(1) A person is not entitled, as against the liquidator of a company:

(a) to retain possession of books of the company; or

1. On 25 September 2014, the Applicant sent a request for information about any instructions the Respondent had with respect to acting for ARBD, whether he holds or retains any books, records or documents that belong to the company and whether any money was held on trust or otherwise on behalf of the company. No response was received to this letter.[1]
2. On 8 October 2014, the Applicant sent a covering letter and accompanying Notice pursuant to s 530B of the Corporations Act 2001 to the Respondent, demanding various books and records of ARBD. No response was received to this letter or the Notice.[2] The Applicant instructed solicitors to deal with the matter.
3. On 29 October 2014, the Applicant made a formal complaint to the Legal Services Commissioner alleging that the Respondent failed to deliver up property to him, which he says, as a matter of law, he is entitled to possession. He also complained that the Respondent failed to deliver up ARBD books and records, contrary to s 530B of the Corporations Act 2001 (Cth). He stated that his duties as a liquidator are being deliberately and unlawfully obstructed.
4. Under cover of a letter dated 1 December 2014, the Respondent delivered eight boxes of files and an accompanying schedule describing the contents of each box.
5. By letter dated 2 December 2014, the Applicant confirmed receipt of eight boxes. However, the Respondent's schedule of documents which accompanied the boxes did not accord with the documents actually received. Many other files for matters in which ARBD conducted business were missing and not included in the schedule of documents. A number of boxes also related to Australia's Residential Builders Pty Ltd ('ARB') rather than ARBD.
6. Under cover of a letter dated 17 December 2014, the Respondent provided trust account statements.
7. On 19 March 2015, the Legal Services Commissioner advised the Applicant that he was unable to resolve the complaint. Accordingly, the Applicant was advised of his right to commence a proceeding at the Victorian Civil and Administrative Tribunal (the 'Tribunal').
8. On 20 May 2015, the Applicant lodged an application with the Tribunal. The Application is made pursuant to s 4.3.15 of the LPA, for resolution of a civil dispute between the parties. Specifically, the Applicant sought an order under s 4.3.17 of the LPA that the Respondent produce to the Applicant the books and records sought pursuant to the s 530B Notice on 8 October 2014.
9. On 3 July 2015, the Tribunal conducted a directions hearing. The proceeding was listed for a compulsory conference on 13 August 2015.
10. The Tribunal ordered that by 4 July 2015, the Applicant must file and serve a more specific version of his letter dated 2 December 2014, including:
    • (a) Particulars of discrepancies between the catalogues of documents produced by each of the parties;
    • (b) Particulars of matters of transactions for which files have not been provided;
    • (c) A list of emails for which attachments have not been provided; and
    • (d) The documents for which the Applicant alleges the Respondent was the 'proper repository'.
11. The Tribunal also ordered the Respondent to provide any further relevant documents to the Applicant and to file and serve an affidavit as to the state of the documents remaining in dispute.[3]
12. On 27 July 2015, the Applicant confirmed five of the eight boxes did not relate to ARBD but rather ARB. The letter also notes that not all emails and attachments had been provided. The Applicant also set out in more detail the documents of which it continued to seek production. The documents sought are set out below.
13. On 13 August 2015, the Tribunal conducted a compulsory conference and the matter did not resolve.
14. By Affidavit dated 30 September 2015, the Respondent set out his response to the Applicant's claims as follows:
    • (a) The request for documents dated 27 July 2015 relates to documents not identified in the s 530B Notice, or the 2 December 2014 letter, and therefore do not relate to this proceeding;
    • (b) He will not object to reasonable requests for ARBD documents but objects to these proceedings being used to obtain documents which do not exist or belong to ARBD.
15. The following documents (a) - (n) were sought by the Applicant, as set out in the Applicant's letter dated 27 July 2015. The Respondent's objections are set out in his affidavit dated 30 September 2015 as follows:
    • (a) A full accounting of the proceedings of sale of the ARBD's property at 8 Peppermint Grove, Taylors Hill, including reconciliation of the account of sales of the vendor's real estate agent and a reconciliation of the funds paid upon settlement;
      1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and that any copy of any such accounting I might hold would not be property of the (Company).
      2. Under cover of that objection I say that:

