled, and calling upon him to respond.
[17] He was granted subsequent extensions of time but was still unable to provide, he says, a complete response. That was because, Mr Quinn submits, that two investigations had taken almost 2.5 years to complete, and created a significant strain on his personal, emotional and business resources which were, as a result, "adversely impacted". The second show cause notice also had an attachment of some five hundred pages requiring review, comment and rebuttal, and Mr Quinn's limited funds effected his ability to engage "...professionals necessary to represent his interest".
[18] Rather, he took steps to close the practice of Q5 law and, henceforth, to engage only in supervised legal practice as an employee.
[19] On 2 April 2012, Mr Quinn wrote to the Society outlining what he was doing, but on 23 April the Society resolved to cancel his practicing certificate.
[20] His application for review asserts that, based upon these facts, the Society erred in resolving that he was no longer a fit and proper person to hold a practicing certificate and to cancel his certificate.
[21] His application for a stay pending the determination of the review proceedings rests on his version of, and submissions about, these historical events and the fact that he is, without a practicing certificate, unable to work in his profession and derive income from it.
[22] Mr Quinn contends that because he is no longer engaged in public practice, and does not propose to engage in public practice as a principal, the interests of the public are not adversely affected; that while the allegations against him are serious, when the surrounding facts and circumstances are taken into account, his conduct was not "disgraceful or discreditable" to a degree that disentitles him from the right to practice as a solicitor; and, that he will be able to show in the review proceedings, relying upon the versions of events set out in his application and summarised above, that the Society's decision was excessive and unwarranted.
[23] Mr Quinn does not dispute that the Society, as a regulatory authority under the LPA, has the power to suspend his certificate.
[24] The main purpose of the LPA is to provide for the regulation of legal practice
"... in the interests of the administration of justice and for the protection of consumers of the services of the legal profession and the public generally."[1]
[25] In review proceedings the Tribunal's power to make an order is set out in s 22(4) of the QCAT Act, which provides that the Tribunal may grant a stay:
"... only if it considers the order is desirable after having regard to ... the interest of any person whose interest may be effected by the making of the order, or the order not being made; any submission made to the Tribunal by the decision-maker; and, the public interest."
[26] As observed by the Honourable James Thomas AO QC in Deputy Commissioner Stewart v Kennedy[2], these are factors that would ordinarily be considered in any event in a stay application (and must, of course, be addressed), together with the basic, relevant tests identified by the Queensland Court of Appeal in Cook's Construction Pty Ltd v Stork Food Systems (Aust) Pty Ltd[3] - that is, the applicant's prospects of success; whether or not the appeal might be rendered irrelevant if a stay is not granted; and, whether irremediable harm might be suffered by the applicant if the stay is not granted.
[27] This is not a case in which it is possible to form a clear view about Mr Quinn's prospects in his application for review. As he properly conceded in his written submissions, what he is accused of doing or failing to do is serious. As both the Queensland and New South Wales Courts of Appeal have observed, reliability and integrity in the handling of trust funds is a fundamental prerequisite in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor. Members of the public put great faith and trust in the honesty of solicitors and the handling of monies on their behalf, and the Court must ensure that this trust is not misplaced.[4]
[28] The primary issue here concerns the proper balance between Mr Quinn's own interest in practicing in his profession and deriving an income from it, and the public interest.
[29] Those factors were considered by the Queensland Court of Appeal in Legal Services Commissioner v Baker[5] in which Chesterman J (as his Honour then was)[6] referred to the judgment of Spigelman CJ in New South Wales Bar Association v Stevens[7], in which the Chief Justice observed that the protection of the public is a matter entitled to significant weight in an application for a stay, and noted the importance of upholding disciplinary sanctions against legal practitioners to protect the public interest, and the reputation of the profession.
[30] Chesterman J also referred to the judgment of Kirby J in Bryant v Commonwealth Bank of Australia[8] to the effect that, in the exercise of the jurisdiction arising in cases involving a stay of the operation of laws designed to protect the public (eg, deregistration of a professional lawyer), it is to be remembered that they are in a class different from those involving no more than the suspension of the operation of orders affecting, for example, private litigants.
[31] Chesterman J went on to observe[9] that an applicant in cases of this kind should establish a cogent reason for the stay, and cannot do so merely by showing that he will be unable to practice his profession until his appeal is heard, and allowed. Something more must be shown than prejudice of this kind; and, the additional factors which would justify a stay must be such as to outweigh the public interest, which is to be afforded particular significance.
[32] Chesterman J further observed[10] that while it was conceded that the solicitor had an arguable case on appeal, that is not always a sufficiently cogent reason for granting a stay. Rather, his Honour stated[11] that other factors will require consideration: the seriousness of the misconduct; the likely prejudice to public confidence in the integrity of the disciplinary process and the reputation of the profession if the practitioner is granted a stay; the means available to mitigate that prejudice; and, the expedition with which the appeal can be heard.
[33] The allegations here, if proved, may fairly be categorized as involving misconduct that is serious. In the face of those serious allegations, it is reasonable to conclude that the confidence of the public in the disciplinary process might be adversely affected if a stay is granted.
[34] Mr Quinn points to the possibility of employment that will extinguish or minimise the risk (because he will not have control of a trust account), but that circumstance must be balanced against other relevant factors.
[35] The Tribunal is currently in a position to offer hearing dates within a reasonable period, i.e. within not more than six months.
[36] Strong statements, in the cases mentioned above, about the importance of the proper maintenance of trust accounts by solicitors as a vital element of the maintenance of public confidence in the profession; the different approach to be taken to a stay application when it involves a lawyer; the serious nature of the alleged misconduct; and, the absence of any compelling evidence that Mr Quinn has a strong or very strong case in his application for review all constitute cogent reasons, in my view, for refusing his application for a stay.
[37] Mr Quinn's submissions in support of his application, which rely principally upon the current effects of the Society's decision, are insufficient to outweigh the strong emphasis upon the importance of protecting consumers of the services of the legal profession, and the public generally.
[38] The Society's submissions also rely upon the fact that, had Mr Quinn's certificate not been cancelled, it would fall due for renewal at the present time (30 June 2012) and, even if a stay is granted, the Society would still be obliged to make a new and different decision at that time. That circumstance, the Society submits, means there is no practical utility in the application. For the very reason that a decision at that time would be new and discrete, I do not think it is appropriate to afford that circumstance any weight in the context of the current separate, but also discrete, proceedings. Otherwise, however, the application remains one which should be refused.
[4] Law Society of New South Wales v Jones, Unreported, NSWCA, CA 333 of 1977, 27 July 1978 at [10]; Council of the Queensland Law Society Inc v Cummings; ex parte A-G (Qld) [2004] QCA 138 per McMurdo P at [19].
[6] With whom McMurdo P and Helman J agreed.
[7] [2003] NSWCA 95 at [151].
[8] (1996) 70 ALJR 306 at 309.
[9] Legal Services Commissioner v Baker [2005] QCA 482, at [28].
[11] Ibid, at [31] citing Finn J in Robb v The Law Society of the Australian Capital Territory, unreported, Federal Court, No ACT G34 of 1996, 21 June 1996.
Quinn
Queensland Law Society [2012] QCAT 274
Council of the Queensland Law Society Inc v Cummings; ex parte A-G (Qld) [2004] QCA 138, cited
Deputy Commissioner Stewart v Kennedy [2011] QCATA 254, cited
Legal Services Commissioner v Baker [2005] QCA 482, considered
New South Wales Bar Association v Stevens [2003] NSWCA 95, cited
(1996) 70 ALJR 306