Legal Services Board v Werden
[2011] VSC 74
•15 March 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 8199 of 2009
3607 of 2010
IN THE MATTER of the Sentencing Act 1991
and
IN THE MATTER of the Confiscation Act 1997
BETWEEN:
| LEGAL SERVICES BOARD | Plaintiff |
| v | |
| GABRIEL WERDEN | Defendant |
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JUDGE: | BEACH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 March 2011 | |
DATE OF JUDGMENT: | 15 March 2011 | |
CASE MAY BE CITED AS: | Legal Services Board v Werden | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 74 | |
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CRIMINAL LAW – Theft – Solicitor – Defalcation of trust moneys – Application for compensation – Application by Legal Services Board – Application not made as soon as practicable after conviction –Sentencing Act 1991, s 86.
LEGAL PRACTITIONERS – Solicitor – Defalcation of trust moneys – Breach of trust – Subrogation of the Legal Services Board to the rights and remedies of claimants – Claims not statute barred – LegalPractice Act 1996, ss 208, 211, 217 and 262 – Legal Profession Act 2004, clause 8.7 of Schedule 2 – Limitation of Actions Act 1958, s 21
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S.R. Senathirajah | Legal Services Board |
| For the Defendant | In person |
HIS HONOUR:
Introduction
Gabriel Werden, the defendant, was a solicitor. On 27 October 2006, he was sentenced to a term of imprisonment of five years and ten months (with a non-parole period of three years and four months), having pleaded guilty to various counts of theft, obtaining a financial advantage by deception and having a deficiency in his trust account as a solicitor. The facts underlying the charges that are relevant for present purposes occurred in 1997 and 1998.
The Legal Services Board, the plaintiff, is the successor of the Legal Practice Board. From 12 December 2005, all rights, property and assets that were vested in the Legal Practice Board immediately before that date, became vested in the plaintiff.[1] Prior to 12 December 2005, the Legal Practice Board was responsible for establishing and maintaining a fund called the Legal Practitioners’ Fidelity Fund.[2] Between 1998 and 2001, the Legal Services Board paid various amounts out of the Fidelity Fund in settlement of claims made against the Fidelity Fund arising from defalcations committed by the defendant.
[1]See clause 8.7 of Schedule 2 of the Legal Profession Act 2004.
[2]See s 388 of the Legal Practice Act 1996.
The plaintiff has issued two proceedings against the defendant. In the first proceeding (issued on 7 August 2009), the plaintiff seeks an order pursuant to s 86 of the Sentencing Act 1991 that the defendant pay it compensation in the amount of $623,000 (“the Sentencing Act proceeding”). The amount claimed in the Sentencing Act proceeding is the sum of the amounts paid to the claimants out of the Fidelity Fund in respect of the counts of theft to which the plaintiff pleaded guilty in 2006.
In the second proceeding (issued on 30 June 2010), the plaintiff alleges 11 breaches of trust against the defendant (“the breach of trust proceeding”). Seven of the eleven matters alleged in the breach of trust proceeding are matters in respect of which compensation is sought by the plaintiff in the Sentencing Act proceeding. The remaining four breaches of trust resulted in a total of $14,343.57 being paid out of the Fidelity Fund. If it succeeds in the Sentencing Act proceeding, then, in the breach of trust proceeding, the plaintiff only seeks an order that the defendant pay it the sum of $14,343.57.[3] However, if it fails in the Sentencing Act proceeding, then, in the breach of trust proceeding, the plaintiff seeks an order that the defendant pay it the $623,000 claimed in the Sentencing Act proceeding and the sum of $14,343.57.[4]
[3]Together with interest and costs.
[4]Together with interest and costs.
The trial
The trial of the Sentencing Act proceeding was heard at the same time as the trial of the breach of trust proceeding. At the commencement of the trial, counsel for the plaintiff outlined the basis upon which the trial would proceed. He said:[5]
“I have had a brief chat to Mr Werden and he tells me that he is not going to propose to lead any evidence, viva voce evidence. So essentially the matter will proceed by way of submissions and opening and by way of the documents in the Court Book and in particular the statement of agreed facts and documents.”
[5]At T1.7 - .12.
Mr Werden did not demur from this approach. The reference to “the Court Book” was a reference to the joint Court Book filed pursuant to the order of Daly AsJ made 19 October 2010. The reference to the “statement of agreed facts and documents” was a reference to a document headed “Statement of Agreed Facts and Documents”[6] contained in the Court Book.
[6]Dated 21 February 2011, signed by A. Castos on behalf of the plaintiff and signed by the defendant personally.
Consistently with the way in which counsel for the plaintiff said the trial would proceed, counsel for the plaintiff handed up an outline of argument and then took me to the relevant documents in the Court Book during the course of his submissions as to why the plaintiff should succeed in both proceedings.
At the conclusion of the plaintiff’s case, the defendant handed up an outline of argument[7] upon which he relied. The document contains allegations and assertions in respect of which no evidence was tendered during the course of the trial: that is, allegations and assertions of matters outside the material in the Court Book and not the subject of the statement of agreed facts and documents. When I raised with Mr Werden that his outline of argument contained material which was not in evidence, and asked him whether he proposed to call or give evidence, he said that he did not intend to take that course. The following exchange then occurred:[8]
“HIS HONOUR: … [W]hat I’m specifically troubled by is your document makes reference to moneys from Crown, money that your mother paid three claimants. In the absence of some evidence of these matters, I am sorry, but I propose to just pay no attention to them. Now, I want to give you the opportunity, if you want, to call some evidence to support any of these matters or what I will do is I will go through your submissions very carefully and rely on those parts of it that are argument based on the evidence that’s before me or submissions of a legal kind. If you are content for me to do that, then that is what I will do.
MR WERDEN: I am content, Your Honour. [Mr Werden then went on to make further reference to an alleged payment by his mother]”.
[7]Dated 7 March 2011.
[8]T23.
Following this exchange, Mr Werden, in essence, relied upon his outline of argument. At the conclusion of Mr Werden’s case, counsel for the plaintiff sought to object to some of the material in the defendant’s outline. The following exchange occurred:[9]
[9]T25.19 – T26.6.
“MR SENATHIRAJAH: I am caught Your Honour because I had anticipated that both these proceedings would be dealt with based on the evidence ‑ ‑ ‑
HIS HONOUR: They are going to be dealt with based on the evidence.
