Warren v Queensland Law Society Incorporated
[2013] QCAT 115
| CITATION: | Warren v Queensland Law Society Incorporated [2013] QCAT 115 |
| PARTIES: | Alexia Margaret Warren (Applicant) |
| v | |
| Queensland Law Society Incorporated (Respondent) |
| APPLICATION NUMBER: | OCR159-11 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 4 October 2012; written submissions subsequently received from the respondent on 14 November 2012 and the applicant on 21 November 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Alan Wilson, President |
| DELIVERED ON: | 12 March 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application is refused. 2. Queensland Law Society Incorporated is at liberty to file and serve submissions in writing on costs within 21 days of receipt of this decision. 3. Alexia Margaret Warren is at liberty to file and serve submissions in reply within 21 days of receipt of submissions on costs by Queensland Law Society Incorporated. |
| CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – PRACTISING CERTIFICATES – CANCELLATION – where a professional indemnity insurer agreed to indemnify the applicant – where the applicant failed to pay the deductible and penalty levy owed and due to the insurer – where the respondent wrote to the applicant advising that it would review the status of her practising certificate if she failed to pay the sum owed to the insurer – where the applicant did not resolve the outstanding payment – where the respondent cancelled the applicant’s practising certificate – where the applicant resolved the outstanding payment with the insurer – where the respondent granted the applicant a practising certificate – where the applicant’s practising certificate was cancelled for three days – where the applicant seeks an order from the Tribunal that the respondent’s decision to cancel her practising certificate is invalid – whether the respondent’s decision to cancel the applicant’s practising certificate was invalid PROFESSIONS AND TRADES – LAWYERS – PRACTISING CERTIFICATES – CANCELLATION – where the respondent emailed a Show Cause Notice as to why the applicant’s practising certificate should not be cancelled – where the respondent cancelled the applicant’s practising certificate – where the applicant claims she never received the Show Cause Notice – whether it is reasonable to infer from the applicant’s conduct that she received the Show Cause Notice Legal Profession Act 2007, ss 46(2)(e), 46(2)(f), 60, 61(1), Bradshaw v Bar Association of Queensland [2009] QSC 226, cited |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Ms Warren on her own behalf. |
| RESPONDENT: | Mr T J Bradley of Counsel instructed by the Office of the General Counsel, Queensland Law Society. |
REASONS FOR DECISION
Ms Warren is a legal practitioner. Her practising certificate was cancelled by the Council of the Queensland Law Society (‘the Society)’ on 28 June 2011 because of her failure, since about mid-August 2009, to pay $22,500.00 owed to her professional indemnity insurer after it settled a claim against her by a former client whose action for damages for personal injury was struck out.
After receiving notice of the cancellation she promptly paid the sum and was then granted a practising certificate for the 2011-12 year as and from 1 July 2011. She was, then, without a certificate for a period of three days.
She seeks an order that the Society’s decision to cancel, actually made on 22 June 2011, be ‘declared invalid’ and set aside.
After many delays and adjournments the matter eventually came on for hearing before the Tribunal on 4 October 2012. Subsequently, the parties filed and exchanged written submissions.
In presenting her case, Ms Warren has generated many thousands of words, almost all of which are fairly categorised as relating to ‘process issues’. Her case is, in short, that the first time the Society raised the question of an alleged outstanding payment owed by her to the insurer was in a telephone conversation with one of the Society’s officers, Mr Lyons, on 1 July 2011;[1] that, in those circumstances, the Society’s conclusion that she was no longer a fit and proper person to hold a practising certificate because of her failure to pay was unreasonable; and that, on a ‘proper construction of the facts and circumstances’;[2] she was denied procedural fairness and natural justice by the Society.
[1]Alexia Margaret Warren, ‘Submissions on behalf of the Applicant’, Submission in Alexia Margaret Warren v Queensland Law Society Incorporated, OCR159-11, 21 November 2012, [15].
[2] Ibid [9].
It will be necessary, later, to go into the history of the matter. There are, however, a number of troubling aspects of Ms Warren’s case which immediately tell against the relief she seeks.
They may quickly and vividly be illustrated by reference to her claim that she did not receive any, or any adequate warning of the risk the Society might cancel her certificate including, in particular, a warning in the form of a Show Cause Notice sent to her by the Society by both email, and registered mail, in early April 2011.
But (as will be seen) the insurer already had been writing to her for some time; and, the Society had previously written to her on 24 September 2010 advising her that unless she paid the outstanding amount to the insurer, professional indemnity insurance cover would not be extended to her, and the Society would be required to review the status of her practising certificate. It wrote again, to similar effect, on 26 October 2010. She did not pay.
