4 August 2017, final submissions received on 18 August 2017.

Victorian Legal Services Commissioner v Beling (Legal Practice) [2017] VCAT 1576

1. Mr Beling is reprimanded.
2. Mr Beling is restricted to practising only under supervision for a period of three years. This may be as :

(b) in another category of legal practice, other than as a principal of a law practice, in circumstances where he is subject to supervision arrangements which are to the satisfaction of the applicant.

Any time spent not practising is excluded from the calculation of three years referred to above, and any time spent practising part-time is to be counted pro rata.

1. Mr Beling is to pay a fine of $10,000 to the Victorian Legal Services Board.
2. Mr Beling is to complete an additional 10 points of continuing professional development (CPD) over and above the requirement otherwise applicable, to the satisfaction of the VLSC, over a period of two years from the date of this decision.

1. Mr Beling is reprimanded.
2. Mr Beling is restricted to practising only under supervision for a period of two years. This may be as :

(a) an employee of a law practice, or

(b) in another category of legal practice, other than as a principal of a law practice, in circumstances where he is subject to supervision arrangements which are to the satisfaction of the applicant.

Any time spent not practising is excluded from the calculation of two years referred to above, and any time spent practising part-time is to be counted pro rata. This period of two years is concurrent with the period specified in order 2 above.

1. Mr Beling is to pay a fine of $5,000 to the Victorian Legal Services Board. This fine is concurrent with the fine imposed in relation to charge 1.
2. Mr Beling is to complete an additional 10 points of continuing professional development (CPD) over and above the requirement otherwise applicable, to the satisfaction of the VLSC, over a period of two years from the date of this decision. This requirement is concurrent with the additional CPD required under order 4 above, in relation to charge 1.

1. Mr Beling is to pay the Victorian Legal Services Commissioner's costs in relation to charges 1 and 3, but not charges 2 and 4, on a standard basis on the County Court Scale to be determined by the Costs Court in default of agreement. The sum of $10,000 (being the amount of the fine imposed under order 2 above) is to be deducted from the amount payable by Mr Beling for costs.

No appearance (written submission subsequently provided)

1. Following a 12 day hearing, I found Mr Beling guilty of one charge of professional misconduct at common law and guilty of unsatisfactory professional conduct in relation to a second charge. These charges related to Mr Beling's conduct of his retainer to act for a Mr and Mrs Hanna in their action against the ANZ Bank. The circumstances are set out in detail in the primary decision[1] (which is 83 pages long). The charges were brought under the Legal Profession Act 2004 (the Act).
2. This is the decision on penalty. It should be read in conjunction with the primary decision.
3. My findings were summarised at paragraphs [17] - [22] of the primary decision:
   1. In summary, Mr Beling. a sole practitioner without experience in the relevant area, agreed to act for difficult but vulnerable clients who had had several lawyers previously, and who had unrealistic expectations as to the claims which they could bring against the ANZ. They also sought to conduct a high-profile campaign against the bank.
   2. Mr Beling continued to conduct the matter in a manner similar to the way that it had been conducted by the Hannas when they were representing themselves. That is, on the basis of serious allegations against the ANZ which were not coherently conceived, and for which no objective basis was able to be articulated, even at this hearing.
   3. After four and a half months the retainer ended. The clients were left with a bill of $50,000 (of which they had paid $9,850). Mr Beling's actions in the conduct of his retainer were seriously misguided in a number of respects, described below. An unsuccessful mediation had been conducted, and little progress had been made in the litigation. The Hannas had little improved understanding of their legal and strategic position, and had received ambiguous advice which potentially understated their liability for costs (both to Mr Beling, and to the ANZ). Mr Beling had spent a considerable amount of the time he charged to his clients in educating himself about the law, with little in the way of outcome for them.
   4. Ultimately in relation to charge 1, I have found that Mr Beling's propounding of such speculative claims, and his lack of competence in carrying out his retainer is so serious that it constitutes conduct which colleagues of good repute and competency would regard as disgraceful and dishonourable.

1. Charge 2 is a subset of charge 1. Accordingly, I regard charge 2 as, in effect, an alternative to charge 1. Given I have found charge 1 proved, charge 2 is dismissed. The same applies to charge 4 relative to charge 3.
2. In relation to charge 3, although the proved conduct the subject of that charge is very serious, I have found the element of consistent failure to reach or maintain a reasonable standard of competence and diligence alleged by the VLSC has not been satisfied. (There was no allegation of a substantial failure.) So Mr Beling is found not guilty of professional misconduct, but guilty of unsatisfactory professional conduct under s 4.4.20 of the Act.