MR SENATHIRAJAH: Having quickly now read his submissions there are a number of objections that I could take.
HIS HONOUR: It’s not necessary. I will not rely on anything that is not in evidence, Mr Senathirajah.
MR SENATHIRAJAH: Thank you for that indication, Your Honour. Can I briefly deal with about three points, Your Honour, in that case by way of reply.
HIS HONOUR: Yes.
MR SENATHIRAJAH: Then I will hand up some reply submissions because I should add some of these points about payments and Crown were agitated at an earlier hearing before Robson J.
HIS HONOUR: There is no evidence about payment from Crown so you don’t need to attend to that.”
Neither party demurred from this course, and there was no further debate about the issue.
The defalcations
The facts underlying the defalcations are largely not in dispute. There were 11 relevant defalcations for the purpose of these proceedings.[10] The circumstances of each defalcation may be briefly summarised as follows:
[10]Albeit that only seven of them are relevant in the Sentencing Act proceeding.
Claim on Fidelity Fund by Paul Judd
By formal Notice of Claim dated 29 April 1998 lodged by Paul Judd addressed to the Legal Practice Board, Judd made a claim for compensation for a pecuniary loss of $5,000 arising from a defalcation committed by the defendant (who was acting for Judd) in respect of $5,000 that Judd gave to the defendant on about 13 March 1998 in payment of fees owed to a barrister (Mr J. Goussis) briefed by the defendant on Judd’s behalf.
On about 27 July 1998, the Legal Practice Board resolved to allow the claim made by Judd in the amount of $5,000.
On about 18 August 1998, at the direction of Judd the Legal Practice Board paid $5,000 out of the Fidelity Fund to G.W. Meldrum Pty Ltd (on behalf of J. Goussis).
Claim on Fidelity Fund by John Goussis
By formal Notice of Claim dated 11 August 1998 lodged by John Goussis, a barrister, addressed to the Legal Practice Board, Goussis made a claim for compensation for a pecuniary loss of $333 arising from a defalcation committed by the defendant (who had briefed Goussis) in respect of a lump sum of $379 that Victoria Legal Aid had given to the defendant on about 23 December 1997 in payment of (amongst other fees) brief fees of $333 owed to Goussis.
On about 26 October 1998, the Legal Practice Board resolved to allow the claim made by Goussis in the amount of $333.
On about 13 November 1998, the Legal Practice Board paid $333 out of the Fidelity Fund to Clerk M (on behalf of Goussis).
Claim on Fidelity Fund by Mary Soul
By formal Notice of Claim dated 2 June 1998 lodged by Mary Soul addressed to the Legal Practice Board, Soul made an initial claim for compensation for a pecuniary loss of $70,000 which was subsequently amended to $40,000 arising from a defalcation committed by the defendant (who was acting for a Maria Raciti) in respect of $45,003.11 that the defendant received on behalf of Raciti on about 5 June 1997, of which $40,000 was to be paid to Soul.
On about 23 November 1998, the Legal Practice Board resolved to allow the claim made by Soul in the amount of $40,000 (together with interest).
On about 4 December 1998, the Legal Practice Board paid $40,000 together with interest of $3,063.60 out of the Fidelity Fund to Michael J. Barone, solicitors (on behalf of Soul).
On about 21 December 1998, the Legal Practice Board paid costs and disbursements of $1,490.80 out of the Fidelity Fund to Michael J. Barone, solicitors (on behalf of Soul).
Claim on Fidelity Fund by Konstantinos and Vicki Fountis
By formal Notice of Claim dated 8 May 1998 lodged by Konstantinos and Vicki Fountis (“Fountis”) addressed to the Legal Practice Board, Fountis made a claim for compensation for a pecuniary loss of $8,000 arising from a defalcation committed by the defendant (who was acting for Fountis) in respect of $8,000 that the Commonwealth Bank of Australia Ltd gave to the defendant (on behalf of Fountis) on about 19 November 1997 to be held (on behalf of Fountis) pending completion of outstanding building works by Fountis’ builder.
On about 21 September 1998, the Legal Practice Board resolved to allow the claim made by Fountis in the amount of $7,708.72 plus costs.
On about 25 September 1998, the Legal Practice Board paid costs and disbursements of $589.05 out of the Fidelity Fund to Antony, Sdrinis & Co, solicitors (on behalf of Fountis).
On about 23 October 1998, the Legal Practice Board paid $7,708.72 out of the Fidelity Fund to Antony, Sdrinis & Co, solicitors (on behalf of Fountis).
Claim on Fidelity Fund by Barbara Phelan
By formal Notice of Claim dated 9 September 1998 lodged by Barbara Phelan, a barrister, addressed to the Legal Practice Board, Phelan made a claim for compensation for a pecuniary loss of $891 arising from a defalcation committed by the defendant (who had briefed Phelan in a matter of Chamoun) in respect of a lump sum of $1,752.35 that Victoria Legal Aid had given to the defendant on about 21 August 1997 in payment of (amongst other fees) brief fees of $891 owed to Phelan.
On about 23 November 1998, the Legal Practice Board resolved to allow the claim made by Phelan in the amount of $712.80.
On about 4 December 1998, the Legal Practice Board paid $712.80 out of the Fidelity Fund to Clerk Holmes (on behalf of Phelan).
Claim on Fidelity Fund by Michael Di Pietro
By formal Notice of Claim dated 22 April 1998 lodged by Michael Di Pietro addressed to the Legal Practice Board, Di Pietro made a claim for compensation for a pecuniary loss of $550,000 arising from a defalcation committed by the defendant (who was acting for Di Pietro) in respect of a total of $550,000 that the defendant received on behalf of Di Pietro in February 1998.
On about 24 May 1999, the Legal Practice Board resolved to settle the claim made by Di Pietro in the amount of $315,000.
On about 29 June 1999, the Legal Practice Board and Di Pietro entered into a deed to effect the settlement of Di Pietro’s claim, and on about 29 June 1999, the Legal Practice Board paid $315,000 out of the Fidelity Fund to Joseph Acquaro Lawyers, solicitors (on behalf of Di Pietro).
Claim on Fidelity Fund by Norrene Sandra Johnston
By formal Notice of Claim dated 2 April 1998 lodged by Norrene Sandra Johnston addressed to the Legal Practice Board, Johnston made a claim for compensation for a pecuniary loss of $83,000 (which was subsequently amended to $60,000 in a later claim form dated 15 April 1998) arising from a defalcation committed by the defendant (who was acting for Johnston) in respect of $60,000 that the defendant received on behalf of Johnston on about 11 November 1997.
