Legal Services Commissioner v King
[2013] QCAT 260
| CITATION: | Legal Services Commissioner v King [2013] QCAT 260 |
| PARTIES: | Legal Services Commissioner |
| v | |
| Ms Karen Louisa King |
| APPLICATION NUMBER: | OCR257-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 17,18,19 October 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Fryberg, Member Mr Ken Horsley |
| DELIVERED ON: | 2 July 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Charges 1, 2, 6 and 7 are proved. 2. .19 July 2013 4:00pm on Parties are to file in the Tribunal and give to each other written submissions in relation to each of the charges proved as to whether Ms Karen Louisa King had engaged in either unsatisfactory professional conduct or professional misconduct and the question of disciplinary orders by |
| CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – OTHER MATTERS – Breach of undertaking PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – TRUST MONEY – Transfer of money to meet costs and disbursements in breach of statute PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – OTHER MATTERS – False statement to Queensland Law Society in the course of an investigation PROFESSIONS AND TRADES – LAWYERS - COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – OTHER MATTERS – Failure to comply with written notice issued by the Legal Services Commissioner – Legal Profession Act 2007, s 443(3) PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – SOLICITOR'S COSTS – Failure to provide itemised bill of costs at request – Legal Profession Act 2007, s 332 Legal Profession Act 2007 (Qld), s 249, s 258(1)(b), s 330, s 331, s 332, s 443, s 443(3), s 452, s 708 Legal Profession Regulation 2007 (Qld), s 58, s 58(3), s 58(4) Briginshaw v Briginshaw (1938) 60 CLR 336, cited. |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Legal Service Commissioner represented by BI McMillan, instructed by Crown Law |
| RESPONDENT: | Ms Karen Louisa King represented by P Davis SC and P Morreau, instructed by Brian Bartley & Associates |
REASONS FOR DECISION
FRYBERG J: On 11 October 2010 an application under s 452 of the Legal Profession Act 2007 (“Act”) was filed in the Tribunal in Form 22 of the Tribunal's forms. It disclosed that the Legal Services Commissioner was the applicant, but did not name him. It sought “[d]isciplinary orders pursuant to section 456 of the Act” against the respondent, Karen Louisa King. It set out seven charges against Ms King. In relation to each charge it alleged that she had engaged in “unsatisfactory professional conduct and/or professional misconduct”.
The office of Legal Services Commissioner exists because s 583 of the Act provides, “There is to be a Legal Services Commissioner”. The Act further provides that the Governor in Council may appoint “a person” as the commissioner by gazette notice.[1] It specifies personal qualities of which the Minister must be satisfied before recommending an appointment[2] and the term of the appointment[3], and makes provision for the Commissioner's remuneration[4]. Plainly it envisages that the appointee will be a natural person. It expressly provides, “The commissioner is appointed under this Act and not under the Public Service Act 2008”[5]. It contains no provision making the Commissioner a corporation.[6]
[1]Legal Profession Act 2007, s 584(1).
[2]Legal Profession Act 2007, s 584(2).
[3]Legal Profession Act 2007, s 585.
[4]Legal Profession Act 2007, s 586.
[5]Legal Profession Act 2007, s 584(4).
[6] Compare State Development and Public Works Organisation Act 1971, s 8.
The functions of the Commissioner are broadly expressed:
“590 Functions
(1)The commissioner has the functions conferred or imposed on the commissioner under this Act or another Act.
(2)The commissioner may appear, by Australian legal practitioner or government legal officer, and be heard by the Supreme Court in relation to the court’s jurisdiction, or an exercise of the court’s power, under a relevant law.
(3)Also, the commissioner may appear, by Australian legal practitioner or government legal officer, for the purposes of prosecuting a person as an unlawful operator.”
One of the functions permitted under the Act is making an application to the Tribunal against an Australian legal practitioner.[7] The present application is brought in the exercise of that function. The Act makes no provision for the name under which the Commissioner should bring such proceedings. It apparently leaves such matters to be dealt with under the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”). The latter provides:
[7]Legal Profession Act 2007, s 452(1).
“33 Making an application
(1)This section applies if this Act or an enabling Act provides that a person may apply to the tribunal to deal with a matter.
(2)The application must—
(a) be in a form substantially complying with the rules; and
… .”
The Queensland Civil and Administrative Tribunal Rules 2009 provide that a discipline application must be made in the approved form.[8] I assume that Form 22 (“Application or referral – disciplinary proceeding”) is an approved form. It includes in Part A provision for the applicant's title, given names and family name. In that regard it appears to conform with the general principle that in the absence of statutory provision to the contrary, only a legal person can commence legal proceedings.
[8]Queensland Civil and Administrative Tribunal Rules 2009, r 115.
On the face of things, therefore, the application is defective. No point was raised about this on behalf of Ms King, and if there is a defect, it is doubtless easily fixed. Since the matter has not been the subject of argument, I shall hear the parties on the question of whether the application ought to be amended[9] after the delivery of these reasons for judgment.
[9]QCAT Act, s 135(1)(d).
On 17 October 2011 charge five was dismissed by consent. The hearing of the remaining charges took place over that day and the two succeeding days. Judgment has been reserved for an inordinate time, a delay for which I am responsible. I have the benefit of my notes made at the time of the hearing as well as the transcript of evidence, and I have a reasonable recollection of the impression made by the witnesses. I am aware that since the matter was reserved, Ms King has been refused a practising certificate by the Queensland Law Society and that her application for a stay has been dismissed.[10] I have not taken those facts into account and I have not read the reasons for either decision.
[10][2012] QCAT 489.
I shall deal with the charges more or less in chronological order.
Charge 7 - Mr Clark
Charge 7 alleged:
"Charge Seven – Breach of Undertaking
7.The respondent, in breach of her duty as a solicitor, failed to honour an undertaking given or authorised to be given by her on 27 July 2006 to Rodney John Clark of Counsel.
Particulars
7.1At all material times, the respondent:
(a)was an Australian Legal Practitioner;
(b)was engaged in legal practice as a sole practitioner under the name K.L. King & Associates;
(c)employed Oriena Stephanie Moloney as a legal practitioner.
7.2As at 27 July 2006 the respondent owed outstanding fees to Rodney John Clark of Counsel in the sum of approximately $29,000.
7.3On 27 July 2006, Ms Maloney gave the respondent's undertaking, with the respondent's authority, to Mr Clark via email in the following terms:
'I have spoken to Karen who has advised that she will undertake to have no less than $5,000 paid to you on or before 1 September 2006 with the remainder to be paid within one month.' ('the undertaking')
7.4The sum of $5,000 was paid to Mr Clark on or about 2 September 2006.
7.5The respondent has paid no further monies to Mr Clark which were due to him pursuant to the undertaking.
7.6In breach of her duty as a solicitor, the respondent failed to honour her undertaking to Mr Clark by failing to pay the amount provided for in the undertaking within the agreed time."
In her Response Ms King stated in relation to that charge:
" I deny charge 7.
As to the particulars:
[7.1]: Admitted
[7.2]: I admit that, as at 27 July 2006, I owed fees to Rodney John Clark of counsel in the sum of $27,474.60. That amount included fees in relation to Ms Leonie Mills amounting to $18,835.10 and otherwise related to fees owed to Mr Clark in relation to other clients.
[7.3]: I admit that on 27 July 2006 Ms Maloney gave an undertaking in the terms alleged in subparagraph [7.3] to Mr Clark. The undertaking related only to the fees owed to Mr Clark in relation to Ms Mills. I deny that the undertaking was given with my authority.
[7.4]: I do not admit subparagraph [7.4] because I believe that Ms Mills made payment of the sum of $5,000.00 in cash to Mr Clark at some time before 1 September 2006.
[7.5]: I admit subparagraph [7.5] but say that I believe that Ms Mills paid Mr Clark the further sum of $3,249.90 on or about 2 September 2006.
[7.6]: I admit that I have failed to honour the undertaking given by my employed solicitor to Mr Clark."
By the end of the evidence it was common ground that as at 27 July 2006 Ms King owed Mr Clark $27,474.60 and the Commissioner did not dispute Ms King's assertion that the amount owing in relation to Ms Mills was $18,835.10.
It will be observed that in particular 7.3, the Commissioner alleged that the undertaking was given “with the respondent's authority”. Issue has been joined on that point. I would have thought that allegation redundant. Without having researched the question, I would have thought that a solicitor was obliged to honour any undertaking given by an employed solicitor and within her apparent authority. The Commissioner chose not to conduct the case on that basis. Consequently, this charge is proved only if the Commissioner has shown that Ms Moloney had actual authority to give the undertaking.
The Commissioner did not contend that Ms Moloney's authority came from her position as an employee. His case was that Ms King expressly authorised the undertaking in a telephone conversation with Ms Moloney; and that the “remainder” in the undertaking referred to all other fees owed by Ms King to Mr Clark for all clients, or at least for Ms Mills' matter. Ms King submitted that the only undertaking which she authorised Ms Moloney to give was for the payment of $5,000 on account of Ms Mills.
The events giving rise to the charge
In February 2006 Mr Rodney Clark of counsel appeared for Ms Mills in a four day trial in the Family Court in Sydney instructed by Ms King. Judgment was reserved. Mr Clark's memorandum of fees to Ms King was dated 27 February and was duly received by her. In a covering letter Mr Clark confirmed his agreement to wait for payment of his professional fees “until we have an outcome”. In the context that meant until the reserved judgment was delivered, and I am satisfied that Ms King so understood it. That bill comprised about 80% of the amount owed to Mr Clark in relation to Ms Mills.
The alleged agreement in July
The judgment was delivered on 30 June 2006. It was not wholly favourable to Ms Mills, and she wished to appeal. However she was in financial difficulty. It is likely that some time before 26 July a conference was held at Mr Clark's chambers attended by him, Ms Mills, Ms King and Ms Moloney. What happened at that conference assumed some importance at the hearing.
In her second affidavit, filed and sworn on the first day of the hearing, Ms King deposed that at the conference Mr Clark advised that Ms Mills had excellent prospects on appeal. He said he would “spec” the appeal. She claimed he was instructed to draft the grounds of appeal for the notice of appeal which was due to be filed by 28 July 2006. It was arranged that Ms Moloney would prepare the form of notice of appeal and insert the grounds which he was to draft. As to the outstanding fees, Ms Mills said that she should be able to pay $5,000 by the end of July and another $5,000 at the end of August. Ms King did not allege that Mr Clark agreed to that arrangement in either full or partial satisfaction of his outstanding fees in the matter.
