The never ending Forster-Voyager litigation … On and on it grinds … Latest wrap from Justin Pen … The Victoria solicitor has a partial win and two losses … Receivers recover 70 percent of their costs … Legal Services Board one step further along the road to strike-off case 

IT has been a gruelling few months for de-ticketed Victorian solicitor David Forster. 

Justinian has previously reported on Forster’s extensive legal strife that followed the solicitor’s titanic handling of 90 victim’s compensation claims, which arose from the HMAS Voyager-Melbourne collision in 1964. 

It was two losses and a partial win for Forster in the latest round of cases concerning the embattled solicitor. 

In June, the Victorian Court of Appeal ordered Forster to pay 70 percent of his receivers’ costs for appeal proceedings brought against him last October. 

Two and a half weeks later, the Supreme Court of Victoria ruled in favour of the Legal Services Board -permitting it to rely on findings made against Forster in proceedings conducted in 2011, 2012 and 2013, in its bid to remove him from the Victorian roll.   

The Forster clan’s winter was not, entirely, one of discontent. 

In July, his wife, Maire Philomena Forster, obtained a partial reprieve. Freezing orders made against the couple’s shared superannuation fund were varied to allow Mrs Forster access to just over $1.7 million, or a little over 50 percent of her share of the account. 

In a denouement to the Victorian Court of Appeal’s April 2016 judgment against Forster, the besieged solicitor was ordered to pay 70 percent of the receivers’ costs of the appeal trial, held over two days in October 2015. 

In its judgment in June, three justices of the Victorian Court of Appeal observed that the receivers had “enjoyed substantial success” in the October proceedings. 

The court, too, rejected Forster’s argument that the receivers should pay him for a failed amendment application, which arose as a part of those proceedings. 

Following the court’s judgment in April, Forster conceded to pay $2,034,563.44 to the receivers – less than a third of the $6.7 million they said they were owed in total.  

The VCA ordered Forster to make good that commitment, but remitted his total payment to the court’s trial division to determine how much, if at all, the sum ought to be topped-up, as per the receivers’ claims. 

Forster was struck another blow on June 24, 2016, just over a fortnight after the VCA ordered he pay the receivers’ costs. 

The loss, in turn, was a preliminary victory for the LSB and in its bid to remove Forster from the roll. 

The Victorian Supreme Court allowed the LSB to admit into evidence proceedings brought against Forster in 2011, 2012 and 2013. 

Forster unsuccessfully argued that findings from those proceedings were inadmissible under s 91(1) of the Evidence Act. 

The decision permits the LSB to introduce and rely on certain evidentiary facts raised in the 2011-2013 proceedings. 

However, the court made clear that the LSB would not be able to adduce facts that go to “ultimate findings” of those decisions. Justice McDonald said: 

“Only those findings which were an essential foundation to the ultimate findings … enliven the operation of s 93(c) of the Evidence Act 2008.” 

The alleged misconduct, that the LSB sought to introduce, includes: 

• A conviction for criminal contempt; 
• A deliberate attempt on Forster’s behalf to get a client to participate in a lie; and
• Failing, breaching and “displaying a casual attitude” towards his duty of honesty and candour to the court and VCAT 

McDonald added: 

“The effect of this ruling is that Mr Forster is estopped from challenging some, but not all, of the findings contained in the judgments … which the board has identified.” 

Forster’s sole win, in recent months, belonged to his wife in proceedings in July before the Victorian Supreme Court. 

Mrs Foster successfully had varied a freezing order against a joint superannuation fund, which at June 30, 2015 held net assets available to pay benefits of $5,410,634. 

Just over $3.5 million was held in her name, with the remaining $1.9 million held in the name of David Forster. 

A Deloitte report, which the receivers had commissioned, revealed that that there was a “significant increase in the revenue of the legal practice in the financial years 2007 to 2009 consistent with most of the Voyager proceedings settling in that period”. 

The receivers argued this revenue, which was the result of Forster’s accounting malfeasance, formed the basis of super fund contributions in the years 2007 to 2010. 

The super fund’s “tainted funds” were, then, fair game for recovery. 

However, Justice Andrew Keogh ultimately held that there was an “arguable case” that Mrs Forster had no knowledge of the solicitor’s monetary misconduct. 

The freezing order “lies at the extremity of [the] court’s jurisdiction,” counsel for Mrs Forster said. 

The variation, which the court ordered, allows Mrs Forster to access 49 per cent of her share of the joint fund. Nearly $1.8 million of her assets remain frozen.