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QLD Criminal lawyers accused of criminality

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Adam Magill3

 
Some high profile Queensland criminal defence lawyers are being accused of serious fraud offences:

“A cadre of high-profile Brisbane criminal defence lawyers have been charged with defrauding the taxpayer-funded Legal Aid Queensland and laundering money for “serious and organised crime”.

The lawyers — Adam Magill, Corey Mullen and Mitchell Cunningham, all of whom worked at law firm Lawler Magill — and another man were arrested yesterday following an 18-month joint investigation codenamed “Operation Stockade”.

More arrests were expected overnight.

The Crime and Corruption Commission alleged some of the men were involved in defrauding Legal Aid Queensland of about $340,000, and fraud by failing to deposit more than $765,000 into a trust account.

Investigators also alleged some of the men laundered the proceeds of serious criminal offences.”

If these charges are proven, these lawyers may be spending time in prison with some of their former clients. In fact, one of them maybe already has:

“Mr Magill, 47 — a former policeman whose clients have included footballer Karmichael Hunt and Hells Angels member Chris Bloomfield — will appear in Brisbane Magistrates Court today on counts of aggravated fraud, fraudulent falsification of records and aggravated money laundering. He has been remanded in custody.”

Magill has this morning been granted bail on strict conditions. The allegations are denied.

Former MP Craig Thomson struck off

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The Supreme Court of NSW has exercised its inherent jurisdiction to strike off a former federal Labor MP for misappropriation of trade union funds and the criminal and civil convictions which resulted from it.  

Thomson

The facts

Craig Thomson was admitted as a lawyer in NSW on 31 March 1995, although he never obtained a practising certificate.

From around 1988, Thomson was employed by the Health Services Union (HSU), initially as an industrial officer in the New South Wales branch.

On 16 August 2002, Thomson was elected as National Secretary of the HSU. Two months later, Thomson established a business account for the HSU National Office in Victoria with the Commonwealth Bank of Australia (CBA). He was the only signatory to this account, which included a CBA credit MasterCard with a cash withdrawal facility accessible by PIN. In accordance with HSU policy, that card was only to be used for work-related expenses. Irregularities in the accounts for the card were, however, revealed by an exit audit conducted after Thomson’s resignation as National Secretary.

On 24 November 2007, Thomson was elected as a Member of the Federal Parliament for the seat of Dobell. Although re-elected in 2010, public revelations concerning the misappropriation of HSU funds during his time as its Secretary led to him resigning from the Australian Labor Party in about 2012 and losing his seat at the 2013 federal election.

On 15 December 2014, in the proceeding in the County Court, Thomson was found guilty of 12 charges of stealing cash belonging to the HSU, amounting to at least $5,350 over a four-year period from October 2003 to October 2007: Director of Public Prosecutions v Thomson (County Court of Victoria, Judge Douglas, 15 December 2014).

On 17 December 2014, he was convicted and, by way of sentence, ordered to pay an aggregate fine of $25,000 and compensation to the HSU of $5,650: Director of Public Prosecutions v Thomson (County Court of Victoria, Judge Douglas, 17 December 2014). As at 13 June 2018, he had paid the fine, but not the compensation.

On 15 September 2015, the Federal Court found that Thomson had contravened ss 285, 286 and 287 of the Workplace Relations Act 1996 (Cth). On 15 September 2015 the Federal Court imposed an aggregate penalty of $175,550 on Thomson and also ordered him to pay compensation of $231,243 and pre-judgment interest of $146,937 to the HSU.

On 11 October 2016, Thomson applied to the Law Society of New South Wales for a practising certificate. His application disclosed “theft of between $3500 and $5500 from employer” and sentence by way of a “fine of $25,000”, but did not disclose the contraventions of the Workplace Relations Act.

On 19 December 2016, the Law Society Council notified him of its refusal to grant a practising certificate on the basis of his criminal convictions.

On 23 February 2017, the Law Society informed the Prothonotary of the Supreme Court of NSW of that refusal.

By summons filed on 15 March 2018, the Prothonotary applied for declarations that Mr Thomson has been guilty of professional misconduct, is not a person of good fame and character, and is not a fit and proper person to remain on the roll of legal practitioners of the Supreme Court.

Relevant Law

At common law, the Supreme Court of NSW has an inherent jurisdiction to control and discipline lawyers admitted or operating within its jurisdiction.

