Victorian Lawyers RPA Ltd Annual Report 2000
Victorian Lawyers RPA Ltd
Annual Report
2000 Victorian Lawyers RPA Ltd Annual Report 200
Contents
Council and Committees ...... 2–3
President’s Review ...... 4–5
CEO’s Review ...... 6–7
Law Institute of Victoria Services and Sections ...... 8–12
Professional Standards ...... 13–16
Ethics Committee Report ...... 17
Membership/Practising Statistics ...... 18–21
Financial Reports
Financial Commentary ...... 22
Operating Statement ...... 23
Balance Sheet ...... 23
Statement of Cash Flows ...... 24
Notes to and forming part of the Financial Statements ...... 25–34
Directors’ Declaration ...... 35
Report of the Council Members ...... 35–36
Independent Auditors’ Report ...... 36
1 Victorian Lawyers RPA Ltd Annual Report 2000
Council and Committees as at 31 December 2000
Elected Members of the Law Institute Executive from the left, John Corcoran, David Faram, Tina Millar, Michael Gawler and Simon Begg
Simon Begg Rebecca Borden Committees: (from May 2000) • Building & Properties • Executive Committees: • Ethics • Incorporation • Ethics • Law Institute Journal Editorial • Events • Legal Documentation (Chair) • Law Institute Journal Editorial (Chair) • Rules of Practice (Chair) • Membership • Unqualified Practice • Major Firms Council meetings attended: 9/10 • Community Legal Centre Review Taskforce • Legal Practice Act Review Taskforce Council meetings attended: 14/14 John Corcoran: Vice-President Peter Caillard Committees: (retired May 2000) • Audit Committees: • Building & Properties (Chair) • Nil • Executive •Incorporation Council meetings attended: 4/4 • Major Firms •Membership • Rules of Practice • Commonwealth Lawyers Association Conference Working Party David Faram: Treasurer Council meetings attended: 12/14 Committees: • Audit (Chair) • Awards Michael Gawler: Immediate • Building & Properties • Executive Past President • Country Law Associations Committees: • Membership (Chair) • Audit • Executive • National Legal Education • Incorporation (Chair) • Major Firms • Legal Practice Act Review Taskforce • National Issues • Nominating Council meetings attended: 13/14 • Commonwealth Lawyers Association Conference Working Party • Legal Practice Act Review Taskforce Helen Glass Council meetings attended: 13/14 Committees: • Admission to Practice (Chair) Leonie Kelleher • Articled Clerkship (Chair) • Events Committees: National Legal Education Nominating • • Admission to Practice Audit RPA Trust Monies (Chair) • • • Costs Policy Unqualified Practice (Chair) • • National Legal Education Community Legal Centre Review Taskforce • • Suburban Law Association • Legal Practice Act Review Taskforce • Council meetings attended: 10/14 Council meetings attended: 8/10
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Melissa Macken Tina Millar: President Committees: Committees: • Admission to Practice • Accident Compensation • Audit • Ethics (Chair) • Building & Properties • Ethics • Law Institute Journal Editorial • Executive (Chair) • Major Firms • RPA Trust Monies • Membership • Nominating Council meetings attended: 11/14 • Small Practice • Suburban Law Association (Chair) • Legal Practice Act Review Taskforce (Chair) • Specialisation Board Jason Newman Council meetings attended: 12/14 Committees: • Ethics William O’Shea • Law Institute Journal Editorial (from May 2000) • Legal Assistance Scheme Committees: • Road Trauma • Audit • Legal Practice Act Review Taskforce • Building & Properties Council meetings attended: 12/14 • Major Firms • Membership Council meetings attended: 8/10 Judith Peirce (from May 2000) Committees: Ian Petty • Ethics (retired May 2000) • Legal Assistance Scheme Committees: • Membership • Nil • Community Legal Centre Review Taskforce Council meetings attended: 3/4 (Chair) Council meetings attended: 9/10
Geoff Provis Moira Rayner Committees: (retired March 2000) • Accident Compensation (Chair) Committees: • Awards (Chair) • Major Firms • Nil • Building & Properties Council meetings attended: 2/2 • Common Law Rights (Chair) • Medico Legal Joint Standing (Co-Chair) • National Issues (Chair) • Road Trauma • National Legal Education •Incorporation • Commonwealth Lawyers Association Conference Working Party Council meetings attended: 11/14 Andrew Scott (retired May 2000) Erskine Rodan Committees: Committees: • Nil • Awards Council meetings attended: 4/4 • Legal Assistance Scheme • Nominating • Suburban Law Association • Community Legal Centre Review Taskforce • Legal Practice Act Review Taskforce Council meetings attended: 12/14 John Weigl Committees: • Country Law Association James Syme • Nominating Committees: • Road Trauma • Audit • Events (Chair) • RPA Trust Monies • Building & Properties • Incorporation • Rules of Practice • Major Firms (Chair) • Membership • Unqualified Practice • National Issues • Specialisation Board • Nominating (Chair) Council meetings attended: 11/14 • RPA Trust Monies • Rules of Practice • Solicitors’ Mortgage Investment Companies Mark Woods Council meetings attended: 12/14 Committees: • Country Law Association (Chair) • Legal Assistance Scheme (Chair) John Whelan • Membership • National Issues Committees: • Solicitors’ Mortgage Investment Companies (Chair) • Costs Policy (Chair) • Commonwealth Law Association Conference • Country Law Association Working Party (Chair) • Nominating • Community Legal Centre Review Taskforce • Small Practices (Chair) • Specialisation Board Council meetings attended: 12/14 Council meetings attended: 12/14
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President’s Review
egulation of the profession was a major issue in R2000. An enormous amount of work went into preparing a submission to the state government’s Legal Practice Act Review. We have been able to show clearly the glaring deficiencies in the present system of regulation of the profession and demonstrate how it can be improved. There can be no doubt that public faith is eroded through a system that is both clumsy and confusing. The argument for an efficient, easily understood system is overwhelming. And it would be just as powerful on the basis of economics. The cost to the taxpayer and to members of the present system is too high. We have been able to show that savings of about $2.1 million a year can be made. From about $6.7 million in 1993–94, the cost of regulation has blown out to almost $11 million a year. Members would be astonished to know of the extraordinary amount of work that was done by members of the executive and others, in their own time, as well as by staff, on the Institute’s response to the Issues Paper on the Legal Practice Act Review. The profession and the public must benefit from this review. Trying to meet as many members of the Institute as possible, as well as those with a role or interest in in the profession. During a visit to the 122nd annual our activities, means attending a considerable number meeting of the American Bar Association in New of meetings. I have tried to attend as many meetings York and London, I was inspired by the way women of country and suburban law associations as possible lawyers help and promote each other. The Americans’ and have certainly met a great number of the Section system of awards for women’s professional accom- members, consulting with them and hearing their plishment and role in opening doors for others views. The warmth with which I have been greeted demonstrates a way forward. has been most encouraging. What I did learn, too, was that the Americans are As well, I have sought to enhance the standing of struggling to a much greater degree than us on the the profession by accepting invitations to as many issue of multi-disciplinary practices, with the proposal activities as I could. I would mention one outstand- that lawyers share fees and work in the same firm as ing example of the activities that I have undertaken non-legal professionals running up against all sorts – I spoke at a leadership forum run by the north- of opposition. eastern region of the Victorian Department of Employ- Victorian Women Lawyers held a significant ment, Education and Training. Such occasions are symposium to discuss ways to change the workplace wonderful opportunities to explain what we lawyers and the profession’s culture in order to keep more do and how we came to be where we are. women in the law. A new approach to the culture of This is a most rewarding part of the position. I the workplace, including more flexible hours, is was able to reach many people in rural districts happening at the major firms, and I applaud them through a stimulating session on ABC Rural Radio for this. Law firms are expected to take up the every fortnight. The questions that I received from challenge and bring about strategies for change. listeners across the state reinforced my under- Already there have been some seismic moves within standing of the range of issues that people outside the profession, with four of our 10 country associ- the cities now face. ations now headed by women. Fittingly I have also devoted a considerable The first annual Law Institute–Victorian Women amount of time and effort to the position of women Lawyers Dame Roma Mitchell memorial luncheon,
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addressed by Professor Hilary Charlesworth of the legal aid, the Institute’s Legal Assistance Scheme ANU on the issue of human rights, demonstrated has fulfilled a great need. the enthusiasm for such a celebration. So much so Some 2400 people rang the scheme in its first 21 that Dame Roma, first female QC and first female months. The 2000 members who have volunteered state governor, will again be commemorated by a to be part of this unique scheme have helped im- luncheon in 2001. measurably in maintaining the standing of the A constant theme during the year was the sweep Institute as an organisation ready to come to the aid of technology. As the prophecy that all businesses, of those in need. including the law, will become Internet businesses Much work was undertaken on ensuring that the seems increasingly to be on the way to becoming state government understood our position on crime reality, we have witnessed and embraced great compensation. We spoke out when the previous change. The Institute offers a range of documents in government removed payment for pain and suffer- electronic form. Electronic conveyancing is being ing and I am pleased that some measure of justice introduced: a world first. Encrypted certified mail, has now been restored. precedent searches and more are already in use. I am optimistic that the outcome of the review of Significant steps were taken during the year to the Legal Practice Act will leave the profession in a help Aboriginal law students. Mentors from the more independent, stronger position, more able to profession have volunteered to help Victorian Koori help the community and uphold the rule of law. law students, in consultation with the Institute, the Bar Council and the Australian Institute of Judicial Administration. This is profoundly useful. Another theme during the year was the amount of pro bono work being performed by the profession. Although there has been a proliferation of schemes TINA MILLAR to help people who cannot get assistance through PRESIDENT
