Cheney v Qld Law Society Inc

[2001] QSC 338

SUPREME COURT OF QUEENSLAND

CITATION:

Cheney v Qld Law Society Inc [2001] QSC 338

PARTIES:

JENNIFER MARY CHENEY
(appellant)
v
QUEENSLAND LAW SOCIETY INCORPORATED
(respondent)

FILE NO:

SC No 4303 of 2001

DIVISION:

Trial Division

DELIVERED ON:

13 September 2001

DELIVERED AT:

Brisbane

HEARING DATE:

21 May 2001

JUDGE:

Chesterman J

ORDER:

Appeal dismissed

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – PRACTICING CERTIFICATES – QUEENSLAND – where appellant contravened the Trust Accounts Act 1973 – where deficiency in trust account caused by dishonesty of appellant’s husband – whether practicing certificate should be issued

Queensland Law Society Act 1952 s 10, s 42
Trust Accounts Act 1973

COUNSEL:

Mr S P Coates for the appellant
Mr D Andrews for the respondent

SOLICITORS:

Dearden Lawyers for the appellant
McCullough Robertson for the respondent

1. CHESTERMAN J:  The appellant is a solicitor admitted to practice in 1978.  For some years she has been a sole practitioner practicing from an office in her home at 175 Honour Avenue in Chelmer.  It was, I am told, predominantly a family law practice. The appellant employed her husband to perform clerical and administrative tasks.  In particular he was charged with banking and maintaining the records relating to the appellant’s trust account and general account. 

1. Audits conducted by officers of the respondent Society on 16 March, 23 March and 5 April 2001 revealed a number of unauthorised transactions on the trust account which, for a time, had been allowed to go into overdraft.  Improper transfers were made from the trust to the general account.  As well funds in the trust account allocated to one client were appropriated to another.  The net position is that there is a deficiency in the trust account of $9,399.50. 

1. It is contended by the appellant, and accepted by the respondent, that the shortfall was occasioned by dishonesty on the part of her husband.  The appellant denies any mendacity on her part and the respondent does not put forward any evidence that she was a party to her husband’s defalcation.  

1. The evidence does, however, reveal that the appellant did not properly supervise the operation of her trust account or ensure that transactions were properly conducted or accurately recorded.  Indeed it shows that the appellant had some suspicion, not that her husband was dishonest, but that he was not scrupulously keeping the accounts.  She did not firmly take control of the situation. 

1. On 9 April 2001 the Council of the respondent, acting pursuant to s 10(1)(d) of the Queensland Law Society Act 1952 (“the Act”) assumed control over the appellant’s trust account and appointed a number of its officers as co-signatories to the account.  By a letter dated 10 April 2001 the respondent called on the appellant to show cause why her practicing certificate should not be suspended pursuant to s 41B(1)(f) of the Act.  The section provides that the respondent’s council may suspend a practitioner’s certificate in the event that a practitioner is in default of a provision of the Trust Accounts Act 1973.

It is not disputed that the appellant had contravened provisions of that Act.  The appellant wrote on 20 April 2001 to the respondent in an endeavour to show why her practicing certificate should not be suspended.  Her explanations for the shortfall and about the manner in which the trust account had been conducted failed to persuade the respondent that it was appropriate that she continue in practice and on 26 April 2001 it suspended her certificate and appointed itself as receiver of her trust account moneys.

1. Apart from her husband’s betrayal the appellant has suffered a number of misfortunes.  Her house was substantially damaged by fire in April 1999.  The house was two storied with the appellant’s office being located downstairs and the living quarters upstairs.  This part was gutted and rendered uninhabitable.  The appellant’s husband’s duties extended to domestic administration but he had neglected to renew the insurance policy covering the house.  The result is that the appellant cannot afford to reinstate her home and is obliged to live in one room next to her office.

1. As well she has suffered indifferent health for a number of years.  The stress of recent events has led to a deterioration in her condition though, it should be noted, she is still able to work in her profession. 

