Three charges of unsatisfactory professional conduct, within the meaning of section 296 of the Legal Profession Uniform Law (Vic), being conduct in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, relating to the estate of the late Mr Bob Zola.

1. The respondent is reprimanded in relation to each finding of guilt.
2. The respondent is to pay:
   1. the Victorian Legal Services Board a global fine of $30,000 in respect of the findings of guilt for all charges; and
   2. the applicant her costs of this application fixed by the Tribunal (and with consent) in the sum of $15,000,

by nine monthly instalments of $5,000 commencing on 30 July 2019.

1. By no later than 31 March 2020, the respondent is to complete three hours of professional development in relation to the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015, over and above the respondent's normal obligations in relation to continuing professional development.

1. The following background is largely drawn from the Amended Application for Order filed by the Victorian Legal Services Commissioner (Commissioner) dated 20 May 2019, the contents of which were not disputed by Mr Aaron Zaitman.
2. The respondent, Mr Zaitman, was admitted to practice in Victoria on 2 March 1970 and was an Australian legal practitioner within the meaning of section 1.2.3(a) of the Legal Profession Act 2004 (Vic) (Act) at all material times prior to 1 July 2015, and an Australian legal practitioner within the meaning of clause 6 of Schedule 1 of the Legal Profession Uniform Law (Vic) (Uniform Law) since 1 July 2015.
3. At all material times, Mr Zaitman was the principal of the legal practice known as Zaitman & Associates (Legal Practice).
4. On or about 20 November 2015, the Commissioner received a report prepared by investigators from the Law Institute of Victoria for the Victorian Legal Services Board identifying certain matters relating to Mr Zaitman's handling of the estate of the late Mr James Keays (Keays Estate) and the estate of the late Mr Bob Zola (Zola Estate).
5. As a result of receiving that report, the Commissioner commenced an investigation, following which Mr Zaitman was charged with 16 counts of professional misconduct and 4 counts of unsatisfactory professional conduct relating to his handling of the Keays Estate and the Zola Estate, the keeping of records and trust account records relating to those estates and his actions in the course of the investigation. The charges, after amendment, relate to the following matters (as summarised in the Applicant's Submissions on Agreed Disposition & Penalty dated 10 July 2019):

1. Mr Zaitman drew wills for Mr Keays and Mr Zola in circumstances where he failed to advise the clients of their rights to appoint an executor who might make no claim for commission and that Mr Zaitman or his firm would have an entitlement to charge legal costs in relation to the administration of the estates, contrary to rules 10.1.2 and 10.1.3 of the Professional Conduct & Practice Rules 2005 (2005 Rules). 2. Mr Zaitman charged the Keays Estate and Zola Estate executor's commission in circumstances where the wills did not entitle him to do so, and he neither sought the informed consent of the beneficiaries of those estates, nor made the necessary application to the Court, and the executorial work on the estates had not been completed at the time the commission was taken, which caused deficiencies in the trust account of the Legal Practice.

1. When Mr Zaitman sought the consent of three of the beneficiaries of the Keays Estate to taking executor's commission, he failed to disclose that he had already charged for and taken executor's commission and failed to provide the beneficiaries with enough information to provide their fully informed consent.

1. Mr Zaitman failed to disclose relevant information to the Commissioner during the course of his investigation, namely the attempt by Mr Zaitman to obtain consent from some of the beneficiaries of the Keays Estate. 2. Mr Zaitman failed to keep proper records and failed to maintain the trust accounts of the Legal Practice in relation to the Zola Estate.
2. It is unnecessary to traverse the entire background of the matters giving rise to the charges, save to note the following matters raised by Mr Tatarka (counsel for Mr Zaitman):-

1. Both Mr Keays (a former member of The Masters Apprentices) and Mr Zola were longstanding clients of Mr Zaitman. 2. At its peak, the Legal Practice handled 10 estates, which Mr Zaitman viewed as a "bolt on" to his practice for existing clients (focused on mortgage finance). He did not advertise his services in relation to wills and estates.

1. There was considerable complexity in relation to the Keays Estate (having regard to matters of copyright and royalties) and Mr Zaitman believes he acted in the best interests of the estate and its beneficiaries.

1. Mr Zaitman has already renounced any executorships of which he is aware, and does not intend to work in the area of wills and estates any more. 2. Mr Zaitman has already reimbursed the Keays Estate for the executor commission charged. He has not done so for the Zola Estate as the beneficiaries of that estate did not wish to be reimbursed.

