Victorian Legal Services Commissioner v Hession
[2018] VSC 38
•1 March 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2017 05245
| VICTORIAN LEGAL SERVICES COMMISSIONER | Plaintiff |
| v | |
| ROBERT ANTHONY BRENDON HESSION | Defendant |
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JUDGE: | J FORREST J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 30 January 2018 |
DATE OF JUDGMENT: | 1 March 2018 |
CASE MAY BE CITED AS: | Victorian Legal Services Commissioner v Hession |
MEDIUM NEUTRAL CITATION: | [2018] VSC 38 |
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LEGAL PRACTITIONERS — VCAT recommendation that lawyer’s name be removed from the roll of practitioners — Application that practitioner’s name be removed — Professional misconduct — Previous professional disciplinary history of misconduct and unsatisfactory conduct — Order that practitioners name be removed from the roll — Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic), r14.13 — Legal Profession Uniform LawApplication Act 2014 (Vic), sch 1 s 23(1)(c).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms J Dodd | Victorian Legal Services Commissioner |
| For the Defendant | No appearance |
HIS HONOUR:
Introduction
In December 2016, Robert Hession’s practising certificate was suspended for five years by a senior member of the Victorian Civil and Administrative Tribunal (VCAT), following a finding of guilt on 13 charges of professional misconduct. VCAT also recommended that Mr Hession’s name be removed from the local roll of lawyers admitted to the legal profession (the Roll). The Victorian Legal Services Commissioner (VLSC) has now brought an application for the removal of Mr Hession’s name from the Roll, pursuant to r 14.13 of the Supreme Court (Miscellaneous Civil Proceedings) Rules2008 (Vic).
The application raises two issues. First, whether it should proceed in light of an implied request for an adjournment by Mr Hession. Second, assuming that the application proceeds, whether Mr Hession is a fit and proper person to be a legal practitioner and remain on the Roll.
Background to the application
Mr Hession is 64 years of age. He was admitted to practise as a legal practitioner on 1 June 1981. He held a practising certificate (at times with limitations) until early 2016.
For most of his professional life, Mr Hession carried on a practice at Hardys Lawyers; initially as an employee solicitor, then as a partner, then as a sole practitioner and finally, again, as an employee.
Mr Hession’s problems, in terms of his disciplinary history, commenced in July 1999 when he was reprimanded for failing to provide costs information when entering into a contingency fee arrangement. He was found guilty of misconduct under the Legal Practice Act 1996 (Vic) (LPA).
In August 2000, he was found guilty of four counts of misconduct within the meaning of the LPA: namely, commencing proceedings on behalf of clients without instructions and without advising of relevant matters; substantial failure to reach a reasonable standard of competence and diligence with respect to that litigation; and failure to make a cost disclosure as required by ss 86(1) and (3) of the LPA.He was ordered to pay a $15,000 fine and costs of $5,192.80.
On 30 August 2005, Mr Hession was found guilty of unsatisfactory conduct within the meaning of the LPA: failure to make cost disclosure for which he was cautioned.
In August 2010, Mr Hession was found guilty of professional misconduct relating to the taking of an executor’s commission without entitlement; and unsatisfactory professional conduct relating to a breach of a fiduciary obligation with respect to advice or statements made about the claim for executor’s commission. He was fined $30,000 and ordered to pay costs of $38,161.90. He was also required to undertake ten additional CPD units on probate and administration law, and to refrain from acting as an executor until completing the additional CPD to ensure familiarity with practice rules relating to deceased estates.
In June 2011, Mr Hession was again cautioned on the basis of his failure to make costs disclosure.
The 2016 charges
On 22 September 2016, Mr Hession was found guilty at VCAT of 13 charges of professional misconduct.[1]
[1]Victorian Legal Services Commissioner v Hession [2016] VCAT 1623 (‘the misconduct decision’).
The substance of the charges was that he:
(a) caused deficiencies in the Hardys’ trust account by:
(i) withdrawing funds without proper authorisation; and
(ii) failing to deposit trust funds into the trust account;
(b)created false memoranda of costs and disbursements, which were used as a basis for withdrawing funds from the Hardys’ trust account; and
(c)making a false statement and providing false documents with an intent to mislead the Commissioner in the course of his investigation.