On about 16 April 1998, the Legal Practice Board resolved to allow the claim made by Johnston in the amount of $60,000.
On about 23 April 1998, the Legal Practice Board paid $60,000 out of the Fidelity Fund to Samuel Sleigh & Associates, solicitors (on behalf of Johnston).
Claim on Fidelity Fund by Elias Raji
By formal Notice of Claim dated 17 June 1998 lodged by Elias Raji addressed to the Legal Practice Board, Raji made a claim for compensation for a pecuniary loss of $70,000 arising from a defalcation committed by the defendant (who was acting for Raji) in respect of $70,000 that the defendant received on behalf of Raji on about 18 March 1998.
On about 23 August 1999, the Legal Practice Board resolved to allow the claim made by Raji in the amount of $45,000 together with reasonable costs.
On about 11 October 1999, the Legal Practice Board paid $45,000 out of the Fidelity Fund to Alex Lewenberg, solicitors (on behalf of Raji).
On about 20 January 2000, the Legal Practice Board paid costs of $3,500 out of the Fidelity Fund to Alex Lewenberg, solicitors (on behalf of Raji).
Claim on Fidelity Fund by Michael Semaan
By formal Notice of Claim dated 6 October 1998 lodged by Michael Semaan (“M Semaan”) addressed to the Legal Practice Board, M Semaan made a claim for compensation for a pecuniary loss of $106,000 arising from a defalcation committed by the defendant (who was acting for M Semaan) in respect of $106,000 that the defendant received on behalf of M Semaan on about 25 March 1998.
On about 22 January 2001, the Legal Practice Board resolved to allow the claim made by M Semaan in the amount of $80,000.
On or about 15 March 2001, the Legal Practice Board paid $80,000 out of the Fidelity Fund to Harris Lieberman Boyd, solicitors (on behalf of M Semaan).
Claim on Fidelity Fund by Robert Semaan
By formal Notice of Claim dated 4 October 1998 lodged by Robert Semaan (“R Semaan”) addressed to the Legal Practice Board, R Semaan made a claim for compensation for a pecuniary loss of $106,000 arising from a defalcation committed by the defendant (who was acting for R Semaan) in respect of $106,000 that the defendant received on behalf of R Semaan on about 25 March 1998.
On about 22 January 2001, the Legal Practice Board resolved to allow the claim made by R Semaan in the amount of $80,000.
On or about 15 March 2001, the Legal Practice Board paid $80,000 out of the Fidelity Fund to Harris Lieberman Boyd, solicitors (on behalf of R Semaan).
Claim on Fidelity Fund by Morris Koury
By formal Notice of Claim dated 4 September 1998 lodged by Morris Koury addressed to the Legal Practice Board, Koury made a claim for compensation for a pecuniary loss of $3,000 arising from a defalcation committed by the defendant (who was acting for Koury) in respect of $3,000 that the defendant received on behalf of Koury on about 16 March 1998.
On about 22 November 1998, the Legal Practice Board resolved to allow the claim made by Koury in the amount of $3,000, together with interest of $115.
On or about 27 January 1999, the Legal Practice Board resolved to allow costs of $993.60.
On about 11 December 1998, the Legal Practice Board paid $3,116 out of the Fidelity Fund to William Abbott & Associates, solicitors (on behalf of Koury).
On about 28 January 1999, the Legal Practice Board paid costs of $993.60 out of the Fidelity Fund to William Abbott & Associates, solicitors (on behalf of Koury).
The Sentencing Act proceeding
Section 86 of the Sentencing Act 1991 permits a court to order an offender to pay compensation. Section 86(1) provides:
“If a court finds a person guilty of, or convicts a person of, an offence it may, on the application of a person suffering loss or destruction of, or damage to, property as a result of the offence, order the offender to pay any compensation for the loss, destruction or damage (not exceeding the value of the property lost, destroyed or damaged) that the court thinks fit.”
The defalcations in relation to Mary Soul, Michael Di Pietro, Norrene Johnston, Elias Raji, Michael Semaan, Robert Semaan and Morris Koury were the subject of pleas of guilty by the defendant to counts of theft from those victims.[11] The pleas of guilty were made on 4 July 2006. The defendant was sentenced in respect of these matters[12] on 27 October 2006.
[11]Although in the case of the claim on the Fidelity Fund by Mary Soul, the victim was (as is set out above) Maria Raciti.
[12]Together with other matters.
The defendant resists orders being made against him in the Sentencing Act proceeding on a number of grounds. Much of what he submits overlaps with the grounds upon which he resists any orders being made against him in the breach of trust proceeding. However, the defendant advances one specific ground which is relevant only to the Sentencing Act proceeding. This ground concerns the application of s 86(5)(a).
Section 86(5)(a) provides that an order under s 86(1) “may be made on an application made as soon as practicable after the offender is found guilty, or convicted, of the offence”. The defendant contends that the application made in the Sentencing Act proceeding was not “made as soon as practicable” after he was convicted of the relevant offences.
The plaintiff does not dispute that its application under s 86(1) was made more than 2½ years after the defendant was convicted of the offences upon which the application is grounded. The plaintiff explains its delay in making the application by reference to a belief (reasonably held) that at the time of the defendant’s plea hearing, the available information indicated that the plaintiff did not have any assets and was unlikely to be in a position to satisfy any compensation order. The plaintiff contends that it has at all relevant times been its practice not to seek compensation orders if the available information suggested that the relevant practitioner would be unlikely to be able to satisfy a compensation order.
In further support of its argument, the plaintiff contends that it was not aware of the possible existence of funds sufficient to justify an application until March 2009. Some investigation was then required, before the Sentencing Act proceeding could be commenced.
In support of its argument in relation to this issue, the plaintiff relied upon affidavits sworn by Amalia Castos[13] and Alan Desmond Holland.[14] Additionally, the plaintiff relied upon the following agreed facts:
[13]Sworn 10 September 2009.
[14]Sworn 19 March 2009.