1. The VLSC submitted that the following global penalties should be imposed:
   • Mr Beling be prohibited from engaging in unsupervised legal practice in the future for a period of five years.
   • That he receive a reprimand.
   • That he be ordered to undertake an additional 10 points of CPD to the satisfaction of the VLSC during the next 12 months that he practises.
   • That a fine be imposed between $10,000 and $15,000.
2. The VLSC also submitted that Mr Beling be ordered to pay costs in accordance with the presumption in Clause 46D of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act). It indicated its assessment of those costs was $197,693.81, but submitted these should be reduced by the amount of any fine ordered.
3. Mr Beling did not attend the Tribunal, and was not represented at the penalty hearing on 4 August 2017, despite having been given notice, and having inspected the Tribunal file the week before. He was given the opportunity to make submissions, including after having received the VLSC's submissions on penalty. He filed a written submission, with attachments, on 18 August 2017.
4. Mr Beling submitted that he should not be subject to any condition requiring him to practise as an employee only for any period, that he be reprimanded, and that his undertakings to participate in further continuing professional development in the area of consumer credit and/or mortgage law be accepted. He also submitted that there are 'exceptional circumstances' such that he should not pay the VLSC's costs in relation to charges 1 and 3, and that there are 'special circumstances' such that the VLSC should pay his costs in relation to charges 2 and 4.

1. The applicable principles were set out by Member Wentworth in Victorian Legal Services Commissioner v O'Brien (No. 2) [2016] VCAT 1797 at [15] - [25]:
   1. If the Tribunal finds a practitioner guilty of unsatisfactory professional conduct or professional misconduct, s.4.4.16 of the Act provides that the Tribunal may make any orders it thinks fit including the orders specified in ss. 4.4.17, 4.4.18 and 4.4.19.
   2. The available orders include reprimand; a fine of up to $50,000; additional professional education; conditions of supervision inspection or reporting; an order that the practitioner's practising certificate be suspended or cancelled; and an order recommending to the Supreme Court that the practitioner's name be removed from the roll.[2]
   3. A practitioner found guilty of professional misconduct or unsatisfactory professional conduct will usually be ordered to pay the Commissioner's costs of the proceedings. By clause 46D of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998, which deals with costs in disciplinary matters under the Act, where the Tribunal has found a practitioner guilty of unsatisfactory conduct or professional misconduct, it must order the practitioner to pay costs, unless there are exceptional circumstances.
   4. The objective of determinations is primarily the protection of the public and the maintenance of professional standards in the eyes of the public (protection of the reputation of the profession). Although the orders may well feel like punishment to the practitioner, the focus of the Tribunal will be on protection, not punishment.[3] As observed in Quinn v Law Institute of Victoria Ltd:[4]

The available sanctions are, by their nature, punitive, and the objectives of specific and general deterrence - which serve the protection of the public - depend upon the sanctions having punitive effect.

Critically for present purposes, however, the Tribunal's protective function is paramount. Thus, where there is a choice of sanctions, it is to be expected that the tribunal will choose that sanction which maximises the protection of the public.

1. With that protective focus in mind, the Tribunal considers a range of factors.
2. The nature and seriousness of the conduct will be taken into account to assess what may be required in the interests of general deterrence (deterring other practitioners from engaging in the conduct).
3. Evidence as to past disciplinary history, character, insight, and the risk of repetition will be relevant to assessing what may be required in the interests of specific deterrence (deterring the specific practitioner from repeating the conduct).
4. The degree to which the practitioner has acquired insight into his or her conduct is relevant to assessing whether the practitioner poses any continuing risk and also whether they are a fit and proper person to practise. As observed by Harper J in Morris v Psychologists Registration Board [5] a practitioner who does not have the necessary insight into the wrongdoing 'ought not, if the public is to be protected, to be allowed to practise.'
5. The degree to which the conduct can be seen as a temporary and explicable departure from otherwise high professional standards, rather than as an indication of attributes of character that may make the person unsuitable for practice, will also be a relevant consideration.
6. Other relevant matters may include mitigating factors such as the practitioner's personal circumstances at the time, any issues of physical or psychological health, and any delay in the case coming to hearing.
7. Orders made in any comparable cases may be a useful guide to proportionality, and parity is important, but every case necessarily involves a different combination of factors. The nature of the offending conduct and its duration, the particular circumstances of the practitioner, the context of the offending, and the assessed risk of repetition are all factors which will rarely be identical in any two cases.

