Legal Services Commissioner v Rhoden
[2016] VSC 67
•2 March 2016 (revised 21 March 2016)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT
S CI 2016 00531
In the matter of the Legal Profession Act 2004 (Vic)
BETWEEN
| VICTORIAN LEGAL SERVICES COMMISSIONER | Plaintiff |
| v | |
| PHILIP HAMILTON RHODEN | Defendant |
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JUDGE: | JOHN DIXON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 2 March 2016 |
DATE OF JUDGMENT: | 2 March 2016 (revised 21 March 2016) |
CASE MAY BE CITED AS: | Legal Services Commissioner v Rhoden |
MEDIUM NEUTRAL CITATION: | [2016] VSC 67 |
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LEGAL PRACTITIONERS — Roll of practitioners — Removal of name — Whether defendant a fit and proper person to practise law — Defendant guilty of misconduct at common law and professional misconduct under the Legal Profession Act 2004 with significant dishonesty and deception of beneficiaries for personal gain — Name removed — s 4.4.3(1) Legal Profession Act 2004.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C E Shaw | Victorian Legal Services Commissioner |
| For the Defendant | No Appearance |
HIS HONOUR:
The Legal Services Commissioner applied for an order that the name of Philip Hamilton Rhoden be removed from the Court’s roll of practitioners. For the reasons that follow, I will make that order.
The Victorian Civil and Administrative Tribunal (‘VCAT’) recommended that Mr Rhoden’s name be removed from the roll.[1] It did so in the context of having found Mr Rhoden guilty of 17 charges of misconduct at common law and four charges of professional misconduct within the meaning of s 4.4.3(1) of the Legal Profession Act 2004. The flavour of his offending may be summarised as four charges of breach of Rule 10 of the Solicitors Professional Conduct and Practice Rules 2005, eight charges of taking executor’s commission from a deceased estate without an entitlement, eight charges of misrepresenting to the beneficiaries of a deceased estate the true position in relation to an executor’s commission, and one charge relating to his failure to provide beneficiaries with full and frank information about his personal association with a claimant against the estate under Part IV of the Administration and Probate Act 1958.[2]
[1]Legal Profession Act 2004 (Vic) s 4.4.17(a).
[2]Victorian Legal Services Commissioner v Philip Rhoden, Senior Member Gerard Butcher, J11/2015, 24 September 2015.
Mr Rhoden was represented by counsel at the hearing of the charges, and pleaded guilty. In addition to the recommendation made to this court, VCAT ordered that Mr Rhoden, having undertaken not to apply at any time in the future for a practising certificate, be reprimanded and make restitution payments totalling $365,482.92, according to a schedule of time for payment.
Mr Rhoden did not appear at the hearing of this application and I am satisfied that the Originating Motion and supporting material was served on him. In particular, the plaintiff put in evidence an email received from Mr Rhoden that stated:
I refer to your letter of 18 February. I do not intend to oppose these proceedings and consent to the proposed order numbered three in the summons issued in this matter. I am obliged that you will not be seeking an order for costs. Suffice it to say I am deeply sorry that my actions have necessitated these proceedings.
The Commissioner made the application for removal from the roll seeking orders in the exercise of the inherent jurisdiction of the Court.[3]
[3]A statutory power of removal is given by s 2.4.42(5) of the Legal Profession Act. As to the distinction between that statutory power and the exercise of the inherent jurisdiction of the Court, see Legal Services Commissioner v Rushford [2012] VSC 632 [5]–[7].
The question is whether, at the time of the hearing and based on the evidence before the Court, Mr Rhoden was a fit and proper person to remain on the roll,[4] which is to be determined on the balance of probabilities. Of particular importance in the court's assessment, while taking into account other matters, is the gravity of the misconduct that is alleged.[5]
[4]A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253.
[5]Evidence Act 2008 (Vic) s 140(2)(c).
Fitness for office involves three things — honesty, knowledge and ability.[6] The disciplinary power of the court that includes the power to remove a person’s name from the roll is protective, and one sense in which that protective jurisdiction is exercised was explained by Harper J (as his Honour then was) in Morris v Psychologists Registration Board:[7]
A psychologist who fails to display such insight into his or her unprofessional conduct as demonstrates an appreciation that what was done was wrong and must not recur ought not, if the public is to be protected, to be allowed to practice.