On 6 April 2011, the Society’s Executive Committee resolved to issue a Show Cause Notice to Ms Warren inviting her to make written submissions by 11 May 2011 as to why her certificate should not be cancelled.
That Notice, dated 7 April 2011, was sent to her as an attachment to an email from Mr Lyons on 11 April 2011. At the hearing of this matter she contended, for the first time, that she had not received it at all. This, despite the fact that the Notice is shown as an attachment on the copy of the email exhibited to her own affidavit and, in an email to Mr Lyons of the same day, she told him that it was received ‘today’. Her attempts, at the hearing, to explain that this did not mean what it plainly appeared to mean were strained, and entirely unconvincing.
The doubt which, in light of that circumstance, must attach to her claim of non-receipt is compounded by something in her own affidavit: in it, she swears that she could not obtain all pages of the Notice and parts showed obliteration so that it was not readable in its entirety. She did not, moreover, elaborate on that point nor make any attempt to exhibit, to her affidavit, a full copy of what she now contends she actually received.
Additional doubt is raised by her subsequent communications to the Society of 11 April, 10 May, 17 May, 3 June, 8 June and 20 June 2011 which are all to the effect that she is preparing a response to the Notice, and make no mention of any page not obtained, nor any part that is obliterated.
Mr Lyons swore, and I accept, that although Ms Warren was in frequent communication with him between 11 April and 22 June 2011, at no time did she raise any concern that she did not have a complete and legible copy of the Notice. Her letter of 10 May 2011 refers, for example, to the Notice ‘dated 7 April 2011 and emailed at 2:14 pm on 11 April 2011’.
Her claim not to have received the Notice is entirely unsustainable in the face of this overwhelming evidence to the contrary – largely, of course, under her own hand.
Another example of these complaints about process, which occupied much of the time at the hearing, is equally dubious. Ms Warren asserted, correctly, that the postcode on the envelope containing the copy of the Show Cause Notice sent to her by registered mail at her office address was incorrect; but, the evidence before the Tribunal established that the incorrect postcode was disregarded and the envelope was taken to the correct address by Australia Post where it could not be delivered because the address was, in fact, a private post box service unattended by Ms Warren. It was marked ‘refused’ and returned, after many weeks, to the Society.
Again, there is nothing to suggest the incorrect postcode had any effect upon delivery of the Notice.
This close focus upon process, but to little apparent purpose, was also exemplified by another of Ms Warren’s contentions. She argued that she had never agreed to receive the Notice by email, so delivery by that method was not satisfactory compliance with the prevailing legislation. However, s 61(1) of the Legal Profession Act 2007 (‘LPA’) only required the Society to ‘give’ the Notice to Ms Warren.
It is trite that email is now a very common means of communication. The evidence establishes that Ms Warren was a frequent user of email to communicate with the Society, and did so on the majority of occasions. Her email address was noted on her practice letterhead. She replied by email to the email attaching the Notice and, also by email, sought extensions of time to respond to it. It is entirely reasonable to infer from her conduct that she did receive the Show Cause Notice by email.[3]
[3] See, e.g. [10] of these reasons for decision.
It follows that these procedural matters are without substance. The difficulty Ms Warren confronts is the absence of any circumstances that could excuse, explain or justify her failure to pay the sum demanded by the insurer (described as a deductable and a penalty levy) over such a long period of time. Similarly, she confronts the difficulty of establishing that the Society’s decision in June 2011 to conclude that, by reason of her failure to pay the insurer, she was not a fit and proper person to hold a practising certificate was unreasonable, peremptory or unfair.
She also faces the difficulty in showing that there were circumstances that made the Society’s decision in June 2011 to conclude that, by reason of her failure to pay the deductable and the penalty levy, she a fit and proper person to hold a practising certificate unreasonable, peremptory or unfair.
The history of the matter begins on 26 October 1998 when Ms Warren was consulted by a client in respect of a potential claim for damages for personal injury allegedly suffered in the course of dental treatment administered by a dentist working for a health fund. Proceedings were commenced on 22 October 2001 against the dentist and the fund, and the claim and statement of claim were served on the health fund that day. No defence was ever filed by the fund, or the dentist. On 10 June 2004, the client’s proceedings were dismissed for want of prosecution.
The client then commenced proceedings against Ms Warren claiming $104,618.00 in damages for negligence and/or breach of contract. Her professional indemnity insurer, after investigation, recommended that the claim be resolved but Ms Warren was not prepared to make any concession in relation to liability. Ultimately, the insurer invoked a clause which enabled it to appoint a senior solicitor to provide an opinion. That opinion was, in short, that there was no genuine prospect of successfully defending the claim, and the insurer then proceeded to settle it.