1. In relation to Charge 1, Mr Beling was found guilty of:

Professional misconduct at common law within the meaning of s 4.4.3(1)(a) of the Legal Profession Act 2004 for failing to exercise due care and competence in the course of engaging in legal practice, for failing to fulfil his duties to his clients Peter and Tracie Hanna (the Hannas) during the period 24 August 2012 to 30 January 2013 to exercise proper care and conduct of the proceedings before the Court in which his clients were the applicants and for which work he charged a fee for his legal services in excess of $50,000.

Professional misconduct within the meaning of s 4.4.3(1)(a) and s 4.4.4(a) for contravention of r 12.2 of the Rules by failing during the period 24 August 2012 to 30 January 2013 in the course of engaging in legal practice to adequately advise his clients the Hannas in the circumstances so as to permit his clients to give proper instructions

Mr Beling was found not guilty of professional misconduct, but guilty of unsatisfactory professional conduct, under s 4.4.20 of the Legal Profession Act 2004.

1. Although it is clear from my findings as a whole that Mr Beling's conduct the subject of charge 3 would have amounted to professional misconduct under s 3.3.4(1)(a) had it been alleged that it comprised a substantial failure to maintain a reasonable standard of competence and diligence, that was not alleged. Only the alternative formulation under s 3.3.4(1)(a) of a consistent failure to reach or maintain that standard was alleged, and it was found that the conduct did not satisfy that consistent descriptor. Obviously, the penalty imposed concerning charge 3 must reflect the fact that it related to a narrower range of conduct, and was a finding of unsatisfactory professional conduct, not professional misconduct, however, it must also consider the protection of the public.

1. As described in the primary decision, charge 1 relates to all seven of the proved key allegations (1, 2, 3, 5, 6, 8 and 9) whereas charge 3 only relates to proved key allegations 2, 3, 5, 6 and 8. That is, charge 3 does not include as Particulars, key allegations 1 and 9, namely, the particulars relating to the preparation of the draft Statement of Claim, and the charging of $50,000 for Mr Beling's services.
2. Charge 1 was an allegation that Mr Beling's conduct of the Hanna retainer, taken as a whole, comprised misconduct at common law. In contrast, in relation to charge 3, Mr Beling was found guilty of unsatisfactory professional conduct as defined in s 4.4.2 of the Act. This is defined as conduct which 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.
3. Charge 3 relates to a breach of Rule 12.2 of the Professional Conduct and Practice Rules 2005, which provided:

A practitioner must seek to assist the client to understand the issues in the case and the client's possible rights and obligations, if the practitioner is instructed to give advice on any such matter, sufficiently to permit the client to give proper instructions, particularly in connection with any compromise of the case.

1. The conduct of most concern in relation to charge 3 is the failure to provide the Hannas with the analysis and advice they needed, especially prior to the mediation, as well as the ambiguity in estimates provided by Mr Beling to the Hannas of their potential liability for costs, both to him, and to the ANZ.
2. Thus, although the two proved charges are brought on different legal bases, they relate to the same actual conduct, save that charge 1 encompasses the preparation of the draft Statement of Claim, and the charging of $50,000 for Mr Beling's services, whereas charge 3 does not. So the finding of guilt on charge 1 relates to a broader range of deficient conduct.
3. For this reason, although it might be said that the proved conduct the subject of charges 1 and 3 is 'inextricably interwoven' in the sense referred to in Matthew Stirling v Legal Services Commissioner[6], in my view separate penalties should be imposed for charges 1 and 3. It is appropriate, however, that they be concurrent. That is, in relation to charge 3, Mr Beling should not be the subject of any additional sanctions over and above those imposed for charge 1.

1. Mr Beling is not an inexperienced practitioner. He has held a practising certificate now for 14 years, albeit that he has not practised full-time for the whole of that period. He is clearly knowledgeable about legal theory in a number of areas.

1. Mr Beling has no prior disciplinary findings against him. As he submitted, since the time of his retainer for the Hannas' in 2012/2013, there have been no complaints made to the VLSC about him either. These are factors in his favour.

1. In this case, the clients were pursuing a misguided 'scattergun' set of claims and ultimately went to a solicitor who, instead of bringing some clarity, order and forensic analysis, magnified the confusion and expanded the allegations against the bank, including serious allegations of fraud, dishonesty, corruption and intent to conceal evidence, when no objective basis for such claims could be articulated. A striking aspect of the case is Mr Beling's preparedness to do so much work pursuing such a novel and speculative claim (and to charge for that work) without obtaining any assistance from a person such as a barrister with some experience in the relevant area.
2. Mr Beling and his clients were isolated in the sense that there were no external influences able to 'reality check' their approach to the litigation. As noted in the primary decision, Mr Beling's actions in discouraging his clients from attending the mediation exacerbated this isolation.
3. The main aspects of concern described in the primary decision are: the unlawyer-like appearance and content of the draft Statement of Claim, Mr Beling's unproductive attitude towards the ANZ's representatives, the disproportionate expenditure of the client's scarce financial resources on educating himself, the failure to provide his clients with realistic advice as to their prospects of success, or to moderate their unrealistic expectations, and the promulgating of the allegations of fraud, etc, without a proper basis being articulated.

