Successful claim on fidelity fund

I appeared for the applicants in Arbuthnot and Anor v Queensland Law Society [2024] QCAT 125 in respect of a successful review against a decision by the Queensland Law Society to entirely reject their claim on the fidelity fund.

The case followed a (then) solicitor drafting a will which relevantly contained a dispositive clause as follows.

“I give devise and bequeath the whole of my estate … unto my executor and trustee UPON TRUST … [provisions dealing with payment of debts, duties and bequests (of which there were none)]… and to hold the balance then remaining (“my residuary estate”) UPON TRUST to my trustee to distribute same at his sole discretion to whomever, including the support of young footballers through schooling, equipment, tours and the like.”

The solicitor subsequently realised the property of the estate to his trust account, and received the benefit of the estate (at [10], [29]).

In rejecting the claim, the Queensland Law Society contended that:

(a) the applicants could not establish that the solicitor was dishonest in paying himself the money; and

(b) there was no 'default' under the Legal Profession Act 2007 (Qld) so that a claim on the fidelity fund could be made.

As to (a), the Tribunal found that for the solicitor to have held an honest but mistaken belief as to his entitlement under the will would require the Tribunal to accept 'improbability piled on improbability' (at [117]).

As to (b), the Tribunal rejected that there was no 'default' because the law firm acted upon an instruction to pay from the solicitor (at [125]-[130]).

The decision of the Law Society to reject the claim was substituted such that applicants' claim on the fidelity fund be admitted for $840,760 plus interest and costs.