The charges related to his dealings with three clients:[2]
(a)Ms McDonald: Over the course of 22 months, between June 2010 and April 2012, Mr Hession transferred $54,100 out of trust from funds held on behalf of Ms McDonald. His transfers were irregular. He created six false invoices to justify these payments. In total, Ms McDonald paid $77,140 for work completed by Mr Hession, although verified invoices rendered to Ms McDonald amounted to only $72,640. Accordingly, Mr Hession was held to have misappropriated the balance of $4,400.
(b)Ms Daffy: In May 2011, Mr Hession transferred $10,000 out of funds held on trust in relation to Ms Daffy’s case and created a false invoice to justify the transfer. In December 2011, Mr Hession received $6,000 that was to be held on trust, but instead deposited the funds into the Hardys’ office account.
(c)Ms Hornsby: Between early 2011 and June 2012, Ms Hornsby paid a total of $35,000 to Mr Hession, all of which had been transferred out of trust by Mr Hession by June 2012. Despite Mrs Hornsby’s request for a detailed invoice and receipts for all payments on 25 June 2012, Mr Hession failed to provide her with any such documents. In August 2012, Mr Hession requested that Ms Hornsby pay a further $55,000 into trust, following which she terminated the retainer. Despite a further request for a tax invoice, a trust account statement, and an itemised account in relation to her case, these documents were not provided to Ms Hornsby.
On 20 June 2013, Mr Hession provided the Commissioner with four invoices totalling $35,500 that were said to relate to Ms Hornsby’s case. The Tribunal held that these invoices were false and had been created to justify the withdrawal of Ms Hornsby’s funds from trust. Despite numerous requests by the Commissioner for a copy of the signed costs agreement and trust statement relating to Ms Hornsby’s matter, no attempt was made to explain why these documents were not provided by Mr Hession.
[2]This summary is taken from the submissions of the VLSC.
In its Penalty Decision,[3] VCAT described Mr Hession’s conduct as follows:
Collectively, the conduct giving rise to the charges must be seen as being at the serious end of the spectrum of offending. It involved false invoicing, trust account deficiencies, failing to comply with obligations to the regulator and failing to provide various documents to the regulator.
[3]Victorian Legal Services Commissioner v Hession (Legal Practice) [2016] VCAT 2056, [5].
Then, in recommending that Mr Hession’s name be removed from the Roll, VCAT stated:
The profession must know and be reminded that the trust account is sacrosanct and must be conducted scrupulously and honestly. Transgressions such as those committed by Mr Hession merit serious sanction both as general deterrence and as a sign to the public that the profession values and protects its standards.[4]
[4]Ibid [17].
VCAT also reprimanded Mr Hession in relation to each of the charges and determined that he not be granted a local practising certificate before the end of five years from the date of the order (8 December 2016), and that he pay the costs in the proceeding.
Developments outside the disciplinary proceedings
On 15 February 2016, Mr Alan Alpass was appointed by this Court as Receiver of the Law Practice pursuant to section 341 of the Legal Profession Uniform Law (the Uniform Law).[5]
[5]Legal Profession Uniform Law Application Act 2014 (Vic), schedule 1.
On 23 June 2016, the Court ordered Mr Alpass as Receiver to distribute what remained of the trust funds in the Hardys Lawyers’ trust account to clients on a pro rata basis.
The distribution was made on the basis of a deficiency of $722,589.70 in the trust account.
On 24 November 2016, pursuant to an application by Mr Alpass, this Court ordered that Mr Hession appear on 8 March 2017 for an oral examination in relation to the regulated property of Hardys Lawyers.
In breach of those orders, Mr Hession failed to appear on 8 March 2017 as directed. Accordingly, this Court issued a warrant for Mr Hession’s arrest.
On 19 May 2017, Mr Hession was arrested pursuant to the warrant and brought before the Court, where he was remanded in custody pending the completion of the oral examination.
Following the conclusion of the examination on 24 May 2017, the examination was adjourned, and Mr Hession released on bail pending an application to resume the examination. It was not resumed, and Mr Hession was released from bail on 28 June 2017.
On the basis of Mr Hession’s failure to comply with the orders of the Court concerning the examination, a proceeding was commenced by the Receiver seeking orders punishing Mr Hession for contempt.
Following Mr Hession’s plea of guilty, an Associate Justice found the charge of civil contempt proven.[6] However, his Honour determined that no further punishment was warranted.