Arrangements for professional indemnity insurance for solicitors were governed at the relevant time by the LPA, the Legal Profession Regulation 2007 (‘LPR’) and the Queensland Law Society Indemnity Rule 2005 (‘the Indemnity Rule’) which referred to a Master Policy that included a form of Certificate of Insurance to be issued to practitioners.
In December 2005, when the insurer first agreed to indemnify Ms Warren it advised her of a requirement that she pay a deductible of $7,500.00 and a penalty levy of $15,000.00.[4]
[4]The Indemnity Rule provided, in r 12, that an amount equal to twice the amount of any deductible payable under the certificate is to be paid if the claim arises out of a failure to comply with any statutory requirement, or diligently prosecute a claim for damages for personal injuries. It is that provision which explains the penalty levy of $15,000.00.
She acknowledged receipt of that correspondence from the insurer on 15 December 2005. In August 2009, the insurer sought payment from her of that sum within 14 days, noting that it had been outstanding since 29 May 2006. On 23 September 2009, Ms Warren wrote to the insurer saying it was not possible to pay such a large amount at short notice and asking for a month ‘… to consider how this maybe addressed’.
The insurer sought payment again in a letter of 24 February 2010, and advised Ms Warren that if payment was not made within seven days the Society would be informed of the matter.
The Society wrote to Ms Warren on 24 September 2010 advising that it had received information from the insurer that she had failed to pay the $22,500.00, drawing her attention to r 7(b) of the Indemnity Rule and advising that if she failed to pay that sum then insurance cover would not be extended to her and, proper insurance being a condition of her right to practice, the Society would be required to review the status of her practising certificate. She was asked to contact the insurer to resolve the outstanding payment by 21 October 2010, failing which the status of her certificate would be referred to the Council of the Society.
On 26 October 2010, the Society again requested that she contact the insurer to resolve the outstanding payment and, again, advised that should she fail to do so by 7 November 2010 the matter would be referred to the Council with a request for a resolution to issue a Show Cause Notice as to the cancellation or suspension of her practising certificate.
Under s 60 of the LPA, grounds for cancelling a local practising certificate include that the holder is no longer a fit and proper person (to hold a certificate) or does not have or no longer has professional indemnity insurance which complies with the LPA in relation to the certificate. Once the Society forms that view it must give the person a Show Cause Notice.
Ms Warren did not resolve the outstanding payment. On 6 April 2011, the Society’s Executive Committee resolved to issue the Show Cause Notice mentioned earlier.
In the course of the subsequent communications between April and late June 2011 Ms Warren sought ‘… particulars of alleged “excuses for non-payment” as referred to by (the insurer)’ – a request which, the Society suggested, should be taken up with the insurer. Ms Warren also sought extensions of time to respond to the Show Cause Notice on 10 May, 17 May, 3 June, 8 June and 20 June 2011. Some were granted. As to the last, on 20 June, the Society replied on the same day advising that the Council would consider the matter on 22 June, and any further requests for extensions should be addressed to the Council and received by midday on 21 June. Nothing was heard from Ms Warren before the Council met on 22 June 2011.
The Council’s decision and the reasons for it were set out in an Information Notice dated 24 June. In short, the Council found that Ms Warren was not a fit and proper person to hold an unrestricted principal practising certificate because of her failure, since about mid-August 2009, to pay the deductible and penalty levy to the insurer.
When it came to consider the circumstances outlined above, the Council of the Society was required, under s 46 of the LPA, to consider ‘… any suitability matter… and whether… the person has failed to pay an amount for which the person was liable under a relevant law… and whether… the person has contravened a provision or a relevant law… about professional indemnity insurance’. It follows that, as the Society’s submissions point out, its decision did not involve any question of whether Ms Warren had engaged in professional misconduct or unprofessional conduct; rather, conduct which might justify the cancellation of a practising certificate need not be so grave.[5]
[5] New South Wales Bar Association v Murphy (2002) 55 NSWLR 23 at 30, 51-52.
These were not, then, disciplinary proceedings. The Society was exercising a statutory function, albeit one which is also designed to protect the public. LPA, s 46(3).[6]
[6]LPA s 46(3); See, e.g. Legal Services Commissioner v Baker (No 1) [2006] 2 QdR 107 at 118.
