Barrister put off the track … Dodgy tax history … More damning information emerges … Harman undertaking … Bureau de Spank wants to use the new material in future proceedings … Person with cognitive impairment pointed sole director of barrister’s tax avoidance vehicle
The bar council last November found that Sandbach was not a fit and proper type to have a ticket and should not be able to apply for a fresh one for another four years.
He sought a review of the bar council’s findings and as part of the process the Legal Services Board wanted more documents. VCAT issued summonses to Sandbag, his wife Maria, his son Michael, his clerk at Dever’s List, his trustee in bankruptcy Andrew Yeo of Pitcher Partners, and a corporate entity called Campus Martius Pty Ltd.
The LSB had to press for further documents as there were concerns there had not been full compliance with the summonses to produce. Eventually, additional material was extracted and the revelations that emerged about the defrocked barrister proved to be more disturbing than the bar council had originally contemplated.
The council’s finding was related to Sandbach’s “tax related conduct”, which included claiming unlawful deductions, failing to lodge returns and pay GST, misconduct before a bar committee and in court proceedings.
The unlawful deductions were said to involve an “artifice, fraud or sham” designed to enable him to evade tax. He assigned his fees as a barrister to Campus Martius Pty Ltd in purported payment of book debts with an initial value of $2 million which the company has purchased for about $200,000 from lenders to a failed farming venture in which Sandbag and another barrister, David Munro, had invested years earlier.
Maria Sandbach was then the sole director of Campus Martius. The fees that the barrister assigned to the company were not declared as income and no tax was paid on them.
When the fresh material was produced in response to the summons it came to light that Sandbach has effective control of Campus Martius and that once the company received his barrister’s fees they were returned to him as “consultant’s fees”. Neither the company nor Sandbach declared as income the money passing backwards and forwards.
This prompted an inquiry into the funds used to acquire substantial assets in the name of Maria Sandbach, well beyond the scope of her declared income.
The LSB contended that quite apart from the tax scam the new materials revealed that Sandbach had engaged in conduct designed to defeat his trustee’s efforts to collect income from his practice on behalf of creditors, principally the ATO.
The documents included business records in relation to fees, banking records and tax returns, transcripts of compulsory examinations, and information about the applicant’s conduct in respect of his tax and bankruptcy affairs.
His son Michael was used in an arrangement whereby debts for legal fees Sandbach allegedly claimed from Campus Martius were assigned to the lad to hold on trust for and then distribute to his father and mother.
The LSB said it wanted to rely on this additional information in case the defrocked barrister in future made an application for a ticket and in any proceedings seeking an order that his name be removed from the jam roll.
Consequently, as the regulatory authority, the board wanted to be released from an implied Harman undertaking so the new material could be used in other prospective contests with Sandbach, and not confined to the review of the bar’s initial determination to cancel his ticket.
There was a proposed consent order between Sandbach and the regulator where it was agreed that the application for review be withdrawn and the LSB be released from its Harman undertaking.
In the proceedings where Sandback was the applicant and the LSB the respondent, Judge Felicity Hampel, vice-prez of VCAT, had concerns about the proposed consent order. The documents in respect of which release was sought came not only from the applicant, but his wife, son, clerk, trustee and the company Campus Martius.
After first refusing to give consent Maria Sandbach and son Michael later did agree to the LSB being released from the Harman undertaking. Maria by now was no longer a director of Campus Martius and was replaced by David Munro.
She said that Munro also consented on behalf of the company.
Judge Hampel said, “I do not consider any assertion by Maria Sandbach as to Mr Munro’s attitude to release on behalf of Campus Martius to be reliable”.
In March last year, Munro’s daughter, associate professor Jane Munro, wrote to the tribunal to advise that her father has not worked for many years as he has dementia.
“… he agreed to sign on as a director of Alan Sandbach’s company. This is problematic given he does not have the cognitive capacity to carry out a director’s governance responsibilities. I immediately rang Alan, who reported he was unaware of dad’s diagnosis and lack of capacity …”
Anyway, the evidence showed that Alan Sandbach controlled the activities of the company.
The upshot was that judge exercised her discretion to release the Legal Services Board from its undertaking that confined the use of the documents and so now they can be used should Sandbach apply for a fresh ticket and in striking off proceedings.
Justinian has had the melancholy duty on previous occasions to report instances of Alan Sandbach’s misadventures.
In May 2017 we had news that Justice Nye Perram closed down Sandbach’s appeal following an AAT decision in favour of the tax man for unpaid tax and two bankruptcy notices.
Justice Perram put it this way:
“Mr Sandbach has failed repeatedly and, if I may say, insouciantly, to comply with the orders made by this court more or less since he commenced the appeal … In my opinion, Mr Sandbach has had his fair share of this court’s time … At some point there must be consequences. That point has arrived.”
Then in November 2017, we reported that a sequestration order had been made against his estate. There was also an earlier appearance before the stipes on a charge of being rude about another barrister. He won that round, with a finding that he was just “sledging” rather than being “unsatisfactory”.