Misconduct at common law within the inclusive definition of professional misconduct in s 297(1) of the Legal Profession Uniform Law (Victoria) (Uniform Law), in that the respondent:

(a) improperly borrowed money from a client; and

(b) took steps to give a false or misleading impression that the respondent did not borrow money from a client

which conduct constituted conduct that other legal practitioners of good repute and competency would regard as disgraceful and dishonourable.

Professional misconduct within the meaning of s 297(1)(a) and/or 298(b) of the Uniform Law by engaging in conduct which consisted of a contravention of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (Conduct Rules) by reason of the respondent failing to act in the best interests of the client and/or failing to avoid any compromise to his integrity and professional independence in contravention of rules 4.1.1 and 4.1.4 of the Conduct Rules.

With the agreement of the parties, the Tribunal orders:

1 The respondent is reprimanded.

2 The respondent is to pay a fine of $10,000, payment to be stayed until 1 July 2022.

3 The respondent is to surrender his practising certificate with immediate effect.

4 The respondent is to pay the applicant's costs on County Court Scale, on a standard basis, to be assessed by the Costs Court in default of agreement, payment to be stayed until 1 July 2022.

5 The Tribunal's orders under the Open Courts Act 2013 (Vic) (OCA) and s 146 of the Victorian Civil and Administrative Act 1998 (Vic) (VCAT Act) dated 4 November 2021 are varied as follows:

(a) Order 3 (order under s 17 of the OCA) is set aside.

(b) Order 2 (order under s 146 of the VCAT Act) is varied to provide that, on paying the prescribed fee (if any), any person may obtain a copy of the following parts of the file: the applicant's application for order and annexures to the application; and the Tribunal Book filed by the parties, redacted to remove documents 11, 12 and 13, and the names of those documents from the index.

The Tribunal records and accepts the respondent's undertaking not to apply for a practising certificate nor engage in legal practice at any time in the future.

1 These are professional disciplinary proceedings under the Legal Profession Uniform Law (Victoria) (Uniform Law) brought by the Victorian Legal Services Commissioner (Commissioner) against Mr Kevin Edward Roache.

2 The Commissioner and Mr Roache reached agreement on the charges brought against Mr Roache and proposed orders ahead of the hearing. I made findings and orders at the hearing and gave summary oral reasons. These are my reasons in writing.

3 Mr Roache pleads guilty to two charges alleging that in December 2017 he improperly borrowed $150,000 from a client, Mathew Hoare;[1] took steps to give a false impression to the Commissioner that he had not done so; and contravened the rules for the conduct of solicitors by failing to act in the best interests of the client and failing to avoid any compromise to his integrity and professional independence.

4 The Commissioner's Application to the Tribunal for Orders sets out the facts alleged and admitted and is set out in the Appendix to these reasons for ease of reference.

5 Having considered the allegations, the supporting documents and Mr Roache's admissions, I was satisfied that the charges had been proved and made those findings.

6 The two charges found proved[2] are that Mr Roache engaged in:

Misconduct at common law within the inclusive definition of professional misconduct in section 297(1) of the Uniform Law, in that the Respondent:

(a) improperly borrowed money from a client; and

(b) took steps to give a false or misleading impression that the Respondent did not borrow money from a client

which conduct constituted conduct that other legal practitioners of good repute and competency would regard as disgraceful and dishonourable.

Professional misconduct within the meaning of section 297(1)(a) and/or 298(b) of the Uniform Law by engaging in conduct which consisted of a contravention of the Uniform Rules, by reason of the Respondent failing to act in the best interests of the client and/or failing to avoid any compromise to his integrity and professional independence in contravention of Rules 4.1.1 and 4.1.4 of the Conduct Rules.

7 As is recognised by Mr Roache by his plea of guilty and in the submissions on his behalf, the conduct is very serious.

8 A finding that a lawyer has engaged in misconduct 'at common law' is not made lightly. It is a finding that the practitioner has engaged in conduct that other legal practitioners of good repute and competency would regard as disgraceful and dishonourable.

9 There are two aspects to the conduct here. Improperly borrowing money from a client, and then falsely claiming to the Commissioner that the money was not a loan.

10 Borrowing money from a client (unless some limited exceptions apply) is unethical because it puts the lawyer's own interests before the client's; compromises professional independence; and exploits the trust placed in a lawyer by their client. The rule is in place to protect the integrity of the relationship between a solicitor and a client.

