Megafirm partner who stole to make budget gets his ticket back after long holiday

The latest application for review of a decision of the Legal Services Board decision not to grant a practising certificate was in the matter of DAP v Law Institute of Victoria [2008] VCAT 688. The 57 year old solicitor and former Melbourne Cricket Club Committee member was a property lawyer at one of Melbourne’s megafirms for about 27 years, many of them as a partner. Over the last nine of those years, he committed various acts of professional misconduct associated with the firm’s trust account. Of course the megafirm was not always a megafirm. The solicitor was for most of his career in one of the firms swallowed up into the megafirm. Justice Betty King, in the solicitor’s criminal prosecution said:

‘6. The [offences] are at the lowest end of the scale of offences of this nature. The total involved was just over $9,000 and it was not money that at any stage was ever to be for your own spending. The money was directed into meeting the targets set by your firm for your department. All firms have become hard-headed businesses, with targets and budgets and six minute units which, I add, is, in my view, driving young lawyers out of the profession at a very rapid rate. You, unfortunately, had commenced practice when it was a profession and unlike its current incarnation. It would, of course, have been preferable to have approached your other partners and indicated that it was not possible to meet the budget that had been set for you and suffered the consequences of not meeting that budget. Instead, you chose this course of conduct, the one of stealing money from those accounts. That has resulted in far worse consequences for you, your wife, your children and the community that you had previously served so well.

11 I accept what was put on your behalf as to what occurred, the type of firm that BDW became compared to the firm with which you were a partner at the time of the merger or takeover, whichever you wish to describe it as. You went from being a practitioner in the conveyancing/probate area with a number of solicitors working on an annual budget of about, according to the notes provided to me, $400,000 a year in 1988 to a budget of $1.5 million by the year 2000 with no solicitors left to assist you, but six to eight clerks helping you. So what you had was a huge volume of turnover, possibly very little in the way of legal work, but you had a budget you had to meet. Those budgets, I think, cause many people problems. As I said, there was a much easier solution that was available to you and one that, to a large degree, when I look at your background, surprises me you did not take.’

BDW initiated an internal audit. When the results were apparent, the firm referred the matter not to the police but to the Law Institute. A month after the period of offending came to an end, presumably as a result of the audit, he went to another firm as a salary partner for less than a year before surrending his practising certificate in the expectation he would be dealt with by the Law Institute (an excellent strategy). One and a half years later or so, he was charged with 87 counts of misconduct. Only at that time were the police involved. The solicitor gave a no comment record of interview. In the misconduct charges, he admitted at some stage the facts alleged against him, and conceded that they amounted to misconduct. No express finding of dishonesty seems to have been made. Four years ago, the Tribunal gave the solicitor a well-earned break for three and a half years, prohibited him from applying for anything other than an employee practising certificate until 2040 (i.e. a month shy of his 90th birthday), and whacked him with a $66,000 costs order, a sum which raises the possibility that the ‘guilty plea’ was not made at the outset.

The three and a half years went by, and the solicitor applied again for a practising certificate. Because he had surrendered his practising certificate early, he had been out of practice by the time of the application for five years. On the plus side, he had a man whose occupation was described as ‘former President of the Melbourne Cricket Club’ to vouch for him. On the negative side, 3 days before the three and a half years ran out, he pleaded guilty in the Supreme Court to 6 crimes arising out of the same general conduct as gave rise to the misconduct propositions — false accounting and having a trust account deficiency — and received a two year good behaviour bond by way of sentence, which he is still serving. See [2007] VSC 384. A former Supreme Court judge and fellow MCC Committee member gave character evidence for him at the criminal trial. Justice Betty King was good enough during her sentencing remarks, to say ‘I accept that you are absolutely unlikely to ever commit an offence of this nature again.’ In classic Justice King style, she also quipped:

‘Equally, I do not believe that there is any need to impose any monetary fine, as I have no doubt that has been imposed over the years by those whom you instruct, as well as this tribunal. No disrespect to those appearing for you.’

The Law Institute, the Board’s delegate, refused his application for a practising certificate. After a review hearing, the newish Vice President, Judge Ross, rolled the Institute, and gave the solicitor an employee practising certificate — just no licence to operate a trust account.

Judge Ross said:

  • [23] In the review of the Board’s decision, VCAT must conduct the review without any presumption as to the correctness of the decision subject to review: McDonald v Guardianship Board [1993] 1 VR 521 at 528; Davidson v Victoria Institute of Teaching [2006] VSCA 193 (6 September 2006);
  • [24] The Applicant carries the burden of showing that he is a fit and proper person: Re S (a solicitor) [1986] VR 743; Frugtniet v Board of Examiners [2005] VSC 332;
  • [34] The Applicant’s argument that he had already been sufficiently punished for his wrongdoing missed the point, because the jurisdiction is protective of the public, and has nothing to do with punishment (he said ‘The issue in each case ultimately, is whether VCAT can conclude, on the basis of all the evidence, that the applicant is now a fit and proper person to join other members of an honourable profession in the responsible and trusted activities that are involved in the work of the legal profession.’);
  • [35] The evidence of a very senior practitioner who had known the applicant professionally for 30 years that in his opinion the applicant ‘set a very good standard so far as the legal profession is concerned’ was considered significant, as was his generosity in helping young people improve their cricketing skills, and the fact that he had been employed for two years at a mortgage broker and financial planning service with a legal arm at which he would be employed under the supervision of an experienced practitioner if he got his ticket back;
  • [41] It was relevant that the Institute had never applied to have the applicant’s name struck off the roll of solicitors;
  • [42] The Law Institute’s argument that the applicant did not show the requisite degree of candour in the Legal Profession Tribunal prosecution in not admitting a dishonest intention (but subsequently pleading guilty to crimes which required dishonesty to be made out) was misconceived because in the Tribunal, no allegations of dishonesty were made against him, except in one category of offences whose circumstances did not overlap with the dishonesty offences he later pleaded guilty to;
  • [44] That the applicant was still serving his sentence was relevant but not determinative;
  • [45] There should be no criticism of the applicant not giving evidence (‘Two previous proceedings have detailed the Applicant’s remorse and the shame that his misconduct has visited upon him and his family. In addition [one of the character witnesses’] evidence before me makes it clear that the Applicant recognises what he has done and is very remorseful.’)

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