1. an accounting of how the proceeds of sale was disbursed were provided to the applicant on 1 December 2014 being a copy of a letter dated 28 May 2014; 2. no other document exists which would constitute a full accounting of the proceeds of sale;

1. a copy of the reconciliation of the account sales of the vendors real estate agent was provided to the complainant on 1 December 2014.
   • (b) All documents in relation to your dealing with the sum/s of $7,449 and/or $165,514.54 and/or any other sum, demanded, requested and/or received by the you at settlement at or in respect of 8 Peppermint Grove, Taylors Hill;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and any copy of any such documents I might hold would not be property of the Company.
     2. Under cover of that objection I say that:

1. The sum of $165,514.54 was the amount the subject of the accounting referred to in paragraph 9(a) above; 2. Any further documentation as I may hold as to that sum is my own property and subject to an obligation of confidence to a third party;

1. The sum of $7,449 was the balanced of the account sales of the vendors real estate agent which was provided to the complainant on 1 December 2014;

1. Copies of a trust account statement relating to the file in respect of which the sum of $7,449 relates was provided to the applicant on 17 and 18 December 2014; 2. Save as aforesaid, I do not believe I have any documents within this category which have not been provided.
   • (c) A full accounting of all your costs and disbursements rendered for all matter wherein you acted for the company, including copies of the bills of costs and disbursements;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and that any copy of any such accounting I might hold and file copies of documents I hold would not be property of the Company.
     2. Under cover of that objection I say that:
        1. A full accounting of my costs and disbursements rendered for all matters wherein I acted for the Company is not a document which currently exists;
        2. My file copies of accounts are not property of the Company.
   • (d) Copies of any and all costs agreements, legal practice costs compliance statements and collateral documents provided to the company or received by you in respect of matters for which you acted for the company;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and that any copy of any such documents I might hold would not be property of the Company.
     2. Under cover of that objection I say no such documents exist.
   • (e) Copies of all documents securing your legal fees and disbursements for legal matters for the company, including collateral documents relating thereto and passing between you and the company in respect thereof;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and any copy of any such documents I might hold would not be property of the Company.
     2. Under cover of that objection I say I hold an irrevocable authority and charge document which is my own property.
   • (f) Copies of all your statements detailing all trust account transactions in company matters wherein you acted;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and that any copy of any such documents I might hold would not be property of the Company.
        1. Under cover of that objection I say that on 17 and 18 December 2014 I provided trust account statements for all matters in which I acted for the Company for which trust monies had been received to the applicant.
        2. I have no documents within this category copies of which have not already been provided to the applicant.
   • (g) Your file of documents in relation to Supreme Court of Victoria proceeding SCI 2013 05925 ARB Developments Pty Ltd v Australia's Residential Builder (in Liquidation) Pty Ltd, including all instructions, communications, advices, memorandums, briefs and files;
     1. My original file of documents in relation to Supreme Court proceeding SCI 2013 05925 was delivered to the applicant on 1 December 2014.
     2. To the best of my knowledge information and belief I do not have any other file of documents other than a copy of the original file delivered on 1 December 2014.
   • (h) Your file of documents in relation to County Court of Victoria proceeding CI-13-05707 Australia's Residential Builder (In Liquidation) Pty Ltd v ARB Developments Pty Ltd, including all instructions, communications, advices, memorandums, briefs and files;
     1. My original file of documents in relation to County Court proceeding CI 2013 05707 was delivered to the applicant on 1 December 2014.
     2. To the best of my knowledge information and belief I do not have any other file of documents other than a copy of the original file delivered on 1 December 2014.
   • (i) Electronic copies of all your communications to and from the company, its officers, agents and servants, including copies of all attachments to those electronic communications;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of such documentation, and that any copy of any such documents I might hold would not be property of the Company.
     2. Under cover of that objection I say that I hold copies of electronic communications from and to the company which I believe are not the property of the Company.
   • (j) Copies of all communication relating your firm's consent to act as the registered the office of the company, including the documents provided to your office at the commencement of its period of record as the registered office of the company;
     1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of communications relating to your firm's consent to act as the registered office of the company, and that any such documents I might hold would not be the property of the Company.
     2. Under cover of that objection I have never held copies of any such documentation.
   • (k) Copies of all trading records of the company during the period from the commencement of your office as the principal place of business of the company;

