1. Mr Hyatt is a legal practitioner who, since 1997 has carried on practice as a sole practitioner in the name of Hyatts Solicitors. By 1 July 2015, he had for many years been conducting a successful high volume practice representing taxi clubs in Magistrates' Court proceedings relating to property damage claims.
2. Following the provision of:
   • an external examiner's report in respect of the conduct of his trust account dated 29 February 2016;
   • a Law Institute of Victoria trust investigation report dated 24 June 2016; and
   • the report of an independent reviewer retained to review the practice's trust accounting, solvency and compliance with the Legal Professional Uniform Law (Victoria) and the Uniform Rules dated 12 August 2016,

the Legal Services Commissioner commenced an investigation into Mr Hyatt's conduct as a disciplinary matter under section 282 of the Uniform Law.

1. Ultimately that resulted in Mr Hyatt pleading guilty to four charges of professional misconduct. They were described in the Respondent's Amended Application for Orders in these terms:

Professional misconduct within the meaning of section 298 (1) (a) of the Uniform Law in that the Respondent is liable pursuant to section 35 of the Uniform Law, as principal of the Practice, for the Practice between 1 July 2015 and 24 February 2016 contravening section 138 (1) (b) of the Uniform Law when it failed to disburse trust money only in accordance with a direction given by the person on whose behalf the trust money was received or as otherwise authorised by law, in breach of section 138 (1) (b) of the Uniform Law, including by the Practice causing deficiencies in the trust account without reasonable excuse in breach of section 148 of the Uniform Law.

Professional misconduct within the meaning section 298 (1) (a) of the Uniform Law in that the Respondent is liable as principal for the Practice's breach as soon as practicable after 30 June 2016 of rule 52 of the Uniform Rules, which required the Practice to give trust account statements to its clients as soon as practicable after each financial year in which trust money was held for the client and after the completion of the client's matter.

Professional misconduct within the meaning of section 297 and 298 of the Uniform Law in that from 1 July 2015 to 1 April 2016 the Respondent is liable as principal for the Practice's breach of rules 61 (b), 62 (1), 62 (3), 64 (1), 64 (2) and 64 (8) of the Uniform Rules, which provide for the proper maintenance of and accounting for controlled money accounts.

Professional misconduct within the meaning of section 298 (1) (a) of the Uniform Law in that the Respondent is liable as principal for the Practice's breach from 1 July 2015 to about August 2016 of section 147 (2) (a) of the Uniform Law when it failed to keep trust records in accordance with the Uniform Rules, in that the Practice breached the following rules:

rule 37 (3) which requires a deposit record for trust money to be made out in duplicate;

rule 43 (1) (a) which specifies the cheques withdrawing money from trust must not be made payable to bearer or cash;

rule 43 (5) which requires written records relating to payments by cheque or EFT to be kept in the order in which the cheques or transfers were issued or effected;

rule 44 (2) which requires the date and amount of each deposit in the general trust account to be recorded in the trust account receipts cash book;

rule 44 (3) which requires particulars in respect of receipts to be recorded in the order in which the receipts are made out and within five working days of the receipt being made out;

rule 45 (1) (d) which requires trust records to record certain particulars in respect of payments by EFT;

rule 45 (2) which requires trust account payments cash book particulars to be recorded in the order in which payments are made and within five working days of the day the payment was made;

rule 48 (1) which requires law practices to reconcile trust records relating to each of one or more trust accounts; and

rule 48 (3) which requires reconciliation statements to be prepared within 15 working days after the end of the month concerned.

