Insurance Law

Authors: Katherine Hayes, Partner & Madelyne Inch, Solicitor

The Queensland Civil and Administrative Tribunal (Tribunal) recently handed down a decision following an investigation into a solicitor who failed to honour an undertaking he gave to the Queensland Law Society.  He also failed to provide an explanation of his conduct as required by the Legal Profession Act 2007 (Qld). The Tribunal delivered its judgment ex tempore and immediately cancelled the solicitor’s practising certificate citing a demonstrable lack of ability for practitioners or the public to have trust in him as a solicitor.

The investigation

An Bui (Mr Bui), the solicitor subject of the disciplinary application by the LSC (Proceedings), was a sole practitioner practising under the name Benson Lawyers (Benson). In November 2014, the QLS commenced an investigation into Benson following notification that it had not lodged Business Activity Statements with the ATO since July 2013.

In April 2015, the QLS resolved that Mr Bui was to:

• provide the QLS with details of Benson’s ATO repayment plan; and
• give an undertaking that he would provide a report outlining the repayment plan progress to the QLS on the first day of each month.

The QLS’s proposal was put to Mr Bui and in June 2015 he gave the abovementioned undertaking by way of email.

From July to December 2015 Mr Bui did not provide to the QLS any details regarding the ATO repayment plan, nor the repayment progress. In December 2015 as a result of Mr Bui’s ongoing failure to respond to the QLS, it issued a notice pursuant to s 443(1)(a)(i) of the LPA which required Mr Bui to provide to the QLS a full explanation of the matter being investigated (Notice). Mr Bui did not provide a response to the Notice within the required timeframe (or in fact at all). Importantly, the Tribunal noted that as at the date of the hearing (3 December 2018) Mr Bui had still not responded to the Notice or complied with the undertaking.

On 31 March 2016 some 11 months after providing the undertaking, Mr Bui provided to the QLS a copy of a repayment plan, together with some bank statements and an integrated client account from the ATO.

As a result of the QLS’s investigation it charged Mr Bui with:

• failing to honour an undertaking; and
• a breach of s 443(2) of the LPA.

The hearing

At the hearing, Mr Bui did not give any oral evidence, or produce any documents, to establish he had either complied with the June 2015 undertaking, or responded to the Notice, despite the passing of almost three and a half years.

The Tribunal considered that the breach of undertaking was the more serious of the two charges, stating that a failure to abide by an undertaking ‘strikes at the heart of a solicitor’s call to practice'. The Tribunal went on to say that a solicitor’s word is his or her bond and a person in legal practice who fails to live up to their word commits a grave infraction of the standard of probity which the community can expect of members of the legal profession.

While the Tribunal was cognisant that there may be particular circumstances where a breach of an undertaking may be categorised as unsatisfactory professional conduct (rather than the more serious characterisation of professional misconduct), this was not one of those situations. Mr Bui’s breach of one of the most fundamental aspects of the legal profession resulted in the Tribunal having ‘no hesitation’ in finding that his conduct could be categorised as professional misconduct.

The Tribunal also found that failing to respond to a statutory request for information by the QLS was similarly a serious matter. The Tribunal observed the fundamental power to require a practitioner to provide an explanation of matters under investigation not only accords with the principles of natural justice, but it is an essential tool in the investigative power of the QLS and the LSC. By failing to respond to the Notice, Mr Bui exhibited a fundamental lack of appreciation of the responsibilities practitioners owe to the profession in general and evinces a lack of understanding of the role of regulators such as the QLS and LSC.

The Tribunal emphasised that solicitors need to understand that receipt of a notice or correspondence from the LSC or the QLS is a serious matter and cannot be ignored with the hope that the LSC or QLS will go away, as they will not. Mr Bui’s flagrant disregard of the Notice was characterised by the Tribunal as professional misconduct.

Sanction

Having found Mr Bui guilty of both charges and characterising them as professional misconduct, the Tribunal turned its mind to sanction. It was noted that the primary purpose of imposing sanctions is not to punish the practitioner, but to protect the public.

However the Tribunal noted Mr Bui’s conduct throughout the QLS investigation, as well as the Proceedings, including:

• Mr Bui’s serial non-compliance with directions from QCAT throughout the Proceedings;
• his inability to provide any explanation of his failure to respond to the Notice or comply with the undertaking for the previous three and half years;
• during submissions Mr Bui admitted to only recently gaining an understanding of the seriousness of giving an undertaking and the consequences of breaching an undertaking;
• in early 2018, at the urging of the QLS, Mr Bui enrolled in trust accounting and ethics courses held by the QLS. He failed both courses; and
• the QLS undertaking was also imposed as a special condition on Mr Bui’s restricted practising certificate in November 2017. So not only had he breached the undertaking, he had also prima facie breached the special conditions attaching to his practising certificate.

The Tribunal considered that in Mr Bui’s current state, it was not in the interests of the general public that he continue to practice. To that end, the Tribunal directed that Mr Bui’s practising certificate be immediately cancelled. A pecuniary penalty was ordered in relation to charge 2 in the sum of $2,500. The LSC was also awarded its costs.

Comment

The Tribunal’s decision sends an important message to legal practitioners that a failure to observe the obligations under the LPA will be treated seriously. The Tribunal’s decision is also a timely reminder for practitioners to remind themselves of the seriousness of undertakings and the consequences of breach. The essential elements of an undertaking must be understood by practitioners, namely:

• It must be given in a professional capacity.¹
• It should be given in clear and unambiguous terms.
• It must be performed in a timely and effective manner.²
• An undertaking must not be sought where it requires cooperation of a third party who is not a party to the undertaking.³
• Strict compliance with an undertaking 'is an important component' of solicitors’ ethical obligations owed to the courts, clients and colleagues.⁴
• Breach of an undertaking may result in a charge of contempt of court, civil liability or disciplinary proceedings.

¹ Australian Solicitors Conduct Rules 2012 rule 6.1.
² Ibid.
³ Australian Solicitors Conduct Rules 2012 (ASCR) rule 6.2.
⁴ Gino Dal Pont, Lawyers’ Professional Responsibility (Thomson Reuters, 5th ed, 2013), 723.