I have never held copies of any such documentation.

(l) The original/s of any charge or instrument in writing to secure your fees together with any advice, recommendation or warning to the company to obtain independent legal advice which accompanied or was given in respect of such charge or instrument and any acknowledgement or communication from the company in respect of same and any such third party legal advice;

1. I object to responding to this request upon the grounds that neither the Notice nor the 2 December Letter sought production of any such documentation and upon the grounds that copy of any such documents I might hold would not be property of the Company.

2. Under cover of that objection I say that I hold an irrevocable authority and charge document. Save as aforesaid there is no such documentation.

(m) The original secretarial file of the company;

(n) The original accounts of and copies of the tax returns of the company.

1. At the hearing of the Application on 13 October 2015, evidence was given by Michael Caspaney, a certified practising accountant and senior manager at the Applicant's firm Hamilton Murphy who has the conduct of the matter on behalf of the Applicant; and by Thomas Egan, the Applicant's solicitor. The Tribunal was satisfied that this evidence proved the basis for the Applicant giving the s 530B Notice to the Respondent. Furthermore, the Tribunal was satisfied that the Respondent failed to comply with such Notice in material respects.
2. Mr Caspaney also gave evidence of becoming aware, via another source, of a letter dated 29 May 2014 from the Respondent to Perfect Choice Conveyancing Services which concerned the proceeds of settlement of the sale of an ARBD property. The documents provided by the Respondent did not explain why the sum of $165,514.54 from this settlement had been received directly into the Respondent's firm account. An email dated 29 May 2014 from the Respondent to Robert Wiederstein refers to '$165,514.54 the subject of my charge and going into my trust account.' However, the only Charge otherwise referred to is for an amount of $55,000. Furthermore, under cover of a letter dated 30 September 2015 from the State Revenue Office ('SRO') to the Applicant, the SRO provided a formal Proof of Debt against ARBD for an outstanding amount of $315,845.28. Mr Caspaney confirmed that none of the documents to date make any reference to such amount or any other liability for outstanding stamp duty.
3. Following the hearing on 13 October 2015, the Tribunal made the following orders:

By Tuesday, 27 October 2015, the Respondent shall provide to the Applicant:

(a) A full accounting of costs and disbursements rendered for all matters where he acted for Australian Residential Building Developments Pty Ltd (ARBD), including copies of all bills of costs and disbursements.

(b) Copies of all documents securing the Respondent's legal fees and disbursements for legal matters for the company, including collateral documents relating thereto and passing between the Respondent and ARBD in respect thereof; and

(c) Electronic copies of all the Respondent's communications to and from ARBD, its officers, agents and servants, including copies of all attachments to those electronic communications.