1. By his pleas of guilty, Mr Hyatt expressly accepted the facts and circumstances set out in certain identified, individually numbered paragraphs of the Legal Services Commissioner's Further Amended Application for Order dated 6 September 2018. Those facts and circumstances were themselves drawn from the external examiners report, the Law Institute of Victoria trust investigation report and the independent reviewer's report.
2. In substance, Charge 2 identified twenty three separate matter files in which Mr Hyatt transferred an amount of money from his trust account into his office account for his costs. The moneys received by him into trust represented a sum agreed to be paid in settlement of a claim, or a payment made as a result of a Magistrates' Court order in favour of a client in respect of a damages claim. The transfers from trust to office were made without rendering a bill to the client, without a fee agreement, without authority and, in most cases without any accounting for the disbursement of costs thereafter.
3. In twenty of the matters, the amount transferred from trust to office was less than $10,000 per matter. Costs in the other three matters did not exceed $20,000 per matter. In total there was a trust account deficiency of $61,367.50. The agreed summary also included in this charge, reference to a further sum of $570 which was withdrawn from trust without authority, a bill or other written request or notification, but which was not characterised as causing a deficiency in the trust account. The period covered by the charge was eight months.
4. Charge 3 in substance concerns Mr Hyatt's failure to give trust account statements to clients in accounting for the disbursement of the moneys received by him on their behalf. In some, but not all cases a document described as a trust account statement was provided, but it did not contain the information required by law. In other cases no accounting for disbursement of trust moneys was provided at all. There is some, but not a complete overlap between the matter files in Charge 2 and this charge. There are some matter files included in this charge which were not the subject of the separate wrongdoing particularised in Charge 2.
5. Charge 4 concerns the failure to appropriately maintain and account for controlled money accounts, a type of trust account. Mr Hyatt had established 53 separate controlled money accounts with Westpac, which contained a total of $1,950,194.25. The requirement to maintain and account for controlled money accounts was breached in a number of ways. None of the accounts were described as controlled money accounts in the account name, as they should have been. There was neither a single register of controlled money accounts, nor individual registers for individual accounts. There were no records kept of transactions on those accounts. There were no monthly statements prepared which included the name, number and balance of each account in a register. There was no register kept which recorded the names of the persons on whose behalf the controlled money on each account was held, or any description of the matter to which the account related. There is no overlap between these CMA breaches and the two previous charges. The duration of this charge is slightly longer than the period particularised for charge 2, but spans approximately the same time frame.
6. Charge 8 is one of widespread and serial failure to keep trust account records as required. This is again, separate from the matters identified in charge 2. It is related to the multiple ways in which Mr Hyatt failed to keep trust records in accordance with the Uniform Rules. Again, this failure commenced in July 2015, but continued for longer, a total of 13 months.
7. I note that the Legal Services Commissioner does not allege that Mr Hyatt has committed any criminal offences in respect of this conduct. Specifically it was not alleged that his conduct in respect of these serious breaches in relation to his trust account was dishonest in the sense in which that term is used in the criminal law.
8. These are not mere technical breaches, or failures to deal with meaningless red tape requirements. As a result of Mr Hyatt's misconduct, the information clients were entitled to by law, in respect of moneys held on trust on their behalf, was not recorded. They were denied the means of accessing the information to which they were entitled, in respect of the holding, and dealing with their money.
9. In respect of Charge 2, they did not know what amounts had been charged for costs, have any means of assessing whether the costs were fair or reasonable, or any means of querying costs charged. Although I am told, that the amounts transferred to office in respect of costs did not exceed the amount that Mr Hyatt would have been entitled to charge had he rendered a bill of costs in taxable form, that does not excuse the failure to adhere to the very high obligations imposed on solicitors to properly account to their clients for costs. It is not to the point, indeed it fails to recognise the point to say, as was put on Mr Hyatt's behalf, that all the clients cared about was the net amount they would receive for their property damage claim.