After copies of that affidavit were provided, Mr Clark was cross-examined. He had not referred to any conference in his affidavit which constituted his evidence in chief. He testified that he recalled a meeting with Ms Moloney and Ms Mills, but he was unsure if Ms King was present. He said at the meeting that he would “spec” the appeal. He had some recollection of a conversation about Ms Moloney liaising with him about an appeal. He was asked if he recalled Ms Mills saying that she could pay $10,000 toward his outstanding fees. He did not recall that figure being discussed, but did recall some discussion of his fees on the part of either Ms Mills or Ms King. He did not remember any mention of $5,000 by the end of July and $5,000 by the end of August, but was not prepared to say that this did not happen. He said that the backdrop to any conversation was that arrangements had to be made for his fees in total, either in one lump sum or instalments. It was not put to him that he had agreed to accept the two sums of $5,000 at the times mentioned in either full or partial satisfaction of his fees, nor was it suggested that he had asked for or agreed to accept payment of one such amount in cash. There had been a discussion with Ms King about payment of $10,000 in June 2008, but that was quite separate from what happened in 2006.
Ms Moloney was also cross-examined about a conference in mid-July 2006. She too had made no reference to such a conference in her affidavit. Ms Moloney testified that at some time before 26 July 2006 Ms Mills had instructed that she “had the funds” and would be “able to pay some funds”; she was “pretty sure” she phoned Mr Clark's chambers and spoke to his secretary after receiving those instructions to let Mr Clark know that the firm had instructions to continue with the appeal. She could recall being in Mr Clark's chambers on one occasion with Ms Mills and Ms King, but could not recall when that was or what it was about. It was possible the sum of $5,000 had been mentioned, but she could not recall it.
Ms King was cross-examined on the third day of the hearing:
“MR MCMILLAN: So you understood as at that date in mid-July that he expected to be paid for his work on the trial?
MS KING: No, that’s not exactly correct. There was a discussion as to the client’s lack of ability to pay and he agreed to accept the sum of $5,000 by the end of July, which he was receiving in cash, and a further sum of $5,000 a month later.
PRESIDING MEMBER: In full satisfaction of his bill?
MS KING: No, no, he expected to be successful on the appeal and he was happy to do it on that basis, your Honour. I think he says in his affidavit----
PRESIDING MEMBER: No, I’m not asking you what you think he said in his affidavit. I’m asking you what you say was the agreement that you reached.
MS KING: That was exactly the agreement, your Honour.
PRESIDING MEMBER: What was?
MS KING: $5,000 by the end of July and another $5,000 by the end of September.
PRESIDING MEMBER: And that’s it?
MS KING: There was no firm commitment for any payments after that date. Equally there was no agreement that that would be in full satisfaction of his bill.
PRESIDING MEMBER: Well then, since I gather you accepted, he did the trial on the basis that he would be paid?
MS KING: That’s so.
PRESIDING MEMBER: Then surely his whole bill would be payable?
MS KING: Well, he agreed to that arrangement at that meeting.
PRESIDING MEMBER: What, that his whole bill would be payable?
MS KING: No, he agreed----
PRESIDING MEMBER: I asked you a question. Surely it would still be the position that his whole bill would be payable?
MS KING: At some stage yes, definitely, but he agreed to $5,000 and then another $5,000.
…
PRESIDING MEMBER: When was the meeting with Mr Clark?
MS KING: I’ve actually looked back through my diary and tried to work out . My recollection was mid-July. I don’t have it in my diary and I think the reason for that was because Mr Clark said, 'Look, I’ll call you when I’m free and just make sure you can come straight in', and in fact that’s what we did, but it was mid-July.
PRESIDING MEMBER: This was an agreement you say that was reached at the meeting about his fees?
MS KING: Yes, your Honour.
PRESIDING MEMBER: Did you write him a confirmatory letter?
MS KING: No, I didn’t.
PRESIDING MEMBER: Did you make a file note?
MS KING: I assumed Ms Moloney had done a file note and I went back to check the file recently and it wasn’t there.
PRESIDING MEMBER: You didn’t make a file note, I gather?
MS KING: No, when Ms Moloney was with me I usually expected her to file note while I was discussing that and other matters.”
The following points should be noted:
· This was the first occasion on which Ms King alleged that Mr Clark had agreed to a proposal that he accept $5,000 at the end of July and $5,000 a month later (I assume the reference to the end of September was a slip of the tongue).
· This was the first occasion on which Ms King alleged that Mr Clark had agreed to a proposal that he accept payment in cash.
· There was no file note of any such agreement, yet Ms King testified that Ms Maloney “file noted very well”.
· Ms King had great difficulty in accepting the obvious proposition that as at the middle of July the whole of Mr Clark's bill for the trial was and remained payable.
The question of payment in cash arose again a little later in her evidence:
“PRESIDING MEMBER: Were you content for that to happen?
MS KING: For the payment to be made in that form?
PRESIDING MEMBER: Yes?
MS KING: Mr Clark requested that.
PRESIDING MEMBER: Mr Clark requested it?
MS KING: He did, your Honour.
PRESIDING MEMBER: Cash?
MS KING: He did, your Honour.
PRESIDING MEMBER: I see and were you content for that to happen?
MS KING: I didn’t feel that I could really say anything to the contrary.
PRESIDING MEMBER: Why?
MS KING: Because he asked for that to happen that way. He did the same thing in another matter in which I was involved. I didn’t feel – I probably didn’t feel strong enough to say not to.
PRESIDING MEMBER: But you knew it was wrong?
MS KING: Well he did the same thing in another matter.
PRESIDING MEMBER: You knew it was wrong did you?
MS KING: No………( inaudible)……….
PRESIDING MEMBER: You saw nothing wrong with a member of the Bar taking cash?
MS KING: I didn’t feel – I don’t think I really did think of it as wrong. I don’t think I really thought too much about it the way he’d asked her to do it. He’d done in a previous case with a client. I knew he had done it in that case.”
I do not believe Ms King's evidence that Mr Clark agreed to accept $5,000 at the end of July and $5,000 at the end of August, nor do I believe her evidence that he requested payment in cash. It is likely that the question of Mr Clark's outstanding fees was raised at the conference (it would be surprising were it otherwise), probably in the context of his agreement to “spec” his fees on the appeal. I find Ms King invented Mr Clark's agreement in order to give credibility to her evidence about the subsequent undertaking.
The chain of e-mails
Ms Moloney deposed that on or about 25 or 26 July Ms Mills indicated that she should be able to fund the appeal. In cross-examination she said that she spoke to Ms Mills. She deposed that she spoke to Ms King, who was away from the office, by mobile phone. Ms King asked her to draw up the grounds of appeal. She told Ms King that she had not done that work before and Ms King suggested that she contact Mr Clark for help.
On that basis, Ms Moloney said, she rang Mr Clark's chambers and told his secretary of Ms King's suggestion. At 4.49pm on Wednesday 26 July she sent an e-mail to Mr Clark:
“I have attached a copy of the notice of appeal. If its ok Rod I need
1. the grounds of appeal
2. the orders sought
I will fill out the form, just thought I would show you what it looks like. The document must be filed by Friday and we have found an agent who will file documents for us.[11]
I am in the office all day tomorrow if you need any. Thanks for your help.”
[11]K.L. King and Associates’ office was at Southport.
At 5.04pm Mr Clark responded, “I take it I have your undertaking that my minimum fee of 5k will be met in 7 days?” Given Mr Clark's agreement to “spec” his fees on the appeal, that must have related to his fees for the trial. Mr Clark said in cross-examination that he thought there was earlier e-mail correspondence between him and Ms King about his fees, but no such correspondence was placed before the Tribunal. He said he was “quite certain” that his e-mail was about a promise made to him to start to pay off the outstanding fees in relation to Ms Mills’ matter. Such a promise “had been made to me and broken on at least one or two previous occasions”. It had been made by Ms King, not Ms Mills.
Ms Moloney deposed that she telephoned Ms King and informed her of Mr Clark's position. Ms King told her that she would need to speak to the client to find out when she could put funds into trust. She therefore contacted Ms Mills who said “she would bring in $2,000 in the following week and have $5,000 at the end of August.” She then e-mailed Mr Clark:
“I mentioned to Tanya that she is bringing in some cash tomorrow and the remainder in the first week in September. She has lump sum payment coming from the Gold Coast Show beginning of September and will pay the remainder then.
Is this ok?”
Tanya was Mr Clark's secretary.
Mr Clark did not respond until 11.16am the following day. He wrote, “What I am looking for is an agreed undertaking and payment timetable for my existing fees. I am agreeable to risking my fees on appeal.” Mr Clark testified that he was referring to all his fees in all matters, but conceded that the chain of e-mails made it seem as if he was referring only to the Mills case. He reiterated that he was certain there were other communications. No such communications have been proved.
Ms Moloney replied a little over half an hour later:
“I have attempted to contact the client. She will be in later this afternoon. She has advised that she will have money to us by the beginning of August. I will confirm all once I can get in contact with her.
I understand your position, but can you advise as a matter of urgency whether you are willing to draw the grounds of appeal and orders sought as the time to file runs out tomorrow and I will have to find someone else to do them this afternoon.”
Ms Moloney testified that this e-mail related to the instructions which she had received from Ms Mills the previous day. If that is right it must have been based on a misunderstanding, since those instructions were that Ms Mills would bring in $2,000 in the following week, i.e. the beginning of August.
Mr Clark was evidently unimpressed. Seven minutes later he replied, “I have drawn the grounds of appeal. I want a proper arrangement made for the payment of my fees. This is a professional issue K L King & Co is ethically obliged to do.”
Ms Moloney deposed that when she received this e-mail she contacted Ms King:
"16.When I received Mr Clark's email I contacted the respondent on her mobile telephone. I read the contents of Mr Clark's email to her. The respondent asked me when the client would be able to pay the money and I advised her of my conversation with the clients.
17.The respondent then directed me to provide an undertaking to Mr Clark with respect to the payment of his fees as follows - 'we would pay him $5000.00 by the first of September and the rest in a month.' The respondent also stated that she was upset by Mr Clark's comments and told me that I should also advise him that we would not require his services any longer. The respondent then assisted me with the drawing of the grounds of appeal over the telephone."
In cross-examination she denied the suggestion that there was only one phone call, namely the one “which preceded the last email being sent to Mr Clark”.
In accordance with those directions Ms Moloney e-mailed Mr Clark at 12.26pm:
“I have spoken to Karen who has advised that she will undertake to have no less than $5000 paid to you on or before the 1 September 2006 with the remainder to be paid within one month.
She has also asked me to advise that she is upset by your early e-mail and advises that we will no longer need your services in this matter.”
Whatever Mr Clark may have believed, I find on the evidence that the undertaking related only to fees in relation to Ms Mills, not to all of Mr Clark's outstanding fees.[12]
[12]Of course, that finding does not bind Mr Clark. He had no control over the Commissioner's conduct of the case.
Mr Clark testified that he was “certain, absolutely certain, unequivocally certain” that he had sent the appeal (presumably, the grounds of appeal and orders sought) to Ms Moloney. He said it was sent in hardcopy form, probably shortly before the last e-mail and possibly earlier or possibly later that day or the next. No such document was tendered.[13]
[13]In fairness I should point out that Mr Clark gave evidence by mobile phone from interstate, somewhere on a highway.