1. By the next Directions Hearing on 9 November 2015, the Respondent had provided to the Applicant a facsimile transmission of 191 pages together with a digital link to 761 emails. Mr Caspaney again gave evidence and confirmed that a number of documents contained redacted material; and an examination of the invoices provided reveal figures which cannot be reconciled. Furthermore, it was not apparent how an Instrument of Charge apparently given by ARBD in favour of the Respondent has been invoked; and a matter identified as 'Trennin' remains unexplained.
2. By the next Directions Hearing on 18 November 2015, the Respondent provided to the Applicant an additional approximately 40 pages.
3. Applicant's Counsel advised the Tribunal that no further documentation is sought but the Applicant seeks repayment by the Respondent of the sum of $165,514.54 on the following bases:
   • (a) There was no costs agreement or disclosure to support the taking of such funds;
   • (b) The application of a Charge for $55,000 and/or any agreement between ARBD and others for the allocation of such funds, is uncertain;
   • (c) The funds were taken without regard to Regulation 3.3.34 of the Legal Profession Regulations 2005;
   • (d) The funds appear to have been set off against subsequent bills dated approximately three months later; and
   • (e) Part of the funds were used to pay bills for entities unrelated to the liquidation of ARBD.
4. The Tribunal indicated at the hearing that the Applicant's claim for repayment of the sum of $165,514.54 could not be properly made as part of the current application or an amendment to such application, but would need to be the subject of a separate claim against the Respondent.

1. Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 ('the VCAT Act') clearly prescribes the general rule in proceedings before the Tribunal that each party bears their own costs. Nevertheless, the Tribunal may order a party to pay all or a specified part of the costs of another party, but only if the Tribunal is satisfied that it is fair to do so after having regard to the matters set out in subs (3).
2. It is also relevant to note that Clause 46D(3) of Schedule 1 to the VCAT Act provides that:

Section 109 does not apply to a proceeding under Division 4 or 5 of Part 4.4 of the Legal Profession Act 2004.

1. A proceeding under Division 4 or 5 of Part 4.4 of the LPA is the hearing of a disciplinary complaint against a legal practitioner. This proceeding is not such a proceeding. It is the hearing of a civil complaint[4] against a legal practitioner. The operation of s 109 of the VCAT Act is not excluded from or modified in such proceedings.
2. Accordingly, s 109 of the VCAT Act remains applicable to this proceeding.[5]
3. Sections 109(2) and (3) of the VCAT Act provide that the Tribunal may order the respondent to pay some or all of the applicant's costs only if it is fair to do so having regard to the five criteria of s 109(3)(a)-(e).
4. The Applicant relies on the criteria under s 109(3)(c), (d) and (e):
   • (a) Paragraph (c) relates to the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;
   • (b) Paragraph (d) relates to the nature and complexity of the proceeding; and
   • (c) Paragraph (e) enables the Tribunal to consider any other matter it considers to be relevant.
5. Section 111 of the VCAT Act provides:

If the Tribunal makes an order for costs, the Tribunal -

(b) may order that costs be assessed, settled, taxed or reviewed by the Costs Court.