11 Here the ethical breach has been aggravated by what Mr Roache did next: he falsely claimed to the Commissioner that it was not a loan but was instead a sale of shares transaction and took steps to lodge documents supporting that false position. As later admitted, the transfer of shares was conceived subsequently to avoid the payment of money being treated as a loan.

12 Unfortunately, and as is often the case, attempting to cover up a transgression made the outcome far worse.

13 Legal practitioners hold a privileged and responsible position in the legal system. At the heart of the ethical obligations of those who wish to stay in the profession is a commitment to honesty in all their dealings with clients, other practitioners, the courts, and the regulator; and, when required, open candour and frankness irrespective of self-interest or embarrassment.

14 So that the relevant obligations are clearly stated, the following are the rules referred to in the Commissioner's Application for Orders:

4.1.1 act in the best interests of a client in any matter in which the solicitor represents the client,

4.1.2 be honest and courteous in all dealings in the course of legal practice,

4.1.4 avoid any compromise to their integrity and professional independence

12 Conflict concerning a solicitor's own interests

12.3 A solicitor must not borrow any money, nor assist an associate to borrow money, from:

12.3.1 a client of the solicitor or of the solicitor's law practice, or

12.3.2 a former client of the solicitor or of the solicitor's law practice who has indicated a continuing reliance upon the advice of the solicitor or of the solicitor's law practice in relation to the investment of money,

(i) an Authorised Deposit-taking Institution,

(ii) a trustee company,

(iii) the responsible entity of a managed investment scheme registered under Chapter 5C of the Corporations Act 2001 (Cth) or a custodian for such a scheme,

(iv) an associate of the solicitor and the solicitor is able to discharge the onus of proving that a full written disclosure was made to the client and that the client's interests are protected in the circumstances, whether by legal representation or otherwise, or

(v) the employer of the solicitor.

43.1 Subject only to his or her duty to the client, a solicitor must be open and frank in his or her dealings with a regulatory authority.

15 The seriousness for Mr Roache is compounded by the fact that the conduct before me, of improper borrowing from a client, is repetition of conduct he has previously engaged in, which was found by the Commissioner in 2015 to be unprofessional conduct. Despite the financial pressure caused by a commitment that had become due that day,[3] he should not have been in any doubt that his conduct was prohibited.

16 This matter is directly relevant to consideration of penalty, which I turn to now.[4]

17 The Commissioner and Mr Roache have jointly proposed, as a global penalty, that Mr Roache:

(a) be reprimanded;

(b) pay a fine of $10,000; and

(c) surrender his practising certificate and undertake not to practise again.

18 As submitted, I am not bound by the parties' proposal as to penalty. I have the ultimate responsibility to decide what is appropriate in this case.[5] A joint proposal is nevertheless a matter of importance, to which appropriate weight should be given when deciding penalty. Greater weight will be given to a proposal that has clearly been carefully negotiated, particularly where, as here, the practitioner had independent legal representation in those negotiations.

19 In this case I regard the proposed orders as appropriate. They meet the goals of penalty orders, which are primarily protective:[6]

• to protect the public by ensuring the practitioner does not repeat the conduct and by deterring other practitioners from engaging in similar conduct by signalling that such conduct will have adverse consequences; and
• to maintain professional standards and public confidence in the profession.

20 It is not overstating the matter to say that had it not been for the offered surrender of his practising certificate, this would have been a case where disqualification was warranted.

21 The orders reflect the seriousness of the conduct engaged in, and the fact there has been repetition of previous conduct, but they also properly reflect matters which are to Mr Roache's credit:

• his plea of guilty and cooperation with the Tribunal proceedings, saving time to hearing and public resources;
• his remorse, expressed as 'the deepest regret';
• the fact that the loan has been repaid with interest (although repayment was delayed well beyond the intended short term promised by Mr Roache and contemplated by Mr Hoare);
• what appears from the character references provided to be an outstanding and longstanding contribution to the Geelong community, including actively contributing to the palliative care organisation Anam Cara; and
• a long career in the law without professional transgression, save for this proceeding and the 2015 matter.

22 I am mindful of the impact on Mr Roache of these orders, even though he has agreed to them and they are appropriate in all the circumstances of this case. This would not be how he planned to retire from legal practice.