I turn to Ms King's evidence. The gravamen of the charge against her was her failing to honour an authorised undertaking. In her Response filed on 26 November 2010 she admitted Ms Moloney had given the undertaking but denied that it was given with her authority. Her principal affidavit was filed on 23 June 2011, by which time she had received Mr Clark's affidavit with the attached e-mails. Her affidavit did not refer to those e-mails and it contained no assertion that any undertaking was given without her authority. That changed in her second affidavit, filed on the first morning of the hearing.
Ms King then deposed that on 27 July 2006 Ms Moloney telephoned her and “read out Mr Clark's e-mail”. She referred only to one telephone call and one e-mail. She said that in this conversation she told Ms Moloney to tell Mr Clark that she would not require his services further, and she then dictated some basic grounds of appeal. In relation to para 16 of Ms Moloney's affidavit she deposed:
"Paragraph 16: I agree that Ms Moloney read Mr Clark's email to me. I then told Ms Moloney to tell Mr Clark that he would have his $5,000.00 by the end of the month (as agreed in conference). I did not instruct Ms Moloney to give the undertaking sought by Mr Clark. At not [sic] time was I told by Ms Moloney that Mr Clark was, in the context of drafting Ms Mills' grounds of appeal, seeking to require payment of fees other than those relating to Ms Mills' trial and certainly not fees owing in respect of other clients."
In cross-examination Ms King was pressed with the proposition that it was clear to her that Mr Clark was seeking an undertaking about his fees. She responded:
“MS KING: No, that’s not. It was clear that he was seeking an undertaking but not – I didn’t know what the undertaking was. I thought it in fact related to that $5,000.
MR MCMILLAN: But you were aware that he was seeking that undertaking from you?
MS KING: Yes, that’s correct.”
That evidence sat very uncomfortably with the cross-examination of Ms Moloney, for which Ms King was present:
“MS MORREAU: … . I’m suggesting to you that at no time did you raise with Ms King the fact that Mr Clark was seeking an undertaking?
MS MOLONEY: Yes, I most definitely did. In the first phone call when we discussed the emails I said that I’d given him assurances and he wasn’t willing to accept them. He wants an undertaking and he wants a payment plan.”
Ms King's case early in the hearing was that the only e-mail of which Ms Moloney spoke was the one which preceded the sending of the undertaking to Mr Clark.[14] That e-mail did not mention an undertaking. That raises the question, how did Ms King know that Mr Clark was seeking an undertaking. Ms King explained that in cross-examination by saying that Ms Moloney had told her of two of Mr Clark's e-mails. Pressed for particulars, she stated unequivocally that during the conversation Ms Moloney read Mr Clark's e-mail timed at 5.04pm on 26 June and paraphrased that timed at 11.16am on 27 June. Neither of these was the one which preceded the sending of the last e-mail to Mr Clark.
[14]Paragraph [30].
The case presented by Ms King at the hearing contrasts with what she wrote in a letter to Mr Clark on 18 October 2006. Mr Clark had e-mailed her asserting the existence of the undertaking in Ms Moloney's e-mail. Ms King responded:
“We note in correspondence you referred to an ‘undertaking’ having been given by the writer to pay all of your fees by the end of October. It is not correct to refer to an undertaking having been given. It is correct that the writer said to Ms Moloney, who was dealing with you in relation to this matter in her absence, that she would attempt to pay the account dated 27 February 2006, that is $5000 and any further sum owing, which she calculated at approximately $8000 (the disbursements having already being paid.) Ms Moloney passed that on to you.”
In that letter there was no suggestion that Mr Clark had made any agreement in the conference in June; there was no suggestion that Mr Clark was to receive less than the full amount owing to him; and there was no suggestion that Ms Moloney acted outside her authority. On the contrary it is accepted that Ms King spoke of paying “$5000 and any further sum owing” and that Ms Moloney passed this on to Mr Clark. Ms King's point was that what Ms Moloney wrote did not constitute giving an undertaking. This was not a point pursued at the hearing.
I do not believe Ms King's evidence regarding her phone conversations with Ms Moloney. I generally accept Ms Moloney's evidence, although I take into account that she was at times uncertain (it was not suggested that she was lying). I find that Ms King authorised Ms Moloney to give the undertaking.
Performance of the undertaking
In his affidavit sworn in February 2011 Mr Clark deposed that he received $5,000 in respect of Ms Mills' matter on 2 September 2006. Ms King produced a copy of a cheque for $5,000 drawn in favour of Mr Clark on her firm's trust account dated 30 August 2006, and there seems no doubt that this is the payment to which Mr Clark referred. The next payment which Mr Clark acknowledged having received was in June 2008. He was not cross-examined about that and it was not suggested that he received other money in 2006 in respect of the amount outstanding in June of that year.
Ms King made two affidavits dealing with this charge. In neither did she suggest that the undertaking given to Mr Clark had been honoured. She did not suggest that Mr Clark had been paid other sums in 2006 or even that she believed other sums had been paid. None of those suggestions was raised by her counsel in opening her case.
In cross-examination she was asked about whether the undertaking had been honoured:
“MR MCMILLAN: You accept that on any construction, even if it relates only to the fees that were payable to Mills, those fees weren’t paid within the timeframe specified in Ms Moloney’s email either were they?
MS KING: Yes, he was paid $5,000 by the end of July in cash by the client and he was paid a further $5,000, I think it was a day late. He says 2 September. I’m not sure why he didn’t receive it on 1 September but he was paid two separate lots of $5,000. He was then paid a further amount and it was an odd amount, $3,000 and something, the next day after that.”
Ms King further testified that at a later unstated time she rang a Mr O'Donnell at the Queensland Law Society to get advice on her professional obligations in relation to the undertaking given by her firm. She testified that at that time, “I knew that the agreement had been to pay the $5,000 and that was paid by the client.” A little later Ms King testified, “I knew that the undertaking had been given and in my view it had been honoured.”
There were two obvious problems with that evidence.
One was that this was the first allegation of an actual payment of $5,000 at the end of July by the client. Ms King had earlier alleged that Mr Clark had agreed to accept two payments of $5,000 each, one by the end of July[15], but it had not been suggested that any such payment was made. Ms King made no attempt to prove the truth of these assertions. Ms King was aware from 5 October 2006 that Mr Clark claimed that no funds had been received since the cheque for $5,000 on 2 September. She did not address this claim in her letter to him of 18 October 2006. In fact at no time did she raise the alleged direct payment of $5,000 with Mr Clark. She said she did not attempt to clarify the amount that was owing because she thought he would be unwilling to talk to her or discuss the matter with her. She said that she tried to deal with the matter through the Law Society and the Bar Association. She was given the opportunity to check the file during the overnight adjournment to see if she had any diary notes or file notes about any efforts made to pay Mr Clark, but she produced no document referring to the alleged cash payment.
[15]See para [19].
The weakness of Ms King's position was demonstrated in cross-examination:
“MR MCMILLAN: Ms King, are you sure that the $5,000 that you refer to was paid by Ms Mills at the end of July; are you sure that’s the case that there were two separate payments of $5,000?
MS KING: I believe so, yes.
MR MCMILLAN: Well, you’re giving sworn evidence.
MS KING: I do believe yes, that that happened.
MR MCMILLAN: You’re not sure?
MS KING: No, no, I always believed that that’s what happened, exactly what happened.
MR MCMILLAN: So you responded----
PRESIDING MEMBER: What’s the basis of that belief?
MS KING: There was an extensive discussion when we had the meeting in July as the fact that Ms Mills was receipting the $5,000 in cash and she was receipting it shortly after mid-July. She said that she would bring it up, ring Mr Clark and see …………….. in that amount and she told him on several occasions after that date that she’d done so.
MR MCMILLAN: You say you still have that belief?
MS KING: I do.
PRESIDING MEMBER: You’ve seen that Mr Clark says he didn’t get any such money?
MS KING: Yes.
PRESIDING MEMBER: Surely that would lead you to try to verify if it was correct?
MS KING: Well, I haven’t been able to contact Ms Mills in recent times but she told me that she’d done that.
PRESIDING MEMBER: And she told you that. Mr Clark’s evidence you’ve heard and you’ve seen his affidavits but you persist in your belief?
MS KING: I believe she did.”
The lateness of the allegation, the absence of any corroborating documents and the irrationality of her belief in the circumstances suggest that the alleged payment was something which she thought of for the first time during cross-examination. She made it up.
The other payment which Ms King relied upon was an alleged amount of about $3,000 on 3 September 2006. That apparently was referable to para 7.5 of her Response, where she alleged a “belief that Ms Mills paid Mr Clark the further sum of $3,249.90 on or about 2 September 2006.” That allegation was not verified by affidavit. On the contrary, in the affidavit filed on the first day of the hearing Ms King deposed:
"15My response to the application refers to a further payment of $3,249.90 on 2 September 2006. I cannot now recollect the basis of that assertion, but to the best of my recollection, it derives from a copy of an invoice dated 16 October 2005 from Mr Clark which records that payment (page 9 of the bundle).
The invoice was not put to Mr Clark and it was not suggested in his cross-examination that he had received the payment. A copy of the invoice was exhibited to Ms King's first affidavit as a copy of a fee note from Mr Clark. The provenance of the annotation was completely unproven. How it got onto a document in Ms King's file remains unknown.
I am not satisfied that any such payment was made to Mr Clark.
The second obvious problem with the evidence was that the total of the amounts allegedly paid to Mr Clark (somewhat over $13,000) was substantially less than what was admittedly owed to him (over $18,000 in relation to Ms Mills). That made it difficult to conclude that the undertaking had been honoured. Ms King attempted the task:
“PRESIDING MEMBER: Mr McMillan’s question was that you knew that the undertaking was given and to pay the balance owing by the end of the month and you knew that that undertaking had not been honoured; is that correct?
MS KING: No, that’s not correct because by reference to the meeting in mid-July the rest of the money that was owing was a further $5,000, not all of the bill and that was what we specifically agreed to.
PRESIDING MEMBER: The meeting was before the undertaking was it not?
MS KING: It was, your Honour.
PRESIDING MEMBER: Well then an undertaking is given to pay the remainder within a month?
MS KING: That’s correct.
PRESIDING MEMBER: And that didn’t happen?
MS KING: I assume that the remainder was the further sum referred to at the meeting, not the entire amount owed on the bill. It was clearly discussed at the meeting that the client didn’t have the capacity to pay that.
PRESIDING MEMBER: You thought the word remainder didn’t mean the balance of the bill?
MS KING: No, I thought it meant the remainder of what had been discussed at the meeting, the amount of…………….
PRESIDING MEMBER: I see. Have you expressed that thought anywhere in your affidavits?
MS KING: I certainly have.
PRESIDING MEMBER: Where in your affidavits have you expressed that thought please?
MS KING: I was going to say I certainly haven’t mentioned the LSC or the Law Society where I say I queried what the ----
PRESIDING MEMBER: I asked you have you expressed that?
MS KING: I don’t think I do………….