[6]Alpass v Hession [2017] VSC 748 Derham AsJ
Mr Hession’s medical history
More recently, as a result of Mr Hession’s discussion with Ms Dodd, solicitor for VLSC, concerning his fitness to participate in this application, the VLSC obtained from Mr Alpass a number of medical reports concerning Mr Hession.
I will not repeat the detail of the reports, but it is clear that Mr Hession has, for a number of years, suffered from ongoing physical and psychological issues. The most serious of those conditions is that of his lung, which resulted in a left sided thoracotomy and decortication on 16 July 2017. The most recent report from his general practitioner notes that he lives a fairly sedentary lifestyle but has a limitation of exercise tolerance. In a report from Monash Health dated 28 July 2018, the cardiothoracic surgical unit resident suggested that it would take approximately six months for Mr Hession to reach his pre-morbid function, and that he was encouraged to recuperate at home and would be unable to attend his court proceeding. The resident noted that it would be appreciated if the court proceeding could be deferred to six months post Mr Hession’s discharge. The subsequent report of Monash Health Outpatients of 11 September 2017 does not suggest that he is incapable of attending to legal matters or of attending court, although it is clear that he suffers from multiple health issues.
This proceeding
This application (issued by originating motion with accompanying summons on 21 December 2017) was originally scheduled for hearing in the Practice Court on 16 January 2018 but was adjourned to 30 January 2018 to enable the filing of submissions, particularly on behalf of Mr Hession.
On 15 January, Ms Dodd, who has the management of this matter on behalf of the VLSC, spoke with Mr Hession. The substance of that discussion[7] was as follows:
[7]Recited in the affidavit of Joanna Lucy Dodd of 17 January 2018.
(a)Mr Hession was too sick to deal with the matter and had recently been discharged from hospital, and was due to be re-admitted on 23 January 2018;
(b)Mr Hession had provided a report from a Dr Cochrame, which confirmed his inability to participate in court proceedings (denied by Ms Dodd);
(c)Ms Dodd advised Mr Hession that he should file a report with the Court;
(d) Mr Hession said the Court had a copy of the report;
(e) Mr Hession said he no longer had legal representation;
(f)Mr Hession asked Ms Dodd to relay his advice to the Court as he was ‘too busy trying to stay alive’.
The first issue: should Mr Hession’s application be adjourned?
No formal application for adjournment was received from Mr Hession. He supplied no material which might form a proper basis for an adjournment of the application. Rather, the Court was supplied by VLSC with emails from Mr Hession to VLSC. These read as follows:
On 24 January 2018:
Joanna
As previously advised I am very ill
I request this matter be adjourned for at least 6 months as I now have to be operated on my other lung
I enclose report from Monash which shows my medical needs are urgent
Robert HessionAnd on 25 January 2018:
Joanna
I'm seeing cardiologist on 1/2
Going to Monash 2/2
Robert Hession
I determined not to adjourn the hearing (which had already been adjourned on the Court’s own motion to allow Mr Hession time to file submissions), but to give Mr Hession another opportunity to file any written submissions that he may wish to put before the Court before it determines this application.
On 1 February 2018, my associate received the following email from Mr Hession:
Dear associate
I am entering Monash hospital tomorrow for surgery.
I am therefore not in a position to respond
I accept that a decision will be made on 1 march
Robert Hession
For the following reasons, I think it inappropriate to delay the determination of this application.
First, Mr Hession’s failure to place any material before the Court in relation to the VLSC’s application and his failure to attend court is not explained by the medical evidence. His own evidence and submissions are totally deficient. The reports obtained by the VLSC provide an insight into his health issues but do not explain why he cannot attend court or, alternatively, provide written submissions to the Court in response to the VLSC’s application. To put it bluntly, silence other than a few emails is no answer.
Second, Mr Hession has relied upon failing health in the past in an effort to delay the hearing of disciplinary matters.
The hearing of the 2016 charges was the subject of hearings in March, April, and July 2016. Mr Hession sought to adjourn that case on the grounds of his ill health.[8] It is only necessary to repeat several paragraphs of the misconduct decision for the point to be understood. He sought, through his legal representatives, to adjourn the hearing either indefinitely or for twelve months. The VCAT member observed:
[8]Misconduct hearing, [19]–[24].