Section 264 of the Legal Profession Uniform Law provides as follows:

264 Jurisdiction of Supreme Courts

(1) The inherent jurisdiction and powers of the Supreme Court with respect to the control and discipline of Australian lawyers are not affected by anything in this Chapter, and extend to Australian legal practitioners whose home jurisdiction is this jurisdiction and to other Australian legal practitioners engaged in legal practice in this jurisdiction.

(2) Nothing in this Chapter is intended to affect the jurisdiction and powers of another Supreme Court with respect to the control and discipline of Australian lawyers or Australian legal practitioners.

In deciding whether to remove a lawyer from the roll of legal practitioners, “the ultimate issue is whether the practitioner is shown not to be a fit and proper person to be a legal practitioner of [the] Court” as “at the time of the hearing”: A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253; [2004] HCA 1 at [15], [21].

In determining such an application, the Court must satisfy itself that any orders made are appropriate in all the circumstances, even if the proceeding is uncontested: Prothonotary of the Supreme Court of New South Wales v Livanes [2012] NSWCA 325 at [27] (McColl JA). The Court should also make appropriately detailed factual findings, both to advance public confidence in the control and discipline of the profession and to assist those tasked with determining any future application for readmission: Bridges v Law Society (NSW) [1983] 2 NSWLR 361 at 362 (Moffitt P); New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [24] (Spigelman CJ, Mason P and Handley JA agreeing); Council of New South Wales Bar Association v Power [2008] NSWCA 135; (2008) 71 NSWLR 451 at [9]–[11] (Hodgson JA, Beazley and McColl JJA agreeing).

In New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [20], Spigelman CJ identified four “interrelated interests” which may be regarded as protected by such proceedings:

“Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people.”

Decision

The Court held that three principles were particularly relevant to the determination of the application:

  1. 1. although the fact of a criminal conviction and sentence is not necessarily sufficient to disqualify a person from continuing as a member of the legal profession, the defects of character revealed by the criminal conduct, and the disgrace flowing from conviction, may be incompatible with practice;
  2. 2. conduct occurring outside the practice of law may nevertheless indicate a present unfitness to practice; and
  3. 3. fitness to practise requires an appreciation of the high degree of trust that the court, of necessity, reposes in legal practitioners and of their general and ongoing obligation of candour to the court in which they desire to serve as an “agent of justice”.

The Court found that Thomson’s conduct whilst National Secretary of the HSU included theft and other misappropriation of funds belonging to the HSU and abuse of a fiduciary or a quasi-fiduciary position, in each case over an extended period which involved “significant and prolonged dishonesty for personal gain”.

Furthermore, the Court noted Thomson had not suggested that he had undergone a period of reformation of character since his time at the HSU, and he had failed to disclose all of his convictions to the Law Society Council or pay the penalties imposed by the Federal Court.

For these reasons, the Court found that Thomson was not a fit and proper person to remain on the roll of lawyers, and his name should be removed from the roll.

Conclusion

This case demonstrates that even when misconduct occurred a long time ago and was not in connection with legal practice, it can still lead to a conclusion that someone is not a fit and proper person to engage in legal practice. In this case, Thomson’s misconduct involved dishonesty on a large scale over a long time, and his lack of candour to the Law Society Council also weighed against his fitness to practice.

Finally, this case also demonstrates the difference between the ethical standards of the union movement and the legal profession. The union movement and the ALP were (at least for a time) willing to tolerate Thomson’s dishonest misuse of HSU funds, whereas the Supreme Court of NSW held that such conduct was inconsistent with being a lawyer.

Solicitor struck off for the second time

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Michael James Quinn has the dubious honour of being the first solicitor in Queensland legal history to be struck off twice.

Legal advice

Normally when a lawyer is removed from the roll (‘struck off’) that effectively ends their legal career, as they are permanently ineligible to obtain a practising certificate which would enable them to practice law again. In this case, the unusual history of the matter led to the practitioner being struck off twice.

The facts

From 1 April 2009, Michael James Quinn practised as sole practitioner in the firm Q5 Law Proprietary Limited until 4 May 2012 when his practising certificate was cancelled.

In 2015, Quinn was first struck off by the Queensland Civil and Administrative Tribunal (QCAT) after failing to appear and contest 64 charges arising from the trust account of Q5 Law Proprietary Limited.

In 2016, Quinn successfully appealed this decision because QCAT had failed to satisfy itself that the charges had been proven pursuant to section 453 of the Legal Profession Act 2007. The Court of Appeal set aside the QCAT orders and ordered a re-hearing.