1. Having pleaded guilty as charged, Mr Zaitman is found guilty of the following charges:

Professional misconduct within the meaning of section 297(1)(a) of the Uniform Law, namely conduct which involves a substantial failure to reach or maintain a reasonable standard of competence and diligence, by:

(a) charging the Keays Executor's Commission when he had no entitlement to do so;

(b) causing a deficiency in the trust account of the law practice without reasonable excuse in breach of section 3.3.21(1)(a) of the Act and section 148(a) of the Uniform Law; and

(c) failing to comply with rules 10.1.2 and 10.1.3 of the 2005 Rules in connection with drawing the Keays Will.

Professional misconduct within the meaning of section 297(1)(a) of the Uniform Law, namely conduct which involves a substantial failure to reach or maintain a reasonable standard of competence and diligence, by attempting to seek the consent of three of the Keays beneficiaries (namely Mrs Keays, Holly and Bonnie) to the charging of the Keays Executor's Commission:

(a) by failing to disclose that he had already charged for and taken the Keays Executor's Commission from the Keays Estate;

(b) by failing to disclose that he had already charged for and taken the Keays Executor's Commission from the Keays Estate and that doing so was in breach of his fiduciary duty to the Keays beneficiaries; and

(c) by providing insufficient information to enable those three Keays beneficiaries to provide their fully informed consent to him charging the Keays Executor's Commission.

Professional misconduct within the meaning of section 297(1)(a) of the Uniform Law, namely conduct which involves a substantial failure to reach or maintain a reasonable standard of competence and diligence, by providing information to the Keays beneficiaries regarding the accounts of the Keays Estate which was misleading, in that it omitted reference to the charging and reimbursement of the Keays Executor's Commission.

Professional misconduct within the meaning of section 297(1)(a) of the Uniform Law, namely conduct which involves a substantial failure to reach or maintain a reasonable standard of competence and diligence by failing to disclose to the Applicant during the course of its investigation the Attempts to Obtain Consent.

Professional misconduct within the meaning of section 297(1)(a) of the Uniform Law, namely conduct which involves a substantial failure to reach or maintain a reasonable standard of competence and diligence, by:

(a) charging the Zola Executor's Commission when he had no entitlement to do so;

(b) causing a deficiency in the trust account of the law practice without reasonable excuse in breach of section 3.3.21(1)(a) of the Act and section 148(a) of the Uniform Law; and

(c) failing to comply with rules 10.1.2 and 10.1.3 of the 2005 Rules in connection with drawing the Zola Will.

Unsatisfactory professional conduct within the meaning of section 296 of the Uniform Law, namely conduct in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, by failing to keep proper records.

Unsatisfactory professional conduct within the meaning of section 296 of the Uniform Law, namely conduct in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, by failing to record the withdrawal of money from the law practice's trust account within 5 days in breach of regulation 3.3.17(9) of the Legal Profession Regulations 2005 (Vic).

Unsatisfactory professional conduct within the meaning of section 296 of the Uniform Law, namely conduct in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, by failing to keep the Zola Estate trust ledger in such a way that it disclosed the true position of moneys received for the period from 20 January 2014 to 26 October in breach of section 3.3.25(2)(b) of the Act and section 147(2)(b) of the Uniform Law respectively.

1. The Commissioner suggests (and Mr Zaitman agrees) the appropriate penalty is for Mr Zaitman to be reprimanded and fined. The proposed fine is $30,000.

1. Mr Zaitman has pleaded guilty. Mr Tatarka submits that doing so at the earliest opportunity is evidence of contrition and remorse on Mr Zaitman's part and also saves time and resources for the Tribunal.
2. Mr Tatarka also suggested that Mr Zaitman was co-operative in terms of the investigation, and took steps early to bring the matter to conciliation and to reach agreement on an appropriate penalty. The level of co-operation, particularly during the course of the investigation, was debated by Ms Kirwan (counsel for the Commissioner).