Section 109(3)(c) Criterion: relative strengths of the claims

1. Applicant's Counsel submitted that the Applicant's claim was very strong. I agree.
2. The Applicant relied upon its power to require the Respondent to deliver the books of the company to him under s 530B(4) of the Corporations Act 2001; and the Respondent's obligation to comply with such a requirement under s 530B(6) of the Corporations Act 2001.
3. The Respondent's affidavit dated 30 September 2015 purports to resist further compliance with the Applicant's Notice on the bases that:
   • (a) The documents particularised in the Applicant's 27 July 2015 letter were not included within the s 530B Notice sent to him on 8 October 2014 or in the 2 December 2014 follow up letter from the Applicant to him;
   • (b) What was sought from him was his, not the company's; and
   • (c) Some documents sought did not exist or were not in the possession of the Respondent.
4. In my view, these objections are spurious. The obligation of the Respondent to deliver the records of ARBD in his possession is unambiguous and unconditional. It did not require the Applicant to particularise individual documents sought, other than by reference to the descriptive categories and transactions. The Applicant's subsequent letters merely sought to identify the extent of the Respondent's failure to comply and do not represent an extension of documents sought under the original Notice.
5. The Respondent's second objection is inexplicable. As stated by Applicant's Counsel, the only documents which can be retained by a solicitor when acting for a client, are the solicitor's own file notes or similar aide memoires. The remaining documents are the property of the client.[6]
6. The Respondent's third objection fundamentally misconstrues the purpose of the s 530B Notice. As indicated in the evidence of Mr Caspaney, while a liquidator may assemble documents and information from a variety of sources, the liquidator is not armed with complete information in advance and cannot describe in any detail the nature of documents or the dates or their purpose or effect or other parties to such documents. Accordingly, it is not surprising that the broad descriptive categories may encompass documents which are not or no longer in the Respondent's possession; or documents of which the Respondent has no knowledge or, to his knowledge, do not exist. Clearly there is no obligation upon the Respondent to produce such documents and to the extent that the Notice encompasses documents which the Respondent cannot produce, does not reflect a defect in the Notice.
7. The Respondent also submitted that the Tribunal had no jurisdiction to consider compliance with a Notice issued under the Corporations Law, for which the Supreme Court was the appropriate forum.
8. In my view, the s 530B Notice is merely the mechanism by which a liquidator, now standing in the shoes of the company, is authorised to demand recovery of the company's documents. In this instance, the Respondent, as a legal practitioner, continues to be subject to the Legal Profession Act 2004, pursuant to which civil disputes may be determined by the Tribunal.
9. For all of the above reasons, I agree that the position maintained by the Respondent was misconceived and without a tenable basis in fact or law.

Section 109(3)(d) Criterion: nature and complexity of the proceeding

1. I accept the evidence of Mr Caspaney to the effect that the subject Notice was in a standard form typically issued in these kinds of circumstances. In that regard there was no particular complexity in the content of the Notice.
2. In my view, there has been no acceptable explanation for the Respondent's objections to the Notice or the inordinate delay in properly complying with it.

Section 109(3)(e) Criterion: any other matter the Tribunal considers relevant

1. In my view, it is a relevant consideration that the Respondent, as a legal practitioner, ought to have:
   • (a) Been aware of his obligation under s 530B(6) of the Corporations Act 2001 to comply with the Notice; and
   • (b) Co-operated with the Applicant, who was exercising his statutory duties.
2. In my view, the further documents provided by the Respondent, following each of the hearings before the Tribunal, are testament to the Respondent's unexplained failure to produce documents of ARBD in a timely manner. Furthermore, the information revealed in the documents do not on their face explain the manner in which the Charge in favour of the Respondent was invoked on account of amounts payable by ARBD; or whether certain moneys received on account of ARDB were properly allocated on its behalf. While these matters ultimately may be adequately explained by the Respondent, the delay occasioned by the Respondent has potentially prejudiced the proper administration of the liquidation of ARBD by the Applicant, for the benefit of outstanding creditors.
3. Finally, Applicant's Counsel gave notice at the hearing, following earlier provision of written submissions, of a further application for compensation, pursuant to s 4.4.17(1)(a) of the LPA, pursuant to which the Tribunal may make:

(a) an order that the law practice or Australian legal practitioner... pay to the complainant as compensation a specified amount not exceeding $25,000 within a specified time;

1. The rationale for an order for compensation was expressed in terms of the detriment and loss to the creditors of the company in liquidation by reason that the costs incurred reduces and diminishes the return to the creditors. Furthermore, the time delay has frustrated the time for a return to creditors and has frustrated and hindered the liquidator to carry out its statutory functions for which he was appointed.
2. In my view, the compensation contemplated by the above section does not extend to compensating third parties, such as the creditors of the company for which the Applicant has been appointed liquidator.