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CEO’s Review
here have been many positive features of the Tyear 2000 for the Law Institute. Last year I commented that our membership had been slightly lower than in 1998. I am pleased to say that there was a significant increase in percentage terms in 2000 and, of course, with the growth in the profession, the increase in the overall number of members was pleasing. Four years ago, we decided that the best method by which we could encourage solicitors to believe that membership of their Institute was worthwhile was by delivering services of value to them. I believe that the evidence suggests that we have succeeded. It may not be realised that to an extent certainly greater than any other Australian law society and, I believe, greater in pro rata terms than other law societies which I have examined in other parts of the world, there is a huge involvement by members in the work of their professional association. For example, a large proportion of members belongs to one Section. That is unremarkable – it is easy enough to tick a box. But what should be understood is that when called upon to do so, many members are prepared to get actively involved in Section executives or the various expert committees. When one takes into consideration the Section network, the extraordinarily high level of activity by In the midst of these positives there are, however, the Specialisation Board and its advisory committees a couple of matters about which comment must be and the members of the various Council committees made. The first is that we continue to be inundated such as the Ethics Committee, I estimate that 800 with reports of unhappiness among members of the to 1000 members make voluntary and obviously profession. I must say that it is by no means only the unpaid contributions towards the work of their legal profession experiencing this phenomenon. profession. Part of the unhappiness lies in the uncertainty And it is bearing fruit. The extent to which both which older members of firms are experiencing, as state and federal governments have consulted the their younger colleagues move around the profession Institute has never been greater. It is pleasing that or in and out of it. I continue to regard this aspect we receive requests for comment, particularly from as positive – we have come a long way since those of the state government, and often at a very early stage my generation were admitted to practice, when we of policy formulation. Indeed it has become plain didn’t even have the right to practise in Albury! that our ability to influence outcomes has never Older members of the profession will have to become been greater. accustomed to the notion that no longer will young Two years ago our Council highlighted the need solicitors be likely to remain at the one place for to provide greater resources for the Young Lawyers’ their professional lives. Section. At about that time the election of a new Young Lawyers executive led to a rapid re-appraisal But increased mobility is not the only cause for of the various activities carried out by the Section. Far dissatisfaction, and the greater availability of other from being a Section based upon social activities, its options is not the only reason why young solicitors, work is generally serious and it is achieving results, in particular, are choosing those options. The In- with a weekend CLE conference booked out long stitute is working with the profession in a thorough before the event. The Section is threatening to examination of the problem, but anyone who claims become “the conscience of the profession” – for that the ultimate answers have been ascertained is myself, I would be well satisfied if it played that role. optimistic indeed.
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The other matter about which I have to make of the relationship whereby we are reimbursed after some comment is that of the financial situation. The the event for expenditure incurred means that we Institute remains essentially in a sound financial are in a position where the maintenance of an position with healthy reserves. We own our building operating budget is virtually impossible. which, while old and dilapidated, is superbly The “scheme” of the Act is quite clear. It requires positioned for the convenience of the majority of that membership activities and regulatory activities our members. should be divorced. If the Board was dealing with a But in the past two years, notwithstanding “stand-alone” Recognised Professional Association excellent performance in revenue from membership which did not have a membership base, I am activities, we have suffered deficits in our operations absolutely certain that a number of the decisions because of our role as a Recognised Professional that it has taken as to funding would have been Association. quite different. While members of the Board state I admit that the legislation which governs the that they well recognise that the voluntary members relationship between the Legal Practice Board and of the Law Institute should not be obliged to Recognised Professional Associations is complex and subsidise the 100 per cent of solicitors whom we are hopefully that will be sorted out by the review of the obliged to regulate, the decisions which they make Legal Practice Act which is now being undertaken do not reflect this belief. and which commanded so much of our resources Goodwill continues to exist – decent people are during 2000. But in my view, Council cannot accept wrestling with a difficult legislative framework that a situation in which the level of regulatory activity will, no doubt, be reformed. But the reforms may, as is either increasing, or at least in no way yet, be some distance away and in the meantime the diminishing, while the reimbursement for that Institute cannot continue to conduct its professional activity has shrunk. standards activity at a heavy loss. It is discomforting, to say the least, when members of the Legal Practice Board demonstrate a belief that they are contributing much greater sums in reimbursement of Professional Standards activity than in 1998, when in fact precisely the opposite is the case. In actual terms, let alone real terms (adjusted for inflation), the sums contributed by the IAN DUNN Legal Practice Board have reduced. And the nature CEO
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Law Institute of Victoria Services and Sections
Bookshop the legal profession of the changes and the implications for their practices. Funding assistance Members made a record number of purchases was received from the GST Start-Up Office for these through the bookshop this year, with a significant seminars, which attracted over 1500 participants. increase in the sale of legal forms. Book and legal Another highlight of the year’s CLE activity was form sales to members of the public and non-mem- the Trade Practices and Intellectual Property break- bers equalled sales to members for the first time, fast seminar series. Three seminars were held through- due mainly to the bookshop’s role as the only re- out the year, each hosted by a major firm. A total of maining law-customer service centre within the CBD. 280 participants attended these seminars. This Student text sales also increased significantly as year’s Advanced Civil Litigation seminar series more city-located students discovered the convenience attracted 200 registrants. One mediation training of buying legal texts from the bookshop’s centrally workshop was held over three days and was fully located premises. subscribed. Thirty-five lectures were held as part of Implementation of the federal government’s GST the annual Young Lawyers lecture series, attracting policy was carried out with few problems thanks to 1100 registrants. the cooperation of the Institute’s information tech- The Criminal Law Section’s bi-annual conference, nology staff. held in Lorne, was attended by over 100 delegates. More space was made available to the bookshop to The Litigation, Family Law, Commercial Law, and facilitate mail orders, making a more efficient site Property and Environmental Law Sections again for bookshop staff to package and mail out the held a conference as part of the Annual Conferences increasing number of orders received daily. The event in August 2000, collectively offering 30 topics bookshop’s website received a greater number of hits and attracting over 800 registrants. The annual Wills than ever previously recorded, with most products and Estates Conference attracted 200 registrants and books sourced from the website. Improvement and the annual Small Practice Committee Conference in processing and turn-around time for form and attracted 85 registrants. book orders was achieved. Two conferences were held outside the CBD Melbourne area. A CLE day in Warrnambool was Continuing Legal Education held in conjunction with the Western District Law During 2000, 123 CLE events were held, attracting a Association, offering five topics and attracting 30 total of 6500 enrolments. Joint seminars were registrants; and a CLE day in Rutherglen was held conducted with: in conjunction with the North East and Goulburn ◆ Leo Cussen Institute; Valley Law Associations, offering eight topics and ◆ Legal Practitioners’ Liability Committee; attracting 30 registrants. ◆ Australian Advocacy Institute; A number of ad hoc seminars were scheduled ◆ North East Law Association; throughout the year on topical issues to ensure ◆ Goulburn Valley Law Association; members were kept up-to-date with the many new ◆ Criminal Bar Association of Victoria; pieces of legislation and issues relevant to the ◆ Business Law Section of the Law Council of various areas of practice. Australia; ◆ Federal Litigation Section of the Law Council of Costing Service Australia; The Costing Service’s business was very successful ◆ Victorian Employers’ Chamber of Commerce and in 2000, with several months showing exceptional Industry; income. At the end of the year the service was able ◆ Intellectual Property Society of Australia and to produce a high net income for the Institute. New Zealand; Non-business activities were much greater than ◆ Commonwealth Department of Foreign Affairs in other years because of the GST. This entailed and Trade; giving a large amount of advice to members and ◆ Sheriff’s Office, Victoria; and carrying out work to increase the statutory scales of ◆ The Accord Group Australia. costs on 1 July 2000 to take into account payment of The Institute responded to the introduction of the GST. Also, work was carried out associated with the GST and other taxation reforms by providing 22 usual cost of practice increase for statutory scales of seminars in city and regional locations to inform costs which commenced on 1 January 2001.
