Parties Dispute Solicitor's Removal from Roll of Attorneys

Re Zita (a solicitor) [2022] VSC 354 (24 June 2022)

Orders were made for the principal of a law firm to pay his costs.  However, he was adjudged to have breached overarching obligations to the administration of justice.  The Court assessed considerations relevant to imposing suspension from Roll in determining whether he is a fit and proper person to remain practicing law. 

Facts:

On 11 October 2021, orders were made that Mr Anthony Zita, the principal of the firm of solicitors, Portfolio Law, who were the solicitors on record for the plaintiff, Mr Bolitho, pay to the special purpose receiver (‘SPR’) of the rights and entitlements of debenture holders in Banksia Securities Ltd, compensation of $11,700,128, his costs, assessed on an indemnity basis, of the appeal and the remitter and the Contradictor’s costs of the remitter, assessed on an indemnity basis.  Further orders were made Mr Zita show cause, on a date to be fixed, whether, in the context of the findings expressed in those reasons, he is a fit and proper person to remain on the Roll of persons admitted to the legal profession kept by this court (‘the Roll’). 

The findings expressed in the remitter judgment were that: Mr Zita was subject to the overarching obligations imposed by the Civil Procedure Act 2010 (Vic); Mr Zita contravened the paramount duty and the overarching obligation not to engage in misleading or deceptive conduct by his conduct in allowing Mark Elliott/AFP to maintain dual interests as funder of and legal representative for the plaintiff; Mr Zita breached the paramount duty by acting as a post-box solicitor; and that he failed to comply with his duty to further the administration of justice. In being complicit in the charade of an independent solicitor for the plaintiff, he was complicit in the corruption of the administration of justice.

Further, it was held that Mr Zita contravened the paramount duty by his conduct in connection with the negotiations that led to the Trust Co Settlement deed approved by the court; Mr Zita failed to identify and properly manage conflicts of interest between AFP and Mr Bolitho/group members that were clearly present at the time of the Trust Co Settlement; Mr Zita contravened the paramount duty by his conduct in connection with entering into and documenting arrangements in relation to the Lawyer Parties’ fees, and in failing to ensure that fees claimed from the Trust Co Settlement sum were properly incurred; Mr Zita misled the court when supporting Mr Bolitho’s application for a settlement distribution scheme; and more significantly, Mr Zita contravened the paramount duty, misled the court and contravened the overarching obligation to only take steps that are reasonably necessary to facilitate the resolution or determination of the proceeding, by his conduct in connection with Mrs Botsman’s appeal.

Mark Elliott arranged for Mr Bolitho and group members to be represented by Portfolio Law as solicitor on the record expressly for the purpose of retaining personal control of the position of solicitor on the record for the representative plaintiff.  It was necessary to maintain this charade to disguise Mark Elliott’s non-compliance with the Bolitho No 4 decision and to conceal the misleading nature of the representations made to the court and to other parties in the proceedings.  Mark Elliott/AFP, O’Bryan, Symons and Mr Zita each intended that Mr Zita only superficially represented the interests of Mr Bolitho, and not in a manner independently of AFP when their interests were in conflict, by permitting Mark Elliott and O’Bryan to control the position of solicitor on the record for the plaintiff despite the Bolitho No 4 decision.  Mr Zita was complicit in this strategy, enabling and advancing its implementation in practice. 

Mr Zita was engaged on a no win no fee basis, contrary to the terms of his costs agreement. He did not keep contemporaneous records of time spent or work performed, nor issued regular accounts, and he created a spreadsheet purportedly to demonstrate that he had performed valuable work in the proceeding to be relied on by the costs consultant, Mr Trimbos. He did not scrutinise or monitor fees charged by the other Lawyer Parties.  The Lawyer Parties waged a campaign of intimidation against Mrs Botsman, who was their own client, having entered into the funding agreement.

The Lawyer Parties sought to achieve two purposes, both of which were dishonourable. First, to avoid or minimise the prospect that earlier conduct prior to the institution of the appeal would be discovered by the Court of Appeal and secondly to ensure that the court’s approval of AFP’s claims would not be set aside or varied to deny the Bolitho legal team their ill-gotten spoils.  While this conduct was mostly driven by Mark Elliott and O’Bryan, Mr Zita was aware of it and supported or encouraged it.

Issue:

Whether Mr Zita's conduct in breach of his duty to the proper administration of justice, as opposed to any notion of dishonest conduct, demonstrates that Mr Zita is not a fit and proper person to remain on the Roll.

Applicable law:

Vale v Daumeke [2015] VSC 342 - provides that the need for preliminary determination is to be considered with care.