1. I accept Mr Beling's submission that he did make a few concessions, for example, that in hindsight his 18 October 2012 costs evaluation and estimate should have included fees above $50,000 and the 25% uplift (albeit that he then said this was obvious to the Hannas in any event).[7]
2. However, the situation overall is that Mr Beling has, right up to the present, very largely demonstrated a lack of insight into the shortfalls of his conduct in carrying out the retainer for the Hannas.
3. In acting for himself throughout the disciplinary proceeding, Mr Beling pursued time-consuming, misguided evidentiary and legal submissions. He produced many hundreds of pages of documents comprising submissions and evidence. His conduct caused the case to run for much longer than it needed to. Mr Beling is of course entitled to defend himself, but the way in which he conducted his defence again demonstrated a lack of proportionality and judgement, and a lack of insight.
4. Also, in this hearing, Mr Beling again demonstrated a preparedness to make allegations of unethical conduct and professional misconduct, this time against the VLSC officers, seemingly not conscious of the seriousness of making such allegations, and the need to ensure there was at the very least an arguable basis, before proceeding to make them.
5. Mr Beling submitted that he had 'shown a great deal of remorse since the start of the Commissioner's investigation, in that he stated many times in his responses to the Commissioner that he was sorry that the Hannas did not receive the outcome they wanted'. In this case, it is the concept of insight which is more relevant generally, rather than remorse. If remorse does have any relevance in this case, it would be in relation to Mr Beling's preparedness to make allegations of fraud, etc, without a proper basis being articulated. However, no remorse in relation to that matter has been demonstrated. And in respect of his response that he was sorry the Hannas did not receive the outcome they wanted, this in itself suggests a lack of insight.
6. In his written submissions, Mr Beling sought to revisit some of the matters which were ruled upon in the principal decision. This included the contention that he had achieved a 'successful outcome' for his clients, his contentions concerning 'waiver of Mr Hanna's legal professional privilege' and the authenticity of documents produced by the VLSC. Mr Beling also submitted that his originating motion filed with the Supreme Court 'was competent and diligent and that the proceeding had merit'.[8] Those submissions do not assist him in relation to the question of penalty.

1. The two key considerations in determining penalty are the protection of the public, and of the reputation of the profession. In this case, in my view, the most important factor is the protection of the public - in a literal sense. That is, I am satisfied from all the evidence and submissions received from Mr Beling, that as things stand at present, there is a significant risk to potential clients of Mr Beling's that their interests will not be protected in the event of his acting on their behalf.
2. This conclusion follows from the narrative of events, combined with Mr Beling's lack of insight, and unpreparedness to accept that his conduct of the Hannas' file was seriously deficient.
3. There is a significant danger that clients' personal, strategic and financial interests will not be properly considered. Mr Beling has demonstrated a lack of objectivity and was overly influenced by his clients' ill-advised and inappropriate instructions.
4. As noted in the principal decision, if other practitioners acted in the way Mr Beling did, the reputation of the profession would quickly decline.
5. While I do not consider that removing Mr Beling's right to practise is necessary, in my view, it is clear that the protection of the public (and also of the reputation of the profession) require that Mr Beling be supervised when carrying out legal work for clients for a period. And given his stubborn lack of acceptance of the inadequacies of his conduct of the retainer for the Hannas, even at this stage, after five years have passed, and after extensive analysis of his conduct has been undertaken, this supervision needs to be for a substantial period.
6. While it is apparent Mr Beling does not regularly handle this type of case, the evidence leads me to conclude that it would be inconsistent with the protection of the public for him to be allowed to practise without the supervision of a principal, at least for a period, in relation to any kind of work. Mr Beling chose not to attend the penalty hearing, and did not make any submission along the lines, for example, that he should be allowed to continue to conduct Magistrates' Court pleas, intervention order applications and the like, without the supervision of a principal, and that it would be safe for him to do so.
7. Protection of the public through the more indirect means of the application of the principles of specific and general deterrence is also relevant here.[9] Concerning general deterrence, the promulgating of serious allegations against another party without a proper basis being able to be articulated[10] is a breach of a practitioner's professional duties. Mr Beling's conduct was not as serious as if he had actually filed the draft Statement of Claim, but, as found, it was a significant component of the actions found to comprise misconduct at common law.
8. The potential for abuse of process by the making of such allegations is something which practitioners generally, especially those involved in litigation, must be very careful to consider, and to avoid. Concerns about such matters generally have given rise to reforms such as those brought about by the Civil Procedure Act 2010, and the requirement to sign 'proper basis' certificates. These changes emphasise the special responsibility which legal practitioners have to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute in litigation.
9. As far as specific deterrence is concerned, Mr Beling's lack of insight underlines the importance of that factor here.