24.No explanation was given as to why Mr Hession or his legal representative were unable to obtain medical certificates or why Mr Hession would not be represented at the hearing. The Tribunal was left with no more medical information beyond the note from Dr Gamboni, which in the view of the Tribunal both as constituted by Senior Member Smithers on 10 March 2016 and as presently constituted by myself was manifestly inadequate for the purpose of justifying adjournment. The Commissioner pressed for the hearing to proceed. The Tribunal was left with no alternative other than to proceed with the hearing.
25.The matter proceeded to hearing on 29 March 2016, 11 April 2016 and 18 July 2016 with no appearance by or on behalf of Mr Hession.
26.On 29 March 2016, leave was granted for the applicant to amend the application for orders and the applicant was ordered to file and serve the amended application.
27.On 11 April 2016 evidence was received from Deborah McDonald, Christine Daffy and Loretta Hornsby and charge 12 was amended with an order that the applicant was to serve the amended charge and an order that if the respondent wished to be heard in relation to the amended charge, he was to notify the Tribunal. No notification was received.
28.On 18 July 2016, a further hearing took place in order to afford Mr Hession the opportunity to be heard in relation to the amended charge. There was no appearance by or on behalf of Mr Hession.
29.Throughout, Mr Grundy has forwarded orders and notices to Mr Hession and has kept the Tribunal informed of his actions.
30.Mr Hession was given every opportunity to provide medical evidence as to his state of health but provided nothing other than Dr Gambino’s short letter. The Tribunal was left with no alternative than to proceed with hearing the matter.
The position is not much different here. Mr Hession has been offered a number of opportunities to make submissions relevant to this application. The medical material does not justify the application being put off, notwithstanding that it is clear that he suffers from ill health. It has not been suggested that his medical condition played a part in the commission of the offences and the medical reports speak for themselves as to his infirmities. Apart from giving Mr Hession a further and final opportunity to file submissions (which Mr Hession has not availed himself of), the application could not be adjourned.
The second issue: should Mr Hession’s name be removed from the Supreme Court roll of lawyers admitted to the legal profession?
VCAT has the power to recommend that Mr Hession’s name be removed from the Roll pursuant to section 302(1)(f) of the Uniform Law. The Court has a discrete power to implement the Tribunal’s recommendation provided by section 23(1)(c) of the Uniform Law, as follows:
Removal from Supreme Court roll
(1)The Supreme Court may order the removal of the name and other particulars of a person from the Supreme Court roll, on—
…
(c) the recommendation of the designated tribunal.
The test to be applied in determining whether to exercise the power under section 23 was set out by McMillan J in Victorian Legal Services Commissioner v Horak:
In order to exercise its discretion to remove a practitioner from the roll, the Court must be satisfied at the time of the hearing that the practitioner is not a fit and proper person to be a legal practitioner, and is likely to remain so for the indefinite future.[9]
[9][2016] VSC 780 [57].
In Legal Services Board v McGrath[10], Warren CJ emphasised that removing a practitioner from the Roll serves the purpose of protecting not just the public, but also the legal profession as a group, the courts, the justice system and the community’s confidence in the justice system. Her Honour also noted that the plaintiff bears the onus of proving to the Briginshaw standard that the test is made out. Thus, while the recommendation of the Tribunal should be given appropriate weight, the Court must independently exercise its discretion and is not bound to follow the Tribunal’s recommendation.
[10][2010] VSC 266; (2010) 29 VR 325.
I am comfortably satisfied that Mr Hession is, at the present time, not a fit and proper person to be a legal practitioner. His disciplinary history and the seriousness of the 2016 offences make this conclusion inevitable.
The only issue about which there could be any doubt is whether he is likely to remain so for the indefinite future. As with any determination regarding the course of future events, nothing is certain, and this determination must be made on the balance of probabilities with a reasonable degree of satisfaction.
Sadly, it is abundantly clear that Mr Hession’s personal life and his health have collapsed in a way that most people would find impossible to cope with. He has virtually no means of support, he is at times homeless, and can no longer practice in his chosen profession—all in all, a modern tragedy.
But those matters cannot deter a court from reaching what I think is the only conclusion. Mr Hession’s disciplinary history is poor—with serious charges being levelled against him on at least two occasions, both of which have caused major problems for his clients. That conduct, when combined with his medical condition (and particularly that involving his psyche) means, I am afraid, that a court can confidently reach the conclusion that he will not be a fit or proper person to practice as a lawyer in the foreseeable future.
Once that conclusion is reached, the Court has no alternative but to order the removal of his name from the Roll. I propose to make such an order effective today.
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