PRESIDING MEMBER: Thank you. Yes, Mr McMillan.”
For reasons which have already been made apparent, the attempt failed.
Conclusion – charge 7
I find that Ms King dishonoured her undertaking.
Consequently I find charge 7 proved.
Charge 1 – Ms Martin, and Charge 4 – Queensland Law Society
Charge 1 and charge 4 are so closely related that it is convenient to consider them together.
Charge 1
Charge 1 is in these terms:
“Charge One – Unlawful drawing of trust monies
1. On 30 January 2008, the respondent withdrew trust monies in the amount of $87,000 from her trust account in breach of r. 58 of the Legal Profession Regulation 2007.
Particulars
1.1At all material times, the respondent:
(a)was an Australian Legal Practitioner;
(b)engaged in legal practice as a sole practitioner under the name K.L. King & Associates;
(c)acted for Kerri Anne Martin on an application in matrimonial matters to the Federal Magistrates Court of Australia.
1.2On 25 January 2008, King received trust moneys on behalf of Kerri Anne Martin
1.3On 30 January 2008, King transferred from those trust monies to her general account the sum of $87,000.00 purportedly on account of costs and outlays for the matrimonial matter.
1.4At no time prior to 30 January 2008 did the respondent render to Kerri Anne Martin a bill relating to costs and outlays in the matrimonial matter.
1.5At no time prior to 30 January 2008 did the respondent obtain written authority for the withdrawal of trust monies from Kerri Anne Martin or provide Kerri Anne Martin with a request for payment or notice of withdrawal."
In her response in relation to this charge, Ms King admitted particulars 1.1 and 1.2 and that she transferred $87,000 from her trust account to her general account on 30 January 2008. It was common ground that on 25 January 2008 Ms King had received $87,389.44 and on 6 February 2008, $19,330.78 into trust for Ms Martin from her ex-husband. She pleaded in relation to particulars 1.3 to 1.5:
"(a)I admit transferring the sum of $87,00.00 from my trust account to my general account on 30 January 2008.
(b)At the time of such transfer, I believed that I was entitled to effect that transfer because Ms Martin had been billed fees in the sum of $87,000.00, in that accounts had been given to her as follows:
23 August 2007 - $82,185.05
16 January 2008 - $84,602.61 (replacing account dated 23 August 2007)
17 January 2008 - $16,500.00, but reduced to $2,397.39
Total $87,000.00
I am unable to say when those accounts were actually sent to Ms Martin. As at 30 January 2008, I believed on the basis of information provided by my book-keeper, Sue Beilby that:
(i)The account dated 23 August 2007 had been given to Ms Martin in about August/September 2007;
(ii)The accounts dated 16-17 January 2008 had recently been sent to Ms Martin.
(c)The funds were transferred in reliance upon the authority contained in Ms Martin's client agreement, clause 7 of which provided:
'The client authorises the firm:
(a)to receive on the client's behalf any monies due to the client in the course of or as a result of the proceedings;
(b)to deduct from any such monies as may be received by the firm and to transfer to the firm's own account, such monies or accounts as are necessary to pay the firm's costs and disbursements in accordance with this agreement, such monies or accounts to be transferred the next business day after issuing an account for such monies or accounts to the client.' "
Both the form of the charge and the form of the response present some difficulties. The charge suggests that Ms King acted in breach of s 58 of the Legal Profession Regulation 2007 (“Regulation”), which regulates the withdrawal of funds from trust accounts. That suggestion is misleading. Section 58 relevantly provides:
“58 Withdrawing trust money for legal costs
(1) This section prescribes, for section 258(1)(b) of the Act, the procedure for the withdrawal of trust money held in a general trust account or controlled money account of a law practice for payment of legal costs owing to the practice by the person for whom the trust money was paid into the account.
(2) The trust money may be withdrawn in accordance with the procedure set out in either subsection (3) or (4).
(3) The law practice may withdraw the trust money—
(a)if—
(i)the money is withdrawn in accordance with a costs agreement that complies with the legislation under which it is made and that authorises the withdrawal; or
…; and
(b)if, before effecting the withdrawal, the practice gives or sends to the person—
(i)…
(ii)a written notice of withdrawal.
(4) The law practice may withdraw the trust money—
(a)if the practice has given the person a bill relating to the money; and
(b)if—
(i)the person has not objected to withdrawal of the money within 7 days after being given the bill; or
… .”
Section 58 does not oblige a legal practitioner to do anything. It prescribes a procedure for the purposes of s 258(1)(b) of the Legal Profession Act 2007. That section too does not oblige a practitioner to do anything. It simply confers a permission. That permission is of utility to a practitioner who wishes to withdraw money from trust to pay legal costs owing to the practice or to do the other things set out in the section. Its utility derives from the fact that it relieves practitioners of the duty imposed by s 249 of that Act:
“249 Holding, disbursing and accounting for trust money
(1) A law practice must—
(a)hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received; and
(b)disburse the trust money only under a direction given by the person.
Maximum penalty—50 penalty units.”
If a practitioner disburses trust money and fails to comply with s 58 of the Regulation or some other enabling provision, an offence under s 249 of the Act results.
Ms King raised no objection to the wording of the charge and did not require amendment of the charge. It is unnecessary to say any more about the point.
Ms King’s Response pleads a belief about certain matters. That was an inadequate plea, since Ms King's intent was also to allege those matters as matters of fact. That was how her case was conducted, and no objection was taken on behalf of the Commissioner. Whether mere belief was sufficient to negate the charge is considered below. The matters of fact pleaded invoked both s 58(3) and s 58(4) of the Regulation.
Charge 4
Charge 4 alleged:
"Charge Four - False Statement to QLS
4.On 21 May 2008, the respondent dishonestly or recklessly made a false statement to the Queensland Law Society in the course of an investigation pursuant to the Legal Profession Act 2007.
Particulars
4.1The applicant repeats and relies upon particulars 3.1 to 3.3 above.
4.2In the course of the investigation a Bill of Costs dated 23 August 2007 was located on the client file kept by the respondent in relation to Kerri Anne Martin's matrimonial matters.
4.3In a letter dated 21 May 2008 to the Society, the respondent stated that the said Bill of Costs dated 23 August 2007 had been prepared by her employee, Christine [Trueman].
4.4That statement was false in that the said Bill was in fact prepared by the respondent.
4.5At the time of making the statement referred to in particular 4.3 above, the respondent knew, or ought to have known, that the statement was false."
Ms King responded:
“I deny charge 4.
As to the particulars:
4.2 - 4.3: Admitted
4.4 - 4.5: The statement that the bill of costs dated 23 August 2007 had been prepared by Christine [Trueman] was true. Alternatively, I believed (and still believe) that the statement was true.”
A minor difficulty in relation to this charge is that, as will appear, there were three slightly different versions of documents answering the description in particular 4.2. The Commissioner did not specify which version was the subject of the charge, nor was he asked to do so. As will appear, that uncertainty interacted with the ambiguity of the word “prepared” in particular 4.3.
Potentially a more serious difficulty is that notwithstanding the admission of particular 4.3 in Ms King’s Response, her letter of 21 May 2008 did not state what it is alleged to have stated. The nearest it came was the following:
“That application [for indemnity costs] was made in September 2007, I believe. (I cannot be more specific as I do not have the file in front of me as it is with the Law Society. In any event, nothing turns on the date.) The matter was handled by a solicitor then in my employee, Christine Trueman. Ms Trueman was required to prepare a bill of costs, presumably to provide to the Court for the purposes of the indemnity costs application.”
Ms King did not say who or what had required this of Ms Trueman, but clearly she was not asserting that the requirement was imposed by her. She probably meant that the requirement arose as part of the proper preparation of the application. It does not matter. What Ms King did not say was that Ms Trueman did prepare the bill.
As noted below, in a letter to the Law Society which Ms King enclosed with her letter of 21 May, Ms Beilby said that Ms Trueman prepared the bill . However the case against Ms King was not conducted on the basis that her fault lay in knowingly forwarding a false letter.
Fortunately it is unnecessary to resolve those difficulties.
The August 2007 invoice: s 58(3) of the Regulation
Ms King on behalf of her firm made a contract entitled “Engagement and Retainer Agreement” with Ms Martin as the client.[16] It was dated 1 February 2005. Clause 7 of the agreement was set out above.[17] I assume that “accounts” in cl 7(b) is a typographical error for “amounts”.
[16]I shall refer to it as "the costs agreement" or "the agreement".
[17]Paragraph [55].
In written submissions delivered after the hearing, Ms King also quoted cl 8 of the agreement. As far as I can determine, that clause was not pleaded, nor was it referred to during the hearing. I do not understand it to be submitted that Ms King can succeed by relying upon cl 8 if she is unable to succeed by reference to cl 7. In any event, it seems to me that cl 8 does not in terms apply to the circumstances of the case. For all of these reasons I shall not refer to it further.
Paragraph (a)(i) of s 58(3): “complies with the legislation under which it is made”
The first question is whether the agreement was one which “complies with the legislation under which it is made”. Ms King submitted that this question “can be quickly dealt with”. She referred to s 8(1) of the Trust Accounts Act 1973. The Commissioner did not favour me with any submissions on the question.
Implicit in that reference is the proposition that “complies” in s 58(3) of the Regulation means “complied on the date on which the agreement was made”. I am prepared to assume that proposition is correct. Even so, the reference to the Trust Accounts Act 1973 is misconceived. It is so for two reasons. First, s 8 of that Act is not concerned with agreements; it deals with trust account withdrawals. Second, the agreement was made under s 48 of the Queensland Law Society Act 1952, not under the Trust Accounts Act 1973.
In the absence of submissions from the Commissioner it is not the Tribunal's function to parse and analyse the agreement and the legislation under which it was made. Nothing obvious appears to suggest non-compliance with the legislation. I find that the agreement complied with the legislation under which it was made.
Paragraph (a)(i) of s 58(3): “that authorises the withdrawal”
On 25 January 2008 Ms King's firm received $87,389.44 in trust for Ms Martin as a result of the proceedings covered by the costs agreement. It was paid into the firm's trust account. The amount was a part payment under an order made by the Federal Magistrates Court on 20 August 2007. Receipt of that money was authorised by cl 7(a) of the agreement. The money was covered by the words “such monies” in cl 7(b).
Clause 7(b) of the agreement expressly authorised the deduction from that money of an amount “necessary to pay the firm's costs and disbursements in accordance with this agreement”. Ms King claimed that as at 30 January 2008 her firm was owed at least $87,000 for costs and disbursements in accordance with the agreement, and deducted that amount as such. Neither side has squarely addressed the question whether costs and disbursements in accordance with the agreement amounted to $87,000 and, while the evidence suggests that the fees properly chargeable were significantly less than this amount, it was in the end inconclusive. In his final submissions the Commissioner did not challenge Ms King’s claim. I therefore find that the agreement authorised the withdrawal.
