Disciplinary charges and intentional wrongdoing

Update, 4 December 2009: see now Legal Services Commissioner v Madden (No 2) [2008] QCA 301.  What the Queensland Court of Appeal said there about Walter’s Case, the subject of this post, is reproduced at the end of the post.

Original post: Does a lawyer’s Bureau de Spank have to say in a charge in a disciplinary prosecution that the norm allegedly transgressed was transgressed deliberately or recklessly, if that’s what they desire to prove?  In the old days, deliberate or reckless transgression was what distinguished professional misconduct from unsatisfactory conduct, the lesser form of disciplinary offence.  Nowadays, it is only a ‘useful guide’ in distinguishing the two.  So a finding of misconduct might, theoretically, be made in respect of conduct by a person ignorant of the norm transgressed, or who simply made a mistake about a relevant fact. And so there is a particular reason now why it is desirable to know whether dishonesty is alleged, making it more important than ever to be informed by the charge if the Bureau is going to contend at the hearing that the solicitor intentionally did wrong, or was dishonest.

Back to 1988 and a unanimous High Court decision of the Mason Court which did not make it to the CLRs and which I read for the first time only recently: Walter v Queensland Law Society [1998] HCA 8; (1988) 77 ALR 228; 62 ALJR 153.  J R S Forbes’s Justice in Tribunals (2nd ed., 2006) suggests at p. 132 that it stands for the proposition that if a professional regulator wants to establish dishonesty or wilful wrongdoing it should say so, also citing Melling v O’Reilly, Appeal 6/91 Misconduct Tribunal, Criminal Justice Commission (Qld), 9 December 1991.

Mr Walter was the responsible partner within a firm with a mortgage practice.  A disciplinary prosecution was brought against him in respect of his dealings with trust funds, amongst other things.  He gave evidence and so did an accountant investigator engaged by the Bureau.  The disciplinary tribunal suspended him from practice for a year.

The Bureau appealed against the leniency of the penalty, seeking an order that he be struck from the rolls.  It said that the tribunal must have found, despite not having said so, that a disbursement of trust monies to a person other than the beneficiary, or as directed by the beneficiary, must have involved dishonesty, justifying striking off rather than suspension.  Such a finding came with a double-whammy: not only must the solicitor have been dishonest, but he must have been dishonest again when he put the disbursements to non-beneficiaries down to clerical errors, confounding his dishonesty.  Two appeal judges swallowed this logic, while one dissented.  The result was that he was struck off.

In the Highkers, Mr Walter said to Chief Justice Mason, and Justices Wilson, Deane, Toohey and Gaudron:

Hang on! It doesn’t say in the charge that I disbursed the monies dishonestly.  The tribunal did not find that I did so.  It just found that the elements of the charge were made out.  The Court of Appeal had no justification for finding that the tribunal had found I was dishonest and so no justification for striking me from the rolls.

The unanimous High Court said at ALR 232 that the charge:

‘alleged no more than that [the solicitor] paid or caused or permitted to be paid, to persons other than Mr McKay or other than at Mr McKay’s direction, moneys which had been received into the firm’s trust account on behalf of Mr McKay.’

Their Honours continued at 233:

‘The particular paragraph [of the charge relied on by the Bureau] says nothing about the intention with which the actions described therein were taken. There is no mention of stealing or wrongful conversion.’

There were aspects of the hearing, and comparison with other aspects of the charge, which did descend to particularise the solicitor’s state of mind, which served to reinforce the impression that the absence of an allegation of dishonesty was associated with an absence of intention to carry on about it.  Their Honours said at 234, allowing the appeal and remitting the matter to the Bureau:

‘It follows that the bare finding of the [tribunal] that the allegation was proved falls short of a finding of dishonesty … It should be noted that [the then applicable legislation] expressly requires that every order made by the [tribunal] be “prefaced by  a statement of the findings of [the tribunal] in relation to the facts of the case.”  As we have indicated, the findings of [the tribunal] contain no mention of an allegation, let alone a finding, that the appellant was guilty of stealing or dishonesty.’

Walter’s Case summarised by the Queensland Court of Appeal

‘[81] The Tribunal considered that it should not be denied the opportunity to explore an arguably serious case against a practitioner merely because the Commissioner had pegged the charge at what turned out to be an inappropriately low level.27

[82] That reflects an approach adopted in Walter v Council of Queensland Law Society Incorporated.28  In that case the High Court allowed an appeal from a decision in which the Full Court found that the penalty of suspension imposed by the former statutory committee of the Queensland Law Society Incorporated (“the Committee”) was inadequate.  The Full Court held that, although the Committee did not find dishonesty in terms, it must have found that the appellant’s conduct was dishonest.   The majority of the Full Court considered that for that reason the appellant’s conduct required that his name should be struck off the rolls.  The High Court allowed the appeal because of the absence of any allegation of dishonesty of the character found by the majority of the Full Court, but remitted the matter to the Committee for further consideration on the footing that the Committee could continue the hearing, receive further evidence if tendered by either party and give further consideration to the order that should be made.  The Court observed:29

“The matter cannot be resolved simply on the basis of an adversarial proceeding in which the appellant has been successful, with the consequence that the decision under appeal be set aside and the original order restored. The public interest is an important factor in disciplinary proceedings because a primary object of such proceedings is to protect members of the public from professional misconduct:  see New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183-4; Weaver v Law Society of New South Wales (1979) 53 ALJR 585 at 587; 25 ALR 359 at 363. In the present case, we consider that the materials before the court give rise to grave suspicion touching the appellant’s fitness to practise. The public interest requires that further consideration be given to the culpability of the appellant in respect of the facts alleged in para 15(c)(vii) and also to the question of the veracity of the appellant’s evidence to the committee in that regard. The respondent should be at liberty to particularise further its allegations against the appellant.”

[83] However those statements were made in the context of a regulatory scheme that has since been superseded.  The 2007 Act [Qld] confers upon the Commissioner the role of determining what particular allegations, if any, are made against a practitioner.  As mentioned earlier, the Act adopts an adversarial scheme, one aim of which is to secure procedural fairness by the provisions now in issue.  The reasons for the Tribunal’s conclusion that it was empowered to consider the inferences of dishonesty which the Tribunal brought to the party’s attention are, with respect, substantial, but that conclusion cannot stand with the High Court’s analysis of an analogous statutory scheme in Walsh30.

27 Legal Services Commissioner v James Xavier Madden [2008] LPT 2 at [27].

28 cf Walter v Council of Queensland Law Society Incorporated (1988) 77 ALR 228;[1988] HCA 8.

29 cf Walter v Council of Queensland Law Society Incorporated (1988) 77 ALR 228 at 235; [1988] HCA 8.

30 Walsh v Law Society of New South Wales (1999) 198 CLR 73; [1999] HCA 33.’

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