Lapses, failings and breaches see Melbourne solicitor put off the track for nine months … A lack of insight … Bankruptcy … Madeline White follows the chaotic trail 

MELBOURNE practitioner Bruce McNab has had his trading ticket suspended for nine months after pleading guilty to five charges of professional misconduct, three of unsatisfactory professional conduct and one of misconduct at common law. 

The offending is quite the laundry list – wide-ranging unethical behaviour over a three year, five-client window. 

McNab appeared before VCAT member Elizabeth Wentworth and conceded that he: 

What is notable is his persistent lack of insight:

“At crucial times, Mr McNab did not stop and think about the potential consequences, what his ethical obligations might be, and what necessary steps were to be taken. He appeared to be blind to fundamental ethical obligations, despite having been in practice since 1982 …”

Wentworth went on:

“It was not clear to me whether this was a result of a gap in professional education or some deeper defect …”

Education may not solve McNab’s problems, but his problems may be educative for others.

Embroiled in a dispute over a deceased client’s funds, McNab gave an undertaking to hold the money on trust until the dispute was resolved. 

McNab instead waited some time, paid himself for legal services, and disbursed the rest to his deceased client’s wife. 

That episode was particularly tricky because McNab held his practising certificate subject to the condition that he not hold trust property. 

He had taken steps to avoid doing so, holding the funds in another lawyer’s trust fund. He had not realised that, “for the period of time that it took him to get from the apartment to the National Australia Bank in order to effect the deposit as required by the acknowledgement, he would be deemed to be holding trust funds in breach of his practising certificate”. 

Acting in a family dispute, McNab was drawn into the dispute personally. Acting for a woman seeking possession of a home, McNab found himself the subject of “disobliging or unfavourable remarks” in the defendant couple’s affidavits. 

Associate Justice Nemeer Mukhtar smelled a problem quite quickly.

“I am completely unconcerned with the personal remarks or allegations of pressure and duress by Mr McNab as money lender in looking to recover money he had lent. But I think there is sufficient in the materials to show, I think, that Mr McNab is in a hopelessly compromised position as practitioner acting in this case.” 

McNab continued to act and later he appeared before Justice Clyde Elliott, who voiced similar concerns. Following the defendants’ complaint to the Legal Services Commissioner, an investigation was launched.

McNab’s response to a request by the commissioner’s for submissions was a letter, “in which he advised that he did not consider that there was any reasonable likelihood that the tribunal would find him guilty of professional misconduct or unsatisfactory professional conduct and was of the view that the [commissioner] should take no further action against him”.

He was, however, willing to compromise, later advising the commissioner that he would accept a reprimand “rather than be required to go the expense of a VCAT hearing”. 

The commissioner responded that he would be prepared to finalise the matter if McNab acknowledged:

“… that his conduct fell 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 and that the now better understands how to approach such matters in future.”

McNab failed to respond to the commissioner and missed the opportunity to escape with only a reprimand. In relation to that charge, Member Wentworth pointed out that the quite obvious nature of the conflict, and expressed surprise that two judges explaining the conflict to McNab had still not resulted in him realising the seriousness of the offence.

Remarkably, McNab offered to present a CPD paper to other lawyers on the ethical issues relating to this charge. Member Wentworth declined the offer and accepted the commissioner’s submission that: 

“… in circumstances where Mr McNab has engaged in wide-ranging conduct, well below the standard expected of a solicitor, that indicates a substantial misunderstanding of a solicitor’s obligations, it would not be appropriate for Mr McNab to provide guidance or education to other practitioners.” 

Another charge related to McNab’s breach of an undertaking made on behalf of his client to the Supreme Court. McNab had distributed trust property without the agreement of the relevant parties, as required by the undertaking. 

The explanation offered was that he had not read the undertaking prior to paying out the funds.

Member Wentworth said:

“I respectfully adopt a statement of the Tribunal in Legal Services Commissioner v Burgess [2013] VCAT 350 at [21 (f)]:

‘It is incomprehensible that a prudent solicitor would not have checked the very document containing the terms of the undertaking prior to its performance’.”

A further charge arose from a misadventure in freezing orders that McNab embarked on with his client Kris Babicci. 

Babicci was mistakenly paid nearly $170,000 by a company Focus Metals, which managed to obtain a freezing order over Babicci’s account. Problematically for Focus Metals, Babicci had already transferred about $30,000 of their money to McNab, and shifted the rest to a different account. None of that information was provided to the court when McNab appeared before it three times in relation to the freezing order.

 Justice Emilios Kyrou was unimpressed. Seeking to explain the whole thing, McNab tried this:

“… perhaps if I could say I’m instructed that the money that was in the account was simply applied against the line of credit Your Honour.”

He forgot to mention the $30,000 that had been transferred to him.

Later Focus Metals pieced it together and joined McNab as a defendant, while Babicci found himself a new solicitor. 

Appearing now as defendant himself, McNab asserted that the $30,000 was a gift. This, Justice Melanie Sloss explained, was “untenable in the face of the contemporaneous documents designating that amount as a ‘refund'”.

The strew of unethical conduct, and in particular the conduct that saw him joined as a defendant in his client’s matter, has taken a toll on McNab. 

Justice Sloss concluded that McNab “embarked on a strategy designed to establish a basis for holding on to the moneys” which HH found he knew to have been paid in error. He has been declared bankrupt following those proceedings.

This necessitated self-representation in the disciplinary hearing, which Elizabeth Wentworth took this into account.

“I have allowed for the possibility that because of poor advocacy he may have done his case a disservice. Much of his evidence and submissions gave the strong impression of a lack of insight.”

Nine months off the track, conditions aplenty on his ticket when it is renewed, nine reprimands, 20 more hours of CPD a year and bankruptcy.