Paragraph (a)(i) of s 58(3): “withdrawn in accordance with a costs agreement”
Clause 7(b) of the agreement required the money to be transferred one business day after an account has been issued to Ms Martin. Precisely what accounts were issued to Ms Martin was a hotly contested issue of fact. That issue also arises in relation to s 58(3)(b)(ii) of the Regulation. It was not argued that any distinction should be drawn between “issued” and “sent”.
Paragraph (b)(ii) of s 58(3): “sends”
Relevantly, s 58(3)(b) of the Regulation required the practice to give or send a written notice of withdrawal to Ms Martin before effecting the withdrawal. “Send” would be satisfied by posting the notice to Ms Martin's last known address.[18] Ms King contended that she believed, and that it was the case, that a tax invoice dated 23 August 2007 was sent to Ms Martin. Much of the time taken by the hearing was devoted to the question whether that indeed occurred.
[18]Acts Interpretation Act 1954, s 39(1)(a)(ii).
Creation of the invoice dated 23 August 2007
Ms Martin was the respondent and cross-applicant in proceedings in the Federal Magistrates Court relating to residence/contact issues with respect to a child of her marriage, property settlement, spousal maintenance and child support. The proceedings were reasonably complicated and prolonged. They began in about April 2005, which was when Ms Martin retained K.L. King & Associates. Judgment had been reserved in relation to financial issues in February 2007. It remained reserved in July 2007 when Ms Christine Trueman commenced employment with Ms King, with responsibility for the day to day management of client files, including that of Ms Martin. At that time Ms King, who lived in premises above her office at Southport, had scaled back her day to day involvement in the practice for the period of her pregnancy and post-natal recovery
On 30 July 2007 the court gave judgment on financial matters in favour of Ms Martin. It ordered her former husband to pay her more than $100,000 despite the fact that the marriage had subsisted for only eight months and also ordered payment of child support. Issues relating to child contact remained ongoing. On 1 August Ms Trueman wrote to counsel engaged in the matter, Mr McGregor, reminding him that he was to prepare a written submission in support of an application for an order for costs. On the next day, following a request from Mr McGregor, Ms Trueman sent him information about the history of the matter on which to base the submission Under the Magistrate's order the submission was due to be exchanged and properly filed within 14 days of the judgment. Supplementary information for inclusion in the submission was sent to Mr McGregor on 13 August and on the following day, Mr McGregor e-mailed the draft submission to Glenda Henry, a secretary employed by Ms King, for formatting. He wrote in the e-mail, “Please find the necessary attachments and have a schedule of [Ms Martin's] costs from the beginning prepared to be annexed as a schedule.” The draft submission made provision for such a schedule.
On an unknown date (but not later than 23 August 2007) Ms Henry typed an urgent memo to Ms King:
“Karen,
Chris needs to know the total amount of fees Kerri Martin has been billed.
I can't find any evidence of her ever being billed and Sue confirms this.
Could you please advise of an amount she should be invoiced for the work on her file.
It is so we can give an amount to the Federal Magistrate for the Costs Order.
Thanks, Glenda”
That memo was created following a request from Ms Trueman, who made some handwritten amendments to bring it into the form quoted before it was delivered.
Ms King responded by a memo to Ms Trueman:
“Chris,
I haven't done an account as I assumed other side would agree to us having an assessor tax the file and both share the cost –
I can do an account – would estimate $65,000 + disbursements, but then the issue is where we would take the account from (ie date etc) –.”
It is not certain on what date the submission was filed, but it was probably 20 August 2007, the day Ms Henry e-mailed a copy of it to Ms Trueman at the Federal Magistrates Court. It must have been filed without the schedule of costs envisaged by Mr McGregor. On the same day Ms Trueman sent it to Ms Martin. She responded by a text message asking for the submission to be expanded to include a claim for interest. On the following day Ms Trueman contacted Mr McGregor and he prepared a supplementary submission on that topic. Ms Henry e-mailed that submission to the Magistrate’s associate on 22 August and later that day faxed some “attachments” which should have accompanied the principal submission. They did not include the schedule of costs.
On 23 August 2007 someone prepared a tax invoice addressed to Ms Martin setting out the fees owed by her. Outlays were itemised and professional fees were included as a lump sum of $65,000 plus GST. The first version contained a mathematical error which was corrected in handwriting. In cross-examination Ms Trueman said that the handwriting was that of Ms King, and that evidence was unchallenged. The error was corrected in the second version. I find that Ms Henry sent this version by e-mail to the Federal Magistrate’s associate on that day. I am satisfied that whoever instructed Ms Henry to send the bill to the court, Ms Trueman was complicit in that process. After it was sent the invoice was seen by Ms Sue Beilby, the firm's bookkeeper, who noted that it incorrectly included counsel’s fee ($8,740) as a disbursement when counsel had not been paid, and wrongly charged GST on the filing fee which was GST-exempt. Ms Beilby created a corrected invoice in the sum of $73,445.05, still including $65,000 plus GST.
Ms Trueman, Ms King and Ms Beilby all denied preparing the invoice or sending it to Ms Martin. Ms Martin denied receiving it. There were important differences in their versions of what occurred.
Ms Trueman deposed that her work involved only maintenance of client files and providing legal services to clients. According to her, Ms King was responsible for the production of accounts for clients; she (Ms King) was adamant that the bills were “her thing”. She “would usually dictate bills for the secretaries and then settle the accounts. She was very guarded about the account production process.” Ms Trueman deposed that she vaguely recalled that “a bill was produced in Ms Martin's matter as part of an application for costs”.
Under cross-examination her memory improved: she said Ms King prepared it. She was unable to identify any particular form of invoice on the file as the one which was produced. Her belief was that it was produced only for annexing to the submission and was not sent to Ms Martin. She claimed that it was her understanding that party and party costs could be claimed in the Federal Magistrates Court even if the client claiming them had not been sent a bill. That claim does not sit comfortably with the opening sentence of the memo to Ms King.[19] For the first time she made an even more serious allegation. She said she would not have sent the invoice on the file to Ms Martin because she “knew that the bill was not a reflection of the actual costs that were incurred on her file”. The figure for costs was “over-inflated” by Ms King. She specifically discussed with Mr McGregor that the submissions he was making to the court might prove embarrassing because he was being asked to make submissions on a false basis.
[19]Paragraph [78].
Counsel for Ms King pointed out to Ms Trueman that she had obligations to the court. He suggested that there was never any discussion about the bill being inflated and that she had made that up in an attempt to “slurry” Ms King's reputation. She denied that suggestion. I do not believe her denial. I am satisfied that had she believed that the costs in the invoice were over-inflated she would not have allowed it to be used as the basis for the submission for costs on an indemnity basis. Ms King's submission that this account was not over-inflated is accepted.
That reflects adversely on Ms Trueman's credibility, but it does little to resolve the question of who prepared the invoice.
Ms King deposed that she ceased being involved in her practice on a daily basis in June 2007 because she was pregnant. Her twins were born on 19 September 2007, but she did not return to work immediately for health reasons. At the time she ceased her involvement a judgment on Ms Martin’s matter, which had been to trial on property issues in February 2007, remained reserved. She further swore:
“I do recall being asked by Ms Trueman, following delivery of the trial judgment, how much Ms Martin should be billed.”
That is apparently a reference to the memo created by Ms Henry. Ms King continued:
“I told her that I estimated that the professional costs would be about $65,000, but I provided the estimate without reference to the file and I expected that Ms Trueman would review the file to determine an appropriate charge and would discuss the matter again with me if she formed the view that the costs should be significantly different from that figure.”
In cross-examination Ms King went further. She said that she expected Ms Trueman to do the bill. She did not expect a bill in taxable form but she did expect one which broke down what was done into the various events performed, whilst also indicating the period for each event. As she put it, “I expected Ms Trueman to do a proper bill.” According to Ms King, none of the August invoices was a proper bill.
To undertake such a task, Ms Trueman would have needed full details of all attendances on Ms Martin. There was no system of time recording in the practice, but Ms King deposed that she placed all her file notes in a separate folder so that they were available during the course of the trial for review of the client's instructions. As well as recording instructions, the file notes recorded the time spent on attendances. She had not seen that folder since the trial; it was not with the rest of the file when she inspected it at the Commissioner's offices; and she was unable to say when or in what circumstances it went missing.
On this point I do not believe Ms King. She made no effort during the hearing to prove the existence of the separate folder. Her affidavits were silent on this point. She said she had discussed it with her solicitor “at length on several occasions”, but the solicitor was not called to give evidence even though he was available. Witnesses who worked in her office were not cross-examined about it or even about a practice of using separate folders for file notes in other cases. No evidence of any attempt to locate the separate folder was led. Ms Campbell, who exhibited large portions of Ms King's file, was not cross-examined. I am not satisfied that any such folder existed.
Ms King deposed that she “did not prepare the 23 August 2007 account”. However she was well aware that what was required was simply an amount “so we can give an amount to the Federal Magistrate”. She responded, “I can do an account.” Later, when the first version of the invoice was prepared, it was she who detected the arithmetical error.
That evidence suggests the real possibility that it was Ms King who instructed someone, possibly Ms Henry, to prepare the August invoice.
The third candidate for that finding was Ms Beilby. The Commissioner put to Ms King that she had instructed Ms Beilby to create the August invoice. Ms King denied this. So did Ms Beilby. Unfortunately, the reliability of Ms Beilby's testimony was severely compromised by a stroke and a cerebral haemorrhage for which she underwent neurosurgery in September 2010. Her recollection of past events was adversely affected and she had difficulty remembering facts in detail. For example, by the time she testified in mid-October she was unable to recall making her affidavit in late June. It did not help that she had spoken to Ms King about the preparation of her affidavit “about what to put in it, what were the issues”; she has been a personal friend of Ms King's since 2005.
Ms Martin terminated Ms King's retainer on 2 April 2008 and complained to the Commissioner two days later. He referred the matter to the Queensland Law Society for investigation. On 14 April the Director of Professional Standards wrote to Ms King after examining her files, claiming that there was no evidence that the August account was ever shown to Ms Martin. Ms King replied by letter dated 21 May,[20] enclosing a letter addressed to the Law Society and signed by Ms Beilby:
“During early September 2007, as the bookkeeper at KL King & Associates, I was presented with a draft tax invoice for the client, Kerri Martin. This bill was given to me, and had been prepared by, an employed solicitor, Chris Trueman. As was the standard practice, the purpose was for me to check if there were any paid disbursements and/or outstanding outlays and ensure that figures tallied.”[21]
[20]Exhibit DCG-3, p 427.
[21]Ibid, p 430.
How that letter came into existence is unclear. What is clear is that Ms Beilby did not have access to the Martin file at the time she wrote it. I infer that she had forgotten by that time that the invoice was prepared for submission to the Federal Magistrates Court in support of Mr McGregor's submission.
Nearly two years later Ms Bielby was asked to revisit the question in the course of providing a formal statement to the Law Society. In that statement she wrote:
“I have since [the 2008 letter] checked the file and ascertained by reference to file notes dated 22, 23 and 27 August 2007 that the draft tax invoice was in fact provided to me by Ms Trueman on 22 August 2007.”