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The manager of the Costing Service acts as many more. The officer is also extensively involved secretary to the Costs Policy Committee. It also had in setting the VCE Legal Studies examination paper. a busy year considering GST issues as well as its usual workload. External Relations Free “Buying a Home” seminars drew more than Counselling and Advice 3000 people. The number of publications sold and The Institute continues to cover the cost of a the questions put to four volunteer solicitors show member’s initial consultation with the Law Care that they were a great success. counsellor. While members’ details are strictly Quarterly editions of the Client Newsletter went confidential, the counsellor has found that the most to 100 subscribing firms, totalling more than 60,000 common problems are personal relationships and copies. Another 30 firms subscribed to the Client separation, stress associated with financial and Newsletter on disk. organisational management, sole practice stress, Each month all law associations received news- depression, career planning issues and harassment. paper network articles for use in local newspapers. The Institute increased its promotion of the service The Speakers’ Bureau averaged about four requests during 2000 in the hope that practitioners would a month for solicitors to speak to local community use it before their problems became too serious. groups. Dial-A-Law and Referral Service Law Week There was a considerable increase in demand for the A total of 400 members of the public received free services of the Dial-A-Law and Referral Service legal advice through the 3MP free legal advice line during 2000. The taped service took almost 20,000 and on-line service. Radio promotion on 3MP, 3AW, calls – 6600 of which came via the LIV website. 3LO, Radio 3TR, 3RPH and 3RRR promoted the There were over 18,200 direct referrals to legal firms, Institute and Law Week activities. The Careers Expo which gives some indication of how readily the drew about 550 secondary school students and their public accepted the change made by the Institute to parents. More than 50 members of the public toured provide the service free. There has been a very Melbourne courts. positive response from the member firms willing to pay a small fee to renew their records with the service. Funds raised in this manner will be used to Legal Assistance Scheme further promote the service. The Legal Assistance Scheme has been in operation for nearly two years. In that time it has processed Education Liaison 210 applications and assisted 69 other applicants in an informal manner. One in two applications are Students and teachers in law-related courses, referred for assistance. This rate is double that of particularly VCE Legal Studies, are the main users similar schemes. Many thousands of dollars have and beneficiaries of this joint program between the been expended by volunteer lawyers in assisting Law Institute and the Department of Education, eligible people in diverse areas of law. As well, the Employment and Training, with the support of the scheme deals daily with many members of the public Court Network Supreme Court Education team. The who ring the Law Institute seeking assistance. It has service provides information files on a wide range of responded to more than 2000 calls in 18 months. legal topics and issues, and careers in law. It also The scheme has gained acceptance in the community runs an annual school lecture series. as a single gateway access point for pro bono The service coordinates the Court Education assistance. Referrals are received from courts and Program at the County and Supreme Courts for school and community groups. During 2000 a total tribunals, legal aid and community centre lawyers, of 11,000 students undertook this program, other lawyers and the public, both in Victoria and involving 500 schools; and 1900 information files interstate. were forwarded to students and 2300 to teachers. Many practitioners received copies of the three Library comprehensive career resource booklets to dis- The library has continued to deliver high-quality tribute when they undertook talks to schools and reference and research services, with 25,000 refer- attended career expos. ence and research enquiries received from members. A major source of current legal information for A members’ lounge has been established, with tea Legal Studies teachers is the Legal Update column and coffee facilities, daily newspapers and telephone. prepared for Compak, the journal of the Victorian Situated at the front of the library, the members’ Commercial Teachers Association, by the education lounge permits easy access to the members’ IT lab. liaison officer. This journal is circulated to over A members’ Internet training program was com- 1300 teachers four times each year, and is read by menced. This program aims to provide an intro-
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duction to selected freely available Internet-based privileges. Restaurant patronage jumped 14 per cent legal resources and effective search skills required during the year. A much-hailed initiative saw the to research the law electronically. Working in addition of an exclusive reserve cellar list, now partnership with the country law associations, this available for a special occasion or to enjoy at lunch. program will be extended in 2001 to incorporate on- site training in venues throughout regional Victoria. Publications Department Automation of the library invoicing system has During the year, the Law Institute Journal resulted in streamlined staff administrative pro- confirmed its reputation as the country’s leading cedures, improved record-keeping and faster notifi- law society journal when it won a number of prizes cation to members. at the annual Victoria Law Foundation legal re- porting awards. Against strong competition from Member Services and Support other media outlets, including The Age, The Commercial benefits Australian Financial Review, The Australian and Members continued to take advantage of the various the Herald Sun, the Journal won the prestigious discounted services available, especially the Common- Best Report in Print category and also won the Best wealth Bank Gold Privilege Program and the mem- Legal Image category. ber alliance telecommunication services through The department also continues to produce the Cable and Wireless Optus. In late 2000, the Institute monthly LIV News, the annual Law Institute ® and the Commonwealth Bank were pleased to Diary /Directory, RPA newsletters and a range of launch the Silver MasterCard as part of a banking other publications. package specifically designed to meet the needs of student, articled clerk and young lawyer members. Sections The Sections are crucial to the Institute’s work. President’s luncheons They are a powerful link between the Institute, the Once again these luncheons were a highlight of the profession and the various arms of government. Institute’s calendar. In October distinguished long- serving members were honoured at a special Administrative Law & Human Rights president’s luncheon at the Hotel Windsor. Other Section speakers during the year included the editor of the The Victorian Attorney-General’s Department, the Herald Sun, Peter Blunden, Nazi hunter Eli Scrutiny of Acts and Regulations Committee and Rosenbaum, Sir Gustav Nossal, Professor Deborah the (Commonwealth) Legal and Constitutional Hensler, the Chief Federal Magistrate, Diana Bryant, Legislation Committee were busy during the year the then Governor, Sir James Gobbo, Hong Kong with a constant referral of proposed legislation for human rights activist Christine Loh, Internet comment. This meant, in some instances, the executive Emma Rosenberg, Australian Cricket forming of ad hoc sub-committees to prepare Board CEO Malcolm Speed, Paralympic athlete Don submissions within a limited time frame. The major Elgin and cyclist Anna Wilson. submissions by the Section related to: ◆ Dinners Equal Opportunity Act 1995; ◆ reconciliation implementation and framework The Australian String Quartet played brilliantly at a agreements legislation – discussion paper; dinner in May. This was among a number of out- ◆ whistleblowers’ protection proposals; standing dinners during the year. In September Des ◆ Administrative Review Tribunal Bill 2000 and Ryan, winemaker and partner at Davies Collison Cave, Administrative Review Tribunal (Consequential was Master of Ceremonies for a wonderful evening and Transitional Provisions) Bill 2000; featuring wines from the Macedon Ranges. A success- ◆ reducing discrimination against same-sex ful Law and Literature Dinner featured Maria couples; Hyland, author, editor, critic and solicitor with ◆ Guardianship List – VCAT; and Clayton Utz. ◆ Review of Health Services (Conciliation Review) Public relations Act 1987. At least one major firm was given an intensive The Health Law sub-committee expressed its explanation of dealing with the media. Practitioners concerns to all members of the Australia New from small and middle-range firms were advised on Zealand Food Authority regarding comprehensive a range of media issues and strategy. All arms of the labelling of genetically modified food. At the ANZFA media sought the Institute’s views and comments conference in Wellington, New Zealand, in July on a vast range of issues. 2000, the Health Ministers addressed most of those concerns. Snail ’n Bottle restaurant There were superb attendances at the debates An exclusive Snail ’n Bottle membership club was arranged by the Human Rights sub-committee held launched. Eighty members now benefit from special in May and August and entitled:
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◆ Should Australia withdraw from UN Human Litigation Lawyers Section Rights Committees? The Section contributed energetically to influence ◆ That the Laws of War Work (with the Red Cross). reform in the Victorian civil justice system. A After three years at the helm, Michael Gorton did successful full-day conference was held once again not re-nominate as chair of the executive and was to bring practitioners up-to-date on legal and succeeded by Dominique Saunders. procedural changes. The Section has representatives Commercial Law Section on various law reform and other committees. The This Section’s membership topped 2900 for the year, ADR sub-committee maintains its vital support for making it the Institute’s largest. The busy year the Schools Conflict Resolution and Mediation included a well-received annual conference at the Competition (SCRAM), which continues to gain Grand Hyatt Hotel and many submissions to gov- momentum. Some of the Section’s main sub- ernments, especially on the potential impact of the missions were: CLERP 6 legislation on legal practice. Other ◆ NADRAC Discussion Paper on the Development submissions included entity taxation and the of Standards for ADR; expanded EFT Code of Conduct. In addition, the ◆ Wrongs (Amendment) Bill; Minister for Small Business, Marsha Thomson, ◆ review of the Going to Court Discussion Paper; attended a combined meeting of the Business Law ◆ interest on judgments; and Committee and Business Law Study Group in the ◆ cross-vesting. latter part of the year. The Business Law Committee Managed Mortgages Section expanded its role to include a watching brief on The LIV Council approved the formation of the employment law. Managed Mortgages Section on 9 March 2000. This Criminal Law Section Section was formed specifically to cater for the needs A highlight of the year was the successful weekend of small mortgage practice firms (with less than conference at Lorne, opened by the Victorian Attorney- $7.5 million funds under management), and 30 have General, Rob Hulls. Other highlights included the joined the Section as at the end of December 2000. Section’s third special issue, published in the In setting up the Section the Institute developed December 2000 Law Institute Journal and liaison an administration kit, with User Guide, Policy with government, the courts, prosecutorial bodies Statement 144 and ASIC Class Order CO 00/203, as and interstate practitioners. Major submissions well as the Section’s by-laws and rules and the trust included: deed of the Section’s fidelity cover vehicle, the ◆ issues surrounding detention in police cells; Managed Mortgages Fund. The rules were approved ◆ whistleblowers’ protection proposals; by the LIV Council on 14 September 2000. ◆ sentence indication; Class Order CO 00/203 also provides (partial) ◆ Independent Investigation into the Management relief for other categories of mortgage practice, and Operation of Victoria’s Private Prisons; including: ◆ Review of Summary Offences Act; ◆ run-out mortgages; ◆ legal aid funding issues; and ◆ schemes with 20 or fewer investors; and ◆ submission to the Drug Policy Expert Com- ◆ schemes in which no management services are mittee. provided by the solicitor or firm. A full description of the controlling legislation Family Law Section appears in the Managed Mortgages Section of the Submissions for the year included: Institute’s website www.liv.asn.au. The executive ◆ Children and Young Persons (Appointment of committee comprises Alan Roberts (chair), Michael President) Bill 2000; Murray, Gordon Bell, John Brack, Chris Viglietti, ◆ Children and Young Persons Act 1989 – dis- Peter Byrne, Don Duffy, Ian Still and Dom Segafredo. cussion paper; and ◆ Registrar’s (RICA) Powers, Registrar Initiated Property & Environmental Law Section Change of Assessment (RICA) and Child Support Section membership for the year rose to 1943. A Legislation Amendment Bill (No. 2) 2000 successful annual conference was held at the Grand The Family Law Amendment Bill, which Hyatt Hotel. A highlight was luncheon entertain- introduces binding financial agreements, was ment provided by the Section’s deputy chair, Derry closely monitored during the year by the Section. It Davine, with the assistance of professional comedians. came into force on 27 December 2000; certain The Section’s committees again performed aspects caused concern and will be acted on in 2001. strongly and submissions were made on numerous New guidelines on family law costs announced by matters, including the Retail Tenancies Reform Act, Victoria Legal Aid are of great concern and will be the Gene Technology Bill, the national competition addressed early in 2001. Caroline Counsel was re- policy review of the use of crown lands, and the elected as chair in September. removal of restrictive covenants affecting land. The
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Environmental Issues Committee assisted with the lawyers, the negotiation skills workshops, and the running of the National Dryland Salinity Confer- Hanover Welfare Services Mooting Competition. ence at Bendigo and was also addressed by the The Section produced three editions of the Young Minister for Conservation, Sherryl Garbutt, and the Lawyers’ Journal, addressing immigration, global- Opposition spokesperson on the environment, isation and technology and the law. Membership of Victor Perton. the Section rose steadily throughout the year, with significant increases in membership among articled Young Lawyers’ Section clerks and law students. The Section was also Initiatives included the re-constitution of the Young greatly assisted by the appointment of a full-time Lawyers’ Social Committee and the launch of the manager, Jacqui Boymal. new Law Reform Committee. The Professional Development Committee formulated the “Healthy Specialist Balance Guidelines for Law Firms and Employee Solicitors”, designed to give advice about employ- Accreditation ment, professional development and quality of life Paul Staindl and Paul Brotchie issues. stepped down from the The Section hosted the first Young Lawyers’ Specialisation Board during Assembly weekend attended by young representatives the year after completing the from various suburban and country law associ- maximum 10 years’ service. Both ations, Victorian Women Lawyers, the Aboriginal made outstanding contributions to the Legal Service and NSW Young Lawyers. The specialisation scheme. Annemaree Lanteri replaced Assembly provided an opportunity for the Section to Paul Staindl as chair of the Board. plan for the year ahead and a forum in which to Accreditation was offered in six specialities – address the common concerns of young practitioners. Business Law, Commercial Litigation, Criminal In May 2000, the Section held its inaugural CLE Law, Mediation, Wills and Estates, and Immigration Conference at Daylesford, which featured guest Law, the last as a national program with New South speaker, Judge Betty King of the County Court, and Wales. Of 52 candidates, 35 were successful, was attended by young lawyers from across Victoria. bringing the total accredited over the life of the Other projects included the Careers Advice Pro- scheme to 807. The number currently accredited is gram for law students, articled clerks and young 682.
12 Victorian Lawyers RPA Ltd Annual Report 2000
Professional Standards
e have now completed four full years since the The 18-month practising certificate year is Wintroduction of the Legal Practice Act 1996 on drawing to a close and we are currently undertaking 1 January 1997. a review to ensure the renewal for 2001/2002 proceeds It can be seen from an analysis of the expenditure in an orderly fashion. of the Department of Professional Standards since the introduction of the Act that, notwithstanding an Claims Section increase in the volume of work conducted by the Under the Legal Practice Act 1996, the Legal Department, the cost of the Department fell from Practice Board is the body responsible for the approximately $4.35 million in 1997 to $3.85 administration of the Fidelity Fund. People who million in the year 2000. This reduction in expend- have suffered a pecuniary loss from a defalcation iture occurred during a period when the number of committed by a practitioner lodge their claims with practitioners in Victoria increased from approxi- the Legal Practice Board. In turn, the Board, mately 8500 in 1997 to 9650 in the year 2000. pursuant to the provisions of the Act, refers the The Department of Professional Standards, which claims to the Victorian Lawyers RPA Ltd for in- is a division of the Victorian Lawyers RPA Ltd, vestigation. continues to maintain six sections: During 2000, the Legal Practice Board referred ◆ Claims; 107 new claims (58 in 1999), with a total claimed ◆ Complaints; amount of some $4.9 million ($5.7 million in 1999). Of the 107 claims referred during 2000, 85 were ◆ Inspections; ◆ new claims against eight solicitors/firms, while the Litigation; remaining 22 were against solicitors from previous ◆ Practising Certificates/Records; and years’ defalcations. ◆ Receiverships. As at 31 December 2000, all claims except 22 had Each section is involved in administering the been investigated and processed. statutory requirements of the Victorian legal pro- fession. The Department is continuing to develop its Complaints Section key performance indicators in each section as part The number of complaints received in 2000 in- of its business plan and this has been reflected in creased by 6.5 per cent from 1999. The average the efficiencies identified. number of files being investigated at any one time During 2000, the Attorney-General, Rob Hulls, has increased to approximately 600. announced the review of the Legal Practice Act The reason for this increase is due, in part, to the 1996 and appointed Professor Peter Sallmann QC increased numbers of files, as well as the stricter (Crown Counsel) and Richard Wright (Associate requirements of complaints investigation identified Director, Civil Justice Review Project) to conduct in the High Court decisions of Barwick v Law the enquiry. Messrs Sallmann and Wright published Society of New South Wales & Ors and Murray v an Issues Paper which identified the key issues Legal Services Commissioner & Anor. relating to any necessary reform of the legal pro- The staffing level remains at seven solicitors and fession. A response to the Issues Paper was published it is considered that this level of staffing will be in December 2000 detailing the Institute’s vision for retained for the foreseeable future. future regulation of the profession. The Legal Ombudsman undertook the fifth “six- Other highlights for the year included an enquiry monthly file audit”. The findings of the Legal by the Chief Inspector of the Department of Ombudsman’s monitoring report were generally Professional Standards into the E.Dec system of reasonable from the Section’s perspective, with auditing solicitors’ trust accounts, which was some faults in handling a number of files identified. adopted in New Zealand approximately two years The majority of the criticisms appeared to involve ago. The Chief Inspector, Laurie Neville, with the minor matters relating to individual files and Chief Executive Officer of the Legal Practice Board, differences in policy directions. Bill Robinson, went to New Zealand to review the The rate of confirmation of RPA decisions by the strengths and weaknesses of the system. A joint Legal Ombudsman on conduct files was 82 per cent. report by them will be considered in 2001 and This is a result which is reasonable, but the Section Council will determine whether the system should will continue its endeavours to improve on this be implemented in Victoria. figure in future.