“53.On about 19 March 2009, Mahmud Chowdhury, a solicitor working in the Proceeds of Crime Directorate of the Office of Public Prosecutions (“the OPP”) contacted the Board and:
(a) notified the Board that the Defendant had been released from jail and that the OPP had obtained a [sic] order from this Court restraining funds (held in a bank account) in which the OPP believed the Defendant had an interest;
(b) notified the Board that the OPP had obtained the restraining order for the purpose of satisfying any order for restitution or compensation that may be made under the Sentencing Act 1991;
(c) invited (on behalf of the OPP) the Board to consider seeking an order for restitution or compensation under the Sentencing Act 1991; and
(d) said that he would send the Board a copy of the restraining order obtained by OPP.
54.On 20 March 2009, the Board received a fax from Mr Chowdhury attaching a copy of the Restraining Order.
55.At the time of the Defendant’s plea hearing before the Honourable Justice Teague (on 3 and 4 July and 23 October 2006), the available information indicated that the Defendant did not have any assets and was unlikely to be in a position to satisfy any restitution or compensation order made against him in respect of the losses suffered by the Board as a result of the Defendant’s actions. At the plea hearing, counsel for the Defendant submitted in substance that the Defendant [was] totally impecunious and still in debt to ‘loan sharks’. In fact, in those proceedings, the Defendant was represented by Victoria Legal Aid.
56.The practice of the Board (both at that time (ie July 2006) and to date), was not to initiate recovery proceedings or seek orders for payment of compensation/damages against a practitioner, where the available information indicated that a practitioner would be unlikely to be able to satisfy an order for payment to the Board.
57.The Board was not aware of the existence of the funds in the account the subject of the restraining order obtained by the OPP, until about 19 March 2009 when it was contacted by Mr Chowdhury as referred to above.
58.In the circumstances referred to above, in accordance with its practice (as described in paragraph 58 [sic 56] above), the Board would not have sought an order pursuant to section 86 of the Sentencing Act 1991 at the time of the Defendant’s plea hearing.”
The plaintiff then submitted that the expression “as soon as practicable” does not mean “as soon as possible”. It was submitted that “as soon as practicable” refers to what is reasonable in all the circumstances and appropriate to the requirements of the situation. Reference was made by the plaintiff to statements to this effect in cases such as Creely v Ingles,[15] Tampion v Chiller[16] and Nicholl v Hunter.[17] So much may be accepted. Indeed, this submission accords with authority concerning the interpretation of legislation covering the same field in other jurisdictions.[18]
[15][1969] VR 732.
[16][1970] VR 361, 365.
[17]Unreported, Supreme Court of Victoria, Smith J, delivered 15 July 1994.
[18]See for example R v Monks (2001) 122 A Crim R 324 and D v B (2008) 196 A Crim R 323 (affirmed in Attorney General for Tasmania v B [2010] TASCCA 6).
Section 86(5)(a) has been amended twice since it was originally enacted. It was first amended by the insertion of “(and, in the case of an application for compensation for pain and suffering, no later than six months)” after the word “practicable”.[19] It was then amended by the deletion of what had been inserted by the first amendment.[20] Thus, notwithstanding the two amendments to s 86(5)(a), the section is currently in the form in which it was originally enacted. The explanatory memorandum in relation to s 86 relevantly provides:
“Clause 86 enables the court to make a compensation order on application as soon as practicable after the offender is found guilty or convicted. …”
[19]See s 74(1)(b) of the Victims of Crime Assistance Act 1996.
[20]See s 22(2)(b) of the Victims of Crime Assistance (Amendment) Act 2000.
In Taylor v Vukovic,[21] Eames J said:[22]
“The application for compensation in this case was dated and filed with the court on 18 November 1999 and accordingly was beyond six months from the day on which the plea of guilty was entered, although it was within ten days of six months running from the date of sentence. The terms of s 86(5)(a) make it clear, in my opinion, however, that the time period of six months in this case must run from the day on which the plea of guilty was entered, by which plea Mr Vukovic was convicted. In those circumstances the application which is brought here is out of time and accordingly the court has no jurisdiction to deal with the matter. That conclusion is one which counsel before me do not seek to challenge and, indeed, accept that it is the correct interpretation of the legislation as it relates to the circumstances of this case.”
[21][2000] VSC 29.
[22]Ibid, [5].
The plaintiff submitted that s 86(5)(a) was not a limitation provision. I reject this submission. In Taylor v Vukovic,[23] Eames J held that s 86(5)(c) was a limitation provision. I respectfully agree with this conclusion. Whilst the version of s 86(5)(a) considered by Eames J in Taylor contained the words “(and, in the case of an application for compensation for pain and suffering, no later than six months)” after the word “practicable”, the subsequent deletion of these words did not change the character of the provision. Section 86(5)(a) has (as the explanatory memorandum relating to it also suggests) always been a provision of limitation, requiring an application to be made as soon as practicable after a finding of guilt or conviction.
[23]Ibid, [5].
The question, so far as the Sentencing Act proceeding is concerned, becomes whether or not the plaintiff made its application for compensation as soon as practicable after Mr Werden pleaded guilty to the relevant offences (4 July 2006).[24] In this case, the answer to that question turns upon whether the Sentencing Act proceeding was issued as soon as practicable after 4 July 2006.
[24]See Taylor v Vukovic [2000] VSC 29, [5].
The plaintiff’s submissions appear to be predicated on the proposition that it is not practicable to apply for a compensation order under s 86 of the Sentencing Act if the material discloses that the offender is impecunious; alternatively, if the material discloses a reasonable basis for believing that the offender has insufficient assets to satisfy a compensation order. Whilst some time may be allowed to consider such matters, the section requires an application to be made as soon as practicable after a finding of guilt (or conviction) – it does not require the application to be made as soon as practicable after an applicant has determined that an offender may have at his or her disposal sufficient funds to meet a compensation order.
In R v Monks,[25] Evans J had to consider s 68(4) of the Sentencing Act 1997 (Tas). Section 68(4) provided that an application for compensation had to be made “as soon as practicable after the offender is found guilty or convicted of an offence”. His Honour adopted a passage of Bryson J’s judgment in Vision Nominees Pty Ltd v Pangea Resources Limited[26] to the effect that the range of facts and circumstances which can bear on what is practicable is a wide range and a requirement to do something as soon as practicable is neither a requirement to do something as soon as possible, nor in the least time which can be arranged. His Honour then said:[27]
“Time should be allowed to address any matters which warranted attention before the making of the application including the lapse of some time, provided it was a short time, in the course of that process: Richards v Schutt (1978) 18 SASR 421 at 425 and Magain v Roberts (1991) 14 MVR 313 at 320.”
[25](2001) 122 A Crim R 324.