Yara Australia Pty Ltd v Oswal [2013] VSCA 337; (2013) 41 VR 302 - relied upon in holding that although the question that was originally remitted by the Court of Appeal addressed the entitlement of AFP to recover from the settlement sum a commission and the plaintiff’s costs, the remitter exposed circumstances, as the judgment makes clear, requiring the court to address the further question whether AFP along with the Lawyer Parties, including Mr Zita, was liable to pay compensation to debenture holders pursuant to s 29 of the Civil Procedure Act by reason of breach of overarching obligations.

King v Muriniti [2018] NSWCA 98; (2018) 97 NSWLR 991 - concerned an application for a wasted costs order against the solicitor for the losing party (who went bankrupt without paying costs orders made against her).

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 - provides that greater caution was necessary in a show cause procedure than was applied when assessing civil compensation.  

Re A Solicitor [1960] VicRp 96; [1960] VR 617 - provides that an application to remove a legal practitioner from the Roll is strictly personal. It relates to the legal practitioner himself and the question of his fitness to practice.

Peeke v Medical Board of Victoria [1994] VSC 7  - where it may be accepted that a reprimand in itself is a serious sanction for a professional person.

Environment Protection Authority v Barnes [2006] NSWCCA 246 - provides that detriments may include expenditure on legal costs and liabilities for the legal costs of others.

Ha v Pharmacy Board of Victoria [2002] VSC 322 - provides that detriments may include expenditure on legal costs and liabilities for orders for the payment of compensation.

Council of NSW Bar Association v EFA (2021) 106 NSWLR 383 - when confirming the tribunal’s disposition, a reprimand and an order to pay the costs of the prosecution, the Court of Appeal held that but for the detriments already suffered by the practitioner, his conduct would have warranted a more penal sanction.  

Victorian Legal Services Board v Gobbo [2020] VSC 692, [7] (‘Gobbo’) - provides that removal of a practitioner from the Roll is not a punitive measure. It operates to protect the public from misconduct by practitioners and to promote community confidence in the proper administration of justice. 

Hughes & Vale Pty Ltd v NSW (No 2) [1955] HCA 28; (1955) 93 CLR 127 - provides that in order for a person to be ‘fit and proper’ to become, or remain, a legal practitioner, they must be honest, independent, able to judge what ethical conduct is required of them, and then be capable of diligently discharging the responsibilities of their office. 

Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 - provides that a legal practitioner must be ‘possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public, without further inquiry, as a person to be entrusted with the sort of work which the licence entails. 

Analysis:

Mr Zita, at trial, contended that a solicitor can defer to the advice provided by properly instructed counsel and act in accordance with that advice.  While that proposition may be relevant in respect of, for example, a solicitor’s duty of care to a client, the obligations imposed by the Civil Procedure Act are nondelegable.  Mr Zita was concerned that the Court's findings in relation to his obligations under Barnes v Addy principles for breach of fiduciary duty might be construed as findings of dishonesty for the purposes of this application.  The Court is not considering whether Mr Zita is a fit and proper person by taking the view of his breach of fiduciary duty that it shows he is a dishonest person, because the Contradictor did not make that allegation against him and he was not afforded any opportunity to respond to an allegation of that sort.

The protection of the public and the integrity of the administration of justice may result in onerous consequences for the practitioner.  What would be considered as mitigating factors in the context of the criminal law may not have that effect when the purpose is protective rather than punitive.  While accepting that the scale of the applicant’s offending seen in light of his previous offending was such that he should be suspended from practice as a principal solicitor for a significant period, their Honours were not persuaded that there was much to be gained by way of deterrence or community protection, still less by way of rehabilitation, by requiring him to stand out of the profession altogether or be deprived of a livelihood if there were other suitable sanctions.

The findings made in the remitter judgment in respect of Mr Zita’s conduct show that he was unfit to work with judges and legal practitioners to ensure that justice is administered with integrity.  Had his conduct been in pursuit of a dishonest intention to gain a financial advantage at the expense of his clients, there would be little prospect of being able to rationally conclude against the evidence of such sustained dereliction of duty that he could ever be regarded as fit to be entrusted with the privileges of being an officer of the court.  However, unlike in respect of other members of the Bolitho legal team, the Court's findings do not go that far.

Conclusion:

Mr Zita is not presently a fit and proper person to remain on the Roll.  The Court orders that the registration of his name and other particulars on the Roll be suspended until 30 June 2024.  Mr Zita may, subject to satisfying the requirements of the Legal Profession Uniform Law, engage in legal practice after 1 July 2024.

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