Legal Services Commissioner v McNamara (Legal Practice) [2011] VCAT 1228

1. As to the charges brought by the applicant against the respondent by application for orders dated 2 July 2010 Charge 1 is dismissed and as to Charge 2 the Tribunal finds that the respondent engaged in unsatisfactory professional conduct.
2. As to any further orders that ought to be made, adjourned to further hearing 2.15 pm, 11 August 2011 at 55 King Street, Melbourne.

Dr C. Hanscombe SC and Ms Ursula Stanisich of Counsel

1. Mr McNamara carries on practice as a solicitor under the firm name McNamaras in Mt Alexandra Road, Moonee Ponds. He qualified for his law degree at the University of Tasmania in 1985 and was admitted to practise as a barrister and solicitor of the Supreme Court of Victoria on 6 November 1985. He worked as an employed practitioner at a number of firms and then took over his father's practice known as McNamaras. He is now the sole proprietor of that firm. That firm incorporates the practice of Astuto, Carbone and Co which firm historically had a large Italian clientele. McNamaras' practice is general but Mr McNamara himself is a Law Institute accredited specialist in criminal law. Criminal law represents the bulk of Mr McNamara's practice. Whilst his ancestors and mine were probably fellow supporters of King Brian Boru in the west of Ireland a thousand years ago, despite the similarity in our names we are not otherwise related as far as I can ascertain.
2. Mr McNamara's professional record is unblemished. He was the subject of a complaint to the authorities some years ago but it was apparently summarily dismissed. On 4 March 2004 Mr Sergio Velia visited Mr McNamara relative to his work. The diary note of the consultation records that Mr Velia described himself as 'terminal' but did not know how long he would live. Mr McNamara remarked:

I recall Mr Velia being in the office. When he came in the first time, it stuck in my memory because he said he was dying and frankly didn't look anything like a man who was dying. But beyond that I rely heavily on the notes.

1. Mr McNamara said before this visit he had had nothing to do either socially or professionally with Mr Velia.
2. The diary note records Mr Velia telling Mr McNamara that his 'wife 81. Has dementia.' There is a reference to term deposits and bank accounts $160,000 and $80,000 and land at Heathcote Junction which is recorded as being worth $70,000. The note records that Mr Velia directed that Mr Giuseppe or 'Joe' Care should be the executor of the will or his wife Mary if Mr Care predeceased Mr Velia. The note also records that Mr Velia was looking at 'getting annuity enforce b/c wife getting too old to manage affairs'. Highlighted by being enclosed in a rectangle are the words 'don't tell wife he has been here'. The final entry in the note indicates that Mr Velia would bring in the title for the country property but did not want to change the will 'just yet'. There was a further consultation with Mr Velia on 18 May 2004. The note of this consultation records that Mr Velia was happy with old will his only concern was 'wife may have dementia'. There was a reference to joint tenants and to 'two separate joint accounts $80,000 each'. Next it was said 'all to wife'. Mr & Mrs Care were described as friends, and nominated to be executor with their daughter Shannon Brown as the third choice if both Mr & Mrs Care predeceased him. If Mrs Velia was dead 'all to them', presumably the Cares.
3. Mr Velia made the new will on 3 June 2004, it was witnessed by Mr McNamara and his receptionist. It appointed the Cares as executor and trustee with Mr Joe Care being the first choice with his wife a second choice if he were dead or unable or unwilling to act and finally Shannon Brown in default of Mr & Mrs Care. The whole estate was left to Mr Velia's wife Edera with provision if she predeceased Mr Velia that the estate would go to Mr & Mrs Care and their daughter Shannon Brown.
4. Some months later on 25 August 2004 a file note in Mr McNamara's file seems to record that Mr Care rang, recording 'He's got P of & At for wife - some concern about her capacity to look after herself now'. There was a reference to 'we've got his will'. That is, presumably Mr Velia whose name also appears in the file note. Mr Velia had died on 11 July. McNamaras wrote to Mr Care by letter dated 31 August 2004 enclosing a copy of Mr Velia's last will. The letter said:

We presume that you have the original of this will as we do not appear to hold same, and it will be necessary for you to bring it to our office to enable us to obtain probate.

1. The letter also enquired as to the estates assets and 'the current health of Mrs Edera Velia'.
2. The firm's file contains two file notes dated 2 May in different handwriting. The second of the notes appears to be in Mr McNamara's. The other presumably is in the writing of one of his staff members. The first note records a call from Mrs Care stating:

Wife [presumably Mrs Velia] has original will - will not give it to her husband [presumably Mrs Care's husband] who is the executor.

1. The second note in Mr McNamara's writing records a telephone attendance on Mrs Care which records that Mrs Velia was 'bank loosing all her money etc → I say dementia'. Mrs Care said that she did not want to ask Mrs Velia for the will because Mrs Velia would think 'she's after $!'. Mr McNamara records that 'if necessary we will visit'. The will was needed to obtain probate.
2. On 31 January 2005 Mr Care and Mrs Velia attended Mr McNamara in conference to discuss estate matters it would seem. The assets are recorded as constituted by a house, a block of land worth '$70 - $80,000'; bank account $160. There was a note 'client [presumably Mrs Velia] wants to keep original titles'. The note records 'I think we can do survivorship application w/out need to get probate b/c only two properties'. The note records Mrs Velia as being aged 82, born on 31 December 1922. Mr McNamara observes 'must make sure doesn't lose pension'. Apparently Mrs Velia had both an Australian pension and a pension from the Italian Government. The Australian pension was $450 and the Italian pension was $600, presumably per month. She was said to be 'living on interest and pension'. The note continues observing that Mrs Velia was 'very concerned about pension' and also any liability for Capital Gains Tax on the 'block'. There is a reference 'no tax on sale of house'. There is also recorded the statement 'Serg wanted Joe to have block'. Mr McNamara recorded that he was to look at his notes 'and see what has to happen with block. Joe believed was to be given to him and I may have notes'. Again, it is recorded that 'he'll wait just doesn't want to upset pension wants to do right thing for Edera'. These views are presumably a record of what Mr Care said. Next, the note records a proposal to make a will for Mrs Velia 'she'll talk about it with Mrs Care'. Next to the heading 'Gifts' is the word 'block to Joe?' The note records 'Mr Care wants to pay the account' and 'client kept original documents'.
3. Things apparently failed to progress and there was a further conference on 8 July 2005. Once again Mrs Velia attended the conference with Mr Care. The note recorded that Mrs Velia 'wants to give land to Joe [without] payment'. It was said that she needed a letter 'for pension people'. She did not want to pay any stamp duty 'wants Joe to pay it'. Mrs Velia 'wants a paper to prove ... doesn't have to pay it'. The note records 'deceased [presumably Mr Velia] gave block to Joe C and she wants to honour the agreement'. Finally, it is recorded 'Joe will pay all additional costs to get this sorted out'. The note says that Mr McNamara explained the procedure to Mrs Velia and recorded that she needed 'a short letter explaining effect of will'. The conference apparently occupied one and a half hours according to the note.
4. A couple of weeks later by letter dated 26 July 2005 Mr McNamara reported to Mr Care requesting details of the date of Mr Velia's death and the full death certificate and continuing:

We confirm we are seeking counsel's advice in relation to the transfer of the block of land from the estate and Mrs Velia to yourself ... we confirm that this transfer is by no means straight forward given the effect it may have on her pension and the tax implications.

