Lawyer’s misconduct judged against messy backdrop of extortion and romantic affair

He also changed WAM’s email passwords and froze its bank accounts.

These actions were taken without authority from his then-good friend and business partner, Jianing Wang, and his wife, Qiaoxi Feng. Wang co-founded WAM with Tsai, and Feng was appointed sole director.

While satisfied that this arose to professional misconduct, the Queensland Civil and Administrative Tribunal (QCAT) was not prepared to accept the Legal Services Commissioner’s request that Tsai’s name be struck from the roll.

Instead, Tsai was publicly reprimanded, ordered to pay a $15,000 pecuniary penalty, complete an ethics course, and cannot be granted a principal practising certificate before June 2028.

“While, on its face, Tsai’s conduct involved a departure from the standard expected of a lawyer – the actual relationship and dealings between the individuals involved cast a very different light on what transpired and why,” judicial member Duncan McMeekin KC said, supported by practitioner panel member Susan Forrest and lay panel member Dr Julian Lamont.

The rise and fall of the Winston Asset Management partnership

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WAM was registered by Tsai and Wang to be used as a vehicle to hold the management rights business for a unit complex and a caretaker unit.

Initially, the equal split of shares was to be held by their partners, and, in what Tsai said was a “kindness to his friend’s wife”, Feng was to be provided employment and income by being appointed caretaker.

At this time, Tsai was unaware Feng had provided about $100,000 – or 6 per cent of the total funds – into Wang’s share of the company.

Later, to facilitate a loan, it became necessary that Tsai transfer his 50 per cent shareholding to Wang’s company, to be held on trust. Tsai and Wang told QCAT it was never intended Tsai lose his 50 per cent interest.

By late 2020, around the same time the management rights business was failing, Wang learnt Feng had been “unfaithful in her relationship”. QCAT was told Feng believed Tsai had revealed her “marital secrets”.

On 1 November 2020, a “crucial meeting” occurred between the three of them in Wang and Feng’s home to discuss the sale of the business.

In claims that were “very difficult to accept”, Feng asserted the meeting was an “unexpected and social one”. This was contrary to evidence of there being a prior meeting about the business between Feng and Wang, and the fact that it was unlikely the three would meet for anything other than business given the extensive relationship breakdowns.

In written evidence, Feng claimed they discussed that Tsai would bear the loss from WAM’s sale and that she would be employed by another business owned by the two men in a warehouse manager position.

On Tsai’s version of events, Feng refused to sell the business or transfer his shares “unless I meet her demands”; those being that he personally bear the loss of the sale, that he give her shares in the other company, and that he pay her $4,000 a month to make up for lost income.

McMeekin said the probabilities “strongly favour” Tsai’s characterisation.

“The tenor of Tsai’s response that he was ‘being extorted’ is entirely credible and Feng’s claims that the parties arrived at an amicable resolution are not,” McMeekin said in his recently published decision.

Given the improbabilities of her various claims, QCAT also gave “little credence” to her denial of there being discussions about shares.

QCAT questions state of mind, reasonable belief

With the study of corporations law forming part of a standard law degree, QCAT said it was difficult to that accept Tsai would assume a person not a shareholder to a company would have the legal right to alter the ASIC register and to do so against the wishes of its sole director.

Relying on the fact he had acted without authority in the past without complaint from Wang or Feng, Tsai claimed he believed he could do so again when he made the shareholding changes on 12 November. A letter from Feng’s solicitors spurred Tsai into undoing the changes “very quickly”.

McMeekin said the difficulty in relying on an “established practice” is that changing the shareholding and removing Feng as director did not reflect anything that had occurred in the past. While he has altered his own shares before, he had not previously made changes to Feng’s.

“Prior practice did not in any sense justify this removal,” McMeekin said.

Further, by the time the register was altered, Tsai had come to learn of Feng’s investment that was “over and above the ‘family’ contribution”.

“Over and above those issues, to accept Tsai’s arguments, it needs to be accepted that Tsai acted reasonably in not informing himself as to the law governing corporations – e.g. how directs were to be removed; who was entitled to alter the shareholdings shown in the register; who could call shareholders meetings?” McMeekin set out.

“Qualified lawyers possibly may not know even basic corporate law, but they do know that such law must exist and therefore ought to recognise a need to consult that law before adversely affecting others.”

However honest Tsai’s beliefs may have been at the time, QCAT was unable to accept that his beliefs were reasonable.

Commissioner fails to meet dishonesty onus

Calling for a shareholder meeting, claiming he has a right to insist Feng appear in person, and her own attendance at the meeting with a solicitor was consistent with Tsai believing he had authority to act as he did. Each of the parties also seemed to “concur in that approach”.

Further, Tsai’s claimed response to his barrister’s advice was “consistent too with his claim of a belief in the honesty of his then mistaken understanding of his rights”, QCAT determined.

McMeekin was prepared to accept that Tsai had “little faith in the authorisations conveyed by the resolutions [of the 1 November meeting], assuming those resolutions were made”. However, he had difficulty determining whether Tsai “simply closed his eyes to the issue … and did not bother to check” or whether he knew the law did not permit him to act in the way he did.

Either way, given the onus was on the commissioner, “we are not prepared to conclude that Tsai was actively dishonest”.

The appropriate sanction

Contrary to the commissioner’s submissions, QCAT was not prepared to accept that Tsai was motivated by a personal grievance with Feng, but rather to reclaim “only what he was beneficially entitled to”.

There was a “great deal of force” in Tsai’s view he was the subject of alleged extortion demands by Feng, as well as his concerns that Feng would allegedly use her control in the company to misuse his investments.

The problem, however, is that solicitors are “required to act honestly and with integrity no matter the personal pressures they might perceive”.

“At the very least, he should have appreciated that he ought to have reviewed carefully his legal position before acting on 12 November. While one can understand the pressures he acted under, his conduct cannot be excused,” McMeekin, Forrest, and Lamont said.

Having been aware he was not a shareholder, Tsai should have had serious concerns as to the legitimacy of his conduct.

QCAT said at the least, Tsai was “ignorant of fundamental corporate law and mis-stepped”, meaning his conduct could be described as a substantial failure to maintain a reasonable standard of competence and diligence.

“A finding of professional misconduct on that ground involves no regard to the beliefs of the practitioner,” McMeekin said.

“A practitioner may be doing their honest but incompetent best and still be found to have engaged in professional misconduct.”

The commissioner’s submissions that Tsai was not fit to practice failed to grapple with the context in which he acted, the motivation for his conduct, or the absence of an attempt to obtain more than what he could claim.

There was also no regard to his lack of other disciplinary action.

Tsai has conceded he was wrong and has demonstrated full insight.

“Given these considerations it is difficult to believe that anyone familiar with the facts would conclude that Tsai is a dishonest practitioner in the wider sense, or one given to practising deceit on others.

“People make mistakes in life. He trusted someone he found out he should not have,” McMeekin, Forrest, and Lamont said.

Citation: Legal Services Commissioner v Tsai [2026] QCAT 322.