1. Mr Tatarka observes that Mr Zaitman is one year short of 50 years of practice and that the matters the subject of the charges did not arise from complaints by his clients, but rather as a result of a routine audit.
2. Mr Tatarka says his client is 'deeply ashamed', noting that he has learnt an important lesson, given his 'good name will be[come] subject to an element of disrepute'.
3. While he indicated that it was not really a matter for mitigation of penalties, Mr Tatarka suggested that the area of wills and estates, especially the question of appropriate compensation to executors for their 'pains and troubles', is complex. He said that Mr Zaitman, like some other longstanding practitioners, may not have kept up to date with current practices in terms of fully documenting necessary consents.
4. Mr Tatarka handed up 2 character references. One reference is from Mr Leon Goldberg of Leon Goldberg & Associates, who has been the auditor of Mr Zaitman's practice for in excess of 20 years. The other reference is from Mr Alan Goldstone OAM, a principal of Tisher Liner FC Law. Both are relatively short, but suggest that the offences are 'not reflective' of Mr Zaitman's character.
5. The Commissioner provided details of two prior disciplinary matters relating to Mr Zaitman.
6. In 1994, Mr Zaitman was found guilty of professional misconduct in acting for both sides in a loan transaction giving rise to breaches of his fiduciary duties and breaches of professional practice rules requiring fully informed consent to be obtained. He was disqualified from practice for a period of time.
7. In 2012, a complaint was made by a client that Mr Zaitman had failed to obtain the client's instructions as to how certain settlement funds from a property transaction were to be paid. The Commissioner determined that 'there is a reasonable likelihood that VCAT would find [Mr Zaitman] guilty of unsatisfactory professional conduct' and was satisfied that he 'acted in a conflict of interest in this matter, and did not act in the best interests of [the client]'. However, as the Commissioner was satisfied that Mr Zaitman was 'generally competent and diligent' and there had been no substantiated complaints in the preceding 5 years, the Commissioner decided to take no further action.
8. Mr Tatarka submits that the first matter is 'stale' and the second matter was at the 'low end' of disciplinary matters.

1. The Commissioner submits that there is a need for both specific and general deterrence.
2. In relation to the former, the Commissioner says that:[1]

the charged misconduct is of a serious nature in the context of the administration of wills and estates. Whilst not involving dishonesty, [Mr Zaitman's] failure to properly and transparently deal with both his intention to claim executor's commission, and the taking (and reimbursement) of commission, must nonetheless be regarded as substantial failures to carry out his duties as solicitor and executor competently and diligently. As a fiduciary, such duties are particularly onerous and ought not be taken lightly.

1. In relation to general deterrence, the Commissioner says:[2]

It is unfortunate that a significant number of legal practitioners fail to apply the law when taking executor's commission and when dealing with beneficiaries of deceased estates. That this kind of misconduct continues demonstrates a need for general deterrence.

1. Ms Kirwan characterised Mr Zaitman's attempts to obtain consent to his executor commission from the beneficiaries of the Keays Estate as 'clumsy', a characterisation which Mr Tatarka (for Mr Zaitman) accepted.

1. The Commissioner has identified seven previous Tribunal decisions dealing with either or both the charging of executor commission where there was no entitlement to do so or a breach of rules 10.1.2 and 10.1.3 of the 2005 Rules.[3] The following table briefly summarises those decisions:

Unsatisfactory professional conduct due to failure to comply with rule 10

Reprimand, and respondent required to attend seminar on legal costs attracting 3 compulsory professional development points

Two charges of unsatisfactory professional conduct due to failure to comply with rule 10

$5,000 (which took account of the fact that the respondent had no prior record of disciplinary action and credit for significant community service)

Four charges of unsatisfactory professional conduct due to failure to comply with rule 10 and 8 charges of misconduct at common law for taking executor's commission without entitlement to do so and other charges relating to misrepresentation of the law regarding commissions

Undertaking not to practice, reprimanded for 21 charges, agreement to make restitution to 8 estates totalling $300,000. No fine was ordered, however the matter was referred to the Supreme Court of Victoria with a recommendation that the respondent be removed from the roll of practitioners

Numerous charges of gross breaches of duty in connection with charging executor's commissions

Undertaking not to act as executor of any estate (other than family) and not to practice except in relation to family law.

Disqualified from practice for 9 months, and only permitted to practise as employee for following 4 ½ years

Prohibited from applying for a practising certificate in the future, $5,000 fine, and requirement to reimburse $120,000 (jointly) to estate

Executor's commission totalling $109,669 from one estate where no entitlement to do so.