1. A brief was delivered to counsel and a copy of the Memorandum of Advice dated 2 September 2005 and expressed to be 'estate of Velia re Care' was provided to Mr Care. Counsel's memorandum included a record of what he understood were 'the facts of this matter'. He observed:

It is important to note that if (which is quite possible) the above version of the facts is not completely accurate then the advice that follows may have to be modified.

1. Counsel's recitation was to the effect that Mr Velia died leaving a will dated 3 June 2004 appointing Mr Care his executor and giving the entire estate to his widow Mrs Velia. This appears to be accurate as far as it goes. The following propositions are either incorrect or contentious:

1. The estate including the block of land at Wallen Wallen worth approximately $75,000;

1. Mr Care has been granted probate of the will; 2. Before he died Mr Velia promised to transfer the land to Mr Care by way of gift; 3. Mrs Velia accepts that it was Mr Velia's wish that the property be transferred to Mr Care (for no consideration); 4. Mrs Velia is in receipt of the aged pension.
2. It is correct to say that Mrs Velia is in receipt of a pension. It is incorrect to say that the late Mr Velia's estate included the block of land, whether it is correctly described as being at 'Wallen Wallen' or not. As Mr McNamara had observed in January of that year, since the land was co-owned it did not form part of the estate and went to Mrs Velia by survivorship. Again, the proposition that the late Mr Velia promised to transfer the land to Mr Care by way of gift is contentious. There is nothing in the record of the consultation which Mr McNamara had with Mr Velia to support this. Had Mr Velia intended to leave the block of land to Mr Care or indeed to make a gift of it to him before he died, one might have expected Mr Velia to have given that instruction. In fact, the instruction he gave as to the operation of his will was that the Cares were to take only in the event that Mrs Velia predeceased. There is the further complication that since the block was jointly owned by Mr & Mrs Velia, unless Mr Velia had acted to make the gift before his death his estate had no interest in the land to make that disposition. There is also the more general question as to whether or not as was apparently represented to counsel, Mrs Velia agreed to all this and whether it would be proper in all the circumstance to act on any wishes or assertions to that effect which she might have. Counsel advised assuming that Mrs Velia took her interest in the land 'under the will' she would 'then be free to give it to anyone she wished including Mr Care'. He noted however that stamp duty at conveyance rates would be payable under the Duties Act 2000 and no relevant exemption in the Duties Act would apply. As to the issue of pension entitlement, counsel referred to a 'gifting fact sheet' which he had accessed through the Centrelink website. The affect of the relevant rules as he recorded then was:

Where a gift of a value greater than $10,000 is made, the gifting of that asset will be considered as depravation of Mrs Velia's assets and the deprived asset (in the present cause $70,000 less the allowable amount of $10,000) will be counted as an asset for five years fro the date of the gift. The fact that the deprived asset will be counted against Mrs Velia's assets would undoubtedly have an effect on her age pension entitlement.

1. Counsel therefore advised that Mr Care should commence an application under Part IV of the Administration and Probate Act 1958 'for provision out of Mr Velia's estate'. Counsel said that if a court order were obtained 'appropriately worded' the property would vest in Mr Care 'instead of the named beneficiary'. He suggested that to implement such a strategy Mr Care would have to be removed as executor and a new executor appointed and a proceeding would have to be commenced in the Supreme Court 'unless the value of the estate was less than $200,000'. He suggested the relevant order might be obtained by consent but nevertheless the Court would retain 'a supervisory role'. Counsel then advised that if the only basis for the application was that there had been a promise that the land would be gifted it would be 'unlikely' that the Court would approve the proposed order. No application under Part IV of the Administration and Probate Act 1958 was ever commenced.
2. On 26 September 2005 Senior Constable Davis of Victoria Police at Preston rang Mr McNamara's office and left a message that Mrs Velia had made a complaint that the title to her house had been stolen and she feared eviction. The message records that she told the Police she believed it had been stolen by 'Giuseppe Kay', obviously a reference to Mr Care. In his evidence to the Tribunal, Mr McNamara agreed that these allegations made by Mrs Velia sounded delusional. Mr McNamara wrote a letter to Mr Care dated 7 October 2005 reporting the allegations that had been made to the Police and observing that 'given Mrs Velia's current behaviour, she may not have capacity to make decisions and/or consent to any claim by you'. McNamaras recommended that if Mr Care intended to make a claim he should make his decision on the point 'as soon as possible'. The letter asked Mr Care to contact Mr McNamara 'to discuss the matter as a matter of urgency'. Perhaps as a result of that letter Mr McNamara had a conference with Mrs Velia. The file note records that Mrs Velia was very concerned about the whereabouts of the title to her home 'she thinks CARE may have taken it!!'. The note records 'we have title to block of land ... we'll get new title with just her name on it'.
3. There was a further meeting on 17 April 2006 with notes from 'Leon Masters' to 'Adriana'. The first thing that was discussed was the missing house title. Mr McNamara advised Mrs Velia to make a statutory declaration to the effect that she did not know the whereabouts of the title which would enable a new title to be issued. Then Mrs Velia said that she wanted the country block to be transferred to the Cares. She said that Mrs Care 'had gone to her house and got her to sign documentation stating that the property was no longer hers'. Mrs Velia apparently said that she wanted no money for the property. Mr McNamara:

Advised that the property could be worth some money and he would see to it that if she sold or transferred the property it would not affect her current old age pension, but he would let her know of the outcome.

1. Later Mr & Mrs Care attended and presented a letter which it would seem was intended to be given to Mitchell Shire Council over Mrs Velia's signature, stating:

I wish to have said property changed into Mr & Mrs Care of 21 Broadford Road, Wandong and receive no further correspondence from the Mitchell Shire. Thank you

1. Mr McNamara explained that this document would not transfer title to the land but might have some effect on rates.
2. McNamaras' file records that on 5 May Mrs Velia rang leaving a message for Mr McNamara at 4.38 pm that she wanted to confer with Mr McNamara and 'doesn't want Mr Care there'. It seems that the proposed consultation never occurred. Then on 10 August Mr Care rang to advise that Mrs Velia had had a stroke. He wanted to see Mr McNamara and according to the note that he left 'he is worried says "they" want to take over all the financial matters for her'. Another diary note taken by Mr McNamara himself on 10 August records 'Govt carers have taken over. They want to be in charge to assist her. She can't go back home.'
3. A diary note of 15 August 2008 records that Mr Care informed Mr McNamara that Mrs Velia 'was tested yesterday and is getting better'. The note said that if Mrs Velia had capacity she could do a will 'if no capacity will have to deal with it differently eg VCAT? Part IV? - claim on promise? - not likely to be successful'. A line has been struck through Part IV. The note records that Mr Care:

Will talk to her about doing her will - leaving [block] that will be best to avoid gift tax etc.

1. On 21 September 2006 Dr Lanki Pangnadasa, a clinical psychologist reported upon his neuropsychological assessment of Mrs Velia. He concluded:

Overall, there is sufficient evidence to question her decision-making ability regarding issues of health care. This is an overriding issue, and her discharged estimation will be dependent upon where her health care can be most effectively managed. There is also evidence to question her decision making regarding the management of her finances.

