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Forster v Legal Services Board

Forster v Legal Services Board

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Case Copied 11 April 2013 81 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCR 2011 0213

DAVID BRIAN FORSTER	Appellant
	v
LEGAL SERVICES BOARD (ABN 82 518 945 610)	Respondent

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JUDGES	WEINBERG and HARPER JJA and KYROU AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	4 February 2013
DATE OF JUDGMENT	11 April 2013
MEDIUM NEUTRAL CITATION	[2013] VSCA 73
JUDGMENT APPEALED FROM	Forster v Legal Services Board [2011] VCAT 2216 (Ross J)

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LEGAL PRACTITIONERS – Receivers appointed by Supreme Court to appellant’s legal practice on basis of deficiencies in trust account – Legal Services Board subsequently refused to renew appellant’s practising certificate on basis he was not a fit and proper person to hold practising certificate – Application to Victorian Civil and Administrative Tribunal (‘VCAT’) for review of Board’s decision dismissed – Appeal against order dismissing application – Legal Profession Act 2004 ss 5.2.2(2)(c), 5.5.1.

ISSUE ESTOPPEL – Comparison with res judicata – Whether issue estoppel applied to Supreme Court’s findings regarding trust account deficiencies – Whether Supreme Court and VCAT proceedings involved same question – Whether Supreme Court decision was final – Whether same parties in both proceedings – Whether VCAT relied on Supreme Court’s findings regarding deficiencies in trust account.

LEGAL PRACTITIONERS – Duty of honesty and candour – Duty applies when practitioner is a party to litigation – Misrepresenting nature of document exhibited to affidavit – Not disclosing to Court alterations made to document before being exhibited to affidavit – Not intervening when counsel asked questions of witnesses based on premise known to appellant to be factually incorrect – Not correcting position once error became apparent – Failure to disclose to Court known facts which were inconsistent with positive assertions made by counsel – Legal Profession Act 2004 ss 1.2.6, 2.4.4(1), 2.4.7(2)(b).

TRUSTS – Deficiency in trust account – Deficiency not dependent on commission of breach of trust or client suffering loss – Legal Profession Act 2004 s 3.3.21(3).

PRACTICE AND PROCEDURE – Appeal from VCAT to Supreme Court on question of law – Error of law must have affected outcome of VCAT’s decision – Victorian Civil and Administrative Tribunal Act 1998 s148(1).

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Appearances:	Counsel	Solicitors
For the Appellant	The Appellant appeared in person
For the Respondent	Dr K P Hanscombe SC with Mr S R Senathirajah	Corrs Chambers Westgarth

WEINBERG JA:

I have had the advantage of reading in draft the reasons for judgment prepared by Kyrou AJA. I agree, for the reasons that his Honour gives, that the appeal should be dismissed.

I wish to add only this. The appellant conducted this appeal with an apparent fixation upon findings that Emerton J had earlier made, in other proceedings,[1] regarding the appointment of receivers to his legal practice, ‘Hollows Lawyers’. He persisted throughout in seeking to challenge her Honour’s conclusion that the practice committed ‘serious irregularities in relation to trust money’ and that ‘double payment of disbursements … created deficiencies in the firm’s trust account of significant proportions’.[2] Indeed, a major part of his argument before this Court…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSCA 73
Decision Date: 11 April 2013

CaseChat Overview and Summary

The appellant, Forster, was a legal practitioner whose legal practice was subject to receivers being appointed by the Supreme Court due to deficiencies in his trust account. Subsequently, the Legal Services Board refused to renew Forster's practising certificate, finding he was not a fit and proper person to hold it. Forster sought a review of the Board's decision before the Victorian Civil and Administrative Tribunal (VCAT), but the application was dismissed. He appealed the VCAT order dismissing the application to the Supreme Court.

The central legal issues in this appeal were whether issue estoppel applied to the Supreme Court’s findings regarding the trust account deficiencies and whether Forster had breached his duty of honesty and candour. The court needed to determine if the proceedings before the Supreme Court and VCAT involved the same question, if the Supreme Court decision was final, and if VCAT relied on the Supreme Court's findings regarding the trust account deficiencies. Additionally, the court had to assess whether Forster's conduct constituted a breach of his professional duties.

The Supreme Court found that issue estoppel did not apply, as the question before VCAT was different from that before the Supreme Court. The court held that the Supreme Court decision was not final because it did not determine Forster's fitness to hold a practising certificate. The court also concluded that VCAT did not rely on the Supreme Court's findings regarding the trust account deficiencies. Regarding the duty of honesty and candour, the Supreme Court found that Forster had indeed breached his professional duties by misrepresenting the nature of a document, failing to disclose alterations made to it, and not correcting errors once they became apparent.

The Supreme Court dismissed the appeal, upholding the VCAT order. The court found that the error of law did not affect the outcome of VCAT's decision, as required by the Victorian Civil and Administrative Tribunal Act 1998.

Orders