1. Mr Beling produced two references, attached to his written submission of 18 August 2017. One was from Mr William Krammer, the accountant who stated he had been the external examiner of Mr Beling's trust account for the past 12 years. He said Mr Beling was totally scrupulous in the way he had maintained his trust account and stated 'his integrity has never been questioned'.
2. The other was from Ms Diana Augstkalns, who stated she is currently a full-time postgraduate Masters student in Social Work at the University of Melbourne. She said she had worked with Mr Beling in a professional capacity since July 2013, collaboratively, to support and advocate for vulnerable socially disadvantaged mutual clients through their involvement in the justice system. She described Mr Beling as well prepared, sensitive to clients' individual circumstances and special needs, and an excellent communicator. She said she recalled instances of Mr Beling explaining the limitations of his role to clients, 'for example advising in such cases where a barrister is required or practices fall outside the parameters of his role or expertise'.
3. I take these references into account. In relation to the first, I note that the VLSC did not accuse Mr Beling of dishonesty, or of any trust account breaches. In relation to the second, I note the positive comments in relation to Mr Beling's conduct of pleas. However, a reference in this form falls well short of allaying my concerns about the potential for clients' interests not to be sufficiently protected should Mr Beling be allowed to continue to practise without the supervision of a principal.

1. In my view, it is clear from the circumstances of this case that the most important determination which the Tribunal should make is one which provides for effective supervision of Mr Beling. Mr Beling submitted that the period of five years supervised practice contended for by the VLSC was not in parity with other disciplinary decisions. He referred to a number of cases where he said the conduct was more serious, to support his contention that the VLSC's proposal that he be restricted to practising as an employee only for five years was too harsh.
2. Mr Beling referred to the case of Victorian Legal Services Commissioner v Wise[11]. In that case, the practitioner pleaded guilty to breaches of trust accounting rules. He did not have a clean disciplinary record. It was ordered that he not be allowed to practise as a principal, or to receive trust monies, for four years and 10 months. He was fined $10,000. I do not regard the penalty I have imposed in this case as lacking parity with Wise. Although it related to trust account breaches (as opposed to negligence, comprising misconduct at common law), the penalty imposed recognised Mr Wise's 'early acknowledgement of his wrong-doing. his plea of guilty, remorse, the fact that there was no misappropriation and that the offending is at the very low end of the scale'.[12]
3. Mr Beling also referred to Victorian Legal Services Commissioner v Logan[13]. I agree that the conduct in that case was more serious (concerning a scheme involving motor vehicle crash repairs). In that case, Mr Logan was banned from practising for two years, then restricted to being an employee for a further 18 months.
4. I also agree that in the case of Victorian Legal Services Commissioner v Mingos[14], the circumstances were different in a number of ways.

1. Finally, Mr Beling referred to Victorian Legal Services Commissioner v McBain[15]. That case involved more serious conduct concerning the practitioner repeatedly preferring his own interests to those of beneficiaries in deceased estates administered by him. In that case, the practitioner was barred from practising for a minimum of nine months, with resumption depending on a satisfactory psychologist's report. He was then restricted to practising as an employee only for four years after that. I note in that case there were mental health issues. The main issue in terms of protection of the public was able to be dealt with by the acceptance of an undertaking which the practitioner gave to the Tribunal that he would not act as executor for clients and that in the future, he would only practise in the area of family law.
2. Of course, each case must be considered on its own facts and circumstances. This is an unusual case. Mr Beling has shown a stark lack of insight, such that I have concluded the protection of the public requires he should only practise under the supervision of an employer for a significant period. The only proposal that has been put by Mr Beling for restrictions to be placed on his practice in any particular way is his agreement, expressed in his written submissions, to give an undertaking to the Tribunal:

(a) that he will participate in workshops or courses relating to consumer credit and/or mortgage law, being workshops or courses for which a total of five continuing professional development points have been allocated, between the period of the Tribunal's decision on penalty and a date 12 months later (in addition to the obligations imposed on the respondent by the Legal Profession Uniform Continuing Professional Development (Solicitors) Rules 2015);

(b) that he will not act for any client in the areas of consumer credit and/or mortgage law until he has participated in workshops or courses for which five continuing professional development points in the areas of consumer credit and/or mortgage law have been allocated; and

(c) that he will ensure that he is familiar with the practice rules that are current from time to time relating to consumer credit and mortgage law.