Undertaking to participate in courses relating to probate and administration of ten continuing professional development points and no to act as executor of a will or administrator of a deceased estate until completion of courses. Fine of $30,000 (noting that deficiency in trust account of estate had been restored)

1. The Commissioner notes that the penalties in these cases 'range from a reprimand for a breach of rule 10, to a fine of $30,000 for misconduct broadly similar to that engaged in by [Mr Zaitman], to the practitioner agreeing never to practise again'.[4] She observes that '[i]n those cases where practitioners wished to continue in legal practice, however, either a substantial fine was imposed ... or there was a moderate period of disqualification'.[5]
2. While the Commissioner accepts that the commission charged in Hession ($109,000) was significantly higher than the combined commission charged by Mr Zaitman to the Keays Estate ($12,000) and Zola Estate ($30,528.52), she submits that a penalty of $30,000 remains appropriate given:

1. Hession related to one estate, whereas the present case relates to two estates. 2. While the commission in Hession was greater, it also related to a larger estate.

1. While the solicitor in Hession did not plead guilty, in the present case, the subsequent attempts by Mr Zaitman to obtain consent 'should be condemned'.
2. In oral submissions, Mr Tatarka submitted that the agreed penalty was 'well within range' and the Tribunal 'ought not depart from the agreed penalty'. In particular, he said there was 'no need to interfere with Mr Zaitman's right to practice' in circumstances where he had already given up all his wills and estates work and had made an early plea of guilty.

1. I agree with the joint submissions that it is appropriate that Mr Zaitman be reprimanded and fined.
2. Prior to the hearing, the parties had agreed that an aggregate fine of $30,000 was appropriate to reflect the seriousness of the offending in the circumstances. As can be seen from the comparable cases identified by the Commissioner, this is at the top of the range for similar offences.
3. As an executor, Mr Zaitman assumed fiduciary duties beyond those owed as a legal practitioner. It should have been obvious that he could not charge a commission where this was not provided for in the wills that he had drawn for Mr Keays and Mr Zola. Further, given his submissions that this was a "bolt-on" area of practice to his mortgage lending activities, it was incumbent on Mr Zaitman to develop his knowledge and skills in the area of wills and estates if he wanted to do so. He could, for instance, have undertaken training in the area or consulted with an accredited specialist.
4. I also agree with the submissions of the Commissioner that the subsequent attempts by Mr Zaitman to obtain consent to his executorial commission from the beneficiaries of the Keays Estate should be condemned. In my view, this was more than clumsy, it was an attempt to cover his tracks when he had already been caught out through the trust account audit and subsequent investigation by the Commissioner.
5. Therefore, while the penalty might seem high when compared to Hession, if regard is had to the comparative amounts of the executor commission and the guilty plea in this case, there is an overall equivalence between the two cases that make the fine of $30,000 appropriate in this matter.
6. I do take account of the references, although note that it cannot be said Mr Zaitman has had an entirely unblemished legal career having regard to the previous offences identified. Concerningly, while not related to wills and estates, they do raise similar issues about consent and conflicts of interest.
7. I am also concerned by the claim, in mitigation, that the issue arose because Mr Zaitman was not keeping up to date with current practices in wills and estates. Given the fundamental nature of the fiduciary obligations owed by an executor, I am concerned that there might be other areas of 'current practice' that Mr Zaitman is not aware of.
8. In my view, having regard to these matters, a global fine of $30,000 for the eight charges which Mr Zaitman has been found guilty of is appropriate. In addition, I will require Mr Zaitman to undertake three hours of professional development in relation to his duties under the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 to ensure that he is aware of 'current practices'. This will be in addition to the normal professional development he is required to undertake to maintain his practising certificate.

1. Under section 303 of the Uniform Law, a solicitor found guilty of professional misconduct or unsatisfactory professional conduct is liable to pay the costs of the Commissioner in prosecuting the matter (other than in exceptional circumstances). The costs have been agreed between the parties at $15,000 and there is no reason to disturb that agreement. Accordingly, I will award the sum of $15,000 by way of costs. I note the parties have agreed that, given the substantial sums involved in terms of the combined fine and costs, Mr Zaitman be allowed to pay the combined sum by monthly instalments of $5,000, which has been reflected in my orders.

[1] Applicant's Submissions on Agreed Disposition & Penalty [15].

[3] The cases are Legal Services Commissioner v Horvat [2014] VCAT 1041, Victorian Legal Services Commissioner v De Marchi [2016] VCAT 2057, Victorian Legal Services Commissioner v Rhoden [2015] VCAT 1546, Victorian Legal Services Commissioner v McBain [2015] VCAT 1545, Legal Services Commissioner v Maguire [2014] VCAT 974, Victorian Legal Services Commissioner v Barlow [2014] VCAT 973 and Legal Services Commissioner v Hession [2010] VCAT 1328.

[4] Applicant's Submissions on Agreed Disposition & Penalty [14].