[26](1988) 14 NSWLR 38, 43.
[27]Ibid, [8].
In the circumstances disclosed in Monks, Evans J considered that an application made 2½ months after conviction was not made as soon as practicable after the offender had been found guilty. Each case must, of course, be considered on its merits. However, in my view, the period of in excess of 2½ years in the present case is excessive, and does not meet the as soon as practicable test. The fact that the circumstances might have disclosed that the defendant was impecunious at the time he pleaded guilty does not justify an applicant under s 86 waiting some indefinite period for assets to be uncovered, before then bringing an application under s 86. There is no basis for any conclusion other than that it was practicable for the plaintiff in this case to make an application under s 86 within a matter of weeks of the defendant’s conviction and sentencing.
Section 86 is a provision designed to enable a summary recovery of compensation.[28] Its purpose is to enable awards of compensation to victims of crime in relatively clear and non-complex cases, and not to bog down the criminal list in longer compensation claims.[29] Further, s 86(10) provides that nothing in s 86 takes away from, or affects a right to recover damages or to be indemnified against any loss as a result of the offence. These considerations provide further grounds for rejecting the notion that an application for compensation under s 86 might be brought years after the offender has been convicted and sentenced – even if the delay is capable of explanation. The central question remains: “Was the application made as soon as practicable?”. The answer in this case is “No”.
[28]R v Braham [1977] VR 104.
[29]R v Braham [1977] VR 104; Gregory v Gregory (2000) 112 A Crim R 19 and D v B (2008) 186 A Crim R 323 (affirmed in Attorney General for Tasmania v B [2010] TASCCA 6).
For these reasons, the Sentencing Act proceeding must be dismissed.
The breach of trust proceeding
In the breach of trust proceeding, the plaintiff seeks to recover amounts it has paid totalling $637,343.57.[30] This figure is the sum of the amounts paid pursuant to the claims on the Fidelity Fund that I have already identified. There is no doubt that each claimant or victim had a cause of action against the defendant as a result of the defalcations admitted by him in the statement of agreed facts and documents. Further, there is no dispute that the sum of these claims is $637,343.57.
[30]Together with interest and costs.
The defendant disputes the plaintiff’s entitlement to judgment on a number of bases:
(a)first, the defendant denies that the Legal Practice Board (and thus, later, the plaintiff) became subrogated so as to entitle it to maintain the breach of trust proceeding;
(b)secondly, the defendant contends that a total of $628,000 of the claims paid out of the Fidelity Fund “were for moneys provided for the purpose of investment and re-investment and in accordance with s 211(3) should not have been paid”;
(c)thirdly, the defendant resists that part of the plaintiff’s claim based upon the payment made in relation to the Di Pietro claim – contending that the deed of release to which Mr Di Pietro and the Legal Practice Board are (amongst others) parties discloses that Mr Di Pietro’s claim was (to use the defendant’s words) “not merely based upon my own actions but upon actions done by the Legal Practice Board in allegedly giving him [Mr Di Pietro] telephone advice, prior to him investing money with me, that should money be misappropriated, he would be covered”;
(d)fourthly, the defendant contends that the receiver of his former practice received a settlement from Crown Casino which should be taken into account;
(e)fifthly, the defendant contends that his mother paid “a sum not less than $350,000” to three of the claimants, and that this should be taken into account;
(f)sixthly, the defendant asserts that all of the claims in the breach of trust proceeding are statute barred; and
(g)seventhly, the defendant contends that even if the plaintiff’s claims are not statute barred, “any remedy that it may have otherwise been entitled to, has been lost by laches or delay”.
I turn now to consider each of these bases.
The issue of subrogation
Each of the claimants settled with the Legal Practice Board on terms whereby the claimant agreed that the Legal Practice Board would be subrogated to the claimant’s rights against the defendant. However, it is not necessary in this case to consider the individual terms in the release agreements. The issue of subrogation is also dealt with in the Legal Practice Act.
Section 217 of the Legal Practice Act provides:
“(1) Subject to section 262, on payment out of the Fidelity Fund of any money in satisfaction of a claim for compensation under this Division, the Board is subrogated to the extent of that payment to the rights and remedies of the claimant against any person in relation to the defalcation.
(2) The Board may exercise its rights and remedies under this section in its own name or in the name of the claimant and must pay into the Fidelity Fund any money paid to it as a result of it doing so.
(3) If the Board brings a proceeding under this section in the name of a claimant, the Board must indemnify the claimant against any costs awarded against the claimant in the proceeding.
(4) Despite anything to the contrary in the Limitation of Actions Act 1958, if, immediately before the subrogation of the Board by virtue of this section to the rights and remedies of a claimant against any person in relation to a defalcation, the period within which the claimant could bring a proceeding in relation to the defalcation had expired or was due to expire within 12 months, the Board may bring a proceeding under this section at any time before the expiration of 2 years after the date of the subrogation.”
There have been payments out of the Fidelity Fund in satisfaction of each of the claims for compensation the subject of the breach of trust proceeding. On its face, s 217 provides for the Legal Practice Board (and thus, now, the plaintiff) to be subrogated to the extent of those payments to the rights and remedies of the claimants against the defendant. Further, s 217(2) provides that the Legal Practice Board (and thus, the plaintiff) may exercise its rights and remedies in its own name.
The defendant denies that the Legal Practice Board became subrogated pursuant to s 217 of the Legal Practice Act. On 2 April 1998, a receiver of all of the trust property of the defendant was appointed.[31] During the receivership, there was a change of receiver. Ultimately, the appointment of a receiver of the trust property of the defendant was terminated by an order of Gillard J made on 5 July 2006.
[31]Cf s 250 of the Legal Practice Act 1996.
In denying that the Legal Practice Board became subrogated to the various claimants’ rights under s 217 of the Legal Practice Act, the defendant relies upon s 262. Section 217(1) is expressed to be subject to s 262. Section 262 provides:
“On payment to a person out of the Fidelity Fund of any money in satisfaction of a claim for compensation under Division 2 of Part 7, the receiver is subrogated to the extent of that payment to the rights and remedies of that person against any other person in relation to the defalcation.”