10. In respect of all charges, Mr Hyatt's conduct meant that his clients were denied a proper accounting in respect of monies held by Mr Hyatt in trust on their account. They were unable to obtain the information to which they were entitled, and therefore exercise control over monies held by him in trust on their behalf. He was unable to provide them, or the regulator, with the information which he was required to keep in respect of trust moneys.
11. The terms trust account, trust money, money on trust are not meaningless. The use of the word trust in these terms is fundamental. The lawyer is trusted to hold other people's money, and to deal with it only as they direct, and to fully and properly account to those who entrust them with their money for where it is and where it has gone. To abuse that trust diminishes not just the reputation of the individual wrongdoer, but unfairly diminishes public trust and confidence in the integrity of the legal profession more generally.
12. These are, nonetheless, as counsel for the Legal Services Commissioner submitted serious charges. They occurred over a significant period of time. There were widespread, multiple breaches of the trust reposed in a solicitor in respect of the holding, dealing with and accounting for what he was entrusted to do with other people's money. Mr Hyatt was an experienced solo practitioner, with a long established practice. He cannot call in aid, youth, inexperience, or ignorance of his obligations.
13. I am satisfied that the admitted conduct does constitute misconduct, as alleged in each of the four charges.
14. The primary purpose of disciplinary proceedings is protective. The sanctions or punishments imposed must also reflect the seriousness of the breach of trust, and the risk to the reputation of legal practitioners as honourable people entitled to be entrusted with other people's money.
15. Denunciation of the misconduct is also necessary to make it clear to the public and practitioners alike that along with the privilege of legal practice, of being entrusted with other people's money, comes considerable responsibility. Responsibility includes compliance with the requirements imposed on legal practitioners by law in respect of holding, and dealing with other people's money.
16. The sanctions must also reflect the need to protect the rights of clients, and to promote public confidence in the integrity and accountability of those persons who are entrusted with other people's money. Sanctions must also serve as a deterrent both to the individual wrongdoer, and to other practitioners.
17. Mr Hyatt is a mature man with over 20 years' experience in sole practice. I was told he was articled, and spent some time in practice at one of Australia's top tier law firms before setting up in solo practice. I was told this offending came about because he was ignorant of his responsibilities. That a practitioner of over 20 years' experience, and with that background could be ignorant of his trust account responsibility beggars belief. It does not sit comfortably with his experience. And it is inconsistent with the submission, also made, that I can take into account in his favour his past twenty years of unblemished professional reputation.
18. I accept that Mr Hyatt is ashamed of what has happened, and recognises how far short of the standard expected of a legal practitioner, and of the standards he expected of himself he has fallen. He was rightly proud of his achievements. His parents came to Australia from the Ukraine, in search of a better life, when he was a child. He spoke no English when he arrived. His parents worked hard in semiskilled work to make a life for themselves here. Mr Hyatt was able to take advantage of the opportunities offered to him in Australia. He gained entry to law at Monash University and as noted, successfully completed his course, and sufficiently impressively to obtain articles with a top tier law firm. He had run a successful solo practice for over 20 years.
19. This is a considerable fall from grace. Mr Hyatt voluntarily surrendered his practising certificate last year. He has found alternative employment, but it appears to represent a drop in status, income, and enjoyment. He is unsure at this stage as to whether he wishes to practice again in the future. The personal toll has been heavy. His marriage has failed, and whilst no professional assessment was presented to me, I accept that his mental health is likely to be adversely affected.
20. An agreed position was put to me in relation to penalty. I was told that it was arrived at, having regard to penalties in comparable cases, and taking into account the mitigating factors counting in Mr Hyatt's favour. In particular that his previous 20 years in practice had been unblemished, that he had pleaded guilty and cooperated with the investigation from the outset, and that he has voluntarily surrendered his practising certificate.
21. The High Court in Commonwealth v Director Fair Work Building Industry Inspectorate,[1] set out the following principles which are applicable here:

1. there is an important public policy benefit in receiving, and if appropriate, accepting agreed penalty submissions;[2] 2. the decision of the High Court in Barbaro and Zirilli v The Queen, as to the inadmissibility of prosecution, or agreed penalty provisions in criminal proceedings has had no application to cases of this kind;[3]

1. upon persuasion of the accuracy of the parties' agreement as to facts and consequences, and that the penalty the parties propose is an appropriate one, it is a highly desirable practice for the Court to accept the parties' proposal.[4]
2. It is clear that it is my duty to determine the level of conduct alleged, and to impose sanctions. No agreement between a regulator and a regulated practitioner such as Mr Hyatt can supplant that duty. Subject to that overriding responsibility, it is appropriate for parties to put an agreed position before the Tribunal. If satisfied the agreed penalty is an appropriate one, it follows I should not lightly depart from that agreed position.
3. The agreed penalty is:

exclusion from practice entirely for a period of 12 months;

a limited right to practice, without authority to operate a trust account, for 5 years after the expiration of the 12 months complete exclusion from practice;

payment of the Legal Services Commissioner's agreed costs of $10,000.

1. As I said in the course of the hearing, I was surprised that the agreed penalty did not include a reprimand. I was told it has been the practice in LSC cases to reserve reprimand for cases of lesser gravity, where there is no monetary penalty or interference with the right to practice ordered. It followed, if I understood correctly, that it was thought a reprimand was unnecessary if the more punitive sanctions, such as fine or suspension or disqualification were imposed.
2. If this does reflect the view of the LSC, then I respectfully differ. In my view a reprimand is a powerful statement to the practitioner of how far below the standard of their profession they have fallen by their misconduct. It is in that sense a more personal sanction than the imposition of a fine, or suspension or disqualification from practice. Fine, suspension or disqualification affect a practitioner's livelihood. A reprimand goes to their personal integrity. In my view it is not necessarily a sanction that is to be imposed only in circumstances where more punitive, livelihood-affecting sanctions are not imposed. Nor should the importance of a reprimand as a powerful public statement by the authority vested with the power to impose sanctions, and maintain professional standards as to how far short of those standards a practitioner's conduct has fallen be underestimated. I note that in other fields of professional discipline which come before the Tribunal, reprimand is not uncommon, for more serious cases, including those where livelihood sanctions are also imposed.
3. I have decided that in the circumstances of this case, a penalty that does not include a reprimand is not an appropriate one.[5] The apparent failure to consider the appropriateness of a reprimand as part of the penalty in my view renders the reasoning as to what constituted a permissible range flawed. In my view, the importance of a reprimand as a personal, as opposed to livelihood-affecting sanction provides a clear reason[6] to depart from the agreed position of the parties.
4. Having come to this conclusion, I have also considered whether a reprimand should be imposed in addition to the agreed sanctions, or whether that should lead to a reduction in the agreed penalty. Because I have reasoned a reprimand is imposed for a different purpose, and is of a different quality to a livelihood-affecting penalty such as fine, suspension or disqualification, I have come to the view that the addition of a reprimand does not make the sanctions as a whole too harsh. That is, to take it outside the range of what was agreed between the parties, or the accepted range. It goes without saying that as a reprimand addresses the personal integrity aspect of sanction, it is not appropriate to seek to offset it by reducing the agreed fine, or the period of suspension or disqualification.
5. I find that Mr Hyatt has engaged in professional misconduct by reason of the admitted conduct giving rise to each of Charges 2, 3, 4 and 8.
6. I direct:

An Australian practising certificate not be granted to Vladislav Hyatt for a period of 12 months from the date of this order.

An Australian practicing certificate with a condition that Vladislav Hyatt is authorised to receive trust monies not be granted to Vladislav Hyatt for a period of five years commencing on the first anniversary of the date of this Order.

Vladislav Hyatt pay a fine of $10,000 to the Victorian Legal Services Board, payment to be by three equal monthly instalments, commencing 45 days after the date of this Order.

Vladislav Hyatt pay the applicant's costs fixed in the amount of $10,000, payment to be by three equal monthly instalments, commencing one month after the date on which the final instalment of the fine is payable.

[1] [2015] HCA 46; (2015) 258 CLR 482.

[5] Commonwealth v DFWBII at 491 at [58].

[6] Medical Board of Australia v Fox [2016] VCAT 408 at [16].