1. As indicated, it is not a lack of knowledge of legal theory which is the primary concern. It is the lack of judgement, and preparedness to pursue a novel and misguided approach to conducting litigation on behalf of his clients, including a lack of proportionality in terms of expenses incurred, without genuinely seeking any kind of guidance or reality checking from a professional colleague. Plus his preparedness to make serious allegations against those opposed to him.
2. In my view, Mr Beling's submission that he not be supervised at all is quite unrealistic. In view of the extent of his lack of insight, and his failure to suggest any realistic conditions which might apply to his practice, I have concluded the appropriate disposition in relation to charge 1 is one which restricts him to working only under the supervision of a principal for a three-year period. During this time he will have the opportunity to develop his skills in the ways identified as necessary in this case. A longer period would have been appropriate, but for the fact that I am conscious it may be possible after three years to allow Mr Beling to practise as a principal in particular areas to be specified, where the risk to the public is not unacceptably high.
3. As noted, charge 3 concerns a less broad range of conduct than charge 1. It does not relate to key allegations 1 and 9, namely the preparation of the draft Statement of Claim, and the charging of $50,000 to the Hannas for his services. But the nature of the proved conduct covered by charge 3 - especially the failure to provide the Hannas with the analysis and advice they needed, and the ambiguity in cost estimates provided - does demonstrate a need for supervision in order to protect the public.
4. In relation to charge 3, I determine that Mr Beling should be required to be subject to supervision for a period of two years, concurrent with the period imposed in relation to charge 1.
5. While the VLSC initially suggested its proposal for supervision be given effect to by Mr Beling being restricted to being able to hold only an employee practising certificate for a period, it accepted that an order which allowed him to practise under supervision as a corporate legal practitioner, government legal practitioner or volunteer at a community legal service (or otherwise on a pro bono basis) would be acceptable, as long as he was subject to effective supervision.[16] For example, it would not be satisfactory if he were to practise as a corporate legal practitioner without being subject to the direct active supervision of a superior who was an experienced legal practitioner. I will make an order to that effect.
6. I am not proposing to require specific mentoring over and above what is entailed by being under supervision as an employee, given Mr Beling's principal will bear ultimate responsibility for his conduct. It will be apparent to any future employer from this decision, and the principal decision, the kind of matters which he or she should specifically focus on in supervising Mr Beling as an employee.
7. At the end of the three-year period, Mr Beling will need to satisfy the VLSB that he is a fit and proper person to be allowed to practise as a principal, if he wishes to do so, and under what conditions. For example, whether he should be confined to working in specified areas of practice. It is likely an important factor in determining whether Mr Beling is suitable will be the reports received from practitioners who have supervised him during that period.
8. Also, the intention is that before he is eligible to practise as a principal (whether or not subject to conditions) Mr Beling should receive the benefit of supervision for a period which equates, broadly, to three years of full time practice. I will make an order to that effect as well.

1. I accept the VLSC's submission concerning additional CPD to be undertaken by Mr Beling. Formal CPD, to the satisfaction of the VLSC, will serve to complement the supervision he will receive as an employee. I will order the additional 10 units over and above the normal requirement, as was sought by the VLSC, but will allow it to be completed over two years.

1. It is clearly appropriate, as Mr Beling accepted, that he should be reprimanded. This is a public expression of denunciation of his conduct. It is a sanction which carries with it a sting for any practitioner who values their good reputation.

1. The VLSC submitted that a fine be imposed in the order of $10,000 - $15,000. This was submitted as being appropriate in light of the need for specific and general deterrence given that Mr Beling had engaged in serious misconduct, and that it was proposed that he should be reprimanded, but not that he be suspended or prohibited from practising.
2. The VLSC submitted, however, that the costs payable by Mr Beling be reduced by the amount of any fine imposed, so that any fine would not add to the financial burden he would have to bear, when costs are taken into account. In terms of financial impact, I also note that the outcome of this case also has obvious implications for Mr Beling's prospects of being able to obtain payment of the fees he has levied on the Hannas - which amount to $50,000 in total (of which $9,850 has been paid).
3. I accept the VLSC's submission that a fine is appropriate. Bearing in mind the importance of specific and general deterrence, the lack of insight demonstrated, and the disproportionate expenditure of the client's scarce financial resources on educating himself, I will impose a fine of $10,000 in relation to charge 1. Given the narrower range of conduct the subject of charge 3, and the fact that it does not include Particular 9, concerning the charging of $50,000 to his clients, I will impose a fine of $5,000, this being concurrent with the $10,000 fine for charge 1. That is, the total amount Mr Beling is ordered to pay by way of fines is $10,000. And, accepting the VLSC's submission on this point, costs are to be reduced by that amount of $10,000.