1. There was then a conference conducted by Leticia Rodriguez described as 'para-legal' and Mr McNamara. Mr McNamara took instructions as to a will from Mrs Velia and powers of attorney. Ms Rodriguez observed in the note:

She [that is Mrs Velia] appeared to know where she was, whom she was speaking to, and the significance of making a will and the powers of attorney. She was aware of her long history with Mr Care and the details, and was aware of her present hospitalisation due to her physical health. She was able to give and confirm details needed for the documents, was aware of when the documents would be made, who to sign the documents before and when this would occur.

1. At some point it seems Mrs & Mrs Care returned to the conference. At the conclusion of Mr McNamara's handwritten notes of the conference the following appears:

Capacity underline an issue. Need DR to say she is capable GP speaks Italian.

1. On 29 September Mr McNamara's note records Mr Care advising him 'went to doctor. Told doctor didn't know what doing!' Mr McNamara spoke to the practitioner, Dr Perrinni and recorded 'no way she is legally competent'.
2. On 3 October a further brief was delivered to counsel. Counsel was asked to 're-visit his previous advice'. It was observed that Mrs Velia 'may now have dementia and/or damage as a consequence of a stroke'. A note of a telephone conversation from Counsel sees him suggesting 'you'd have to show some sort of contract? What was the consideration?' On 10 October 2006 Mr Care currently asked Mr McNamara whether the letter which Mrs Velia had signed would effectively transfer the land. Mr McNamara apparently said 'I'm not sure it's enough'. He said he would refer that question to counsel. McNamara's then wrote a letter dated 13 October to Mr Care noting that he had spoken again with Counsel as 'to how to proceed with this matter'. The letter continued:

Before we can provide you with advice as to whether you should renounce your position as executor with a view to making a claim against the estate, we would be pleased if you would advise us the basis of your claim that the deceased intended to give the property to you either before or after his death.

1. On 19 October 2006 Senior Member Dr Lyons appointed State Trustees Limited as administrator of Mrs Velia's affairs and the Public Advocate as a limited guardian to make decisions relative to Mrs Velia concerning accommodation, her medical and dental treatment or other health care and access to services.
2. On 30 October Counsel provided advice, presumably by telephone, that Mr Care should 'stop being exec'. With the new executor were appointed there should be a summons for direction. Mrs Velia was clearly not capable of being an executor. The new executor 'would have to deal with guardian'.
3. Lon 24 May 2007 McNamaras wrote to State Trustees apparently in response to being pressed to release to State Trustees as administrators of the affairs of Mrs Velia, the two duplicate certificates of title which they held, one for the contentious block and the other for the principal residence in Steame Street, Reservoir. The letter stated that the firm held three files, one relating to Mrs Velia styled 'Wills and Power of Attorney', the second relating to Mrs Sergio Velia will and the third relating to Mr Sergio Velia probate. The letter also included a bill in taxable form. The letter said 'we would be please if you would confirm which files you require and pay our account'. The bill which totalled $8,879 costs, $1,338.90 disbursements making a grand total of $10,228.30 was described as being in the Supreme Court of Victoria probate jurisdiction 'In the matter of Sergio Velia deceased application by Giuseppe Care'. Item 99 on the bill was 'instructions generally having regard to complexity of matter including care, attention, ......... Responsibility (40%)'. The bill included inter alia charges and disbursements relative to the briefing of counsel and the advices obtained from him. There ensued hostile correspondence with both State Trustees and McNamaras accusing one another of failing to return phone calls. State Trustees wrote a lengthy letter dated 18 September 2007 objecting to a variety of items in the bill. A major theme of the letter was that much of the work that was billed for was properly chargeable to Mr Care and not to Mrs Velia. In a letter dated 31 October 2007 McNamaras joined issue. The letter stated inter alia:

We have not forwarded the titles to State Trustees as Mr Care's solicitors have instructed us not to forward same and we believe we have a lien over the file. As indicated to the parties we are more than happy for them to sort matters out and jointly instruct us what they wished to do with the titles. We do not want to act in a manner which is contrary to the interest of either party for fear of the sort of allegation that was made in paragraph 1 of your letter. As indicated to the parties we are more than happy to seek an ethical ruling from the Law Institute in relation to the matter.

1. State Trustees lodged a complaint with the Legal Services Commissioner dated 31 October 2007. The complaint was lodged on behalf of Mrs Velia by an offer of State Trustees. It asserted 'Edera lacks capacity'. In the panel headed 'What do you hope to achieve by making this complaint (please list expectations)?' the following appeared:

- Will not to be charged to Edera or estate (for expenses that are not incurred by estate)

1. As a result of this complaint the Legal Services Commissioner filed an application in this Tribunal dated 21 July 2010 making the following charges against Mr McNamara:

Between 31 January 2005 and 30 October 2006, in the course of engaging in legal practice you were guilty of misconduct at common law and within the meaning of section 4.4.3 of the Act for engaging in conduct which would reasonably be regarded by legal practitioners of good repute and competence as disgraceful and dishonourable, namely by acting on behalf of Mrs Edera Velia in circumstances where she was vulnerable and lacked capacity, or at all, while acting for Mr Giuseppe Care in relation to a claim against a block of land owned by Mrs Velia, being the land at 510 South Mountain Highway, Heathcote Junction more particularly described as certificate of title Volume 8454 Folio 082.

Further or in the alternative to charge 1, you were guilty of professional misconduct within the meaning of section 4.4.3 of the Act by engaging in conduct which involved a substantial failure to reach or maintain a reasonable standard of competence and diligence by placing yourself in a position of conflict of interest by acting on behalf of Mrs Edera Velia in circumstances where she was vulnerable and lacked capacity, or at all, while acting for Mr Giuseppe Care in relation to a claim against a block of land owned by Mrs Velia, being the land at 510 South Mountain Highway, Heathcote Junction more particularly described as certificate of title volume 8454 Folio 082 in contravention of Rule 8.2 of the Professional Conduct and Practice Rules 2005.

1. In both cases the particulars of the charges are said to be found in some 59 paragraphs of allegation which preceded the charges.
2. The matter came on for hearing in the Tribunal before a senior member on 21 October 2010 it did not conclude in the estimated one day sitting allowed for it. Being part heard it was adjourned over to further hearing on 16 December 2010 at which time the hearing concluded and the learned senior member reserved his decision.
3. By 16 December 2010 the senior member was within a few days of the end of his term of office. He went out of office later that month without having delivered a decision. He has not been reappointed as a Tribunal member. As a result the President reconstituted the Tribunal appointing me to determine the matter. After a number of preliminary steps and following the parties full review of the transcript of the two days of hearing that took place in 2010, I directed on 27 May that the proceeding be determined based on the revised transcript made available to me by the parties. The parties wished neither to call more evidence nor make further submissions. Mrs Velia is now deceased though on what date the evidence does not disclose. No transfer of the block to the Cares was executed during her lifetime or prepared by McNamaras. No probate has been granted for the will of Mr Velia.
4. Section 4.4.3 of the Legal Profession Practice Act provides a non-exclusive definition of 'professional misconduct' in sub-section (1) as follows:

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and

(b) conduct of an Australian legal practitioner, whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law, that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

Section 4.4.4 specifies conduct that is capable of constituting professional misconduct and section 4.4.6 specifies conduct that constitutes professional misconduct.

(2) For the purpose of finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate.