13 Victorian Lawyers RPA Ltd Annual Report 2000
In July 2000 the Chief Inspector travelled to New Statistics 1999 2000 Zealand to review its Financial Assurance System following the implementation of recommendations Complaints received 2,431 2,588 contained in the E.Dec Report. A report on the New Unauthorised practice files 135 114 Zealand model was to be put to Council at the From the complaints files completed: 1999 2000 weekend conference in February 2001. Telephone calls received in relation to trust Referred as misconduct/ regulation were as follows: unsatisfactory conduct – s151(2) 78 72 ◆ 1,885 telephone inquiries from practitioners Reprimands – s151(3) 36 33 concerning trust issues; Dismissed – s151(5) 1,302 1,062 ◆ 929 calls from auditors; and ◆ 224 from the public. Inspectors delivered 36 trust account seminars Inspections Section for practitioners and their staff and the Chief The Chief Inspector directly oversees the inspection Inspector delivered three training seminars for trust program and assists the General Manager in the account auditors. management of the Professional Standards division. The Managers of Practising Certificates and Fidelity Litigation Section Fund Claims report to the Chief Inspector. The Litigation section provides legal, administrative The section has a staff level of 14 – a Chief and other services in relation to: Inspector, Deputy Chief Inspector, 11 inspectors and 1. Some Legal Practitioners’ Fidelity Fund matters a secretary. There are two inspector vacancies at (Fidelity Fund) under a consultancy agreement present. In the reporting period, the section suffered with the Legal Practice Board. the sad loss of the Deputy Chief Inspector, Brian 2. Prosecutions of regulated practitioners brought Delany, and Jol Dunn was appointed to the position. before the Legal Profession Tribunal, Supreme In 2000 inspectors were involved in the in- Court or Court of Appeal. vestigation of 219 firms’ trust accounts. Inspectors 3. Matters arising from the RPA’s regulation of the were also involved in the statutory audit of 82 profession, which include: practices. ◆ applications for appointment of receiver and/or manager; ◆ proceedings and recoveries arising from receiver- Statistics ships and appointments of managers; ◆ striking off applications; A summary of practice visits is as follows: 2000 ◆ recovery proceedings relating to payments made New practices visited 17 by the Legal Practice Board (formerly Law In- Single-issue investigations 12 stitute of Victoria) from the Fidelity Fund (formerly Solicitors’ Guarantee Fund); Practices where practitioners suspected ◆ litigation necessary to address unqualified of practising without a current practising practice; certificate 10 ◆ practising certificates – application, cancellation, Random routine inspections 54 variation of conditions; Inspections arranged after review of the ◆ challenges to the complaint/investigation annual audit report 89 process; ◆ Investigations related to complaints by clients 18 other matters concerning bankruptcy issues, search warrants for inspectors at the RPA, sub- Inspections on the suggestion of the poenas for production of documents and appli- Legal Practice Board 4 cations for re-admission; Service calls/educational visits 5 ◆ recovery of fines ordered in favour of the Legal Mortgage firms (routine) 10 Practice Board; and ◆ recovery of costs ordered in favour of Victorian Total firm visits 301 Lawyers RPA Ltd. The main litigation matters for the year involved In 2000, inspectors reported seven defalcations, receivership applications, the completion of claims two of which came from the investigation of a on the Fidelity Fund in relation to the practice of complaint, and there were 10 other matters referred R.J. Martin, litigation arising from the Max Green to the Trust Monies Committee for other breaches receivership and recovery action commenced to of trust rules. recover or preserve trust property.
14 Victorian Lawyers RPA Ltd Annual Report 2000
financial year by means of an 18-month practising Statistics 1999 2000 certificate for 2000/2001 presented significant challenges to the Practising Certificates/Records Fidelity Fund claims finalised 238 39 section. These challenges included: Receivership orders obtained 4 8 ◆ responding to numerous enquiries from practi- Receivership applications dismissed 3 1 tioners who were confused by different aspects of Receivership applications the changes; adjourned sine die 11◆ interpreting and applying the transitional pro- visions of the Act; Action by Receiver to recover ◆ trust funds 9 9 adapting the renewal process, documentation and computer systems for an 18-month renewal Order of Receiver to recover possession period; of land 1 1 ◆ educating staff; Receiver filed final report of ◆ charging and collecting surcharge penalties recoveries at court 1 3 where practitioners were late in renewing their Orders regarding unqualified practice 4 4 practising certificate; and ◆ Orders to remove practitioners from introduction of the GST as from 1 July 2000. the roll 3 4 The surcharge penalty arrangement had the effect Interlocutory orders and orders for of forcing practitioners to renew their practising listing of hearing 10 10 certificates by the due date. However, it did place considerable pressure on the physical resources of Injunctions 2 1 the section. Orders regarding taxation of costs 1 1 The renewal process for 2000/2001 was quite Appeals against LPT order 3 2 successful. During the year a total of 10,573 practising Letters to suspend, vary or refuse certificates were issued to practitioners – this is an practising certificates 11 8 increase of 844 on 1999, or 8.7 per cent. A number of valuable lessons were learned that will greatly Legal Profession Tribunal – Conduct Hearings assist future renewals. Tribunal files opened by Litigation Late advice from the Australian Taxation Office section 67 104 that practising certificate fees and Fidelity Fund Charges filed at Tribunal by RPA 74 60 contributions were GST-exempt meant that the GST component of the fees and contributions collected Applications for practising certificates had to be refunded. This was a major undertaking, filed at Tribunal by practitioners 2 3 again taxing the resources of the section. Matters completed: In addition to the renewal process, the normal, Full Tribunal – Disciplinary hearings 23 23 day-to-day functions continued, as follows: Practising certificate ◆ maintenance of computer and physical applications 2 3 files/records for solicitors and firms; Dispute appeal ◆ response to written and telephone requests for (under LPPA 1958) 2 3 non-confidential information in relation to Filed at Tribunal but yet to be solicitors and firms; completed as at 31/12/00 11 10 ◆ presentation of evidence at the Legal Profession Registrar – Disciplinary hearings 41 47 Tribunal or Supreme Court of Victoria; Dispute hearing ◆ processing of out-of-cycle applications for or (under LPPA 1958) 1 2 variations of practising certificates pursuant to Assessment of costs – 1 s22 of the Act; ◆ regular transfer of money received for practising Filed at Tribunal but yet to be certificate fees and Fidelity Fund contributions to completed as at 31/12/00 8 11 the Legal Practice Board; ◆ provision of administrative services to the Legal Practising Certificates/Records Practitioners Liability Committee in relation to professional indemnity insurance; Section ◆ monitoring of annual lodgement of trust account The transitional arrangements to change the statutory declarations or audit reports for practising certificate year from a calendar to a practitioners entitled to receive trust money;
15 Victorian Lawyers RPA Ltd Annual Report 2000
◆ management of the approved trust account auditor file; Statistics ◆ preparation of certificates of good standing and Practising Certificates* 1997 1998 1999 2000 collection of appropriate fees (during 2000 there were 691 certificates issued. Since charging for Principal (Trust) 4,630 3,715 3,664 3,715 certificates was introduced on 6 December 1999 Principal (No Trust) 180 816 900 1,100 a total of $37,500 has been generated); and Employee 3,387 3,506 3,947 4,452 ◆ entry of data onto the computer system and issue of practising certificates and LIV membership Corporate 1,041 975 1,042 1,158 cards. Incorporated 102 107 176 148 The section achieved a high level of performance Total 9,340 9,119 9,729 10,573 in what was an extremely challenging and difficult Firms of Solicitors year. Sole Practitioner 1,897 1,999 2,078 2,137 2–3 partners 313 306 298 299 4–6 partners 61 60 54 51 7–10 partners 21 19 20 23 11–20 partners 19 15 13 15 * Note that since more accurate recording of 21–40 partners 5 8 8 6 practising certificates was established in 1999, Over 40 partners 6 6 6 8 the figures shown for the years 1997–99 are different from those in the 1999 Annual Report. Total 2,322 2,413 2,477 2,539
Receiverships Section
In the year ended 31 December 2000, nine new The practice involved offices in Avondale Heights receiverships were obtained, indicating an increased and Springvale with a large number of clients and level of activity for the Receiverships section, as documents to be dealt with. Work continued on the shown in the table below. tracing of the recovery of trust monies associated Of the new receiverships obtained: with the receivership of the late Max Paul Green. ◆ four were due to a suspected defalcation; This work was undertaken closely with the Litigation ◆ three were due to a practitioner’s inability to section. For the period from 30 May 1998 to 20 attend to his/her practice (through illness or December 2000, about $3.5 million has been otherwise); distributed to investors in the Max Green scheme. ◆ one was due to trust record keeping difficulties; There are still considerable funds being adminis- and tered by the Receiverships section as shown by the ◆ one was due to the death of a practitioner. following figures: ◆ Six of the new receiverships required substantial Just under $2.4 million was held in trust in attendance at the practices, which involved much relation to 19 receiverships. work by receivership and locum staff. Resources ◆ $416,846.57 was paid over to the Legal Practice were particularly taxed when carrying on the Board by way of expenses or claim recovery, practice of Keith William Allan (trading as Keith W. making a total of nearly $2.5 million that has Allan & Associates) where the practitioner was been forwarded to the Legal Practice Board by reported missing in late May 2000 and is still the receiver from the beginning of January 1997 missing at the time of preparation of this report. to 31 December 2000.