23 As the character references indicate, he is a man who has been of high standing in his community and continues to be held in high regard by those referees, most of whom were aware of these proceedings. There has been an undoubted impact on him and his family of the media coverage of these proceedings, including on his mental health. His reputation has been damaged. It is clear, however, that he will not be without friends.

APPLICATION BY THE VICTORIAN LEGAL SERVICES COMMISSIONER FOR ORDERS

1. The Respondent has at all relevant times been admitted as a barrister and solicitor of the Supreme Court of Victoria.

2. The Respondent is an Australian legal practitioner within the meaning of section 6 of the Uniform Law.

3. Since at least December 2017, the Respondent was a principal of Coulter Roache Lawyers (CRL).

4. As at December 2017, the Respondent held at least 300,000 shares in Trans Otway Travel Pty Ltd (TOT). Annexure 1 to this application is a copy of a search of records held by the Australian Securities and Investments Commission in relation to TOT.

5. At all relevant times Mr Matthew Hoare (Hoare):

(a) was the director and shareholder of Samworth Pty Ltd (Samworth).

(b) had retained or previously retained the Respondent to act for him in relation to the affairs of Samworth.

Annexure 2 to this application is a copy of a search of records held by the Australian Securities and Investments Commission in relation to Samworth.

6. In about December 2017, the Respondent required funds in the amount of $150,000 (Funds) to meet his obligations pursuant to an arrangement with other partners of CRL to contribute to the working capital requirements of CRL.

7. On or about 12 December 2017, during a meeting between the Respondent and Hoare:

(a) the Respondent informed Hoare that he required the Funds;

(b) the Respondent asked to borrow the Funds from Hoare;

(c) alternatively to (b), Hoare offered to lend the Funds to the Respondent;

(d) the Respondent offered to pay interest for borrowing the Funds;

(e) the Respondent and Hoare entered into an agreement pursuant to which the Respondent borrowed the Funds from Hoare and / or Samworth; and

(f) Hoare provided a cheque to the Respondent in the amount of $150,000.

8. The Respondent acknowledged in a note dated 12 December 2017 and signed by the Respondent receipt of $150,000 from Samworth by way of a temporary loan (the Loan). Annexure 3 to this Application is a copy of the note.

9. Hoare made a file note of the meeting on 12 December 2017 in which he stated that the Respondent had asked to borrow the Funds from Hoare on that day. Annexure 4 to this Application is a copy of the file note.

10. On or about 12 December 2017, the Respondent presented the cheque for payment at the Bendigo and Adelaide Bank and withdrew the Funds. Annexure 5 to this application is a copy of the withdrawal receipt.

11. During or following the meeting on 12 December 2017, the Respondent agreed to transfer 300,000 shares in TOT (the Shares) to Samworth:

(a) as security for the Loan;

(b) alternatively, by way of sale, as consideration for the Funds.

(a) provide or obtain any valuation of TOT so as to ascertain the value of the 300,000 shares transferred to Samworth;

(b) advise Hoare to obtain any independent advice or valuation in relation to the purported Share transfer or the Loan.

13. A complaint dated 2 May 2018 was made to the Applicant by Mr Richard Sykes, an accountant involved with the administration of the estate of Hoare's father. Annexure 6 to this application is a true copy of the complaint.

14. The complaint contained a disciplinary matter within the meaning of section 270 of the Uniform Law.

15. On or about 7 May 2018, a copy of the complaint was provided to the Respondent.

16. On or about 17 May 2018, the Respondent lodged a Form 484 with the Australian Securities & Investments Commission (ASIC) recording the transfer of the Shares from the Respondent to Samworth which stated that the form was signed by the Respondent on 1 January 2018. Annexure 7 is a copy of the Form 484.

17. On or about 18 May 2018, the Respondent provided a response to the complaint. In his response, the Respondent:

(a) admitted that Hoare had offered to lend the Funds to him;

(b) asserted that he had declined the offer but agreed to transfer the Shares in exchange for the Funds;

(c) asserted that Hoare had asked to pay the Funds prior to the Shares being transferred on 1 January 2018;

(d) denied the existence of the Loan and said that no discussion about interest or repayment occurred.

Annexure 8 to this application is a copy of the response.

18. The Respondent repaid the Funds to Hoare in three instalments with the final one being made on or about 25 November 2019.