1. The Respondent has failed or refused, without reasonable excuse, to comply fully with the s 530B Notice sent to him on 8 October 2014 within the timeframe provided in the Notice, namely, by 5.00pm on 17 October 2014.
2. I am satisfied that as a result of such delay, the Applicant has incurred delay and additional costs by reason of the following steps being taken by the Applicant, as identified by Applicant's Counsel:
   • (a) Sending a follow up letter to the Respondent on 24 October 2014;
   • (b) Making a civil complaint to the Legal Services Commissioner on 29 October 2014 regarding the Respondent's non-compliance;
   • (c) Assessing what the Respondent did provide under cover of letter dated 1 December 2014 then writing to him on 2 December 2014 identifying certain discrepancies and omissions;
   • (d) Making an application to the Tribunal on 20 May 2015 for the determination of the civil dispute with the Respondent, following the Legal Services Commissioner being unable to resolve the complaint;
   • (e) Appearing with Counsel at a Directions Hearing of the proceeding on 3 July 2015;
   • (f) Liaising with his solicitor to once again assess what had been provided by the Respondent and then drafting the letter dated 27 July 2015 detailing what remained to be provided by the Respondent (which process, according to Mr Caspaney and Mr Egan's evidence, took the best part of a day);
   • (g) Appearing with Counsel at a compulsory conference of the matter on 13 August 2015; and
   • (h) Appearing with Counsel and solicitor at the hearing of the proceeding on 13 October 2015, 9 and 18 November 2015.
3. In my view, for the reasons given, it is fair that the Respondent be ordered to pay the Applicant's costs of this proceeding.
4. I am further satisfied that special circumstances exist in this case to justify that such costs be ordered on an indemnity basis by reason that: [7]
   • (a) The Respondent has not demonstrated any basis for delay or objecting to the production of documents;[8] and
   • (b) The Respondent has demonstrated a wilful disregard for known facts or clearly established law.[9]

1. The Tribunal does not have a scale of costs. Under rule 1.07 of the Victorian and Civil Administrative Tribunal Rules 2008, the power to award costs in the Tribunal effectively incorporates the rules applying in the County Court, unless the Tribunal orders otherwise. Amendments to the County Court Civil Procedure Rules 2008 ('the Rules'), which came into effect on 6 October 2014, repealed previous rules regarding orders to pay party and party costs, solicitor and client costs or costs on an indemnity basis, and replaced them with power to make an order for costs on a 'standard basis' or on an 'indemnity basis'.
2. The Rules still allow an order for costs to be taxed on a solicitor and client basis, although the 'standard basis' appears similar to the traditional 'solicitor and client' basis in any event. In this regard, I note as follows.
3. Part 3 of the County Court Rules is titled 'Costs of Party in a Proceeding'. Rule 63A.27 provides that Part 3 (comprising rules 63A.27 to 63A.31):

applies to costs in a proceeding which by or under any Act or these Rules or any order of the Court are to be paid to a party to the proceeding either by another party or out of a fund.

Subject to this Part, costs in a proceeding which are to be taxed shall be taxed on -

1. Accordingly, I propose to order that the Respondent pay the Applicant's costs, to be assessed by the Costs Court, in default of agreement, on the relevant County Court Scale on an indemnity basis.

[1] Evidence of Michael Caspaney, CPA and Senior Manager of Hamilton Murphy, who has the conduct of the liquidation, on behalf of the Applicant.

[3] The date for filing and serving was originally 7 August 2015. By orders dated 3 July 2015, the date for compliance was extended to 27 August 2015.

[4] Within the meaning of s 4.2.2 of the Legal Profession Act 2004.

1. [5] See also D'Angelo v Zolis Lawyers & Consultants [2009] VCAT 757 where the Tribunal awarded costs following the hearing of a civil dispute between a client and a law firm.

[6] Refer Wentworth v De Montfort & Ors (1988) 15 NSWLR 348.

[7] Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 536.

[8] Ragata Developments Pty Ltd v Westpac Banking Corporation [1993] FCA 115 per Davies J.

[9] J-Corp Pty Ltd v Australia Builders Labourers Federation Union of Workers (WA) (No 2) [1993] FCA 70; (1993) 46 IR 301 at 303.