New Zealand Law Society - Queensland lawyer facing imprisonment for breach of undertaking obtains stay

Queensland lawyer facing imprisonment for breach of undertaking obtains stay

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A Family Court of Australia judge has granted an application for a stay of orders she made on 9 August 2016 that a lawyer serve a term of six months imprisonment for breach of an undertaking given in 2013.

In Bain & Bain (Deceased) [2016] FamCA 694 (19 August 2016), Justice Jenny Hogan stayed the order pending the outcome of the appeal by the solicitor - given the pseudonym "Mr Bain" - to the Full Court of the Family Court.

In her decision on 9 August in Bain (Deceased) & Bain (No 3) [2016] FamCA 662, Justice Hogan found that the solicitor had failed to pay the $457,786 proceeds from a life insurance policy on his late wife into a trust account.

Mr Bain had said the proceeds were used to meet matrimonial debts, but had given an undertaking to the Family Court in 2013 that he would pay the proceeds into the trust account. After he failed to do so - and revealed that he had spent all the money - he was found guilty of contempt on 25 May 2016.

Sentencing Mr Bain to imprisonment, Justice Hogan said all orders or injunctions made by a court were made in the public interest.

"The same can, I think, be said of undertakings accepted by court during the conduct of proceedings before it."

Finding that Mr Bain's breach of the undertaking was "in a manner that involves deliberate defiance and flagrant challenge to the authority of the Court" and that he had demonstrated no contrition, Justice Hogan was satisfied that the circumstances gave rise to a need for general deterrence.

"That is, the manner in which Mr Bain is punished should, in my view, send a strong message to all litigants that, irrespective of their views as the appropriateness or otherwise of orders which bind them to hold funds in trust pending further order, it is not open to them simply to make decisions contrary to those binding terms."

While the undertaking was not offered by Mr Bain in his capacity as a lawyer and officer of the Court, but rather in his personal capacity as a litigant involved in proceedings before the Court, it was relevant that he was an officer of the Court.

"I find it hard to think of actions more likely to decrease public confidence in legal practitioners or the Court system than those undertaken, in my view, as found by me, by Mr Bain in this case," she said.

Noting that Mr Bain, aged 59, was likely to be struck off the roll and would not be able to continue to operate his practice which had six solicitors and nine other employees, Justice Hogan imposed the sentence of imprisonment.

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