1. The version of cl 46D of Schedule 1 to the Victorian Civil and Administrative Tribunal Act 1998 which is applicable to these charges, which were brought under the Legal Profession Act 2004,[17] is as follows:

(1) Subject to this clause, the costs of a proceeding under Division 4 or 5 of Part 4.4 of the Legal Profession Act 2004 are in the discretion of the Tribunal.

(2) The Tribunal must make an order requiring an Australian legal practitioner whom it has found guilty of unsatisfactory professional conduct or professional misconduct to pay costs (including the costs of the Commissioner and the complainant (if any)) unless the Tribunal is satisfied that exceptional circumstances exist.

(3) The Tribunal must not make an order for costs against the Commissioner unless satisfied that special circumstances make it appropriate to do so.

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

(5) In this clause, Australian legal practitioner, Commissioner and complainant have the same meaning as in the Legal Profession Act 2004.

1. This is a matter of great significance in this case, because such substantial resources have been devoted to the disciplinary process. The VCAT hearing ran for 12 days (excluding the penalty hearing).
2. Mr Beling contended that exceptional circumstances exist, such that no order for costs should be made in the Commissioner's favour. He submitted 11 matters, each of which he said constituted 'exceptional circumstances'. He also submitted that on the basis of the same 11 matters, it should be concluded that 'special circumstances' existed, such that it was appropriate for an order to be made for the VLSC to pay his costs in relation to charges 2 and 4.
3. The first basis relied on by Mr Beling was his contention that the VLSC had refused or failed to negotiate in writing to amend or withdraw any of the charges. He quoted a number of without prejudice communications which occurred between himself and the VLSC during the course of the hearing, which might be described as negotiations.

