The lawyer engaged to act as a 'postbox' for the egregious Banksia cartel, which planned to fraudulently charge inflated commissions and fees to members of a class action intent on recovering their investments in the failed securities firm, has been suspended from the roll of practitioners in Victoria for two years after being found presently unfit to practice.
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Anthony Zita, principal of Portfolio Law, was banned from engaging in legal practice by Victorian Supreme Court Justice John Dixon until July 1, 2024 last week.
"I have concluded that Mr Zita is not presently a fit and proper person to remain on the roll," Justice Dixon said.
"Mr Zita contravened the paramount duty by his conduct in connection with entering into and documenting arrangements in relation to the Lawyer Parties' fees, and in failing to ensure that fees claimed from the Trust Co Settlement sum were properly incurred. His conduct was deceptive or misleading and he failed to ensure that costs were reasonable and proportionate.
"Mr Zita breached the paramount duty by acting as a post-box solicitor. It is important to appreciate that the expression 'post-box solicitor' is used as a convenient short hand expression to refer to a course of conduct that I will shortly explain, by which Mark Elliott effectively controlled the position of solicitor on the record for the plaintiff.
"As a post-box solicitor, Mr Zita did not discharge his duty to the court. His conduct was misleading. He failed to comply with his duty to further the administration of justice. In being complicit in the charade of an independent solicitor for the plaintiff, he was complicit in the corruption of the administration of justice."
Zita submitted over $375,000 for legal work to the class action group, bills which he admitted were 'unreliable'. Despite expressing contrition for his actions at a show-cause hearing in May this year, Zita had failed to repay any of these fees to Banksia's special purpose receivers, tasked with recovering investor funds.
"There was no evidence that any sum had been paid towards the judgment debt by, or on behalf of, Mr Zita," Justice Dixon said.
"The debenture holders have his apology but not his money."
Zita's counsel submitted at length a reprimand was adequate penalty for their client's actions, but Justice Dixon demurred.
"I say again that it is important in this context to accept that in Mr Zita's case this question is not being assessed on the basis that he lacks honesty. Rather, the question is more whether he is possessed of sufficient rectitude of character to permit him to be safely accredited to the public as a person who can, without supervision, be entrusted to discharge his obligations to the proper administration of justice... the court must be satisfied of their independence, their ability to judge what ethical conduct is required of them and their capacity to act diligently to discharge the responsibilities of their office.
"Simply put, Mr Zita cannot be trusted to be fearlessly independent. He cannot be trusted to put the integrity of the administration of justice above all else, particularly personal or private interests. Plainly, that character trait - his vulnerability to complying with powerful authority figures - demonstrated, and continues to demonstrate, an inability to recognise when independent judgment was, and is, necessary, and an incapacity to recognise when the proper administration of justice was being corrupted and how that consequence might have been, or can be, avoided by proper ethical conduct."
In January, the Victorian Legal Services Board did not renew Zita's practicing certificate, declaring him ineligible to apply for a new certificate before 2026. The decision is being challenged at VCAT.
Banksia Securities Ltd collapsed in 2012 owing its investors $660 million, despite having issued financial reports stating the company was capitally sound only weeks before.
A civil case stemmed from a $64 million settlement negotiated with Banksia's trust company in 2017. Australian Funding Partners Limited (AFPL), a firm comprised of Mr Norman O'Bryan, barrister Michael Symons and the late class action lawyer and funder Mark Elliott, had represented Banksia's debenture holders - but were then accused of overcharging for their representation to the tune of around $20 million.
AFPL was found to be liable for $21.7 million in damages and costs to Banksia investors in October 2021, after years of litigation by debenture holders following the crash of the firm in 2012. The principals of the litigation funder were condemned as having committed 'fraudulent and appalling' actions by Justice Dixon, and two were struck off.
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