The defendant’s argument appears to be that because the receiver had rights of subrogation (at least while the receiver was appointed between 2 April 1998 and 5 July 2006), no right of subrogation exists in the Board. I reject that submission. If the Parliament had intended that the Legal Practice Board was not to be subrogated to the rights of a claimant where a receiver has been (or was) appointed, it could have enacted a provision in those terms. There is no provision which suspends or cancels the Legal Practice Board’s right of subrogation where there is (or was) a receiver. Section 217(1) is expressed to be “subject to” s 262. This signifies, at most, a priority or precedence in a receiver’s right of subrogation over that of the Legal Practice Board. No such issue arises in the present case. There is no receiver. More specifically, there is no receiver claiming to exercise a right of subrogation inconsistent with the right of subrogation given to the Legal Practice Board under s 217.
The plaintiff, having a right of subrogation as provided for in s 217 of the Legal Practice Act, has (subject to the defendant’s remaining arguments) a right to maintain the breach of trust proceeding. I turn now to the second of the defendant’s contentions.
The contention that $628,000 of the claims should not have been paid
Section 211(3) of the Legal Practice Act provides that the Legal Practice Board “must disallow a claim against the Fidelity Fund if the claim does not lie under s 208”. The defendant contends that $628,000 of the claims paid should have been disallowed because they did not lie under s 208. The defendant relies upon s 208(3)(b)(i), which relevantly provides:
“A claim does not lie against the Fidelity Fund - … in respect of a defalcation of, or in relation to, any money given to a practitioner, a firm or a partner of a firm for the purpose of investment or re-investment by the practitioner, firm or partner, other than an investment or re-investment that is - … merely incidental to the legal practice of the practitioner, firm or partner.”
In Vaughan v Legal Services Board,[32] the Court of Appeal had to consider s 208(3)(b)(i). Kyrou AJA (with whom Buchanan and Neave JJA agreed) said:[33]
“The word ‘incidental’ in s 208(3)(b)(i) makes it clear that what the exception covers are investments or reinvestments which are not made by a practitioner as a primary purpose of his or her engagement by the client but as secondary or subordinate to, or supportive of, another service of a legal nature being provided by the practitioner. The adverb ‘merely’ serves to emphasise that the investment or re‑investment must be an outlying, rather than the pivotal, feature of the practitioner’s retainer. A typical situation falling within s 208(3)(b)(i) would be where the client pays money into the practitioner’s trust account in anticipation of settlement of legal proceedings or the purchase of a property and the funds are invested by the practitioner at the request of the client pending the settlement.”
[32][2009] VSCA 187.
[33]Ibid, [109].
The defendant contends that $628,000 of the claims paid out of the Fidelity Fund were for the purpose of investment and re-investment “other than investment or re-investment that is merely incidental to [his] legal practice”. This is a matter about which one might have expected the defendant to give some evidence. However, he chose not to do so. It is, of course, trite to say that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.[34] If any of the claims paid by the Legal Practice Board were in relation to any money given to the defendant for the purpose of investment or re-investment by the defendant, then one would have expected the defendant to be in the best position (as between the parties) to have given that evidence. The same point can be made in respect of whether any such investment or re-investment was or was not merely incidental to the defendant’s legal practice.
[34]Swain v Waverley Municipal Council (2005) 220 CLR 517, per Gleason CJ at 525 [17] citing Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63, 65 (98 ER 969, 970).
Whilst s 211(3) provides that the Legal Practice Board must disallow a claim against the Fidelity Fund if the claim does not lie under s 208, s 211(1) empowered the Legal Practice Board to “allow and settle” a claim against the Fidelity Fund. That is what occurred with each of the 11 claims the subject of the breach of trust proceeding. The power to settle claims against the Fidelity Fund must include a power to settle claims where it is arguable that a claim does not lie against the Fidelity Fund. The fact that it might be arguable that a claim does not lie against the Fidelity Fund does not make a settlement entered into in reliance on the power in s 211(1) invalid or of no effect.
Further, the right of subrogation given by s 217 is not predicated upon the Legal Practice Board having to negative every exception contained in s 208. Rather, the right is predicated upon payment out of the Fidelity Fund of any money in satisfaction of a claim made under Division 2 of Part 7 of the Legal Practice Act. That is, what the plaintiff must establish in order to succeed is not the negative of any exception in s 208, but rather, the fact that a payment or payments were made out of the Fidelity Fund in satisfaction of a claim for compensation under Division 2 of Part 7 of the Legal Practice Act. The question of what right is conferred by s 217 on the Legal Practice Board, is answered by construing s 217(1).[35] Specifically, construing s 217(1), the Legal Practice Board becomes subrogated, to the extent of a payment, upon payment out of the Fidelity Fund of that amount in satisfaction of a claim for compensation under Division 2 of Part 7.[36]
[35]Cf James Hardie and Company v Seltsam Pty Ltd (1998) 196 CLR 53, 65 [25] (Gaudron and Gummow JJ).
[36]Whilst the position might be different if the Legal Practice Board’s payment of a claim against the Fidelity Fund was “colourable” in the sense used in Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219, no such suggestion was made in this case – nor could it have been on the evidence.
That it is not necessary for the plaintiff to have to negative every exception contained in s 208, finds further support from the terms of s 217(2). Section 217(2) permitted the Legal Practice Board (and thus, now, the plaintiff) to exercise the rights and remedies given by s 217, either in its own name or in the name of the claimant. If the Legal Practice Board (or the plaintiff) exercised the right of subrogation in the name of the claimant, there could be no issue[37] about the liability to make a payment out of the Fidelity Fund. If, upon litigating the issue, it might have been determined that the claim should not have been accepted, this would not have provided a defence to a proceeding brought in the name of the claimant. It is not good law to say that, in order for the plaintiff to succeed in a proceeding brought in a claimant’s name, the plaintiff must show that if the Legal Practice Board had been sued by the claimant, the claimant must have succeeded in that action.[38] That being so, it would be, at least, a curious construction of s 217 if the right to relief of the Legal Practice Board (and now the plaintiff) might be different dependent upon whether the right of subrogation is exercised on the one hand in the name of the plaintiff or, on the other hand, in the name of the claimant.
[37]Provided that the Legal Practice Board acted in good faith and honestly (which is not in issue in this proceeding).
[38]King v Victoria Insurance Co Limited [1896] AC 250 (PC). See also GRE Insurance Limited v QBE Insurance Limited [1985] VR 83 at 100 – 103.