1. However, there was nothing having any of the attributes of a calderbank offer which was relied upon by Mr Beling, let alone something which would constitute 'exceptional circumstances' so as to displace the presumption that Mr Beling is to pay the VLSC's costs.
2. Indeed, Mr Beling said, 'While it is certainly not submitted that the respondent would have definitely pleaded guilty to any of the charges, the respondent simply could not consider his options because nothing was presented by the Commissioner in writing.' In the correspondence provided by Mr Beling, the VLSC stated in response to certain contentions by Mr Beling that it had taken an unreasonable stance in negotiations, that the Commissioner remained 'ready to discuss with Mr Beling on a without prejudice any reasonable plea to the charges'. In effect, it alleged unreasonable conduct by Mr Beling, and went on to say that 'any assertion by you that the Commissioner has failed to properly engage in settlement negotiations will be vigorously refuted'.
3. In any event, in the context of the comprehensive findings made against him, the matters referred to by Mr Beling from the without prejudice communications, even if accepted, would fall short of constituting a basis on which the Tribunal would conclude that 'exceptional circumstances' exist.
4. The second contention made by Mr Beling was, in the alternative, that since he had only been found guilty of two of the four charges, he should only be required to pay 50% of the VLSC's costs.
5. However, as was made clear in the principal decision, the dismissal of charges 2 and 4 was simply on the basis that charge 2 was a subset of charge 1, and that charge 4 was a subset of charge 3. Charges 2 and 4 were found to be, in effect, alternative charges. (See paragraphs 21, 401 - 2 and 441 - 2 of the principal decision.) They were dismissed on the basis that it was unfair to Mr Beling for him to have findings of guilt against him for four charges in the circumstances.
6. The whole of the conduct the subject of charges 2 and 4 was conduct which was also found against Mr Beling in relation to charges 1 and 3 respectively. Mr Beling was found guilty of all the matters alleged against him in the nine key allegations, with only a few minor exceptions.
7. For these reasons, no order confining the VLSC's costs to 50% will be made. However, I will order that costs referable to charges 2 and 4 are not payable by Mr Beling to the VLSC. It may be, in the circumstances, that there are few if any costs in this category.
8. Mr Beling also submitted that an award of costs against him would lead to his financial ruin and destroy his prospects for rehabilitation for the next five - ten years. The brief details of his financial position he gave in his written submission supported this. They include an unspecified, but doubtless substantial costs liability to the VLSC for his unsuccessful Supreme Court challenge to the commencement of these disciplinary proceedings.
9. The extent of the costs incurred by the VLSC in this case is very largely due to the manner in which Mr Beling's conduct of his own defence, pursuing misguided legal and evidentiary challenges, drawnout cross examination of Mr Howell to little effect, and highly convoluted written and oral evidence and submissions. These caused the hearing to run for many more days than it needed to.
10. It seems clear that a key purpose behind clause 46D is to require a practitioner to bear the costs caused by their deficient conduct, rather than the VLSC (and therefore, ultimately, the profession and the public).
11. It is not apparent how the submission that a costs order would destroy Mr Beling's prospects for rehabilitation for the next five - ten years was put. One implication seems to be that it would cause him to lose his current employment (the nature of which was not indicated) although it was not made clear how this would follow from a costs order, as opposed to the actual disciplinary findings against him.
12. In the above circumstances, I do not accept that Mr Beling's financial position comprises 'exceptional circumstances' which would justify a departure from the general position that a practitioner found guilty of professional misconduct or unsatisfactory professional conduct must pay the VLSC's costs.
13. Mr Beling's third and fourth submissions again raised his contentions that he had been instrumental in achieving a 'successful outcome' for the Hannas, and that Mr Hanna had not waived legal professional privilege. These matters were ruled upon in the principal decision, and are not relevant to costs.
14. Mr Beling's fifth submission was relevantly that the 'majority of the Commissioner's submissions on penalty may tend to mislead the Tribunal and are well outside the relevant penalty range'. This is not accepted. For the reasons set out above, I have not accepted Mr Beling's contention, in effect, that he should be allowed to continue to practise without supervision.
15. Mr Beling's sixth, seventh and eighth submissions concern his allegations of professional misconduct by the VLSC's officers in conducting this matter, in particular in relation to the veracity of the documents provided as comprising his file in relation to the Hannas' litigation. Again, these submissions do not assist Mr Beling at this point. To the extent necessary, these matters were ruled on in the principal decision.
16. Mr Beling's ninth, tenth and eleventh submissions are that a suppression order was initially granted concerning the Hannas, that they consistently complimented his work, and that Mrs Hanna sought to re-negotiate the retainer with Mr Beling. These do not bear on the exercise of the Tribunal's discretion in relation to the question of costs in this case.
17. In summary, I do not accept Mr Beling's submissions that there is any basis for departing from the starting point under clause 46D of Schedule 1 to the VCAT Act that Mr Beling is to pay the VLSC's costs in relation to charges 1 and 3.
18. Mr Beling also relied on those submissions as supporting his contention that there are 'special circumstances' which justify an award of costs in his favour in relation to charges 2 and 4. Given I have rejected those submissions, I find there is no basis for the making of such an order in Mr Beling's favour.
19. I will order that Mr Beling is to pay the VLSC's costs in relation to charges 1 and 3, but not charges 2 and 4.

[1] Victorian Legal Services Commissioner v Beling (Legal Practice) [2017] VCAT 1022.

[3] See the observations in Hannebery v Legal Ombudsman [1998] VSCA 142 [22] (Tadgell JA with Phillips and Chernov JJA agreeing).

[4] [2007] VSCA 122 [30] - [31].

[5] Unreported, Supreme Court of Victoria, Harper J, 19 December 1997; referred to in VLSC v Lewenberg (No 2) [2016] VCAT 556 [12].

[6] [2013] VSCA 374 at [75].

[8] This is the application which gave rise to the decision in Beling v Legal Services Commissioner [2016] VSC 108 (22 March 2016) per Derham AsJ. His honour concluded in relation to that application that the material advanced by Beling 'reveals no arguable case for relief of any kind. The proceeding has no real prospects of success and it should be summarily dismissed...' (at [103]).

[9] See Quinn v Law Institute of Victoria Ltd [2007] VSCA 122 at [30] - [31].

[10] This applies particularly to charge 1, which related to conduct including the preparation and reliance on the draft Statement of Claim (key allegation 1). But it also relates to charge 3, to some extent, given that his advice to pursue serious allegations of fraud, etc against the Bank without a proper basis being able to be articulated, is also part of the conduct the subject of charge 3.

[11] [2016] VCAT 2112.

[13] [2017] VCAT 189.

[14] [2016] VCAT 918.

[15] [2015] VCAT 1545.

[16] See s 47 of the Legal Profession Uniform Law (Victoria).

[17] Clause 46D was amended by the provisions which introduced the Legal Profession Uniform Law (Victoria), although those changes did not affect the operation of the two key components of cl 46D, namely, the obligation to award costs against a practitioner unless exceptional circumstances exist, and the prohibition on ordering costs against the Commissioner unless the Tribunal is satisfied that special circumstances make it appropriate to do so.