Statistics and descriptions
1994 1995 1996 1997 1998 1999 2000 Number of receivership orders obtained 11 4 9 6 11 4 9 Final reports filed or terminations lodged 8 2 22 40 4 4 3 Number of staff (FTE) (average for year) 3 3 9 10 7 7 7
16 Victorian Lawyers RPA Ltd Annual Report 2000
Ethics Committee Report and must be particularly careful to avoid conflict of interest arising. The Ethics Committee comprises experienced Similarly, care must be taken by solicitors present and past members of the Council of assisting unrepresented applicants in court to Victorian Lawyers RPA Ltd and its predecessor, ensure that no conflict arises between the interests representing a wide spread of areas of practice. Law of those they assist and those represented by the Institute staff also play an integral role in preparing, legal firm that employs them. researching and presenting requests for rulings to The conflict of interest in some matters re- the Committee. inforced the fact that, where a solicitor has reason The Ethics Committee met monthly between to believe that he or she would be required to be a February and December 2000 to consider ethical material witness in a dispute, the solicitor should issues encountered by solicitors in their work. cease acting. In response to the heightened awareness and Issues on which rulings discussion of ethical issues within the legal profession and to assist in the early resolution of were made 2000 ethical dilemmas, the Ethics Committee agreed in Conflict of interest 21 November 2000 to undertake the preparation of a booklet on ethics. The booklet will draw on both the Undertakings 5 rulings of the Ethics Committee and the experience Letters of demand 4 of Law Institute staff in dealing with ethical issues Release of deposit or trust monies 4 day-to-day, and is intended to provide practitioners with an easily understood guide to common ethical Debt recovery arrangements 2 problems. Release of file 1 In April 2000 the chair of the Ethics Committee delivered an address on Legal Ethics and the Role of Custody of clients’ files and documents 1 the Ethics Committee at the Practical Ethics Seminar Income sharing 1 organised by the Legal Practice Management section, chaired by the Chief Justice of the Supreme Court of Victoria, the Hon. Mr Justice Phillips, at the Law Interestingly, more than half of the requests for Institute of Victoria. rulings related to conflict of interest. A significant On 15 August 2000 the chair of the Ethics number of these involved family law matters where Committee addressed law undergraduates at Deakin a solicitor acting for a husband and wife in relation University on Conflict of Interest: the Migratory to a property matter was subsequently requested to Lawyer, and on 4 October 2000, the law under- act on behalf of one of the parties in a matrimonial graduates at Monash University on Conflict of dispute. Interest and Chinese Walls. Fewer rulings than in 1999 were required on the Throughout 2000 the Ethics Committee transfer of a solicitor or other employee from a legal published a selection of rulings in the Law Institute firm acting on one side of the record to a firm Journal and in June 2000 republished the Conflict acting on the other side. of Interest Guidelines previously adopted by the A number of the requests for rulings arose as a Council of the Law Institute on 13 December 1990. result of the type of practice in which the solicitor The members of the Ethics Committee serve in was engaged, such as locum work or assisting an honorary capacity. Members and LIV staff have unrepresented applicants as a duty solicitor. In such worked together cooperatively and tirelessly to areas the potential for conflict of interest might be ensure that the profession is well served by timely greater. responses to all problems raised by practitioners. A locum solicitor might handle a number of files Each is sincerely thanked for the contribution made. in the same area of law on behalf of different firms MELISSA MACKEN (CHAIR)
17 Victorian Lawyers RPA Ltd Annual Report 2000
Membership/Practising Statistics as at 31/12/2000
Membership 81%
Male
Female
10.9% 8.1%
Practising Non-practising Associate Member Member
Male Female Total Practising Members 5204 2457 7661 Non-practising Members 610 421 1031 Associates 348 417 765 6162 3295 9457
Practitioners 50.2% – by employment category
39% Members
Non-Members
10.8%
Principal Employee Corporate Certificate Certificate Certificate
Members Non-Members Total Principal Certificate 3940 698 4638 Employee Certificate 3068 536 3604 Corporate Certificate 653 342 995 7661 1576 9237
18 Victorian Lawyers RPA Ltd Annual Report 2000
Years in Profession 31.6% Private Practitioners
Members 23.5% Non-Members
16.9% 14.5% Members Non- Total 13.5% Members 0-5 Years 2381 541 2922 6-10 Years 1032 309 1341 11-15 Years 992 254 1246 16-25 Years 1877 294 2171 Over 25 Years 1379 178 1557 0-5 Years 6-10 Years 11-15 Years 16-25 Years Over 25 7661 1576 9237 Years
Section Membership 31.4% (Incl. multiple memberships)
21.5% 20.6%
Count Administrative Law 630 10% Commercial Law 2972 6.7% 6.7% Criminal Law 638 Family Law 947 3.1% Legal Practice Management 293 Litigation Law 2031 Law Law Law Property/Environmental Law 1943 Property/ Commercial Commercial Family Law Family Management Criminal Law Legal Practice Environmental Litigation Law 9454 Administrative
Law Association 56.9% Membership (No overlaps)
28.1%
Members City 4357 11.9% Suburbs 2156 3.1% Country/Provincial 912 Other 236 City Suburbs Country/ Other 7661 Provincial
19 Victorian Lawyers RPA Ltd Annual Report 2000
2000 Income 44.2%
29.9%
17.8%
5.6% 2.5%
1. 2. 3. 4. 5. Legal Practice Membership Membership Administration Interest & Other Board Fees Activities Sundry Items
1. Legal Practice Board (Incl. Abnormal Income) $ $ RPA Work 4,005,434 Contributions under s387 of the Legal Practice Act 1996 789,948 Administration, Governance and Support Costs 1,471,588 Occupancy & Rental 220,586 6,487,556 2. Membership Fees 2,610,758 3. Membership Activities Continuing Legal Education [CLE] 541,828 Specialisation 235,610 Journal Subscriptions 92,947 Journal & News Advertising 479,071 Diary Income 796,532 Dial-A-Law Annual Membership Fees 128,720 Sponsorship Income 186,553 Bookshop Sales & Commissions 611,001 Costing Services Fees 503,854 Restaurant & Catering 555,179 Other 247,956 4,379,251 4. Administration Section Membership [MMS & Sections] 70,038 Legal Practitioners Liability Committee 111,145 Superannuation Funds 645,348 826,531 5. Interest & Other Sundry Items Interest 297,398 Legal Assistance Scheme Grant 5,322 Audit Fees 29,969 Other 37,945 370,634 TOTAL 14,674,730
20 Victorian Lawyers RPA Ltd Annual Report 2000
2000 Expenses 41%
26.9%
20.5%
8.1% 3.5%
1. 2. 3. 4. 5. RPA Work Governance & Membership Finance & Capitation (Direct Costs) Representation Services Internal Support Fees
1. RPA Work [Direct Costs] 3,950,521 2. Governance & Representation – Council & Executive 875,207 – Media & Government Relations 123,496 – Member & Public Relations 191,599 1,190,302 3. Membership Services (LIV) Division – Research & Information – (Incl. CLE) 1,120,882 – Specialisation 232,410 – IT Special Projects 21,337 – Publications 1,552,453 – Bookshop 476,506 – Costing 394,116 – Dial-A-Law & Referral Service 202,770 – Marketing 474,283 – Library 448,226 – Restaurant & Catering 572,207 – Other (Including General – Management) 528,644 6,023,834 4. Finance & Internal Support – Finance & Administration 1,935,331 – Human Resources 199,196 – Information & Technology 427,409 – Superannuation 447,873 3,009,809 5. Capitation Fees 501,598 TOTAL 14,676,064
21 Victorian Lawyers RPA Ltd Annual Report 2000
Financial Commentary for the year ended 31 December 2000
