Legal Services Board v Werden - [2010] VSC 105

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PRACTICE COURT

No 8199 of 2009

IN THE MATTER OF THE SENTENCING ACT 1991
AND
IN THE MATTER OF THE CONFISCATION ACT 1997
BETWEEN
LEGAL SERVICES BOARD	Plaintiff
and
GABRIEL WERDEN	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 February 2010
DATE OF JUDGMENT:	9 April 2010
CASE MAY BE CITED AS:	Legal Services Board v Werden
MEDIUM NEUTRAL CITATION:	[2010] VSC 105

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PRACTICE AND PROCEDURE – application for a stay of originating process – abuse of process – application under s 86 of Sentencing Act 1991 by Legal Services Board for compensation by a solicitor convicted of misappropriating clients’ moneys – the Legal Services Board recovered some of the moneys misappropriated from Crown Ltd the operator of the Crown Casino under the Lotteries Gaming and Betting Act 1966 – application by convicted solicitor for stay of Legal Services Board’s application for compensation on the grounds that the Board would not disclose amount received from Crown Ltd – moneys received under a confidentiality agreement - whether application would be inherently unfair and oppressive to the applicant former solicitor – whether proceeding is an abuse of process as it is foredoomed to fail - whether Court entitled to take into account moneys received by the Board from the Casino operator in making an order under s 86 of the Sentencing Act 1991 - application refused – s 86 Sentencing Act 1991

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S R Senathirajah	Amalia Castos Legal Services Board
For the Defendant	Mr C G Juebner	Theo Magazis & Associates

Boncristiano v Lohmann [1998] 4 VR 82
Gill v Walton (1991) 25 NSWLR 190
Jago v District Court of New South Wales (1989) 168 CLR 23
The National Insurance Company of New Zealand Ltd v Espagne (1961) 105 CLR 569
Redding v Lee (1983) 151 CLR 117
State of Tasmania v Leighton Contractors Pty Ltd [2005] TASSC 133
St George Bank Ltd v Quinerts Pty Ltd [2009] VSCA 245
Victorian Lawyers RPA Ltd v Werden [2006] VSC 73
Walton v Gardiner (1993) 177 CLR 378

HIS HONOUR:

INTRODUCTION AND SUMMARY

By an originating motion dated 7 August 2009, the plaintiff (“the Board”) commenced proceedings against the defendant (“Mr Werden”) seeking an order pursuant to s 86 of the Sentencing Act 1991 that Mr Werden pay compensation to the Board in respect of his misappropriation of various sums of money, an offence he was convicted of.

By a summons dated 15 January 2010, Mr Werden applies for an order that pursuant to the inherent jurisdiction of the Court, or alternatively pursuant to r 23.01(1)(c) of the Supreme Court (General Civil Procedure) Rules 2005, the Board’s claim against him be stayed until further order.

Alternatively, Mr Werden seeks a similar order insofar as the Board’s claim relates to:

(a) $60,000 (count 4); and

(b) $315,000 (count 6). The counts are explained below.

Mr Werden contends that the…

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: [2010] VSC 105
Decision Date: 9 April 2010

CaseChat Overview and Summary

In the matter of Legal Services Board versus Werden, the Legal Services Board sought compensation from a solicitor who had been convicted of misappropriating clients' moneys. The Board had previously recovered some of these misappropriated funds from Crown Ltd, the operator of the Crown Casino, under the Lotteries Gaming and Betting Act 1966. This recovery was made under a confidentiality agreement, meaning the exact amount received was not disclosed. The convicted solicitor applied for a stay of the Board's application for compensation, arguing that the proceeding would be inherently unfair and oppressive, and constituted an abuse of process as it was foredoomed to fail. The central legal issues the court had to address were whether the application for compensation would be inherently unfair and oppressive, whether the proceeding constituted an abuse of process, and whether the court was entitled to consider the amount received by the Board from the Casino operator when making an order under section 86 of the Sentencing Act 1991.

The court found that the application for compensation was not inherently unfair or oppressive, as the solicitor had not been misled about the nature of the proceedings and the Board had acted in accordance with the law. The court also ruled that the proceeding did not constitute an abuse of process, as there was a real prospect of the Board succeeding in its application. Regarding the amount received by the Board from the Casino operator, the court determined that this factor was relevant and could be taken into account when making an order under section 86 of the Sentencing Act 1991. However, this did not automatically render the proceeding an abuse of process or inherently unfair. Consequently, the application for a stay of the originating process was refused.

The court's decision was based on a careful analysis of the principles of fairness, the nature of the Board's application, and the relevant statutory provisions. The solicitor's argument that the proceeding was inherently unfair due to the non-disclosure of the amount received by the Board from the Casino operator was not substantiated. The court emphasised that the Board's application for compensation was a legitimate exercise of its statutory powers, and the solicitor's contention that the proceeding was foredoomed to fail was not supported by the evidence. The court's ruling affirmed the Board's right to seek compensation from the convicted solicitor, while also recognising the importance of maintaining confidentiality in certain circumstances. The final order of the court was that the application for a stay of the originating process was refused.

Orders