Login
Solicitor may face disciplinary action over attempted sale of law firm
A Canberra solicitor engaged to assist in the sale of a law firm could face allegations of professional misconduct.
Naomi Neilson
The ACT Law Society charged James Colquhoun with issuing a statutory demand for an improper purpose and settling and witnessing a false affidavit during the attempted sale of Hill & Rummery Barristers and Solicitors for $520,000.
Following a “common mistake” in which it was discovered that IHPL’s director, Alan Hill – also a solicitor – was the actual owner of the firm, a new agreement was struck in 2018. Mr Zhang confirmed in writing he still had $120,000 owing on the 2015 agreement debt.
Following a breakdown of the relationship between Mr Zhang and Mr Hill, on behalf of IHPL, Mr Colquhoun allegedly demanded payments of the second, third and fourth instalments in the amount of $300,000.
In February 2019, a further letter, allegedly signed by Mr Colquhoun, maintained the $400,000 was not a payment under the 2015 agreement because the cheque had not been made out to IHPL and had not been paid into IHPL’s bank account.
The same month, IHPL served a statutory demand on TALC for the full $520,000 and Mr Hill swore an affidavit in support of this demand.
In the affidavit, Mr Hill expressly claimed no instalments had been made and stated it was his belief there was “no genuine dispute about the amount of the debt owing” by TALC.
In the first complaint made by a solicitor at TALC, it was alleged Mr Colquhoun had witnessed the affidavit in circumstances where he “ought to have been aware … there was a genuine dispute between the parties about the amount allegedly owing”.
As the Law Society found there was no substance in this first complaint and concluded the issue was a “contractual dispute” it could not involve itself in, this complaint was dismissed.
The second complaint was made in October 2019 and followed a Federal Court proceeding to set aside the statutory demand – which IHPL withdrew three months after issuing it – and an order that IHPL pay TALC’s costs of the proceedings on an indemnity basis.
The complainant pointed to the Federal Court’s comments that it had found it “difficult to understand” how Mr Hill could swear an affidavit in support of the statutory demand and claim no money had been paid “when he personally had received a payment of $400,000”.
In March 2015, the ACT Law Society decided Mr Colquhoun’s conduct constituted professional misconduct.
The commencement of a disciplinary proceeding was put for a special case to have the Supreme Court determine if the ACT Law Society had the jurisdiction to pursue the second complaint in circumstances where the first complaint had been dismissed.
The Supreme Court was also tasked with determining if the ACT Civil and Administrative Tribunal could hear and decide the matter.
Given Mr Hill’s special case had been discontinued, the Supreme Court determination was related to Mr Colquhoun only.
Counsel for Mr Colquhoun, Philip Walker, submitted the second complaint arose out of the “same facts” or “substantially the same facts” as the first complaint, but the Law Society disputed this.
The Law Society instead submitted the first complaint concerned Mr Hill’s affidavit and the second concerned the statutory demand and comments made by the Federal Court about the affidavit.
Justice Audrey Balla accepted comments made by the Federal Court “reflected adversely on the professional conduct of Mr Colquhoun” and gave the substance the second complaint needed to commence, “which appeared to be lacking from the first complaint”.
The Supreme Court also found that even if Mr Colquhoun’s conduct in relation to the statutory demand had been the subject of the first complaint, “the fact that the conduct continued after the first complaint had been determined means that the second complaint is not the same as or substantially the same as the first complaint”.
As for the ACT Law Society’s jurisdiction, Mr Colquhoun submitted the “very nature of taking disciplinary action is not one ordinarily capable of being exercised more than once”.
Counsel for the Law Society, Danny Moujalli, submitted it was contrary to construe the Legal Profession Act as “precluding complainants from making a second complaint where the first complaint had been dismissed without investigation”.
Justice Balla declined to find section 399 of the act – which provides the Law Society may dismiss a complaint if the conduct has been the subject of a previously dismissed complaint – was “binding and conclusive”.
“In the circumstances of this case, [section 399 does not] preclude the Law Society from dealing with the second complaint,” Justice Balla found.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