or the 2000 year the Institute recorded a marginal of the Legal Practice Act. In consequence, the IT Fshortfall of $1,334 and closed with a Members’ department’s ability to properly service its clients Funds of $6,580,655, made up of: during 2000 was significantly hampered. ◆ Retained Surplus $6,247,385 Superannuation ◆ Specific Funds $4,500 ◆ Asset Revaluation Reserve $328,770 The Law Institute of Victoria (LIV) is administrator of three superannuation funds – the Legal Industry Of this total, $2,730,628 represents fixed Superannuation Scheme (LISS), the Victorian Solici- assets which are made up as follows: ◆ tors’ Superannuation Fund (VSSF) and the Law In- Freehold land and buildings stitute of Victoria Staff Superannuation Fund (LIVStaff). – 470 Bourke Street (at 1999 As administrator, the LIV manages the day-to-day independent valuation) $2,200,000 activities of the funds on behalf of the trustee of ◆ Other $530,628 each fund. Day-to-day activities include receipting, Membership banking and allocating contributions to member Membership take-up in the private profession of accounts, processing and paying benefits to 7661 equated to 82.9 per cent of the practising members who leave the funds, telephone and population. Total membership fees achieved written inquiries and other functions required to $2,610,758 which represented an increase in conduct the funds’ business. numbers of 477 and revenue of $160,625. Legal Industry Superannuation Scheme Legal Practice Board In the year ended 30 June 2000, LISS increased net membership by 1179, increased total assets by A major component of the Institute’s revenue is a $25.6M and added 13.25 per cent interest to reimbursement of reasonable costs incurred in the member accounts. conduct of its RPA role. For the 2000 year re- In 2001 LISS plans to: imbursement income totalled $6,487,556. ◆ Adopt public offer status which will allow LISS Included in this total was a retrospective adjust- to broaden the base from which its member- ment (for 18 months to 31 December 1999) of ship is obtained. Currently, self-employed $290,691 to the administration fee component. The individuals cannot join LISS unless they are administration fee component comprises the employer supported. When LISS is a public governance, finance, administration and support offer fund self employed individuals will be costs incurred by the Institute in its RPA role, and is able to join LISS. calculated by application of a percentage mark-up to ◆ Introduce investment choice – there will be the direct costs incurred by the Institute’s Professional three investment portfolios to choose from. Standards division. In conjunction with the Institute, ◆ Obtain a securities dealer’s licence which will the Legal Practice Board engaged a consultant to allow LISS to provide more advice to members review the quantum and method of determination of and employers on the LISS superannuation this charge. The review was backdated to pick up any product. reimbursement shortfall from 1 July 1998. Victorian Solicitors’ Superannuation Fund Information Technology In the year ended 30 June 2000, although VSSF’s In 1999, the Institute conducted a needs analysis, on net membership declined marginally, total assets both an internal and external basis, to determine increased by $0.9M. 6.76 per cent interest was the future development path. This resulted in a added to member accounts. VSSF is a fund for proposal to significantly restructure the operation self-employed solicitors. and the migration of data to a more suitable soft- Statistics in respect to the two funds, as at 30 ware environment. Before the Institute’s Council June 2000, were: had considered specific proposals in support of this upgrade, the Legal Practice Board set up an IT Co- Members’ Annual Earnings Member ordination Group, in which the Institute participated, Funds Amount Investment Numbers to examine the feasibility of installing a shared $M $M Return practitioner database by all the parties to the regulatory system. The Institute’s proposals were LISS $116.9 $11.2 12.34% 13,769 put on hold to take into account the findings of this VSSF 28.4 1.6 6.76% 337 group. This project, in turn, has stalled to await the $145.3 $12.8 14,106 outcome of the Victorian Attorney-General’s review
22 Victorian Lawyers RPA Ltd Annual Report 2000
Operating Statement for the year ended 31 December 2000
Consolidated VLRPA 2000 1999 2000 1999 Notes $ $ $ $ Revenue 2(a) 14,384,039 13,828,908 14,384,039 13,828,908 Expenses 2(b) (14,676,064) (14,324,260) (14,676,064) (14,324,260) Operating Surplus (Deficit) before Abnormal Items and Income Tax (292,025) (495,352) (292,025) (495,352) Abnormal Revenue Item 2(a) 290,691 – 290,691 – Operating Surplus (Deficit) after Abnormal Items (1,334) (495,352) (1,334) (495,352) Income Tax 1(d) – – – – Surplus (Deficit) after Income Tax (1,334) (495,352) (1,334) (495,352) Retained Surplus at the beginning of the financial year 6,248,719 6,744,071 6,248,719 6,744,071 Retained Surplus at the end of the financial year 6,247,385 6,248,719 6,247,385 6,248,719
Balance Sheet as at 31 December 2000 Consolidated VLRPA 2000 1999 2000 1999 Current Assets Notes $ $ $ $ Cash 3 6,174,755 6,447,778 6,174,755 6,447,778 Receivables 4 2,270,648 1,403,825 2,270,646 1,403,823 Inventories 5 114,284 109,585 114,284 109,585 Investments 6 4,512 4,512 4,514 4,514 Prepayments 254,901 97,420 254,901 97,420 Total Current Assets 8,819,100 8,063,120 8,819,100 8,063,120 Non-Current Assets Property, Plant and Equipment 7 2,730,628 2,675,773 2,730,628 2,675,773 Total Non-Current Assets 2,730,628 2,675,773 2,730,628 2,675,773 Total Assets 11,549,728 10,738,893 11,549,728 10,738,893 Current Liabilities Creditors 8 907,419 638,123 907,419 638,123 Provisions 9 770,213 730,599 770,213 730,599 Subscription Fees and Other Prepaid Income 3,154,771 2,706,700 3,154,771 2,706,700 Total Current Liabilities 4,832,403 4,075,422 4,832,403 4,075,422 Non-Current Liabilities Provisions 9 136,670 81,482 136,670 81,482 Total Non-Current Liabilities 136,670 81,482 136,670 81,482 Total Liabilities 4,969,073 4,156,904 4,969,073 4,156,904 NET ASSETS 6,580,655 6,581,989 6,580,655 6,581,989 Members’ Funds Retained Surplus 6,247,385 6,248,719 6,247,385 6,248,719 Specific Funds 4,500 4,500 4,500 4,500 Asset Revaluation Reserve 10 328,770 328,770 328,770 328,770 TOTAL MEMBERS’ FUNDS 6,580,655 6,581,989 6,580,655 6,581,989 The Balance Sheets and Operating Statements are to be read in conjunction with the notes to and forming part of the financial statements set out on pages 25 to 34.
23 Victorian Lawyers RPA Ltd Annual Report 2000
Statement of Cash Flows for the year ended 31 December 2000
Consolidated VLRPA 2000 1999 2000 1999 Notes $ $ $ $ Cash Flows from Operating Activities Subscriptions 3,017,354 2,763,528 3,017,354 2,763,528 Interest Received 325,311 268,562 325,311 268,562 Other Income 11,433,078 10,643,803 11,433,078 10,643,803 14,775,743 13,675,893 14,775,743 13,675,893 Payment to Suppliers and Employees 14,286,880 13,629,028 14,286,880 13,629,028 Capitation Fees 501,598 448,828 501,598 448,828 14,788,478 14,077,856 14,788,478 14,077,856 Net Cash Inflow (Outflow) from Operating Activities (i) (12,735) (401,963) (12,735) (401,963) Cash Flows from Investing Activities Payment for purchase of plant & equipment (273,288) (128,541) (273,288) (128,541) Proceeds from disposal of plant & equipment 13,000 28,226 13,000 28,226 Net Cash Flows used in Investing Activities (260,288) (100,315) (260,288) (100,315) Net increase (decrease) in cash held (273,023) (502,278) (273,023) (502,278) Cash at the beginning of the financial year 6,452,278 6,954,556 6,452,278 6,954,556 Cash at the end of the financial year 6,179,255 6,452,278 6,179,255 6,452,278 (i) Reconciliation of Surplus (Deficit) after Income Tax to Net Cash Inflow from Operating Activities Surplus (Deficit) after income tax (1,334) (495,352) (1,334) (495,352) Plus (minus) non-cash items: Depreciation 191,403 282,334 191,403 282,334 Net (profit)/loss on disposal of property, plant and equipment 14,030 12,081 14,030 12,081 Change in assets and liabilities: (Increase) / decrease in receivables (342,358) (162,774) (342,358) (162,774) (Increase) / decrease in inventories (4,699) (11,982) (4,699) (11,982) (Increase) / decrease in prepaid expenses (157,481) (17,844) (157,481) (17,844) (Increase) / decrease in amount owing by the Legal Practice Board (524,465) 487,190 (524,465) 487,190 Increase (decrease) in provisions 94,802 (12,404) 94,802 (12,404) Increase (decrease) in trade creditors 114,577 (80,073) 114,577 (80,073) Increase (decrease) in other creditors 154,719 240,459 154,719 240,459 Increase (decrease) in prepaid income 448,071 11,809 448,071 11,809 Increase (decrease) in prepaid practising fees owing to the Legal Practice Board – (655,407) – (655,407) Net cash inflow from operating activities (12,735) (401,963) (12,735) (401,963) (ii) Reconciliation of Cash For the purposes of the statement of cash flows, cash includes cash on hand and investments in money market instruments. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: Cash at Bank & on Hand 3 6,174,755 6,447,778 6,174,755 6,447,778 Investments 6 4,500 4,500 4,500 4,500 6,179,255 6,452,278 6,179,255 6,452,278
The Statement of Cash Flows is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 25 to 34.