[6]Hughes and Vale Pty Ltd v The State of New South Wales (No 2) (1955) 93 CLR 127, 156; Legal Services Board v McGrath (2010) 29 VR 325 329-330 [12]–[13].
[7]Unreported, Supreme Court of Victoria, Harper J, 19 December 1997, 25.
In this case, I need say no more to explain the test to be applied. I am satisfied that Mr Rhoden has behaved dishonestly over a significant period. Although the effect of the order removing his name from the roll involves the loss of his professional standing, Mr Rhoden is 70 years of age. I take into account that this loss may be significant for him. Nevertheless, that consideration is heavily outweighed by other matters, including the need to protect ‘the public,… the legal profession as a group, the courts, the justice system and community confidence in that system’.[8]
[8]Legal Services Board v McGrath (2010) 29 VR 325 329 [10].
The full details of Mr Rhoden's misconduct are set out in the reasons for decision of the VCAT Senior Member,[9] and I was addressed at length about that misconduct by Mr Shaw, who appeared for the plaintiff, with reference to the source material. I need not repeat those details in these reasons, but I will highlight particular aspects of Mr Rhoden’s misconduct to demonstrate why I have formed the view that he is not a fit and proper person to remain on the roll.
[9]Victorian Legal Services Commissioner v Philip Rhoden, Senior Member Gerard Butcher, J11/2015, 24 September 2015.
Mr Rhoden behaved dishonestly in charging executor’s commissions to which he was not entitled. He did so over a period of about four years, deceiving beneficiaries of estates of which he was executor and earning a significant sum for himself, which he used for his own purposes. Apart from his plea of guilty, there was no other evidence before the tribunal of remorse and no evidence that he had any timely insight into the impropriety of his actions.
Mr Rhoden’s response to his conduct before the tribunal demonstrated a want of fitness to remain on the roll. It was clear that as a lawyer of some 45 years standing, he had no genuine remorse for his conduct, for the reason that the clients whom he had misled had never complained. Further, it was submitted on his behalf to the tribunal that to the extent that the beneficiaries now have misgivings about Mr Rhoden’s conduct, those misgivings were caused by the conduct of the plaintiff in asking them whether they had obtained independent advice or minded paying an executor’s commission.
Mr Shaw informed me that the defendant was basically keeping to the restitution schedule that was ordered.
Mr Rhoden’s misconduct included the provision of positive false information, to varying degrees in each matter, to beneficiaries. His conduct had a significant impact on large numbers of beneficiaries to whom he owed fiduciary duties and was contrary to basic fiduciary principles. It was misconduct that resulted in significant personal financial gain. His conduct also extended to preferring, over the interests of the estate and its beneficiaries, the interests of a claimant against an estate of which he was executor, when that claimant was personally known to him as a former employee, a colleague who had assisted him with estate administration files including relating to commission.
Misappropriation of estate funds by improperly charging an executors commission to which a solicitor is not entitled is a most serious matter. Theft of funds from deceased estates by solicitors is particularly odious for the profession and significantly undermines the confidence of the public in the legal profession and in the law and practice of administration of deceased estates. It is essential that future clients are protected from those who would breach their obligations of trust, especially from those who failed to discharge the high standards expected of a fiduciary that are, or ought to be, well known to every person whose name is on the role of legal practitioners. There is no justification for the names of those who have admitted to such conduct and who have not shown that they have taken steps towards rehabilitation to remain on the roll.
On the evidence before me, there is an absence of rehabilitation, except to the extent that it might be presumed from the discovery of his misconduct, and his conviction and punishment, that Mr Rhoden might feel some sense of personal deterrence. However, apart from expressing his regret that his actions had necessitated this proceeding, he has taken no steps to redress his conduct. I have no confidence that he would alter his ways in the future. Although he took part in the disciplinary process, as I have said, he has not attended the hearing of this application. He does not contest, whether on a proper basis or otherwise, the proposition that he is not a fit and proper person to remain on the roll. In fact, he admits it.
For these reasons, I am satisfied that Mr Rhoden is not a fit and proper person to remain on the roll. I will order that his name be removed from the roll of persons admitted to the legal profession kept by the Court.
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