1. The appellant is concerned that the respondent’s decisions have deprived her of the only means she has of earning a livelihood.  She does not contest the legitimacy of the respondent’s concern about her trust account. 

1. Section 10(7) of the Act provides that:

“Any practitioner in respect of whose trust account a resolution is passed as aforesaid may appeal to a judge . . . in Chambers who is hereby authorised to make such order in the matter as the judge may think fit.”

Section 42(1) of the Act provides that:

“Where . . . council … suspends a certificate, the . . . holder . . . may appeal to . . . a judge in Chambers, who may make such order in the matter as the . . . judge may think fit.”

By subsection (6) an appeal under the section “shall be in the nature of a re-hearing”.

1. By notice of motion dated 14 May 2001 the appellant sought orders setting aside the resolutions and orders of the respondent made on 9 and 26 April respectively and a further order that the appellant be granted an unrestricted right to practice as a solicitor or, alternatively, that she be given the right to practice upon conditions which would allow the appointed officers to remain as co-signatories to her trust account and which would compel her to complete a Practice Management Course with the view to becoming proficient in the conduct of trust accounts.

Although the Act confers rights of appeal in the terms mentioned the appellant seems to have regarded her application to the Court as in the nature of a judicial review.  The grounds taken in her notice of appeal are those commonly found in such reviews.  When the matter was called on counsel for the applicant indicated this was the “first return date” of the application which is terminology relevant to judicial reviews but which finds no justification in the rights of appeal given by the Act which are much more extensive than a right of judicial review. 

1. When the curiosity in the appellant’s approach to the appeal was pointed out, her counsel, who had not come prepared to argue the appeal on its merits, initially sought to treat it as an application for a stay pursuant to s 42(8) of the Act.  This course was opposed by the respondent which sought the immediate determination and dismissal of the appeal. 

1. It appeared to me on the material that the respondent’s very proper concern to protect the beneficiaries of the appellant’s trust account and her demonstrated present lack of capacity to operate such an account meant that the appeal was very unlikely to succeed in that respect but that the deprivation of the appellant’s right to practice in any capacity as a solicitor was hard, and went beyond what was needed for the protection of the public.  Upon inquiry whether a certificate might be issued by the respondent which would allow the appellant to practice as an employed solicitor and thereby earn an income an answer in the affirmative was given.  Mr Andrews, who appeared for the respondent, intimated that it would not oppose the making of such an order subject to the appellant recompensing her trust account the amount of $9,399.50.  The appellant had earlier said she would reimburse it as soon as possible, but has not yet done so.  To allow her to practice, even as an employee, without her having made good the losses suffered by her clients by reason of her lack of responsibility would, Mr Andrews submitted, “send the wrong signal” to the community and the profession. 

1. The submission appeared sound and was accepted as such by the appellant whose counsel intimated she would pay the money within a few days.  I therefore adjourned the appeal to allow the payment to be made on the basis that when informed it  had occurred I would make an order in terms of a draft to be submitted to me which would allow the issue of a restricted practising certificate to the appellant.

1. Because the appeal was successful, but only partly so, there should be no order as to the costs of the appeal.

1. The foregoing reasons were prepared soon after the hearing.  Despite the confidence with which counsel for the appellant intimated that his client would make good the deficiency within a few days to allow the appellant to receive a restricted practising certificate nothing was heard from the parties for months.  On 23 August 2001 my associate, at my direction, wrote to the parties.  He reminded them of the order which had been proposed on 21 May and continued:

“Since that time there has been no notice of the appellant’s repayment and it is presumed the debt remains outstanding.  Accordingly, his Honour intends to dismiss the appeal should nothing further be heard . . . on or before 30 August 2001.”

Nothing has been heard from either party.  The silence might be thought by some to be discourteous.  Be that as it may there is no point in allowing the matter to remain unresolved any longer.  Accordingly I order that the appeal be dismissed.  A copy of these reasons will be sent by post to the parties.