Elizabeth Shearer, president of the Queensland Law Society.
Elizabeth Shearer, president of the Queensland Law Society.

Law society seizes trust account

The Queensland Law Society has seized control of the trust account overseen by embattled Brisbane lawyer Michael Kemp.

A spokesperson for the peak body, headed by Elizabeth Shearer (illustrated), declined to comment on Thursday.

But multiple sources have confirmed to City Beat the dramatic intervention to oversee the disbursement of funds. It's understood that none of the client money has been adversely impacted.

The development comes as former Kemp employees express outrage that regulatory bodies, including the QLS, ASIC and the ATO, have failed to respond to allegations raised more than two years ago of financial mismanagement in Kemp's practice, now trading as Highland Law.

One ex-staffer said he lodged a complaint about unpaid superannuation in early 2019 with the tax man but nothing was done to correct the problem. "I'm so pissed off at them,'' he told us.

He also lodged a complaint with ASIC alleging that now-defunct entity Kemp Law Pty Ltd was insolvent and unable to pay creditors. That entity collapsed in February with debts exceeding $6.2m.

Spin doctors from ASIC and the ATO predictably declined to comment.

As we revealed on Wednesday, the Legal Services Commission has received numerous complaints about unpaid super from former Kemp workers. One of them alleges Kemp has failed to make payments for any of his staff since 2017, a figure believed to be about $250,000.

Kemp did not return a call seeking comment on Thursday.

He faces the threat of personal bankruptcy from his biggest creditor, which is owed $1.68m and has launched legal action in Federal Circuit Court. No defence has been lodged so far in the case, with a second hearing scheduled for next week.

BARRISTER'S ROLE SCRUTINISED

Meanwhile, we can reveal that the Legal Services Commission is investigating the role of Brisbane barrister Lee Smith in his financial dealings with Kemp.

Smith previously had a near half-stake in collapsed company Kemp Law Pty Ltd, a holding he acquired in 2017 but divested just weeks before the firm's demise.

When that business crashed, he nevertheless submitted a claim for $862,629 to the liquidators.

Records show Smith's missus, Katherine Smith, now holds the second biggest stakes in each of Kemp's still-intact entities KLQ Co Pty Ltd and Kemp Law Qld Pty Ltd. She has no involvement in the day-to-day-operation of the business.

Michael Kemp
Michael Kemp

Lee Smith maintains he has done nothing wrong.

"I am communicating on the matter with the Bar Association and Legal Services Commission and I am very comfortable I have, at all times, acted with the appropriate impartiality and in the interests of the clients I represent,'' he told us.

While not addressing the specifics of this situation, legal sources say barristers in general should act independently.

"Their advice as to whether a matter should be settled or whether to continue negotiations should be based only on the strength of their client's legal position,'' one insider noted.

"If the barrister has some sort of financial involvement with a law firm then the barrister's advice conceivably may be influenced by the financial impact that their advice may have on the matter.''

Originally published as Kemp trust account seized



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