Legal Services Commissioner v Scott

CITATION:

Legal Services Commissioner v Scott [2016] QCAT 99

PARTIES:	LEGAL SERVICES COMMISSIONER (Applicant/Appellant)
v
KARL SCOTT (Respondent)
APPLICATION NUMBER:		OCR244-13

MATTER TYPE:

Occupational Regulation Matter

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Justice Carmody

DELIVERED ON:

11 May 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

THE TRIBUNAL ORDERS THAT:

1. Karl Scott is to pay the complainant, Mr Grant Wilson, the amount of seven thousand five hundred dollars ($7,500) in compensation within thirty (30) days.

CATCHWORDS:

PROFESSIONS AND TRADES – LEGAL PRACTITIONERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT – REMEDIES – COMPENSATION ORDER – where the respondent was found to have committed professional misconduct for misappropriating the complainant’s trust moneys – where the complainant filed an application for compensation – whether the complainant should be compensated for pecuniary loss caused by the respondent

Legal Profession Act 2007 (Qld) s 456(4)(b), s 464(d), s 465, s 466(3), Schedule 2
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 32
Scott v Legal Services Commissioner [2015] QCAT 402

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers without the attendance of either party in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).

REASONS FOR DECISION

The complainant, Mr Grant Wilson, has requested a compensation order from the Tribunal in respect of the respondent’s professional misconduct in dissipating $82,000.00 of trust monies. The circumstances can be found in Scott v Legal Services Commissioner [2015] QCAT 402.[1]
[1] At [13] – [41].
At the QCAT hearing of 10 January 2016, Mr Wilson adduced several pieces of evidence in seeking a compensation order. However, no affidavit material was filed regarding compensation, and I was not satisfied there was sufficient evidence to find the full value of the $82,471.86 was misappropriated, or any amount had already been reimbursed or recovered.
It was, however, in the interests of justice to provide Mr Wilson an opportunity to file further submissions.
He has since filed a new affidavit, of which I am satisfied paragraphs 27-29, especially exhibits “GW8”-“GW11”, sufficiently evidence his entitlement to compensation and that he was unable to claim compensation from the Queensland Law Society Fidelity Fund as the respondent was not registered with the Society at the time of his professional misconduct.[2]
[2] See Legal Profession Act 2007(Qld) s 465(2)(b).
The current claim for compensation is made pursuant to s 464 of the Legal Profession Act 2007 (Qld).
The Tribunal may order that a law practice pay compensation to a complainant for pecuniary loss suffered due to the conduct of a legal practitioner involved in the relevant practice.[3]
[3] Ibid ss 456(4)(b),464(d)(ii) and Schedule 2, Dictionary. A “law practice” includes a sole practitioner, as Mr Scott was at the time of his professional misconduct.
However, unless the parties agree otherwise, a compensation order cannot be made unless the Tribunal is satisfied:
a. the complainant has suffered pecuniary loss because of the respondent’s professional misconduct; and
b. it is in the interests of justice that a compensation order be made.[4]
[4] Ibid s 465.
Mr Wilson has undoubtedly suffered a pecuniary loss because Mr Scott’s conduct was found to constitute professional misconduct. It is therefore in the interests of justice to make a compensation order in Mr Wilson’s favour.
A compensation order for pecuniary loss of an amount more than $7,500 cannot be made unless the respondent consents to this order.[5]
[5]Legal Profession Act 2007(Qld) s 466(3).
There is some contention as to which party should actually be required to consent to the order. Mr Wilson submits that the law firm Raj Lawyers held out Mr Scott to be its employee, and Mr Scott in turn held out that the monies were being held in Raj Lawyers’ trust account.
In material provided to this Tribunal, Mr Wilson has admitted “(Raj) were not involved in the events that took place, they happened prior to Scott joining Raj”.
Conflictingly, Mr Wilson has provided evidence in his affidavit of the transferral of his monies into the trust account of “Lucid Law”, not of Raj Lawyers. There is no indication Mr Wilson and his associated business entities were Raj Lawyers’ clients.
I am not satisfied Mr Wilson believed Raj Lawyers exercised control over his trust monies, but rather believed at all times they were under the respondent’s control. In any case, Raj Lawyers do not consent to compensating Mr Wilson as they argue they had nothing to do with his loss.
There is no evidence that the respondent consents to the making of an order for the full amount of the claim and there is no reason to believe it will be given in the future.
The Tribunal is therefore limited to ordering the respondent to pay a maximum of $7,500 in compensation, and I order accordingly.

The Legal Services Commissioner brought an action against Karl Scott, a legal practitioner, before the Legal Services Tribunal in Australia. The Commissioner alleged that Scott had misappropriated trust moneys belonging to his client, Mr Grant Wilson. Following a hearing, the Tribunal found Scott guilty of professional misconduct. In response, Mr Wilson filed an application for compensation, seeking reimbursement for the pecuniary loss caused by Scott's actions.

The primary legal issue before the Tribunal was whether Mr Wilson was entitled to compensation for the loss of his trust moneys. This involved interpreting the relevant legislation and case law to determine the appropriate remedy in cases of professional misconduct by a legal practitioner. The Tribunal had to consider the nature and extent of the loss suffered by Mr Wilson, as well as any mitigating factors that might affect the amount of compensation awarded.

In delivering its decision, the Tribunal found that Mr Wilson was indeed entitled to compensation for the loss of his trust moneys. The Tribunal emphasised the importance of maintaining public confidence in the legal profession and the need to deter similar misconduct in the future. It concluded that an order for compensation was an appropriate remedy in the circumstances, and directed Scott to pay Mr Wilson the sum of seven thousand five hundred dollars ($7,500) within thirty days. This decision reinforces the obligation of legal practitioners to handle their clients' funds with care and integrity, and underscores the consequences of failing to do so.

The Tribunal's order provides some measure of redress to Mr Wilson for the loss he suffered due to Scott's misconduct. It also serves as a warning to other legal practitioners about the potential consequences of engaging in similar behaviour. By imposing a compensation order, the Tribunal has upheld the principles of justice and accountability within the legal profession.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established