In further elaboration of his submissions, the defendant relied upon what he described as the reasoning in Esso Petroleum Co Limited v Hall Russell & Co Limited.[39] That case concerned a claim by a major oil company when one of its ships disgorged a large quantity of oil as a result of a collision caused by a malfunction in one of three tugs attending the ship. The oil company sued the tug builder. As part of its claim, the oil company sought reimbursement of sums paid to crofters in respect of damage to sheep, which sums had been paid pursuant to an agreement between major oil companies (including the pursuer) and terminal operators, known as the Tanker Owners Voluntary Agreement concerning Liability for Oil Pollution (“TOVALOP”). Entry into the TOVALOP was voluntary. That is, the oil company had been under no statutory or general legal liability to make the payments. The payments were entirely gratuitous so far as the crofters were concerned.
[39][1989] AC 643.
Lord Jauncey of Tullichettle[40] dealt with the issue as follows:[41]
“Esso chose to enter into and remain a party to TOVALOP for what were no doubt sound policy and commercial reasons but under no compulsitor of law so to do. They agreed voluntarily to indemnify persons affected by oil spillage. They were under no general duty in law to the crofters and as far as they were concerned the payments which they received were entirely gratuitous. Indeed having received payments from Esso the crofters could have sued Hall Russell arguing that what they had received was no more than gratuities from a disaster fund. TOVALOP is and remains a gratuitous contract of indemnity notwithstanding that the event which gave rise to the payments thereunder was damage to the Bernicia. Esso cannot pray in aid the latter event to convert their claim to repayment of sums paid under that indemnity into a claim for economic loss resulting directly from the damage. The matter can be tested in this way. Assume in the first place that the spillage of bunker oil was entirely due to the negligence of Hall Russell and that Esso had not entered into TOVALOP. In that event Esso would have been liable to the crofters neither in delict nor by virtue of statute and would have made no payments to them. Assume in the second place the same facts but that Esso had entered into TOVALOP, and had made payments thereunder to the crofters. What has caused these payments to be made? In my view they were made because Esso has chosen, by entering into and remaining a party to TOVALOP, to assume a voluntary obligation to the crofters and not because of any alleged negligence on the part of Hall Russell. It follows that Esso are not entitled to claim the sums second and third concluded for in conclusion (1) as direct heads of damage.”
[40]With whom Lord Keith of Kinkel, Lord Brandon of Oakbrook, Lord Templeman and Lord Goff of Chieveley agreed (Lord Goff of Chieveley delivering separate reasons).
[41][1989] 1 AC 677 – 678.
The present case is very different from Esso Petroleum. The liability of the Legal Practice Board to make payments out of the Fidelity Fund was a liability imposed by the Legal Practice Act. It was not voluntary in any sense of the word, other than there being an ability to settle claims made under Division 2 of Part 7.
It follows from what I have said above that, in my view, there is no substance to the defendant’s defence that he is not liable because the various amounts paid in respect of the claims should not have been paid by the Legal Practice Board.
The Di Pietro claim
The deed of agreement, release and authority entered into in relation to Mr Di Pietro’s claim is headed with the title of the proceeding brought by Mr Di Pietro as plaintiff against Mr Werden as first defendant and the Legal Practice Board as second defendant. However, it is clear from its terms and execution that the parties to it were Mr Di Pietro, the plaintiff, the Law Institute of Victoria and Victorian Lawyers RPA Limited.
The deed recites the fact of Mr Di Pietro’s claim on the Fidelity Fund for $550,000; the disallowance of that claim by the Legal Practice Board; the institution of proceedings by Mr Di Pietro in respect of the disallowance of his claim and the following:[42]
“The plaintiff [Mr Di Pietro] alleges that on or about 12 February 1998 he telephoned Victorian Lawyers RPA Limited (‘Victorian Lawyers’) or the Law Institute of Victoria (‘the LIV’) and was advised that any moneys deposited into a solicitors trust account would be safe and covered by the fund and says that he relied upon such advice prior to advancing the funds to the firstnamed defendant [Mr Werden]. He further says that he was misled by this advice given that the secondnamed defendant [the Legal Practice Board] has disallowed the claim (‘the telephone conversations’). Victorian Lawyers and the LIV deny that any such advice was given.”
[42]Recital I.
The deed then records the agreement between the parties to it. The Legal Practice Board agreed to pay Mr Di Pietro the sum of $315,000, and the plaintiff agreed to accept that sum in full satisfaction of all claims he might have had against the Legal Practice Board, the LIV and Victorian Lawyers arising out of the matters referred to in the deed. Mutual releases were given by each of the parties to the deed.
It is not suggested in this proceeding that the Legal Practice Board had power to make payments in satisfaction of any tortious liability incurred by the LIV or Victorian Lawyers. Further, it is not suggested that, if any such power existed, the Legal Practice Board could make such a payment out of the Fidelity Fund. The facts agreed between the parties[43] are that it was Mr Di Pietro’s claim on the Fidelity Fund which was settled in the amount of $315,000, and it was this amount that was paid out of the Fidelity Fund. In the circumstances, there is no substance in the defendant’s assertion that any part of the $315,000 was paid in satisfaction of a liability incurred by the LIV or Victorian Lawyers.
[43]As set out in the statement of agreed facts and documents.
The alleged Crown Casino settlement
The defendant contends that the receiver of his former practice received a settlement from Crown Casino which should be taken into account. The short answer to this point is that this matter was not the subject of any admission at trial, and no evidence was called or produced in relation to it (notwithstanding the various exchanges between the parties and the Court which I have set out above).
In the course of his written submissions, the defendant made reference to an application heard in the Practice Court by Habersberger J between Victorian Lawyers RPA Limited and the defendant[44] and an application in the Practice Court before Robson J in the Sentencing Act proceeding to stay that proceeding as an abuse of process.[45] All that needs to be said about those applications is that on whatever basis they were conducted and whatever the evidence was in those cases, no evidence was produced before me concerning any payment by Crown Casino.[46] Further, whilst the statement of agreed facts and documents sets out a large number of matters agreed between the parties, it contains no reference to Crown Casino or any proceeding involving the operator of Crown Casino. Remembering that this proceeding was conducted on the documents in the Court Book, the documents tendered at trial and the statement of agreed facts and documents, there is no basis for taking into account any alleged settlement of any proceeding to which the operator of Crown Casino might have been a party.
[44]Victorian Lawyers RPA Limited v Werden [2006] VSC 73.
[45]Legal Services Board v Werden [2010] VSC 105.
[46]Cf Cuthill v State Electricity Commission of Victoria [1981] VR 908, per Brooking J at 915.
