Legal Services Commissioner v McQuaid - [2018] QCAT 342

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Legal Services Commissioner v McQuaid [2018] QCAT 342

PARTIES:

LEGAL SERVICES COMMISSIONER
(applicant)

v

TIMOTHY JOHN MCQUAID

(respondent)

APPLICATION NO/S:

OCR 108-17

MATTER TYPE:

Occupational regulation matters

DELIVERED ON:

5 19 October 2018

HEARING DATE:

18 June 2018

HEARD AT:

Brisbane

DECISION OF:

Member Peter Lyons QC

Mr Peter Sheehy

Dr Susan Dann

ORDERS:

1. The respondent is publicly reprimanded.

2. The respondent is to pay the applicant’s costs fixed in the sum of $2,500.

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – OTHER MATTERS – where respondent entered into joint venture with a client – where client had impaired mental capacity – conflict of duty and interest of respondent – whether conduct professional misconduct or unsatisfactory professional conduct – whether a fine should be imposed

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OTHER MATTERS – where s 462(1) of the Legal Profession Act 2007 (Qld) requires the Tribunal to order that a respondent, having engaged in unsatisfactory professional conduct, must pay costs including those of the commissioner – whether respondent should only pay part of the commissioner’s costs

Australian Solicitors Conduct Rules 2012, r 4.1.1, r 4.1.4, r 12
Legal Profession Act 2007 (Qld), s 456, s 462(1)

Boardman v Phipps [1967] 2 AC 46
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19
Law Society of New South Wales v Harvey [1976] 2 NSWLR 154
Legal Services Commissioner v Bone [2014] QCA 179
Legal Services Commissioner v Jones [2015] QCAT 84
Legal Services Commissioner v Shand [2017] QCAT 159
Legal Services Commissioner v Shand [2018] QCA 66
Phipps v Boardman [1964] 1 WLR 993
White City Tennis Club Ltd v John Alexander’s Clubs Pty Ltd [2009] NSWCA 114

APPEARANCES & REPRESENTATION:

Applicant:

M Nicholson, instructed by the Legal Services Commission

Respondent:

B I McMillan, instructed by Gilshenan & Luton Legal Practice

REASONS FOR DECISION

The respondent entered into a joint venture arrangement with a client, Mr Keith Messer. The applicant contends that this amounts to professional misconduct, and seeks orders under section 456 of the Legal Profession Act 2007 (Qld) (‘LP Act’).
Factual background
The material available to the Tribunal consists of a Statement of Agreed Facts (‘SOAG’) and an affidavit from the respondent. No issue has been taken with the facts deposed to by the respondent. The respondent has also admitted facts alleged in the discipline application; and has put before the Tribunal its reasons of 24 August 2015, when dealing with a guardianship and administration matter relating to Mr Messer’s capacity for personal and financial matters (‘guardianship proceedings’).
The respondent has been a solicitor for a little more than 30 years. On 1 July 1989 he became a partner in the firm now known as CSG Law, and remains a partner of that firm.
Mr Messer has been a long-standing client of CSG Law. He was a farmer. He also…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] QCAT 342
Decision Date: 18 June 2018

CaseChat Overview and Summary

In the case of Legal Services Commissioner v McQuaid, the respondent, a lawyer, was found to have engaged in professional misconduct by entering into a joint venture with a client who had impaired mental capacity. The Legal Services Commissioner sought orders under section 456 of the Legal Profession Act 2007 (Qld) ('LP Act') to address the respondent's conduct. The primary legal issues for the court were whether the respondent's actions constituted professional misconduct or unsatisfactory professional conduct, and if so, whether a fine should be imposed. Additionally, the court needed to determine the appropriate amount of costs to be awarded under section 462(1) of the LP Act, which requires the Tribunal to order a respondent, having engaged in unsatisfactory professional conduct, to pay costs including those of the commissioner.

The court concluded that the respondent's conduct amounted to professional misconduct due to the conflict of duty and interest arising from the joint venture with a vulnerable client. The court acknowledged the respondent's extensive experience and the personal relationship with the client but emphasised the importance of maintaining professional boundaries. The court noted that the amount of costs fixed in previous cases provided a reference point, and fixed the applicant's costs at $2,500, which represented a substantial proportion of the amount that would be ordered on taxation. The court considered this amount reasonable given the circumstances of the case and the amounts fixed in other cases.

Consequently, the court ordered the respondent to be publicly reprimanded and to pay the applicant's costs fixed in the sum of $2,500. The court's decision highlights the importance of lawyers adhering to professional standards and avoiding conflicts of interest, particularly when dealing with clients who may be vulnerable due to impaired mental capacity. The court's ruling serves as a reminder of the need for lawyers to maintain professional boundaries and act in the best interests of their clients.