1. In addition to those matters and a number of further matters referred to in the Act as having the potential to constitute professional misconduct there is a so called Common Law definition of professional misconduct from the decision of the House of Lords in Myers v Elman [1940] AC 282. This definition has been adopted for the purposes of Victorian law by Dean J in Re A Solicitor [1960] VicRp 96; [1960] VR 617 where His Honour held that a solicitor could be found guilty of professional misconduct if he were personally implicated in conduct which would reasonably be regarded as disgraceful or dishonourable by solicitors of good repute and competence.

1. Dr Hanscombe and Ms Stanisich on behalf of the Commissioner submitted that the charges had been made out.
2. They contended that professional misconduct had been demonstrated whether one applied the statutory or common law test.
3. They said the evidence showed that the inspections for proposed transaction was given entirely by Mr J. Care. They noted:

It takes nine months between the death of Sergio Velia and the first conference attended by Ms Velia at the practitioner's office. He heard the practitioner give evidence that he'd never heard of the executor's year, it was plain that he has little, if any, formal understanding of the law of succession nor of the provisions of the Administration and Probate Act.

1. They said that under the Legal Profession Act 2004 in contrast with its 1996 predecessor it was possible to make a finding that conduct was disgraceful and dishonourable without finding dishonesty. They said a practitioner:

May be sufficiently reckless as to behave in a way that a reasonable practitioner in the field of reasonable competence would regard as dishonourable and disgraceful.

1. They were critical of the length of time over which these events occurred. They said since Mr Velia had told Mr McNamara that Mrs Velia had dementia there was no explanation why Mr McNamara did not before embarking on the various steps described did not first have Mrs Velia's cognitive capacity assessed. They said Mr Velia died in June, Mr Care rang in August and spoke to Mr McNamara who sent him a copy of the will. Mr McNamara spoke to Mrs Care who told him Ms Velia was worried the bank was loosing her money. Mr McNamara's file note included the words 'I say dementia'. They said that in September Mr McNamara wrote to Mrs Velia enquiring if she wanted to arrange for the block to be sold with the proceeds being paid to her. They said this would be a straightforward transaction, nevertheless they said Mr McNamara's evidence as to his understanding of joint tenancies was entirely unsatisfactory. They said he continued to refer to the deceased estate 'as though it had some independent existence', They said this was remarkable for someone who on his evidence had conducted 20 probate files in 10 years. They said Mr McNamara must have realised that even if there were an estate of the late Mr Velia the block would not form part of that estate, nevertheless he continued to conduct himself as if it did as testified by the continuing references to Mr Care 'making a claim against the estate'. If that claim were made it would have to be against Mrs Velia. They asked:

What clearer conflict could you have than that on any version an elderly widow who, on the practitioner's evidence, appears back in September 2005 to be delusional, and then various manoeuvres being considered as to how to pass the reign to Mr Care free of any payment by him.

1. They asked why Mr Care could not simply pay the stamp duty or top up Mrs Velia's pension. They continued:

It is hard to see how there could be a clearer conflict between the two interests, and admittedly, belatedly, on the first day of the hearing there is an admission that at least for some of 25 August 2004 there was a conflict.

1. They noted there was nothing in the instructions Mr McNamara took from Mr Velia that the block was to go to Mr Care.
2. They noted that on 26 September 2005 Mrs Velia engaged in behaviour that sounded delusionary, that is, that Mr Care had stolen the title to her house. They submitted the practitioner should have asked him at this stage whether Mrs Velia could give any realistic consent to a transfer of the property in these circumstances.
3. They noted that according to a file note dated 17 April 2006 described as 'from Leon Masters', the letter relative to the rates on the block had been prepared by the Cares.
4. They also noted that despite a request being left by way of telephone message from Mrs Velia to have a conference with Mr McNamara in the absence of the Cares this never happened.
5. In September 2006 a clinical psychologist assessment was prepared which includes the words 'there is also evidence to question her decision-making ability regarding the management of her finances'. Insofar as Leticia Rodriguez, para-legal, expressed the view that Mrs Velia had capacity to make a will and a power of attorney, they said I should disregard that evidence. They noted that they would have wished to cross-examine Ms Rodriguez but since the document in question was tendered by the applicant, the respondent declined to make her available. They said there was no explanation as to Ms Rodriguez not having been called as a witness for the respondent. Further, they said there was a letter dated 29 September 2006 addressed to the Guardianship List of this Tribunal where Dr Glen Cook said:

My medical opinion is that Mrs Velia is not confident to be making decisions regarding her accommodation, health care or financial matters.

They noted that even after a guardian and administrator had been appointed for the affairs of Mrs Velia, Mr McNamara was still discussing with Mr Care the possibility of Mr Care making a claim for executor's commission. They said:

There is a plain conflict of interest between Mrs Velia's interests and Mrs Care's.

1. They were also crucial of Mr McNamara's failure to call Mr Care as a witness.
2. They said:

The practitioner now admits that he acted for Mr Care and Mrs Velia. That admission was made on the first day.

1. They noted he also claimed to act for 'the estate'. They submitted on any view he should have ceased to do this when Mrs Velia's guardian and administrator were appointed. Nevertheless, after that they said Mr McNamara continued to give advice to Mr Care 'ostensibly in respect of the estate'.
2. They submitted that Mr McNamara was Mrs Velia's fiduciary. They continued:

He owed fiduciary obligations. He could only be relieved of those fiduciary obligations if she gave her fully-informed consent to what was to occur. We say the evidence is plain that she was not able to give fully-informed consent and there was little other than Mr McNamara's say so that she did.

1. They referred to Law Society of New South Wales v Moulton [1981] 2 NSWLR 736. They said Moulton's case stood for the proposition that:

Where the client has suffered no loss, the solicitor will not be relieved of breach of fiduciary obligation unless what he does is made transparently clear and the client is fully informed to give consent.

1. They also referred to a decision that is recorded in the transcript as 'Commissioner against (indistinct)'. They said had the transaction gone ahead Mrs Velia would have lost an asset 'worth about $80,000 at the time'. It is not to the point they said that Mrs Velia would have continued to have a pension. The asset might have been of value or utility to her 'she might have been able to be put in a nursing home with a bond or anything else'. They also referred to a decision of the Legal Profession Tribunal Patterson and Woodhouse v Sharkeys [1998] VLPT11. This case held they said:

If the fiduciary wants to be relieved of his obligations, he better make sure that he's made it clear to his beneficiary what the beneficiary is loosing, and that just didn't happen here.

1. They said this was not a case about negligence or reasonable forseeability. They said:

There were doubts raised from the very beginning, from the minute Sergio Velia walked in and the minimum that would have been required was to send Mrs Velia off to be assessed.

1. They said despite complaints from Mr McNamara's counsel about a lack of medical evidence, Mr McNamara himself had not adduced any medical evidence:

Or anything else from a third party to say that Mrs Velia had capacity.

1. They noted that his counsel had not sought to cross-examine the authors of the reports relied on by the Commissioner. In any event they said the charges could be accepted and found proven on the basis that Mr McNamara was guilty of misconduct by acting for Mrs Velia in circumstances:

Where she was vulnerable and lacked capacity or, at all, one could strike out where she was vulnerable and lacked capacity in the charge and it would still be a lawful charge under the Act and the evidence would still support it.

1. They accepted that Mr McNamara may be an honourable man and a competent specialist in the criminal jurisdiction. Nevertheless, they:

Strenuously contest[ed] that he reached the requisite standard of a reasonable practitioner competent in the area, [and they also] strongly contest[ed] that the particular conduct would be regarded as honourable conduct.