19. By engaging in the conduct referred to in paragraphs 6 to 17 above, during the relevant period the Respondent breached rules 4.1.1, 4.1.2, 4.1.4, 43.1 and 12.3.1 of the Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 (the Conduct Rules).

20. On 10 October 2019, the Applicant notified the Respondent of its decision to investigate the complaint as a disciplinary matter under section 282 of the Uniform Loan. Annexure 9 to this application is a copy of the Applicant's letter to the Respondent.

21. On 19 November 2019, the Respondent provided a response to the Applicant in which he acknowledged that the purported share transfer 'transaction' was 'not contemporaneous with the receipt of the [Funds]', but was conceived subsequently to avoid the transfer of the Funds being treated as a loan. Annexure 10 to this application is a copy of the Respondent's response.

22. On 13 January 2020, the Applicant advised the Respondent that his conduct may constitute professional misconduct under the Uniform Law and/or at common law, by way of letter. Annexure 11 to this application is a copy of the Applicant's letter to the Respondent.

23. On 28 February 2020, the Respondent provided a response to the Applicant's letter in which he refuted putting himself in a position of conflict, but conceded 'that the arrangement should have been professionally documented from the outset.' The Respondent agreed the conduct fell short of satisfactory conduct by a professional lawyer, but denied it amounted to professional misconduct. Annexure 12 to this application is a copy of the Respondent's response.

24. On 22 June 2020, Mr Sykes submitted further documents to the Applicant, in the format of a further complaint, referring to the Form 484 lodged to ASIC by the Respondent, and alleging it was lodged in an attempt to disguise the true nature of the loan as a legitimate share transaction. Annexure 13 to this application is a copy of the documents submitted by Mr Sykes'.

25. On 19 November 2020, the Applicant wrote to the Respondent notifying him of its intent to extend the scope of the investigation and seeking his submissions in response. Annexure 14 to this application is a copy of the Applicant's letter.

26. On 10 December 2020, the Respondent provided a response noting that he had no intent to mislead the Applicant and that in hindsight, the Form 484 should have been submitted contemporaneously with the provision of the money. Annexure 15 to this application is a copy of the Respondent's response.

27. On the basis of the matters referred to above, the Applicant has formed the opinion that the Respondent has engaged in conduct that amounts to professional misconduct.

Following an investigation, I am satisfied that the respondent's conduct may amount to professional misconduct and/or misconduct at common. Pursuant to section 300 of the Uniform Law, I now make application to the Tribunal for determination of the following charges and consequential orders pursuant to sections 302 and 303 of the Uniform Law.

Misconduct at common law within the inclusive definition of professional misconduct in section 297(1) of the Uniform Law, in that the Respondent:

(a) improperly borrowed money from a client; and/or

(b) took steps to give a false or misleading impression that the Respondent did not borrow money from a client

which conduct constituted conduct that other legal practitioners of good repute and competency would regard as disgraceful and dishonourable.

The particulars relied upon are those set out in paragraphs 6 to 17 and 20 to 26 above.

Professional misconduct within the meaning of section 297(1)(a) and/or 298(b) of the Uniform Law by engaging in conduct which consisted of a contravention of the Uniform Rules, by reason of the Respondent failing to act in the best interests of the client and/or failing to avoid any compromise to his integrity and professional independence in contravention of Rules 4.1.1 and 4.1.4 of the Conduct Rules.

The particulars relied upon are those set out in paragraphs 6 to 17, 19 and 20 to 26 above.

[1] Spelt 'Matthew' in Application for Orders. Spelling used here is as appears in original documents in the annexures to the Application for Orders.

[2] Charges 2 and 3 were in the alternative to Charge 1 and were withdrawn.

[4] As observed at the hearing, prior disciplinary findings are not relevant to the Tribunal's task in making findings of fact and characterising the conduct. They should not be referred to by the parties until after findings have been made. In this case, the parties agreed that the information be provided in advance and neither party objected to me continuing in the matter when I raised it.

[5] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476; see also Victorian Legal Services Commissioner v Hyatt [2018] VCAT 1498, [25] and Victorian Legal Services Commissioner v Antippa [2022] VCAT 74, [15]-[16].

[6] While the focus is on protection not punishment, general and specific deterrence, which serve that protective focus, depend upon sanctions having a punitive effect.