Fallout from the Melbourne-Voyager collision ... Solicitor for victims loses his ticket ... Bad behaviour and lack of candour ... Drawn out case, as elderly clients suffer ... Alix Piatek reports
Forster: ticketless, but the struggle goes onVictorian solicitor David Forster has lost his appeal against the cancellation of his ticket.
After a series of grindingly torturous processes, VicAppeals upheld Justice Iain Ross' findings in VCAT that Forster wasn't sufficiently fit and proper to keep on trading.
The de-ticketed Frankston lawyer is the brother of VicAppeals judge Marcia Neave.
Last week he turned up at a VicBar CPD session and asked about self-represented litigants.
Until now he has been represented by his one man firm, the aptly named Hollows Lawyers, which would write letters:
"Dear So And So,
We act for David Forster ..."
He can't do that anymore.
But, it's not the end of the Forster story - by any stretch.
There are another seven matters in VCAT, to be heard in October; the receiver of his practice is chasing him for $1.5 million in costs and another $7 million to be put back into his old shop's till; and there are two judgments pending in VicAppeals involving Forster's application to terminate the appointment of receivers to Hollows Lawyers.
The Court of Appeal found that Forster was not honest and candid with the court in the receivership proceedings and showed little insight into the gravity of his conduct.
Justice Ross identified five incidents where Forster had misbehaved, including:
- attempting to persuade a client to lie in order to shore-up his defence in the receivership proceedings;
- incorrectly identifying a document as coming from the "executive council" of the Law Institute, and then failing to rectify the error;
- seeking a stay of proceedings on the basis the receivership was doing "mortal damage" to his practice, when at the same time he was closing down his practice;
- inappropriate behaviour towards counsel for the receiver during court proceedings.
Justice Emilios Kyrou, who penned the leading judgment, dismissed Forster's 12 grounds of appeal.
Most of Forster's arguments took issue with conclusions of Justice Karin Emerton from the receivership proceedings.
Consequently, most of the grounds of appeal were irrelevant because the decision not to renew Forster's ticket was based on his conduct during and after the proceedings before Emerton.
Mark Weinberg JA said:
"Ross J's decision had nothing whatever to do with Emerton J's finding that there had been a deficiency in the firm's trust account. That meant that much of the appellant's argument before this court was completely irrelevant."
As for the grounds of appeal regarding questions of law, the Court of Appeal found that Ross had applied issue estoppel and the Briginshaw principle correctly.
Earlier proceedings
Forster, and his law shop, handled nearly 90 of the 214 claims arising from the HMASs Voyager-Melbourne collision at sea off Jarvis Bay in 1964.
Emerton found discrepancies in his firm's trust accounts, which Forster blamed on Infinity Law, his accounting software.
The program didn't adjust the amount owing after payments had been made and some disbursements were paid twice.
Forster also failed to pass on discounts given by barristers to some of the clients.
He attempted to rectify the irregularities by preparing manual adjustment notes. In some instances he offset the overcharging by adjusting it against fees that had been written off - so "netting off" the double payments of disbursements against those fees.
Emerton found the practice had ...
"committed serious irregularities in relation to trust money … and had failed to properly account in a timely manner to clients for trust money."
But it was other conduct that landed Forster in strife with the Legal Services Board.
There are two aspects that are worth mentioning.
Justice Ross; VCAT findings against Forster upheld on appeal
Dishonest dealings with Mr Rann
One of the Melbourne-Voyager clients, Vic Rann, had his case settled for $287,735.14 - all up.
The Commonwealth paid the amount in two cheques. The amount of $162,735.14 was deposited in Hollows' trust account and party/party costs totalling $125,000 were deposited in the office account.
Rann was paid $82,188.39 and then eventually another $12,653.10 after "discrepancies" were discovered.
The Law Institute identified the payment of $125,000 directly into the practice's office account as a potential breach of the Legal Profession Act, which requires trust money to be paid into a firm's trust account in the absence of a written direction to the contrary.
Prior to the hearing of the receivership proceeding, on September 24, 2009, Forster sent the following email to Rann:
"Dear Vic,
Please forward me a fresh email along the lines of ...
'At my settlement conference I can recall Mr Forster explained to me that there would be two cheques received for settlement and that the smaller of the 2 cheques would be costs and I directed him to put this cheque into his office account directly against my outstanding accounts'."
Forster provided no reasons for sending the email to Rann and it was alleged he did so to strengthen his defence against the receivership.
Justice Ross said Forster deliberately attempted to get Rann to participate in a lie. Forster dishonestly put his interests ahead of his client's.
Conduct during the proceedings before Emerton
Forster was strung out during the receivership proceedings in the Supreme Court.
At the conclusion of the proceedings, after Emerton had left the court, Forster followed Dr Kristine Hanscombe SC, counsel for the receivers, from the bar table to the door, repeatedly calling her a "monster".
He also sent a letter to Hanscombe:
"It is my heartfelt opinion that your advocacy is unduly vindictive and totally disproportionate. As you are no doubt aware legal costs claimed against me now exceed $1.5 million and the prospects of say three further years designed to destroy me is not pleasant. My opinion of your behaviour is causing me emotionally very disturbing thoughts towards myself and you."
Ross found that letter to be threatening, and while Forster said he was sorry for his actions he never apologised to Doc Hanscombe.
At a hearing before Emerton on September 30, 2010 he referred to one of the receivers, Noel Batrouney from Hall & Wilcox, as a "vulture" and a bloody parasite".
The transcript reads:
Forster: You guys, at the end of the day, make me bankrupt, destroy my relationship with Mary. You destroy me mentally ...
HH: Mr Forster, this isn't a public ...
Forster: and here, this guy here, is after his 400,000 to make 1.2 million ...
HH: Mr Forster, would you sit down or leave the court please?
Forster: I'm going. But just ....
HH: I'm not listening. Mr Forster ...
Forster: This guy over there is billing, you look at the bills that this guy (indistinct). It's just outrageous.
HH: Could you please restrain your client, Mr Warne.
Forster: And then they talk in that way. Look, I'm a human being and I expect to be treated fairly.
HH: I'm sorry Mr Forster ...
Forster: ... other than having that vulture there that's going to ramp it up to one million, and he double bills for meetings with people and then that. And at the end of the day, someone needs to have a bit of bloody decency around here. It's just unfair. Jesus Christ Almighty. I'll be back at two o'clock, or what 2.30. Bloody parasite ...
HH: Mr Warne, if your client's going to take that attitude in court after lunch, I'll have to consider whether or not it constitutes a contempt in the face of the court.
Justice Ross found Forster's behaviour to be "reprehensible".
See earlier reports:
Voyager victims fleeced by pirate
Sinking of the Voyager survivors
Alix Piatek reporting