1. Mr Smith and Ms Sampson appeared on behalf of Mr McNamara. It was necessary they said first to look at the charges, these were the only charges proffered. They said that there were many broad statements and broad allegations made on behalf of the Commissioner in closing address and in cross-examination which did not strictly pertain to the charges. Properly analysed they said there were three issues. First it was alleged that there was a conflict of interest in acting for both Mr Velia and Mr Care, secondly, that a claim had been made by Mr Care 'against the block' and thirdly, that Mrs Velia lacked capacity. Turning to the charge of misconduct at common law they said there was no doubt that such a finding could be made only if the practitioner's conduct was disgraceful or dishonest. They referred to Myers v Elman [1940] AC 282. The charges entailed an allegation that Mr McNamara acted for Mrs Velia while she was vulnerable and while there was to use the words of the charge a 'claim against the block'. They submitted that none of these matters had been made out. The onus of proving the charges lay on the Commissioner. They denied that Mr Care was in Mr McNamara's camp such that there could be any justifiable inference drawn against him for not calling him as a witness.
2. They said that Mr Care came to Mr McNamara because he was executor of a will. They said Mr McNamara had never acted for him before or after this. They said Mr Care should have been called as a witness by the Commissioner.
3. They said that since the Commissioner bore the burden of proof it was encumbent on the Commissioner to call medical evidence. No inference should be drawn against Mr McNamara because he did not call a person such as a family general practitioner to give evidence as to Mrs Velia's capacity. They said it was extraordinary that Dr Parina had not been called to give evidence. There was no evidence they said to support the view expressed by the late Mr Velia on his first visit to Mr McNamara's office that his wife 'had dementia'.
4. They said the evidence disclosed that Mr Care had previously owned the block which had then been transferred 'to Sergio Velia some years before in circumstances that are completely unknown'. The Cares and the Velias were long and close friends. He submitted that Mr Sergio Velia had told both Mr Care and Mr McNamara 'that he wanted Care to have the block'. Then Mrs Velia instructed Mr McNamara that she wanted Mr Care to have the block. She wanted to honour her late husband's promise.
5. The result said Mr Smith was that there were two persons, one wishing to make a gift and the other wishing to receive it. This in itself he submitted did not give rise to any conflict of interest. Mrs Velia had no use for a small rural block of about nine acres which incurred expenses such as rates. It provided no return. Her husband had wanted it to go to Joe Care, therefore they said there was no conflict of interest.
6. They submitted that in the absence of any issues as to capacity there would be no conflict of interest in one person seeking to have an asset transferred from his ownership to that of another with the practitioner acting for both.
7. They said the allegation of breach of Rule 8.2 of the Professional Conduct and Practice Rules was 'a circular argument'. The Rules as a whole, they said, show no absolute bar on acting for more than one party in a commercial or other transaction:

Subject to certain restrictions, none of which would catch a transfer from one person to another in the circumstances that you're considering here.

1. They referred to Rule 8.1B. They also referred to Rule 8.5 continuing:

The conclusion, when one looks at all of the Rules is that there is no prohibition at all on a solicitor acting for both giftor and giftee, transferor or transferee in a situation such as this where the purported consideration would be love and affection.

Explored means by which the proposed transfer might go ahead without an affect on [Mrs Velia's] pension. He briefed counsel to advise ... but he was left in a position where both parties wanted to proceed with the transfer but it was not in Mrs Velia's interests because she was adamant she didn't want her pension interfered with.

1. They said there is no evidence from anyone 'with any expertise in land valuation' as to the value of the land. They said:

It's a big ask to say to you she would not have known what she was giving away and we say obviously if that were so, that would be of concern to you that there is not a scrap of evidence of that. There is not a scrap of evidence that Mrs Velia did not appreciate that in gifting Joe Care a block of land, it was worth some considerable money.

1. They said the reason the transaction did not proceed was because Mr McNamara remained concerned about Mrs Velia's pension.
2. They said Mr McNamara took instructions and drew the will but it was never signed because Mr NcNamara had put into operation arrangements whereby one of the witnesses would be a qualified medical practitioner who determined that Mrs Velia lacked capacity. They continued:

We say that does not sound in misconduct, disgraceful and dishonourable conduct.

1. They said Mr McNamara handled the matter soundly.
2. They noted the Commissioner relied on a number of matters indicating a lack of capacity on Mrs Velia's part including a statement attributed to Mr Velia that his wife 'may have dementia'. The involvement of the Preston Police and the thought that Mr Care had stolen the title to Mrs Velia's house. They said:

One has to look at the whole picture and he [that is Mr McNamara] had seen Mrs Velia. He has seen Mrs Velia face to face on a number of occasions - his evidence alright. He is not a medical practitioner. His evidence is that he thought that she had capacity. Now, it was open to the Commissioner to call medical evidence relevant to the period in question 2005/2006, presumably the family GP would have been the obvious one. State Trustees as her guardian would have been able to consent to all such medical records being produced. They chose not to go down that path.

Therefore they said any lack of evidence must be held 'against the Commissioner and certainly not against Mr McNamara'. They said:

Dementia does not actually mean lack of testamentary capacity for a start. Certainly people who might have dementia - it can be at the mild end. It can be of the severe end. People can have periods of lucidity where they have capacity and clearly sound mind.

1. Next, they referred to a book described in the transcript of '(indistinct) at p325' which they said:

Makes it clear that there is no conflict per se in a solicitor acting on behalf of two parties to a transaction such as this.

1. They noted that Mr Care made no claim against Mrs Velia and Mr McNamara had made claim to Mr Care that:

If he intended to make a claim he [Mr McNamara] couldn't act for him and he couldn't remain as an executor of the estate.

It was quite reasonable they submitted to give consideration to Mrs Velia having a statutory will made for her. They said:

It's really whether the respondent ... ought to have known that she lacked capacity at any particular time that he was taking instructions from her and that's for the Commissioner to prove on Briginshaw standard and here, where repercussions of convictions are severe, we say that you would need to well satisfied about each of these matters, not only the capacity matter. The fact that she might be vulnerable on its own can't be relevant to these matters. She's a widow.

Apart from that and her age they said there was 'no other evidence to demonstrate particular vulnerability'.

1. They reiterated what they said was an absence of evidence of lack of capacity on Mrs Velia's part and continued:

It's really how she behaved and how she appeared to him, albeit taking other sources of information at his disposal into account [that matters].

The evidence from the psychologist at Austin Health and Dr Cook they said was 'of so little probative value that you should ignore it'. They said the report did not suggest that Dr Cook himself had examined Mrs Velia at all 'he might have done, but his report certainly doesn't indicate it'. They noted that after the stroke on 7 August there was an evident improvement and there was no suggestion of any speech difficulty 'when the neurophysiologist saw her' therefore they said there was a considerable improvement.

1. As to the report by Dr Pagnabasa they said it was unclear on what date the assessment was made albeit that the report was written on 21 September 2006. If it was evidence to Dr Pagnabasa that Mrs Velia was unable to manage her own affairs it was by no means clear they said 'that a lay person should also have been able to come to that conclusion'.
2. They said much of the cross-examination about the distinction between joint tenancies and tenancies in common and the rendering of bills was not germane to the charges, moreover even taking the worst view of matters from the practitioner's standpoint he derived no personal advantage from these transactions. They said it was easy to be wise in hindsight. Perhaps following the contact from Preston Police, Mr McNamara:

Might have got on the front foot and done a little more to establish that she really had capacity.