Orders

Orders of the court

1. The respondent is publicly reprimanded.

2. The respondent is to pay the applicant’s costs fixed in the sum of $2,500.

Background

Background to the litigation

The respondent entered into a joint venture arrangement with a client, Mr Keith Messer. The applicant contends that this amounts to professional misconduct, and seeks orders under section 456 of the Legal Profession Act 2007 (Qld) (‘LP Act’).Factual background The material available to the Tribunal consists of a Statement of Agreed Facts (‘SOAG’) and an affidavit from the respondent. No issue has been taken with the facts deposed to by the respondent. The respondent has also admitted facts alleged in the discipline application; and has put before the Tribunal its reasons of 24 August 2015, when dealing with a guardianship and administration matter relating to Mr Messer’s capacity for personal and financial matters (‘guardianship proceedings’). The respondent has been a solicitor for a little more than 30 years. On 1 July 1989 he became a partner in the firm now known as CSG Law, and remains a partner of that firm. Mr Messer has been a long-standing client of CSG Law. He was a farmer. He also invested in property; and conducted a business hawking fruit. The respondent commenced to act for Mr Messer in about 2002, following the retirement of the partner who had previously acted for Mr Messer. Most of the work performed by the respondent was conveyancing work. Mr Messer and the respondent became personal friends, and Mr Messer used to consult the respondent regularly about life and business matters. In early 2012, Mr Messer discussed with the respondent the possible sale of land owned by Mr Messer in Hervey Bay. Mr Messer was, according to the respondent, unhappy with the prices being suggested for the land by local real estate agents; and was considering developing the land himself. He decided that he did not want to follow this course, and there was some discussion between Mr Messer and the respondent about a joint venture between them relating to the development of this land. The proposal was that the respondent, who had some experience relating to land development, would develop the land with Mr Messer’s assistance. Mr Messer would achieve the price he sought for the land; and any profit would be split between them equally. On 16 August 2012, the company Canefields Estate Pty Ltd (Canefields) was registered. Mr Messer was the director of this company. On 5 September 2012, the Canefields Unit Trust was established. Mr Messer was one unit holder. The other unit holder was Chareden Pty Ltd, the director of which was the respondent’s wife, who along with the respondent was a shareholder in that company. In 2013, Mr Messer lent Canefields $100,000 to fund development costs. In mid-2013 a part of the land was sold to Ergon for $870,000. Of this sum, $761,000 was ultimately deposited to Canefields’ bank account. In the same year, another part of the land was sold to Fraser Coast Regional Council for infrastructure works. Rather than receive the purchase monies, Mr Messer elected to have them retained by the Council as a credit. The amount of the credit was $983,000, and attached to lot 3, being part of the land retained by Mr Messer.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The submissions for the respondent relied on the costs orders made in Shand and Jones; and submitted that they supported an order that the respondent pay the applicant’s costs fixed at $2,500. It might be noted that in Jones the amount was $1,500. In the present case, it is appropriate to fix the applicant’s costs at $2,500. That sum appears to represent a substantial proportion, but by no means the entirety, of the amount which would be ordered on taxation; and bears some relationship to the amounts fixed in the cases referred to.Conclusion The following orders are made:(a)The respondent is publicly reprimanded.(b)The respondent is to pay the applicant’s costs fixed in the sum of $2,500.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Legal Services Commissioner v McQuaid [2018] QCAT 342
PARTIES:	LEGAL SERVICES COMMISSIONER (applicant)
v
TIMOTHY JOHN MCQUAID (respondent)
APPLICATION NO/S:	OCR 108-17
MATTER TYPE:	Occupational regulation matters
DELIVERED ON:	5 19 October 2018
HEARING DATE:	18 June 2018
HEARD AT:	Brisbane
DECISION OF:	Member Peter Lyons QC Mr Peter Sheehy Dr Susan Dann
ORDERS:	1. The respondent is publicly reprimanded. 2. The respondent is to pay the applicant’s costs fixed in the sum of $2,500.
CATCHWORDS:	PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – OTHER MATTERS – where respondent entered into joint venture with a client – where client had impaired mental capacity – conflict of duty and interest of respondent – whether conduct professional misconduct or unsatisfactory professional conduct – whether a fine should be imposed PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OTHER MATTERS – where s 462(1) of the Legal Profession Act 2007 (Qld) requires the Tribunal to order that a respondent, having engaged in unsatisfactory professional conduct, must pay costs including those of the commissioner – whether respondent should only pay part of the commissioner’s costs Australian Solicitors Conduct Rules 2012, r 4.1.1, r 4.1.4, r 12 Legal Profession Act 2007 (Qld), s 456, s 462(1) Boardman v Phipps [1967] 2 AC 46 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 Legal Services Commissioner v Bone [2014] QCA 179 Legal Services Commissioner v Jones [2015] QCAT 84 Legal Services Commissioner v Shand [2017] QCAT 159 Legal Services Commissioner v Shand [2018] QCA 66 Phipps v Boardman [1964] 1 WLR 993 White City Tennis Club Ltd v John Alexander’s Clubs Pty Ltd [2009] NSWCA 114
APPEARANCES & REPRESENTATION:
Applicant:	M Nicholson, instructed by the Legal Services Commission
Respondent:	B I McMillan, instructed by Gilshenan & Luton Legal Practice