The Society’s approach – of considering all the relevant circumstances surrounding the question whether a person is fit and proper to hold a practising certificate – is consistent with the provisions of the LPA. Further, as Douglas J found in Bradshaw v Bar Association of Queensland,[7] a person ‘… in a show cause position … is required to demonstrate that he is a fit and proper person to hold a practising certificate’.
[7] [2009] QSC 226 at [45].
Ms Warren has not contested that she failed to pay the deductible and the penalty levy. In her submissions she has included three pages of closely typed ‘comments’ on matters relating to the circumstances surrounding the striking out of her client’s action. Again, however, these submissions focus in close detail upon alleged procedural problems or defects in the way the matter was dealt with by the insurer – but, as the Society reasonably points out in its submissions, nowhere does she deny the facts and circumstances alleged to give rise to a potentially successful claim against her by her unhappy client.
Ultimately, Ms Warren cannot avoid a finding that she is a person who has failed to pay an amount she was liable to pay under r 12 of the Indemnity Rule; that the Rule was a relevant law for the purposes of s 46 of the LPA; and, that the Society (and this Tribunal) were and are entitled to proceed on that basis.
Between 11 April 2011 (when Ms Warren acknowledged receipt in the Show Cause Notice) and 22 June 2011, when the Council made its decision, she made no submission about her fitness to hold a practising certificate. Nor, between the time when this review application was filed on 26 July 2011 and the ultimate hearing did she advance any evidence on that matter. Her failure to provide any explanation or exculpatory statement means that inferences from proved facts can be drawn more safely, because she has failed to give any explanation of matters particularly within her knowledge.[8]
[8]Prothonotary of the Supreme Court of New South Wales v Leon Nikolaidis [2010] NSWCA 73 at [25] as per Allsop P, McColl and Young JJA.
Ms Warren’s submissions were, rather, directed in the main towards contentions which, for the reasons set out earlier, must be rejected. Those contentions must also be considered in light of compelling evidence that, by mid August 2009, she was well aware that the deductible and the penalty levy were payable; and, that she had been pursued for payment a number of times up to and including the time of the Council’s decision.
Put together, all of these circumstances also compel the conclusion that her failure to pay was deliberate, and not due to any oversight. The fact that when she was, as it were, driven to the barrier and actually briefly lost her practising certificate she paid those sums within eight days.
It is also compelling that Ms Warren’s failure to pay occurred in circumstances where she knew it was unlawful (involving a breach s 12 of the Indemnity Rule, and a term of the Master Policy) and endangered her right to practice.
There are other aspects of the matter which are relevant to the correctness, or otherwise, of the Society’s decision – and, also, to Ms Warren’s claim that she was denied procedural fairness.
The requirement to pay the deductible and the penalty levy arose directly out of her practice as a solicitor, both as a consequence of her failure to prosecute her client’s claim with due diligence, and as a condition of the insurance she needed to practice. Her failure to prosecute the client’s claim was not mitigated by any earlier period in which it had, for example, been diligently pursued. Through that lack of diligence the client lost the opportunity to test the worth of his claim. In those circumstances, her failure to pay monies to the insurer had a direct connection with her professional practice, so that it could not be considered a purely personal matter.
Further, her obligations arose under an insurance policy upon which her right to practice depended. Payment of the penalty levy was an obligation given importance by the Indemnity Rule, the LPA and the LPR; and, payment of the deductible was a contractual obligation. Section 46 of the LPA and, in particular, sub-ss (2)(e) and (f) make it clear that Parliament has attached particular significance to these obligations, in the specific context of the question whether a person is fit and proper to hold a practising certificate. Section 354, for example, makes it an offence for a practitioner to engage in legal practice unless that person has complied with these prescribed requirements.
The Society submits, and I accept, that by failing to pay the deductible and the penalty levy, Ms Warren was placing her cover under the Master Policy at risk; and, that there is a clear public interest in practitioners having proper insurance cover when providing professional services to members of the public. The obligation to effect and maintain this insurance is plainly for the protection of consumers and, by her defaulting conduct, Ms Warren was placing those interests at risk.
I am satisfied that her failure to pay the deductible and the penalty levy demonstrated qualities of a kind that called for the conclusion that, while she was in default, she was not a fit and proper person to hold a practising certificate and the application to review the Society’s decision should be dismissed.
The Society seeks costs. The costs of an adjourned hearing listed for 17 August 2012 were also, previously, reserved. If the Society wishes to pursue its claim for costs it should file and serve submissions in writing within 21 days. Ms Warren should file any submissions in reply within 21 days after receipt of the Society’s submissions. For the sake of clarity, submissions may be given by email.
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