Gold Coast solicitor Douglas McClelland, who charged conveyancing fees up to seven times higher than some other solicitors, has had his Practising Certificate suspended for four months.
While cut-price law firms currently advertise buyers fees from as low as $350, McClelland charged 27 clients buying investment properties $2500 per transaction.
After investigation by the Queensland Law Society for the Legal Service Commissioner, no disciplinary action was taken against him over high fees.
Rather, McClelland faced a professional misconduct charge for sharing those fees from his law practice with an unqualified person in 2003-2004.
The Legal Practice Tribunal found this charge established and, because of the gravity of the misconduct involved, (to quote Tribunal Chair Chief Justice Paul De Jersey) ordered McClelland to be suspended, to receive a public reprimand and to pay costs.
A second charge of unprofessional conduct, relating to breaches of Section 365B of the Property Agents & Motor Dealers Act (non-disclosure to buyers about independence), was also established.
The circumstances of the first (more serious) charge were that McClelland had an arrangement with Simply Conveyancing Australia Pty Ltd, a company owned by Anne Mullins, whereby she organised contracts to be signed by purchasers, assisted with securing finance then referred them to McClelland to complete the conveyances.
From $2500 fees for each matter Mullins (described by the Chief Justice as a legally unqualified clerk) picked up $1000 while McClelland got $1500.
The Tribunal accepted that some of the work done by Mullins was solicitor work.
Chief Justice De Jersey concluded that McClelland and Mullins agreed on a division of labour and fees, and effectively worked in tandem under a collaborative umbrella agreement. McClelland had sanctioned a solicitors work by an unqualified person in circumstances where it suited him not to attend himself to that early work.
McClelland’s barrister, Brian Cronin, a former Coast solicitor himself, submitted that monies paid to Mullins or Simply Conveyancing were never receipts of his client’s practice.
Rather these were for services following Simply Conveyancing’s retainer from a buyer.
The Tribunal found that this argument ignored a significant antecedent arrangement which consisted, in reality, of McClelland’s retainer to an extent via his agent Simply Conveyancing with whom he shared fees.
The Tribunal concluded that the details of the McClelland/Mullins arrangement were apparently crafted with some care to avoid any perception of sharing: Mullins kept separate premises, she retained McClelland to complete the work, they each billed the client separately.
The perception that McClelland paid money received in his practice was avoided.
This arrangement also raised, in the Tribunals view, the prospect of undesirable uncertainty as to the identity of the buyers solicitor at various stages of the transaction.
The second charge resulted from McClelland’s failure to provide buyers with a lawyer’s certificate.
McClelland originally became an acquaintance of Mullins when both were employed by Coast solicitor Don Dickie.
McClelland originally became an acquaintance of Mullins when both were employed by Coast solicitor Don Dickie.
McClelland considered Mullins a capable conveyancer whose rapport with clients ensured she obtained much repeat business.
Some time in 2003, after Dickie closed his practice, Mullins told McClelland she wanted to continue in the conveyancing/property sales area.
By Tim O’Dwyer, Queensland Solicitor & Consumer Advocate watchdog@argonautlegal.com.au.*