1. Here they said there was no greed and no financial loss suffered. They said:

If there was a potential conflict of interest, we say, right at the bottom end of the scale compared with the sort of conflict of interest that was presented in Hession.

Apparently a recent decision in this List by Judge Misso entailing the misappropriation of $110,000. They said not every error or misjudgement constitutes misconduct and in no way could it be said that Mr McNamara had acted dishonourably or disgracefully. There was no justification for any finding that he was not a fit and proper person to engage in legal practice.

1. Mr Smith submitted that the existence of dementia does not in itself and without more preclude a person from having testamentary capacity. He referred to the decision of Vickery J in Nicholson v K Maggs [2009] VSC 64 [370].
2. He submitted that a person may have lucid intervals even despite the progress of dementia. He referred to Kantor v Vosahlo [2004] VSCA 235 [47] - [48]. They also referred to Koehler v Cerebos (Australia) Limited [2005] HCA 15 [55] where in a negligence claim relative to psychiatric injury suffered in employment, Callinan J said:

The fact however that a psychiatrist placed in the same position as an employer might have foreseen a risk of psychiatric injury, does not mean that a reasonable employer should be regarded as likely to form the same view.

They said Mr McNamara should be seen as in the same position, that is, not possessed necessarily of the same powers of observation as a psychiatrist or psychologist would have.

1. It is necessary first to say something as to the proper legal analysis of the phenomena which confronted the practitioner in his involvement with the Velia family and the Care family. Regrettably the practitioner seemed frequently to have lost sight of these important matters of fact and law. Most but not all of these matters were brought out in a withering cross-examination of the practitioner by Dr Hanscombe SC.
2. Before Mr Velia's death he and Mrs Velia were the registered proprietors as joint tenants of an estate in fee simple in what had been described as 'the block' at Heathcote Junction.
3. How they came to this ownership does not seem to have been explained in the evidence but the Commissioner has not denied the assertion made by Senior Counsel for Mr McNamara that the block had been gifted to the Velias by the Cares. Before his death Mr Velia had in effect a half interest in the block. He could have realised it by selling it. Conceivably he could have engaged in some process with or without the co-operation of Mrs Velia which would have severed the joint tenancy. In fact Mr Velia took no such step. The result was that his interest in the block came to an end upon his death; the block never formed part of the estate of the late Mr Velia. It could not therefore have ever been the subject of a claim under Part IV of the Administration and Probate Act 1958 by the Cares, even if the Cares were otherwise entitled to make such a claim against the estate of the deceased.
4. Mr McNamara encountered Mr Velia for the first time when he took instructions from him to prepare a will on his behalf. Mr McNamara said he had little recollection of that consultation aside from his notes apart from believing that Mr Velia did not seem to him to be a man suffering from a terminal illness. I quoted Mr McNamara's comments about his lack of independent recollection earlier in these reasons. Mr McNamara took no file note of any wish on Mr Velia's part that the block should be gifted to the Cares. Mr McNamara proceeded on the basis of a belief that this was Mr Velia's wish. Given the lack of any diary note of Mr Velia having said such a thing to Mr McNamara in conference and the fact that he had no independent recollection of his conference with Mr Velia, the source of Mr McNamara's belief that Mr Velia wanted the block given to the Cares must have come either from Mr Care or Mrs Velia.
5. Aside from the 50% interest in the land which Mrs Velia obtained by survivorship when her husband died, she already had a full 50% interest beneficially derived through her own original ownership. This is therefore not a situation where Mrs Velia came to own the block as a beneficiary under her late husband's will and subject perhaps to some sort of secret or half secret trust. It follows therefore that even if Mr Velia did wish the block to be gifted to the Cares, this would be legally irrelevant. What counted was whether it was the fully informed and voluntary wish of Mrs Velia to make such a gift.
6. If the transformation of Mrs Velia from a half owner of the block to a 100% owner of the block which occurred beneficially upon her husband's death had the effect of either forfeiting her aged pension or requiring it to be reduced, that affect occurred when she became entitled to beneficial ownership of the whole block on her husband's death. Much of the discourse reported above and the submission of Mr Smith and Ms Sampson that the transfer to the Cares never took place because of a desire on the part of Mr McNamara not to imperil Mrs Velia's pension seems misconceived. I have not myself investigated the law as to Commonwealth social security benefits, however the fact sheet quoted by Counsel in his opinion given to Mr McNamara appears to indicate that the effect of a gift of the block by Mrs Velia to the Cares at the time that it was under consideration would not be that Mrs Velia's pension entitlements would be affected. Rather the fact sheet suggested that a gift in those circumstances would simply be ignored by the social security authorities, that is, they would treat her as if she remained the beneficial owner of the block. Her position would be worse following the transfer only in the sense that she would be treated for means tests purposes as having the block even after she had divested herself of it.
7. The evidence seems to indicate that there was in effect no estate of Mr Velia whose property constituted by a residence and a half interest in the block and certain bank deposits were all held jointly with his wife. No grant of probate appears to have been obtained; but a grant of probate would have been entirely futile in the circumstances described. In his acrimonious correspondence with State Trustees, Mr McNamara raised the issue of 'executor's commission', presumably to be claimed by Mr Care. Given that Mr Care carried out no executorial duties, received no grant of probate and had no property to administer it is difficult to see what basis there could have been for a claim of executor's commission.
8. I turn then to the charges. Charge 1 alleges professional misconduct at Common Law:

By acting on behalf of Mrs Edera Velia in circumstances where she was vulnerable, or at all, while acting for Mr Giuseppe Care in relation to a claim against a block owned by Mrs Velia ...

The second charge alleges professional conduct within the meaning of Section 4.4.3 of the Legal Profession Act 2004:

By engaging in conduct which involved the substantial failure to reach or maintain a reasonable standard of competence and diligence by placing yourself in a position of conflict of interest by acting on behalf of Mrs Edera Velia in circumstances where she was vulnerable and lacked capacity, or at all, while acting for Mr Giuseppe Care ...

In substance both charges have as their gist an allegation of acting in the face of a conflict of interest .

1. The first thing to be said about the phrase 'conflict of interest' is that it is for the most part a misnomer. When one looks at the authorities on 'conflict of interest' they are seen to be cases not about conflicts of interest but rather about conflicts of duty. In accepting retainer to act for a client, a legal practitioner owes a duty to act in the interests of his client and to make available to the client all of his expertise and knowledge. If the practitioner concurrently acts for another client who has interests adverse to the first client and a conflict arises the practitioner must necessarily sacrifice the interest of the one client to the other or vice versa or perhaps by failing to act at all on a particular issue might sacrifice the interests of both clients. Whichever way it goes the practitioner fails to perform to the full the duties which he owes to the two clients.
2. Conflicts of interest may arise in other contexts where the retainers are not concurrent. So a practitioner owes certain continuing duties of loyalty and confidentiality to a former client. Duty bound to a new client to make all his knowledge available in that client's interest he will breach his duty if he makes confidential information in his possession by reason of having acted for the former client available to the new client. He will breach his duty to the new client if he refuses to make that information available to the new client.
3. So, Rule 4 of the Professional Conduct and Practice Rules 2005 restricts practitioners from acting against former clients.
4. More generally Rule 8.2 of the 2005 Rules provides:

A practitioner must avoid conflict of interests between two or more clients of the practitioner.