On 12 October 2017 Quinn was convicted after trial by a District Court jury of one count of fraud with a circumstance of aggravation contrary to section 408C of the Criminal Code for trust account defalcations of Q5 Law Proprietary Limited. He was sentenced to 12 months imprisonment, with immediate suspension and an operational period of two years.

The Legal Services Commissioner applied to QCAT for another order that Quinn be struck off for the trust account defalcations conviction as well as unlawful drawing of trust moneys, retention of trust moneys in a general account contrary and a failure to keep records as required by the Legal Profession Act 2007.

The Law

Section 408C of the Criminal Code provides that:

“(1) A person who dishonestly

(a) applies to his or her own use or to the use of any person

(i) property belonging to another; or

(ii) property belonging to the person, or which is in the person’s possession, either solely or jointly with another person, subject to a trust, direction or condition or on account of any other person; or

(b) obtains property from any person; or

(c) induces any person to deliver property to any person; or

(d) gains a benefit or advantage, pecuniary or otherwise, for any person; or

(e) causes a detriment, pecuniary or otherwise, to any person; or

(f) induces any person to do any act which the person is lawfully entitled to abstain from doing; or

(g) induces any person to abstain from doing any act which that person is lawfully entitled to do; or

(h) makes off, knowing that payment on the spot is required or expected for any property lawfully supplied or returned or for any service lawfully provided, without having paid and with intent to avoid payment;

commits the crime of fraud.”

Section 419 of the Legal Profession Act 2007 states as follows:

419 Meaning of professional misconduct

(1)”Professional misconduct” includes

(a) unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence; and

(b) conduct of an Australian legal practitioner, whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

Section 452 of the Legal Profession Act 2007 states as follows:

“Starting proceeding before a disciplinary body

(1) The commissioner may apply—

(a) to the tribunal for an order against an Australian legal practitioner in relation to a complaint against the legal practitioner or an investigation matter.”

Section 453 of the Legal Profession Act 2007 states as follows:

“Hearings

The disciplinary body must hear and decide each allegation stated in the discipline application.”

Section 456 of the Legal Profession Act 2007 relevantly provides as follows:

“456 Decisions of tribunal about an Australian legal practitioner

(1) If, after the tribunal has completed a hearing of a discipline application in relation to a complaint or an investigation matter against an Australian legal practitioner, the tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the tribunal may make any order as it thinks fit, including any 1 or more of the orders stated in this section.

(2) The tribunal may, under this subsection, make 1 or more of the following in a way it considers appropriate—

(a) an order recommending that the name of the Australian legal practitioner be removed from the local roll;

(b) an order that the practitioner’s local practising certificate be suspended for a stated period or cancelled;

(c) an order that a local practising certificate not be granted to the practitioner before the end of a stated period.”

QCAT’s decision

The charges and the facts supporting them were expressly admitted by Quinn.

As QCAT Member Justice Daubney noted, Quinn’s conduct clearly amounted to professional misconduct because it involved both a substantial and a consistent failure over a period of 16 months to keep reasonable standards of competence and diligence, and also justified a finding that the practitioner is not a fit and proper person to engage in legal practice. This was notwithstanding the fact that no client of Quinn’s had suffered any loss.

Justice Daubney then made the following observations:

“It is trite to observe that the clients of solicitors must be able to expect absolute probity from solicitors in relation to dealings with moneys held in trust. Various terms have been used to describe the level of that probity. Those terms have elevated the extent of that probity to levels such as it being a sacred trust. Whatever words one uses, the inherent relationship between a solicitor and their client must be founded on trust, and a necessary practical manifestation of that trust must be the absolute probity with which solicitors both theoretically and in practice approach their dealings with moneys that have been entrusted to them by or on behalf of clients.”

Due to the relative currency of Quinn’s conviction, the serious nature of the offending and the fact that that offending occurred in the course of his conduct of a legal practice, Justice Daubney determined that the appropriate sanction was removal from the roll.

Justice Daubney consequently ordered that Quinn’s name again be removed from the roll and that he pay the Commissioner’s costs.

Conclusion

This case is one of many that shows that trust account defalcations are a serious matter, and in cases where there are numerous or serious defalcations a solicitor can be struck off for them, even when their own clients are not left worse off.

Quinn’s win in the Court of Appeal, in which he managed to have an order that he be removed from the roll overturned, was a temporary victory. A subsequent fraud conviction in relation to some of the same trust accounting issues for which he had been struck off at first instance ensured that he would be struck off again.

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