The defendant’s claim in relation to payment by his mother
The defendant contends that his mother paid “a sum not less than $350,000” to three of the claimants, and that this should be taken into account. Like the claims in relation to Crown Casino, this matter was not the subject of evidence or admission between the parties. Further (again like the Crown Casino issue), when this matter was drawn to the attention of the defendant, he chose not to give or call any evidence. Accordingly, there is no basis for taking into account any such alleged payment.
The defendant’s contention that the plaintiff’s claims are statute barred
In his amended defence, the defendant pleads in relation to each claim that “insofar as any claim is made for breach of contract and conversion, it is statute barred by s 5(1)(a) of the Limitation of Actions Act 1958”. Section 5(1)(a) of the Limitation of Actions Act provides:
“(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued –
(a) subject to sub-sections (1AAA), (1AA) and (1A), actions founded on simple contract (including contract implied in law) or actions founded on tort including actions for damages for breach of a statutory duty.”
However, s 21(1) of the Limitation of Actions Act provides:
“(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action –
(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or
(b) to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.”
Section 21(1) clearly had application so far as the claimant/victim’s causes of action against the defendant were concerned. However, the defendant contends that the breach of trust proceeding is not “an action by a beneficiary under a trust”, but rather it is an action by “the statutory custodian of a Fidelity Fund”.
The short answer to this contention is that (for the reasons I have already given) the Legal Practice Board (and thus, the plaintiff) is subrogated “to the rights and remedies of the claimant” against the defendant. Those rights and remedies include the right to bring a proceeding in respect of which no period of limitation prescribed by the Limitation of Actions Act applies.
In his submissions, the defendant sought to meet this conclusion by contending that, if it was sound, it would apply to all defalcations and no period of limitation would ever exist. The defendant contended that such a position would give no work to s 217(4) of the Legal Practice Act. Section 217(4) is the provision that gave the Legal Practice Board a further two years to bring a proceeding where a right of subrogation arose in circumstances where the period within which the claimant could bring a proceeding had expired or was due to expire within 12 months. The defendant’s argument appeared to be that, because of the existence of s 217(4), the Parliament must have been taken to have expressed an intention that the plaintiff could not call in aid s 21(1) of the Limitation of Actions Act. Alternatively, the defendant’s submission was that, in order to give some work to s 217(4) of the Legal Practice Act, s 21(1) of the Limitation of Actions Act should be held to have no application in the present case. I reject both of these submissions.
In my view, the submission that s 217(4) of the Legal Practice Act has no work to do if s 21(1) has application is misconceived. There are at least two classes of case where s 217(4) could apply (notwithstanding the application of s 21(1) of the Limitation of Actions Act to the circumstances of this case). First, there may be cases where a claimant’s claim against the relevant defendant is governed by the law of a forum outside Victoria.[47] Secondly, there may be cases where the alleged fraud is committed by a solicitor’s agent, but the solicitor is not party or privy to the fraud – having no knowledge of the fraud, and not taking part in it, and not deriving any benefit from it. In such circumstances, a claim might validly be made against the Fidelity Fund, without s 21(1) having any application to a subsequent action in, say, negligence against the solicitor (for example, if there was negligence on the part of the solicitor which put the agent in a position to perpetrate the fraud).[48]
[47]See generally John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 and Regie Nationale Des Usines Renault SA & Anor v Zhang (2002) 210 CLR 491; and see further ss 63C and 208(2A) of the Legal Practice Act 1996 (noting the commencing words of s 208(2A) “Without limiting sub-section (1) …”).
[48]See Thorne v Heard [1894] 1 Ch 599 (Court of Appeal), per Kay LJ at 608. See also Thorne v Heard [1895] AC 495 (Privy Council), per Lord Herschell LC at 503.
Further, even if it could be said that every defalcation claim can be brought within s 21(1) of the Limitation of Actions Act (which, for the reasons I have just given, I take leave to doubt), the fact that another Act (which might be the subject of amendment from time to time) at a particular point in time might deprive the statutory provision under consideration of work to do, does not mandate some different or limited construction of that other provision without some proper basis for inferring that was the purpose intended by the Parliament.
It follows that the plaintiff’s claims in the breach of trust proceeding are not statute barred. I turn now to consider the issue of laches.
Laches
In order for laches to defeat the plaintiff’s claim, there must be both delay and prejudice sufficient to make it unjust in all the circumstances to allow the matter to proceed: mere delay is not enough.[49]
[49]Lindsay Petroleum Company v Hurd (1874) LR 5 PC 221, 239 – 241; Turner v General Motors (Australia) Pty Ltd (1929) 42 CLR 352, 365 – 367; Hourigan v The Trustees Executors and Agency Company Limited (1934) 51 CLR 619; Orr v Ford (1989) 167 CLR 316 and Jones v Stones [1999] 1 WLR 1739.
In this case, the defendant admits the defalcations constituting the various breaches of trust. He has given no evidence of any prejudice or change of position brought about by the late issuing of the breach of trust proceeding. In fact, as I have said above, the defendant gave no evidence on any issue.
At one point in his submissions, the defendant made reference to the High Court’s decision in Brisbane South Regional Health Authority v Taylor.[50] Specifically, the defendant referred to the following passage in the judgment of McHugh J:[51]
“The enactment of time limitations has been driven by the general perception that ‘[w]here there is delay the whole quality of justice deteriorates’. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme court point out in Barker v Wingo (1972) 407 US 514 at 532, ‘What has been forgotten can rarely be shown’. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now ‘knowing’ that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.”
[50](1996) 186 CLR 541.
[51]Ibid, 551.
Whatever prejudice might be inferred by the effluxion of time from the defalcations committed by the defendant, it is to be remembered that the defalcations are admitted and, on the evidence before me, there is little (if any) dispute about the facts relevant to the plaintiff’s causes of action. In the circumstances, such delay as has been established and such prejudice as might be capable of being inferred fall far short of establishing that it is unjust that the plaintiff should succeed; nor is the pursuit of this proceeding contrary to the conscience of equity.[52] If follows that the defence of laches is not made out.
[52]Cf Hampton v Richardson [2009] QCA 328, [32] (Keane JA).
Conclusion
For the reasons given above:
(a)the Sentencing Act proceeding fails; and
(b)the plaintiff is entitled to judgment in the sum of $637,343.57 in the breach of trust proceeding.
I will hear the parties on the questions of interest and costs.
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