1. Rule 8.1B provides that the Rules do not prohibit a practitioner from acting where a conflict of interest may occur

(i) Where no material conflict of interest has arisen, and

(ii) Where the practitioner is permitted to act as provided in Rule 8.5 or in other circumstances where the practitioner reasonably believed that the likelihood of a material conflict of interest arising is unlikely.

1. Rule 8.5 makes special provision for practitioners acting in certain nominated circumstances where a conflict of interest may arise, namely circumstances where the practitioner acts for a vendor or purchaser of land 'for value at arm's length'; for a vendor and purchaser in an arm's length sale of business arrangement; for lessor and leasee in an arm's length lease transaction; financier or borrower in an arrangement for the provision of finance and purchaser of land and lender of money intended to be secured by a mortgage. In these circumstances the practitioner may act subject to obtaining an acknowledgement from each party in accordance with a scheduled form known as the 'Form 1'. This form requires each concurrent client to acknowledge inter alia that in the event of a material conflict of interest arising the practitioner would be bound to cease to act for each party to the transaction. These various provisions are without prejudice to common law equitable or statutory duty. The Rules contain further provisions about conflicts of interest where practitioners act for guarantors 'in connection with the loan of money or the provision of finance'.
2. The result then seems to be that a practitioner is not precluded from acting as a general rule merely because a conflict of interest may arise. There are certain restrictions and rules relative to specific relationships but in general it is the actuality of conflict which precludes a practitioner from continuing to act rather than the mere possibility. I accept the submission made by Mr Smith and Ms Sampson that there is no general rule prohibiting a practitioner from acting for both the giver and the receiver of a gift whether of land or another property. It is to be noted for instance that the special rules about vendors and purchasers including the requirement for the Form 1 only applies in arm's length sales and would not of their own force apply to a gift transaction.
3. Acting for two or more clients whose interest conflict may constitute a disciplinary offence according to Dal Pont Lawyers' Professional Responsibility (3rd Ed) [25.35]. The learned author refers to an unreported decision of Nathan J in Zaicos v Law Institute of Victoria [19 July 1995]. In Zaicos' case the solicitor acted on behalf of two parties in a property development scheme when a conflict of interest arose but then continued to act. His Honour considered that this conduct amounted to professional misconduct. The case concerned a fairly elaborate transaction or rather set of transactions in which 10 clients of the solicitor sold their existing properties upon a promise they would receive a new house on a green acre site. Having parted with their old houses those who promised to provide the new houses defaulted leading to major losses for the 10 complainants. His Honour remarked:

In my view the Australian law is consonant with that in the United States. The Restatement regards a fiduciary duty of an attorney to his client as a special category. An attorney owes to his client an undivided allegiance and after he had been retained by and received the confidence of a client he cannot, without the free and intelligent consent of his client, given after full knowledge of all the facts and circumstances, act for his client and for one whose interests are adverse to or conflicting with that of his client in the same general manner. It makes no difference how slight and adverse the interests may be and the fact that the nature and intention of the attorney are honest is immaterial.

Being aware of the conflict, not merely the possibility of it, he continued to act against the interests of the various X-clients [that is the clients who sold their old houses] in favour of the interests of the Trajcevski Commercial Enterprises [that is those who promised to sell the new houses] and to the detriment of the X's. That conduct would properly appall his professional peers as well as the bystander.

1. In Archer v Howell (No. 2) (1992) 10 WAR 33, 49 Rowland J as a member of the Full Court of the Supreme Court of Western Australia said:

Whenever a practitioner acts for two persons whose interests may not be identical there is a prospect that there will be a conflict of interest. One aspect of conflict is that the practitioner may have privileged information from one party that is relevant to the case of the other. The prospect of conflict, however, may not eventuate and it usually will not eventuate if prior to obtaining instructions each client gives an informed consent to waive that privilege to the extent required.

1. Here the situation is different from the one which typically arises. It is not about confidential information. Again, in contrast to the situation in Zaicos' case no loss was occasioned in the events that occurred. Nevertheless it is the failure to deal with the conflict of interest when it arises by ceasing to act which is the gravemen of the complaint here rather than the loss. Of course it is the suffering of the loss which typically brings these matters to attention. Here it seems it was the attempt by Mr McNamara to obtain payment for the substantially misconceived manoeuvres or planned manoeuvres and the assertion of a lien against Mrs Velia which led to the disciplinary complaint's being made. Analytically however if Mr McNamara continued to act in the face of a conflict, a breach of duty has been established.
2. Many of the submissions made by Mr Smith and Ms Sampson on behalf of the practitioner would have been appropriate enough if this proceeding were one to determine whether a particular disposition were void or voidable for lack of capacity or whether Mrs Velia had testamentary capacity at the time of making a will. The enquiry here is somewhat different. The Commissioner's case is that in the circumstances Mr McNamara owed a duty to take certain protected action relative to Mrs Velia, for instance having an assessment carried out to asses her legal capacity suggesting that she take independent legal advice or at least having a separate conference with her. The need for this type of action it would be said derived from her condition of vulnerability. Certainly she would be vulnerable if she had no capacity at all; but a person can be vulnerable in the relevant sense in many other circumstances and one in which there is a complete lack of capacity to make testamentary or inter vivos disposition. In the Commercial Bank of Australia Limited v Amadio [1983] HCA 14; (1983) 151 CLR 447 the High Court of Australia set aside a guarantee executed by parents of the principal of the debtor company because they were under a special disadvantage. According to Mason J (as he then was):

The situation had special advantage in which the respondents [the guarantors] were placed with the outcome of their reliance on a mere confidence in their son who, in order to serve his own interest, urged them to provide as a mortgage guarantee which the bank required as a condition of increasingly approved overdraft limited his company ...

1. Here, Mrs Velia was by the very nature of her advanced years and the role that the Cares played looking after her, in a similarly disadvantaged position. There was ample evidence both available to Mr McNamara and available to the Tribunal now that her capacity was at least compromised at this time. When Mr McNamara took his initial instructions Mr Velia told him not that his wife 'may have dementia' but that she did have it. Mr Velia appointed members of the Care family as executors of his will where his wife was to be the principal beneficiary. This is also indicative of Mr Velia's doubt as to his wife's capacity. There was the later reference to Mrs Velia as being someone who 'may have dementia'. Then there is Mrs Velia's delusional behaviour thinking that the bank might lose her money; that the Cares had stolen the title to her house, a belief so strong that she made complaint to the local police. Finally there are the assessments made by the neuro-psychologist and Dr Cook.
2. Under the Guardianship and Administration Act 1987, the body entrusted with determining whether persons are inter alia able to look after their business affairs is this Tribunal in its Guardianship List. In October 2006 this Tribunal appointed an administrator for Mrs Velia. The rule in Hollington v Hewthorn [1943] KB 528 would render this determination of the Tribunal inadmissible under the Common Law of Evidence as to the facts underlying it and the modification or abolition of the rule for the purposes of Victorian Courts under the Evidence Act 2008 is not so complete as to cover a situation such as this. Nevertheless this Tribunal is not bound by the rules of Evidence. I treat the Tribunal's determination as to Mrs Velia's capacity as probative evidence of a lack of capacity on her part. Against the background of these matters the submission made on behalf of Mr McNamara that there was no probative evidence of lack of capacity or of compromised capacity for Mrs Velia was breathtaking in its audacity. In my view, given that there were clear doubts about Mrs Velia's capacity, it was incumbent on Mr McNamara either to have her assessed or to contemplate ceasing to act for either party.
3. There is the further issue that Mr McNamara contemplated that there should be some sort of 'claim' brought against the estate or perhaps against Mrs Velia as owner of the block by Mr Care. Whilst Mr McNamara did turn his mind to conflict issues relative to this to the extent of telling Mr Care he would have to cease to be the executor of the estate of the late Mr Velia and that he might have to seek alternative legal representation, he seems to have given no such advice to Mrs Velia. Presumably therefore he contemplated continuing to act for Mrs Velia which in the circumstances would have been inconsistent with the principles to which I have made reference.
4. There is the further consideration or perhaps this is just another facet of the same underlying concern, that a transaction between Mrs Velia and Mr Care or Mrs Velia and Mrs and Mrs Care might be such as to create a presumption of undue influence with a gift being valid only if that presumption were rebutted. Again, a finding to this effect could be made without any finding of an absolute lack of capacity on Mrs Velia's part either to make a disposition inter vivos or of testamentary capacity. The doctrine of undue influence and the equitable jurisdiction to relieve against its exercise was explained by Dixon J as he then was in Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113, 134 as follows: when parties:

... stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but that the gift was the independent and well understood act of a man in a position to exercise a free judgment based on information as full as that of the donee. This burden is imposed upon one of the parties to certain well-known relations as soon as it appears that the relation existed, and that he has obtained a substantial benefit from the other. A solicitor must thus justify the receipt of such a benefit from his client, a physician from his patient, a parent from his child, a guardian from his ward, and a man from the woman he has engaged to marry. The facts which must be proved in order to satisfy the court that the donor was freed from influence are, perhaps, not always the same in these different relationships, for the influence which grows out of them varies in kind and degree.

Whenever one party occupies or assumes towards another a position naturally involving an ascendancy or influence over that other, or a dependence or trust on his part. One occupying such a position falls under a duty in which fiduciary characteristics may be seen. It is his duty to use his position of influence in the interest of no one but the man who is governed by his judgment, gives him his dependence, and entrusts him with his welfare. When he takes from that man a substantial gift of property, it is incumbent upon him to show that it cannot be ascribed to the inequality between them which must arise from his special position. He may be taken to possess a peculiar knowledge, not only of the disposition itself, but of the circumstances which should affect its validity; he has chosen to accept a benefit which may well proceed from an abuse of the authority conceded to him, or the confidence reposed in him; and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction. These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour.

[1936] HCA 41; (1936) 56 CLR 113, 135

1. In Johnson v Buttress the person allegedly under the undue influence was aged 69 years of age and illiterate. He was accustomed to rely on the donee experience and advice in dealing with major matters including property transactions. The High Court held in those circumstances that undue influence should be presumed in any gift between them and this presumption had not been rebutted therefore the gift was set aside. The relationship between Mrs Velia and the Cares was not perhaps as extreme as this one but certainly the evidence that her capacity was compromised to say the least and that the Cares were the family whom the late Mr Velia looked to to manage Mrs Velia's affairs at least raised the question. Had the gift been made, undue influence would have been presumed. In the practitioner's treatment of these matters there was no apparent consideration of the possible operation of this doctrine or the interest which Mrs Velia or someone later representing her such as State Trustees might have in asserting undue influence.
2. A related concern which does not appear to have been followed up by the practitioner was the oscillation in Mrs Velia's attitude to the Cares. Most of the time she seemed to place herself and her business and property affairs under their supervision. At other times she seemed to regard them as a malign influence, complaining to the police that Mr Care had stolen the title to her house and apparently resisting production of the original of her husband's will because, as Mrs Care apprehended it, Mrs Velia thought the Cares were gold diggers, after '$s' as the diary note at the practitioner's office put it.
3. When one puts all these matters together the practitioner's failure to give any or any adequate consideration as to how these concerns might be dealt with in the particular instance, I conclude that he has not avoided a conflict of interest between his clients in the manner which Rule 8.2 of the Professional Conduct and Practice Rules 2005 require. If it mattered, Rule 8.2 of the 2003 Rule, if there are any relevant periods governed by them, is to the same effect.
4. I turn now to the question whether it has been demonstrated that the practitioner has engaged in professional misconduct. As to the statutory definition in Clause 4.4.3 the matter in question is not demonstrated to be other than an isolated incident. So the 'consistent failure' to reach and maintain a reasonable standard of competence referred to in paragraph (a) of the definition is not satisfied. Whilst I do not regard this issue as trivial it is not of such seriousness as to be regarded as 'substantial' for the purposes of paragraph (a) of the statutory definition nor in my view is the matter of such seriousness that it would justify a finding that Mr McNamara is not a fit and proper person to engage in legal practice. I reach both these conclusions based on the evidence narrated and also upon the impressive testimonials which were produced at the hearing on his behalf.
5. Turning to the 'Common Law' definition, I believe fellow practitioners of good standing, competence and repute would be perplexed and dismayed at the flawed analysis exhibited in the way these matters were approached. I do not believe that their dismay or perplexity would go the distance of viewing what was done as constituting disgraceful or dishonourable conduct. I therefore reject the contentions by the Commissioner that Mr McNamara should be found guilty of professional misconduct. Section 4.4.20 of the Legal Profession Act 2004 however empowers the Tribunal to find a person guilty of unsatisfactory professional conduct 'even though the application alleged professional misconduct'. Section 4.4.2 provides the following definition of 'unsatisfactory professional conduct':

unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

Section 4.4.4 specifies conduct that is capable of constituting unsatisfactory professional conduct and section 4.4.5 specifies conduct that constitutes unsatisfactory professional conduct.

1. It is specifically provided by Section 4.4.4(a) of the Act that unsatisfactory conduct may be constituted by:

Conduct consisting of a contravention of ... the Legal Profession Rules.

1. In my view in failing to manage the evident conflict of interest which arose in the circumstances as between his duties on the one hand to Mrs Velia and on the other hand to Mrs & Mrs Care, Mr McNamara did engage in unsatisfactory professional conduct based on the matters alleged in Charge 2.
2. I should stress that I heard no evidence from either Mr or Mrs Care. They were not represented before me. Whilst I have identified the potential for exploitation of the late Mrs Velia in the course of their relationship with her, I make no finding that any such thing has happened. The force of my findings is merely that the potential for exploitation or abuse was not managed by Mr McNamara in the manner in which he continued to act for both parties over a substantial period of time.

1. With the matter before me in the circumstances described, I did not have the opportunity of exploring any of the substantive issues with the parties. When I made my order for the determination of the matter based on the transcripts of the two days hearing before the Senior Member in 2010 I had not read the transcript. When I read it I find a little or nothing on the question of penalty as put by the parties.
2. There is the further complication that the determination that I have made is not the determination contended for by either of the parties. The Commissioner sought findings of professional misconduct. Mr McNamara's Counsel contended for an acquittal. I am unclear in the circumstances therefore whether the parties expected an opportunity in the circumstances as they now exist to make submissions as to the proper disposition in light of my determination. Erring on the side of caution therefore I will fix this matter to enable the parties to make any further submissions on that subject which they may care to make.