That seems to contradict Ms Beilby's own file note of 23 August. That note, which Ms Beilby identified in evidence as one of the three to which she referred in her statement, strongly suggests that Ms Beilby did not see the account until after it had been sent to the Federal Magistrates Court. Nothing in the other documents which she identified cast any doubt on that suggestion. I so find.
That conclusion does not necessarily mean that Ms Trueman did not ask Ms Beilby for a list of outlays to be included in the draft invoice. It points to Ms Beilby as the immediate author of the final version, but not the version sent to the court.
Who prepared the latter version? Ms King fixed the amount of the claim for professional costs in response to Ms Henry's memo and had the arithmetical error in the first version corrected. Ms Trueman urgently needed a schedule of costs to go with the submission and she was aware that the invoice was used for this purpose. The invoice may have been prepared by Ms Henry at the request of either Ms King or Ms Trueman. The Commissioner had obtained an affidavit from Ms Henry. Ms King gave notice requiring her attendance for cross-examination. I do not know what efforts he made to secure her attendance beyond sending her e-mails, but they were unsuccessful. In her absence, her affidavit was not read.
I am not satisfied to the necessary standard[22] that any of the versions can be said to have been “prepared” by Ms King. The Commissioner has not proved that the statement relied on by him was false.
[22]Briginshaw v Briginshaw (1938) 60 CLR 336.
Was the August invoice sent to Ms Martin?
Ms Beilby's 2007 letter to the Law Society concluded:
“I returned the bill to Chris Trueman for her to sign it off and send it out to the client. A week or so later I was informed by Chris Trueman that said bill had indeed been sent to the client.”
Her 2010 statement was somewhat different:
“3. After checking the tax invoice and correcting some inaccuracies in relation to disbursements, I gave it back to Ms Trueman and requested that she send it to the client. She later told me that she had done so on about 27 September 2007.
4. The account was addressed to Ms Martin at Cageput Court. I understand that Ms Martin has asserted that she did not receive the account at that address. I am able to say that the file records that Ms Trueman wrote to Ms Martin at that address on 13 August and 27 September 2007. Any mail returned unclaimed would normally be referred to me. There was no mail returned in relation to Ms Martin so far as I am aware.”
No explanation was offered in Ms Beilby's evidence for why she should have requested Ms Trueman to send the invoice. The reference to 27 September 2007 was also unexplained. It is true that Ms Trueman wrote to Ms Martin on that date. That letter dealt with three matters not presently relevant and concluded:
“In relation to our application for costs, I advise that as yet Federal Mag Burnett has not as yet [sic] handed down that decision. I will contact you immediately when I receive that decision.”
The letter was signed by Ms Henry on behalf of Ms Trueman. It contained no reference to the enclosure of any invoice, although three other enclosures were highlighted.
Ms Trueman flatly denied any conversation with Ms Beilby in which she said she had sent the invoice to Ms Martin. Ms Beilby said under cross-examination that she had a specific recollection of Ms Trueman telling her that she had sent the bill to Ms Martin. However the firmness of her evidence was tempered:
“PRESIDING MEMBER: Do you understand that what Mr McMillan’s suggesting to you is that you would have looked at page 77 and seen that it was addressed to her and he’s suggesting that you would have looked at that and if that was on the file you would have assumed that it had been sent to her?
MS BIELBY: Well, you would make that assumption, yes.
PRESIDING MEMBER: That’s what Mr McMillan is trying to put to you?
MS BIELBY: I suppose you could make that assumption.
MR MCMILLAN: I’m suggesting that you did make that assumption on the day?
MS BIELBY: Well, anything’s possible, but I couldn’t recall and I’m not one for assuming usually.
MR MCMILLAN: You say, 'I will do an amended invoice of today’s date'?
MS BIELBY: Well, that’s the one without the Barrister’s fees.
MR MCMILLAN: Yes. Would you then have sent the amended invoice to the client yourself?
MS BIELBY: Well, Christine had control of all of that and really I didn’t do anything without her or the solicitor, so I can’t recall that I would have said that necessarily myself.”
Ms Martin deposed that the first tax invoice which she received from the practice was received on or about 26 February 2008, when she received two invoices at once. Neither was the August 2007 invoice.
Ms Martin's reaction to the amount of the first of those two invoices was, to put it mildly, indignation. It was a reaction which would have been inconsistent with her already having knowledge of the magnitude of that invoice. It is difficult to imagine that she would not have said anything to Ms King in September or October 2007 had she then received the August invoice.
In her 2010 statement Ms Beilby wrote:
“5. Further, I spoke to Ms Martin by phone in late September or early to mid-October 2007. We discussed the account she had received from the firm. In particular, Ms Martin enquired whether the firm could reduce the amount of the bill payable by her whilst claiming, as against her husband for purposes of her costs application, that the bill was for the full amount. I told Ms Martin that I could not assist in that regard and that she should speak to one of the solicitors.”
The 2008 letter did not refer to any such conversation, and if a file note of it existed, none was tendered. In cross-examination Ms Martin flatly denied the conversation. Given her subsequent indignation of the magnitude of the professional costs, it would be surprising were she to have received it and remained silent.
Three other matters, albeit somewhat more peripheral, should be mentioned. First, Ms Trueman could hardly have been unaware of Ms King's view that the August invoice was not a proper bill.[23] Form did not matter for the purposes of the submission to the Federal Magistrates Court; what was required was a schedule of costs, and that was required urgently. Ms King's perception of the form of a proper bill can be seen from the invoice dated 16 January 2008. In the absence of any urgency, there is no reason why an invoice intended for the client could not have been put into that form.
[23]Paragraph [87].
Second, it may reasonably be inferred from Ms King's response to Ms Henry's memo[24] that Ms King did not envisage the creation of an invoice in a form to be sent to the client. The “issue” to which she referred in her response was the need to apply dates to the various pieces of work done in the matter. This she saw as necessary because in the circumstances the court might choose to award indemnity costs only after a certain date.[25] Such a breakdown would be helpful only for the purposes of the submission; it would be unnecessary in an invoice intended for the client.
[24]Paragraph [79].
[25]That was because the application for indemnity costs was founded in part on Ms Martin's ex-husband's failure to make full disclosure of his assets (a step not required at the outset of the proceedings) and, possibly, because Mr McGregor's submission sought indemnity costs in the alternative from the date of an offer to settle on terms less favourable than those ultimately awarded, which Ms Martin had made at an early stage.
Third, there was no reason why an invoice should have been sent to Ms Martin in August or September 2007. None had previously been sent and it was known that Ms Martin would be unable to pay until she received payment from her husband. He was being uncooperative in carrying out court orders for the sale of property during the second-half of 2007, and there was no prospect of an early payment.
For the foregoing reasons, I find that the August invoice was neither issued nor sent to Ms Martin.[26] I find Ms Beilby's evidence to the contrary as unreliable, at least as to timing. It follows that the August 2007 invoice did not justify, wholly or in part, Ms King's withdrawal of money from her trust account on January 2008.
[26]In making this finding I have not taken into account any findings in Exhibit 7.
In making this finding I have attempted to rely on objective facts and inferences drawn from them rather than simply accepting or rejecting evidence based on findings of credibility. Nonetheless, I have paid attention to the submissions made on behalf of Ms King in relation to the credibility of Ms Trueman and Ms Martin. I agree that Ms Trueman was keen to distance herself from any involvement with the August 2007 invoice, and that this led her on occasions to exaggeration or understatement, particularly in relation to her role in the firm in relation to the preparation of invoices. I also accept that Ms Martin demonstrated animosity toward Ms King, an animosity which on occasions affected the framing of her answers. She had a predisposition during her cross-examination to “shoot from the lip”. Sometimes she unresponsively stated her conclusions rather than referring to the primary facts the subject of a question. She had only a rudimentary knowledge of how the family law system worked and had a great deal of resentment toward that system which impaired her willingness to try to understand it. She blamed Ms King for such things as unanticipated adjournments. Above all, mainly as a result of events in February 2008, she felt that Ms King had tried to cheat her.
These aspects of the evidence on the credibility of Ms Trueman and Ms Martin must be weighed against my views on the credibility of Ms King and Ms Beilby, to which I have previously referred[27] or refer below.[28] The fact is that all four women found the process of giving evidence very stressful and all four were emotionally involved to such an extent that, at some stage, each could not resist bitchy remarks about someone else. In all cases, parts of their evidence must be treated with reserve.
[27]Paragraphs [109]-[110].
[28]Paragraphs [148] and [212].
In the circumstances I have preferred to base my findings on inferences from the written records wherever possible.
Paragraph (b)(ii) of s 58(3): notice of withdrawal
“Notice of withdrawal” is not a defined term. Because the notice has to be given before the withdrawal is effected, the term must refer to a notice of intention to withdraw money. No particular form is required for such a notice. However it cannot be that a mere invoice is sufficient. Nothing in the August invoice suggested an intention to withdraw funds from trust. That is not surprising since there were no funds in trust. The invoice was not a notice of withdrawal.
For this reason also, the August 2007 invoice did not justify the withdrawal under s 58(3) of the Regulation.
The August 2007 invoice: s 58(4) of the Regulation
Ms King also relied upon the August invoice and ss 58(4)(a) and 58(4)(b)(i) of the Regulation to justify the withdrawal.
It is unnecessary to examine the proper interpretation of “given” in para (a) of that subsection. It was not suggested that the invoice was provided to Ms Martin in any other way than by being sent to her. I have found that it was not so sent.
Were that finding wrong, the question would arise whether the August 2007 invoice was a ”bill” within the meaning of s 58(4)(a) of the Regulation. “Bill” is not a term defined in the Regulation. However billing is dealt with by Div 6 of Pt 3.4 of Ch 3 of the Legal Profession Act 2007. Section 330 provides that a bill may be in the form of either a lump sum bill or an itemised bill. It could not be suggested that the August invoice was an itemised bill.
To be a lump sum bill it is necessary that the bill describes the legal services to which it relates.[29] The description in the August invoice was:
“RE: MATRIMONIAL MATTERS
TO OUR PROFESSIONAL COSTS of and incidental to acting on your behalf in this matter and any and all other sundry matters not herein mentioned, and general care and consideration in your case. This invoice can be itemised if required.
COSTS GST AMOUNT
OUR FEES 65000 .00 6500.00 71500.00”.[29]Legal Profession Act 2007, s 300.
In my judgment that is not a description of the legal services to which the bill related. It follows that the August 2007 invoice was not a bill within the meaning of the Act.
That is enough to dispose of the argument based on s 58(4) of the Regulation in relation to the August 2007 invoice. However I should add that there is no evidence that the invoice complied with s 331 of the Act:
“331 Notification of client’s rights
(1)A bill must include or be accompanied by a written statement setting out—
(a) the following avenues that are open under this Act to the client in the event of a dispute in relation to legal costs—
(i)costs assessment under division 7;
(ii)the setting aside of a costs agreement under section 328; and
(b) any time limits that apply to the taking of any action mentioned in paragraph (a).”
My tentative view would be that it would be necessary for a bill to comply with this section in order to be a bill within the meaning of the Regulation. It is unnecessary to decide this point.
The invoices dated January 2008
Ms Martin received two invoices dated 16 January and 17 January respectively by facsimile under cover of a faxed letter dated 26 February 2008.[30] As noted above, she swore that these were the first invoices which she received.[31]
[30]Copies of the invoices are annexed to these reasons for judgment.
[31]Paragraph [102].
Ms King's affidavit regarding these invoices was scarcely more informative than her pleading.[32] Ms Beilby did not refer to them at all in her 2008 letter or her 2010 statement. In her affidavit Ms Beilby deposed:
[32]Paragraph [55].
"14I am not entirely sure just what happened in relation to the sending of the January and February 2008 accounts to Ms Trueman. Copies of the following documents are exhibited:
(i)account dated 16 January 2008 without trust account details (page 6 of the bundle);
(ii)account dated 17 January 2008 without trust account details (page 7 of the bundle);
(iii)account dated 16 January 2008 with trust account details (pages 8-9 of the bundle);
(iv)account dated 17 January 2008 with trust account details (page 10 of the bundle).
15 To the best of my recollection:
“MR MCMILLAN: At paragraph 5 of the affidavit you say you’re expecting the imminent settlement of de facto property matters?
MS KING: A de facto property matter.
MR MCMILLAN: Sorry, of a de facto property matter. That was as at 7 April 2008 that you were expecting that imminent settlement were you?
MS KING: Yes.
MR MCMILLAN: So is your evidence that you were expecting that to settle between 7 April and 10 April 2008?
MS KING: I think I was hoping that it would or that the client would get funds. Settlement is probably an incorrect word to use. I think I was hoping that the client would have funds, whether from impact or directly from her, but I really expected to get it from her brother.”
If the issue were whether Ms King honestly held the intention which she asserted in her letter, that would be damaging evidence. That is not the issue raised by the charge as framed. Apart from damaging Ms King's credibility, both para 5 of her affidavit and the cross-examination were probably irrelevant.
The Commissioner submitted that none of them raised a reasonable excuse for her failure to fulfil her statement of intention. I disagree. Whatever her evasions and fudging it is perfectly plain that Ms King did not have the money to carry out her stated intention. Even supposing she was under some sort of professional duty to implement her stated intention in the absence of some reasonable excuse not to do so, not having the money is a reasonable excuse.
Conclusion
Charge 3 is not proved.
Charge 6 – Legal Services Commissioner
Charge 6 was:
"Charge Six – Failure to comply with s. 443(3) Notice
6.The respondent, without reasonable excuse, failed to comply with a written notice issued by the Legal Services Commissioner ('the Commissioner') pursuant to s.443(3) of the Legal Profession Act 2007 ('the Act').
Particulars
6.1.At all material times, the respondent:
(a)was an Australian Legal Practitioner;
(b)engaged in legal practice as a sole practitioner under the name of K.L. King & Associates.
6.2.On or about 28 May 2008, Jason Reid, a client of the respondent, complained to the Legal Services Commissioner about the conduct of the respondent.
6.3By letter dated 19 June 2008 the Legal Services Commissioner requested the respondent's written response to the complaint by 4 July 2008.
6.4.The respondent did not respond to that letter by 4 July 2008 or at all.
6.5.By letter dated 21 July 2008 the Legal Services Commissioner required the respondent pursuant to s.443(1) of the Legal Profession Act 2007 to give an explanation of matters arising from the complaint by 1 August 2008.
6.6.The respondent did not respond to that letter by 1 August 2008 or at all.
6.7.By letter dated 21 August 2008, the Commissioner gave the respondent written notice pursuant to s.443(1) of the Legal Profession Act 2007 that she may be dealt with for professional misconduct if her failure to provide the explanation as required continued for a further 14 days, namely beyond 4 September 2008.
6.8.The respondent failed, within the 14 day period specified in the Notice, to comply with the requirement to give to the Commissioner the requested explanation and failed to provide the Commissioner with a reasonable excuse for not complying with the requirement within that period."
Ms King's response was terse:
“I deny charge 6 because I responded to the letter dated 19 June 2008 by letter dated 2 July 2008.”
That was an unhelpful pleading. It did not reflect well on those involved in creating it. It should not be necessary for this Tribunal to have elaborate rules or directions as to pleadings in order to enable the true issues to be identified, particularly in cases involving professional discipline of lawyers. In the event, it emerged that Ms King had not yet decided what her response to charge 6 should be. Asked at the beginning of the trial what Ms King's response was, her counsel responded, “I need to take further instructions on that matter and I can do that quickly.” However after conferring with Ms King, counsel informed the court, “Your Honour, it seems that I need a longer time than I originally thought in order to get my instructions on this charge and I can do that over the luncheon adjournment.”
In the event, Ms King tendered an amended Response immediately before the evening adjournment. It represented a distinct improvement, but could hardly be called satisfactory:
"6.1 - 6.3 Admitted.
6.4Denied because I responded by letter dated 2 July 2008.
6.5I do not know whether or not I received the letter dated 21 July 2008 and therefore do not admit the allegation.
6.7I do not know whether or not I received the letter dated 21 August 2008 and therefore do not admit the allegation.
6.6 - 6.8I admit that I did not write to the LSC about Mr Reid subsequent to 21 July 2008."
At that stage there was no suggestion that any further evidence would be led.
By a formal complaint dated 28 May 2007 Mr Reid listed the aspects of Ms King's conduct about which he was complaining:
"The bill is huge for the work undertaken, which was to write one letter. Included in this are fees for a barrister. I never gave permission for Ms King to instruct. Ms King lead me to believe (deliberately in my opinion) that her services on this occasion would be at no cost as have some of her services on previous occasions. Then a few weeks later, I receive the bill, which Ms King has refused to discuss. She is now suing me for this account."
He had been charged $3,865, comprised of $2,200 for Ms King's fees and $1,650 for counsel's fees for:
“acting on your behalf in this matter, including attendance on you to obtain instructions drafting statement and e-mails with your instructions to counsel receipt and perusal of statement from yourself and counsel and preparation of final draft with counsel's assistance and your assistance forwarding final draft to centrelink all due care and consideration exceeding but say [$3865].”
Correspondence between the parties
By letter dated 19 June 2008, written under s 437 of the Legal Profession Act 2007, Ms King was asked for a response to the following by 4 July:
"1.What were your firm's instructions from Mr Reid? Please provide copies of any relevant documents or correspondence.
2.Was a cost agreement entered into with Mr Reid? If so please provide a copy or in the absence of an agreement please provide the basis of your charges.
3.On what basis did your firm retain counsel? Please provide a copy of any instructions in that regard."
In her first affidavit Ms King deposed:
"45I deny that I failed to respond to the letter dated 19 June 2008 from the Applicant because I replied by letter dated 2 July 2008, a copy of which is at page 33-34 of the bundle.
46I believe that the letter was sent in the normal course and am not aware of any reason why it would not have been received by the Applicant."
It is unnecessary to quote the contents of the letter dated 2 July 2008 which was exhibited to the affidavit. It suffices to say that if true, the explanation exonerates Ms King. At that stage that was the totality of her evidence on charge 6.
Ms Campbell, an investigator with the Commission, deposed that she had caused searches of the Commission's physical and electronic files to be conducted and that no letter dated 2 July 2008 concerning the Reid complaint was received from Ms King. As noted above[51], Ms Campbell was not required for cross-examination.
[51]Paragraph [89].
The Commissioner not having received any response from Ms King, an employee telephoned her office on 11 July. Ms King's receptionist told her that Ms King was away; that she could not tell her when Ms King would return; and that no one was handling her matters in her absence. Ten days later, with still no response received, the Commissioner wrote again to Ms King:
“… I enclose a copy of my previous letter for your ease of reference.
I note that to date you have not responded.
Accordingly I now require you, pursuant to section 443(1)(a)(i) of the Legal Profession Act 2007 (the Act), to provide me with the explanation I am seeking and to do so at your earliest convenience or by Friday, 1 August 2008.
…
Please note that the Act obliges you at section 443(2) to comply with my requirement and provides at section 443(3) that you may be dealt with for professional misconduct if you fail to do so within the stated time frame.” (Emphasis in original)
Again the Commissioner did not receive a response. Again he wrote to Ms King:
“…
I note that you have failed to comply with the direction I gave you in the second of those letters to provide me with a full explanation of the matters subject to my investigation.
Accordingly, I hereby give you written notice pursuant to section 443(4) of the Legal Profession Act 2007 that you may be dealt with for professional misconduct if your failure to comply with that direction continues for a further 14 days – that is to say beyond 4 September 2008.
Please note that the Act provides at section 443(4) that you will be taken to have committed professional misconduct if you fail without reasonable excuse to provide me with the explanation by that date.” (Emphasis in original)
Yet again no response was received. On Ms King's instructions, a paralegal employed by her wrote to the Commissioner on 27 October advising that Ms King had been ill, that she was currently in a trial but that she would respond to the correspondence “next week”.
There was no such response. However on 5 December 2008 Mr Bartley, Ms King's solicitor, sent the Commission an e-mail enquiring if it had Ms King's letter to LSC dated 2 July 2008. As the Commissioner promptly informed Mr Bartley, it did not. His request for a copy of the letter went unanswered. I infer that this was because Mr Bartley did not have a copy.
There the matters stood at the close of the Commissioner's case part way through the afternoon on the second day of the hearing. At that point counsel for Ms King sought leave to read and file Ms King's third affidavit, sworn that day. The inference that this affidavit was sworn in order to provide some evidentiary foundation for the amended Response is irresistible. Ms King deposed:
"14I am unable to say with any certainty whether or not I received that notice or the earlier letter dated 21 July 2008 from the applicant.
15I had, at that time, retained my current solicitor, Mr Bartley, to act on my behalf in relation to various matters which had been raised by the Queensland Law Society and by the applicant. I would expect that, had I received such correspondence from the applicant, then I would have referred it immediately to my solicitor. I have checked with Mr Bartley and been advised that he did not receive either of those letters from me (or direct from the applicant.)
16Further, there were a number of matters being investigated by the Society and the applicant at about that time and I was always conscious of the need to respond to correspondence within time limits and either did so or requested extensions. I therefore believe that it would have been out of character and inconsistent with my practice to ignore this particular correspondence.
17For those reasons (and also because I do not remember receiving that correspondence, nor do I have it on my files), I think it is likely that I did not receive that correspondence."
She went on to depose that she was depressed and sleepwalking during 2008, and asserted that she “was not working at an efficient level during the relevant period and it is possible that I overlooked the correspondence, though it is not my belief that that was the case.”
In making that affidavit Ms King was obviously adopting a low-profile strategy. The evidence against her raised a number of questions about the events which preceded and followed those constituting the elements of the charge. Ms King's explanations had to be extracted during cross-examination.
Cross-examination
The first question arose from the telephone call on 11 July. Ms King's receptionist had said that she was away. Was she? Ms King did not know. She had overlooked the file note when she made her affidavits. She read the note for the first time the evening before her case in this hearing had opened. The message had not been passed on to her. Nonetheless, she had not looked in her diary to determine where she was on 11 July.
Ms King said she was definitely ill in July 2008. Asked the details she said she was still having difficulties arising out of the birth of her baby in September 2007. She “was quite ill off and on”. She did not take planned time off but nonetheless would have been off for “perhaps a week, two weeks, something like that”. A little later, somewhat contradictorily, she said that she would not have left her office for a week without a qualified person there because she would come and go and was always contactable by telephone. She lived upstairs from the office and her clients were given her mobile telephone number to contact her if necessary:
“PRESIDING MEMBER: And no one was appointed to look after your matters while you were away?
MS KING: No, they would contact me and ask me. As I say, I’d reduced my workload quite substantially.
PRESIDING MEMBER: Did you tell them before you left how long you would be away?
MS KING: No, I didn’t.
PRESIDING MEMBER: So you just left the office without saying how long you’d be and without appointing anyone to run your affairs?
MS KING: No, because I was still very contactable at all times.”
The receptionist, “Melanie”, who took the message would have known this.
Why then, one wondered, was she not contacted?
“PRESIDING MEMBER: That seems a little improbable in that she would not attempt to contact you?
MS KING: Not with that particular member of staff.
PRESIDING MEMBER: Well, if you knew that that was a person that couldn’t be relied upon, surely you would have put arrangements in place to ensure you would be contacted; not much use saying you’re contactable if you know that the person is not reliable?
MS KING: I didn’t know at the time that she wasn’t reliable. Her employment was terminated a short time later.”
Unfortunately Ms King could not remember Melanie's surname, although she conceded that her office records would contain it.
Ms King could not remember if she was still ill around 21 or 22 July and she had made no effort to find out. Her testimony regarding her illness in July 2008 was completely uncorroborated, despite the assertion in the letter to the Commissioner dated 27 October 2008 that she had medical documentation to support it.
The next undisputed contact was the Commissioner's letter of 21 July 2008. In her affidavit Ms King deposed that she was “unable to say with any certainty whether or not” she received it. That evidence changed somewhat in cross-examination:
“MR MCMILLAN: So it’s possible is it that you did receive it and you just don’t recall that now?
MS KING: It’s not possible that I received it before because I would have acted on it because of course – and moreover would have passed it on to Mr Bartley and he just told me he doesn’t have it, but it’s still possible that it came into the firm and I didn’t see it, that’s correct.”
Her staff would not open mail marked “Private and Confidential” (as this letter was). The letter should have been passed to her but it was not. Counsel for the Commissioner asked about the situation:
“MR MCMILLAN: Ms King, can I ask you this; there were no problems or were there any problems with mail delivery at your office in July and August 2008?
MS KING: There was with that particular staff member, yes. What she would do with mail and also sending mail out there were issues.
MR MCMILLAN: And have you put that in your affidavit that one of the reasons that you didn’t respond might have been that this unreliable secretary didn’t give you mail?
MS KING: I think I did put that in.
MR MCMILLAN: Can you take us to that paragraph?
MS KING: Well probably but I don’t know that it’s here. I don’t know that it’s in my affidavit but I think it may be in correspondence.
PRESIDING MEMBER: I thought that was what you were asked if you put it in your affidavit?
MS KING: No, I’m sorry; it’s not in my affidavit. I think it is in other correspondence though.
PRESIDING MEMBER: Why didn’t you put it in your affidavit?
MS KING: I don’t know, your Honour.
PRESIDING MEMBER: What correspondence is it?
MS KING: I would need to find it. It’s in my record but I would have imagined I would have done.”
Nothing in any of the materials put before the Tribunal by the Commissioner suggested that Ms King had informed him or his offices of a problem with her office mail. The Tribunal therefore adjourned to allow Ms King the opportunity to search for the missing correspondence.
Upon the resumption things took a new turn:
“PRESIDING MEMBER: Well, Ms King, how did you go?
MS KING: Your Honour, I asked Mr Bartley to see if he had it – I can’t find it on my records. I actually believe that I did receive the letter of 21 August because I think that’s when I became aware that the Law Society hadn’t received the earlier letter, the earlier time I’d sent it, and I think it was in my correspondence to them around that time because, your Honour, I initially said that I thought that I had given it to a member of staff to send.
PRESIDING MEMBER: Well you haven’t found anything in your file?
MS KING: No, but I’ve asked Mr Bartley. I’m fairly sure Mr Bartley has something.
MR DAVIS: Your Honour, that’s why Mr Bartley is not here.
…
MR MCMILLAN: Thank you, your Honour. So just to be clear it’s now your evidence that you did receive the 21 August 2008 letter?
MS KING: I think I must have and I apologise, Mr McMillan, because it was the way I found out they hadn’t received the earlier letter, so I must have received that letter. I can’t see how else I would know and I certainly became aware that they hadn’t received the 2 July letter at some stage later that year, so it seems to me that that must have been the way I found out because I then did write back and send a letter. Logically, that sounds correct and it was in that response along with the letter that I believe that I would have said, “Look, I think it was a staff member that I gave it to and that really wasn’t good enough and she probably didn’t send it as requested.”
…
MR MCMILLAN: It’s all right; I’ll ask you to clarify it. Are you saying that there is another letter in existence where you acknowledged that you received the 21 August letter; is that right?
MS KING: I don’t specifically recall but what I’m saying is that I did become aware later that they hadn’t received my 2 July letter and I wrote and I actually said when I re-sent the letter saying, ‘Look, I think this is my fault. I gave it to member of staff to send and perhaps she hadn’t sent it after all’, so I clearly remember that letter. I’ve asked Mr Barley to find it.
…
PRESIDING MEMBER: When you say when you re-sent that when did you re-send it?
MS KING: Later that year and that’s why I’m saying I think I just received that letter of 23 August. I must have found out----
PRESIDING MEMBER: When you say later that year do you mean you re-sent before you got the letter of 21 August or after?
MS KING: No after, your Honour.
PRESIDING MEMBER: After?
MS KING: It would have been after, yes.
PRESIDING MEMBER: And I presume by then you would have also shown him [Mr Bartley] the letter of 21 August?
MS KING: I must have done.”
By the end of Ms King's re-examination, Mr Bartley had returned to the hearing room, but nothing further had been said about the searches he had carried out. I enquired of counsel:
“PRESIDING MEMBER: Now, I don’t know whether you’re proposing to put any evidence in through Mr Bartley but I don’t think it would be necessary for him to be called if there are any documents that he’s found as a result of his search. It would more quickly be done by putting it through this witness.
MR DAVIS: There’s nothing we wish to tender through this witness.”
Ms King was then stood down.
Section 443 of the Legal Profession Act 2007
Section 443 of the Legal Profession Act 2007 relevantly provides:
"443 Powers for investigations
(1)The entity carrying out an investigation as mentioned in section 435 or 436 may, for the investigation—
(a) require an Australian legal practitioner who is the subject of the investigation—
(i)to give the entity, in writing or personally, within a stated reasonable time a full explanation of the matter being investigated; or
…
(2)Subject to subsection (6), the Australian legal practitioner must comply with a requirement under subsection (1)(a).
Maximum penalty—50 penalty units.
(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.
(4)If notice under subsection (3) is given and the failure continues for the 14 day period—
(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
(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.”
Ms King did not challenge the validity of the notice given by the Commissioner in his letter of 21 August 2008 as a notice under s 443(3), nor did she submit that she complied with the requirement in it in the time specified. Her case seemed to be that she had a reasonable excuse for non-compliance in that she had asked a member of staff to resend her letter of 2 July 2008 once she received the notice. Her physical and mental state contributed to her lack of oversight.
Findings
I have no doubt that the letter of 2 July 2008 is a concoction. There are multiple reasons for that. Until the first day of the hearing, when she was required to concentrate her mind on giving proper particulars in her Response, her defence, the only one which she put forward, was that she had not failed to comply with the requirement in the letter of 19 June 2008 and therefore s 443(3) was not engaged. The suggestion contained in her third affidavit, sworn on the second day of the hearing, that she had not received the letters of 21 July and 21 August was a fabrication. It is incredible that she did not raise this possibility in her first affidavit in June 2011, or by correspondence when she was served with the particulars of the charge in October 2010, if it were true. Indeed, one would expect that it would have been raised in Mr Bartley's e-mail of 5 December 2008, for the substance of the charge was known by then.
I do not believe her testimony that she was absent from her practice for up to a week or two at a time during the relevant period. Had she been on sick leave during that time it could have been proved from her office records. She did not even produce the medical documentation which she claimed existed in the letter of 27 October 2008.
Ms King originally deposed that she believed the letter of 2 July 2008 was sent in the normal course and that she was not aware of any reason why it would not have been received by the Commissioner. Her suggestion in the witness box that a semi-remembered unreliable member of her staff twice failed to send the letter is a novelty, is inconsistent with her first affidavit and is incredible. Her claim that she told Mr Bartley about the unreliable Melanie was not corroborated, despite Mr Bartley's search.
She did not explain from where she obtained a copy of the letter dated 2 July 2008 and exhibited to her first affidavit, and she offered no explanation for why that letter was not on the file acquired by Ms Campbell. The copy which she exhibited to her affidavit was presumably printed from some computer. Untypically, it was not on firm letterhead. She proffered no forensic evidence regarding the creation of the file comprising the letter on that computer. Her testimony that she believed the issue between her and the Commissioner was only as to when the letter was sent, not whether it was sent at all cannot stand with the Commissioner's letter to her solicitor of 8 December 2008, which she agreed she saw.
Ms King’s recovered memory of resending the letter, mentioned for the first time while she was under cross-examination, is also unbelievable. How could such a matter have been overlooked?
In the end it was unclear whether Ms King maintained her claim not to have received the Commissioner's letter of 21 July 2008. If, as she claimed in cross-examination, she received the letter of 21 August, she must have received that of 21 July also, for a copy was enclosed in the later letter. In the end it is impossible to sort the precise truth from the fantasy.
I am satisfied that Ms King had no reasonable excuse for failing to comply with the notice issued by the Commissioner under s 443(3) of the Act.
Conclusion
Charge 6 is proved.
Nature of the misconduct and orders to be made
Charges 1, 2, 6 and 7 have been proved. The Commissioner has alleged that in relation to each of them Ms King engaged in either unsatisfactory professional conduct or professional misconduct. The parties made submissions on that question but in my judgment fairness requires that the Tribunal allow further submissions in the light of the foregoing findings. Those submissions can be made at the same time as submissions on the question of disciplinary orders. They should be in writing.
ANNEXURE TO REASONS FOR JUDGMENT
IN LEGAL SERVICES COMMISSIONER v KING
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