24 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following summary explains the significant accounting policies that have been adopted in the preparation of this financial report. Unless otherwise stated, such accounting policies are consistent with those used in the previous year. Comparative figures, where necessary, have been re-classified in order to comply with the presentation adopted in the current year. (a) Basis of Accounting This general purpose financial report has been prepared in accordance with Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Law. It is prepared in accordance with the historical cost convention except for certain assets which are valued at valuation as set out in Note 7. The accounting policies adopted are consistent with those of the previous year. (b) Change in Disclosure In prior years, income received from the Legal Practice Board as reimbursement of expenditure incurred by the Professional Standards area was disclosed as a net amount. From 1999, the gross reimbursement income received from the Legal Practice Board for RPA work and the gross expenses incurred by the Professional Standards area are disclosed in the financial statements. (c) Principles of Consolidation The consolidated financial statements comprise the financial statements of the Victorian Lawyers RPA Ltd (VLRPA), being the parent entity, and its controlled entity, Lawyers Information Network Pty Ltd. In the consolidated financial statements all inter-entity balances and transactions have been eliminated. (d) Income Tax The economic entity adopts the principles of tax-effect accounting. In assessing its income tax liability, the VLRPA applies the principle of mutuality to its revenue and expenses. Revenue in the form of receipts from members represents mutual income and is not subject to income tax. Expenses associated with mutual activities are not deductible for income tax purposes. All other receipts and payments of the VLRPA are classified for income tax purposes in accordance with income tax legislation. The future income tax benefit relating to timing differences and any future income tax benefit relating to tax losses are not carried forward unless the benefits are virtually certain of being realised. (e) Revenue Recognition In general, revenue is recognised, where it can be reliably measured, in the period to which it relates. However, where there is not an established pattern of income flow, revenue is recognised on a cash receipts basis. Income generated from advertising in the Law Institute Diary® is recognised in the year received to more appropriately reflect the period in which it was earned. (f) Receivables The terms of trade are 30 days from the date of invoice. Collectability of debtors is reviewed on an ongoing basis. A provision for doubtful debts is raised where doubt as to collection exists and debts which are known to be uncollectable are written off. (g) Inventories Inventories are carried at the lower of cost and recoverable amount, that is, net realisable value. The cost of inventories comprises all costs directly related to the acquisition and production of inventory items, plus an allocation of overhead expenses. Cost is based on the first-in, first-out principle. Net realisable value is determined on an item by item basis. (h) Property, Plant and Equipment ◆ Acquisition All acquisitions of assets are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to acquisition.
25 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
◆ Revaluation All items of property, plant and equipment are carried at the lower of cost, less accumulated depreciation, and recoverable amount. The VLRPA has adopted a policy of revaluation of land and buildings at three yearly intervals. Revaluations reflect independent assessments of the open market value of land and buildings based on existing or contemplated use. Revaluation increments are credited directly to the asset revaluation reserve. To the extent that a revaluation decrement reverses a revaluation increment previously credited to, and still included in the balance of, the asset revaluation reserve, the decrement is debited directly to that reserve. Otherwise the decrement is recognised as an expense. Potential capital gains tax is not taken into account in determining revaluation amounts unless there is an intention to sell the assets concerned. Revaluations do not result in the carrying value of land and buildings exceeding their recoverable amount. ◆ Depreciation Depreciation is calculated on a reducing balance basis to write off the net cost of items of property, plant and equipment, other than freehold land, over their expected useful lives. The expected useful lives are: Buildings 40 years Fixtures & Fittings 7 years Freehold Improvements 7 years Motor Vehicles 4 years Furniture, Equipment & Software 2-7 years Assets are depreciated from the date of acquisition and where they have been revalued, depreciation is charged on the revalued amount. (i) Investments Controlled Entities Investments in controlled entities are carried in the VLRPA’s financial statements at the lower of cost and net recoverable amount. (j) Trade Creditors Trade creditors represent liabilities for goods and services provided to the economic entity prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (k) Employee Entitlements Annual Leave The provision for annual leave represents the amount which the VLRPA has a present obligation to pay resulting from employees’ services provided up to balance date. The provision has been calculated on current wage and salary rates and includes related on-costs. Long Service Leave The liability for employee entitlements to long service leave represents the present value of the estimated future cash outflows to be made by the employer resulting from employees’ services provided up to the balance date. Liabilities for employee entitlements which are not expected to be settled within twelve months are discounted using the rates attaching to national government securities at balance date which most closely match the terms of maturity of the related liabilities. In determining the liability for employee entitlements, consideration has been given to future increases in wage and salary rates, and the economic entity’s experience with staff departures. Related on-costs have also been included in the liability. (l) Superannuation Funds The VLRPA contributes to two employee superannuation funds. The contributions payable to these funds are charged against income. (m) Cash For the purposes of the Statement of Cash Flows, cash includes cash on hand, cash at bank, deposits at call and highly liquid investments which are readily convertible to cash on hand, net of outstanding bank overdrafts.
26 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
2. OPERATING SURPLUS/(DEFICIT) The Operating Surplus (Deficit) for the year has been determined after:
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ (a) Crediting as revenue: Subscriptions 2,610,758 2,450,133 2,610,758 2,450,133 Interest Revenue 297,398 292,406 297,398 292,406 Other Income 5,266,018 4,958,380 5,266,018 4,958,380 Proceeds from sale of property, plant & equipment 13,000 – 13,000 – Legal Practice Board Contributions and Reimbursements Note 1(b) 6,196,865 6,127,989 6,196,865 6,127,989 14,384,039 13,828,908 14,384,039 13,828,908 Abnormal Revenue Item Prior years reimbursement from Legal Practice Board 290,691 – 290,691 – Applicable Income Tax – – – – 290,691 – 290,691 – (b) Charging as expense: (Profit)/loss on disposal of property, plant & equipment 14,030 12,081 14,030 12,081 Depreciation 191,403 282,334 191,403 282,334 Amounts set aside for provisions: Employee Entitlements 117,850 98,645 117,850 98,645 Services to Members 5,538,302 5,361,004 5,538,302 5,361,004 Marketing & Public Affairs 444,190 394,686 444,190 394,686 Bad Debts written off – 14,830 – 14,830 Auditors’ remuneration in respect of: Auditing the Accounts 25,000 22,630 25,000 22,630 Other Services 33,864 16,607 33,864 16,607 Contributions to Law Associations and Law Council of Australia 501,598 448,828 501,598 448,828
3. CASH
Consolidated VLRPA 2000 1999 2000 1999 Current $ $ $ $ Cash at Bank and on Hand 1,087,514 892,516 1,087,514 892,516 Deposits at Call 113,675 1,619,679 113,675 1,619,679 Bank Bills 4,973,566 3,935,583 4,973,566 3,935,583 6,174,755 6,447,778 6,174,755 6,447,778
The deposits at call and short term money market securities bear interest rates of between 6.24% and 6.27%. All transactions are made with major trading banks with a minimum credit rating of A1. The VLRPA collects funds on behalf of the Legal Practice Board and holds these funds in trust in a bank account entitled “Victorian Lawyers RPA Limited/Legal Practice Board” which had a balance of $45,493 at 31 December 2000. The account has not been included as part of the VLRPA’s Cash at Bank balance.
27 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
4. RECEIVABLES
Consolidated VLRPA 2000 1999 2000 1999 Current $ $ $ $ Trade debtors 446,634 263,911 446,634 263,911 Less Provision for doubtful debts (20,068) (20,068) (20,068) (20,068) 426,566 243,843 426,566 243,843 Amount Owing by the Legal Practice Board 1,225,029 700,564 1,225,029 700,564 Sundry Debtors 608,656 421,108 608,654 421,106 Interest Receivable 10,397 38,310 10,397 38,310 2,270,648 1,403,825 2,270,646 1,403,823
5. INVENTORIES
Consolidated VLRPA 2000 1999 2000 1999 Current $ $ $ $ Publications and VLRPA Products 73,284 82,869 73,284 82,869 Restaurant Food & Beverage Supplies 41,000 26,716 41,000 26,716 114,284 109,585 114,284 109,585
6. INVESTMENTS
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ Lawyers Information Network Pty Ltd – – 2 2 Victorian Solicitors’ Superannuation Pty Ltd 12 12 12 12 Specific Funds 4,500 4,500 4,500 4,500 4,512 4,512 4,514 4,514
28 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
7. PROPERTY, PLANT AND EQUIPMENT
Consolidated VLRPA 2000 1999 2000 1999 Non current $ $ $ $ Freehold Land and Buildings and Freehold Improvements, 470 Bourke Street At independent valuation 2,200,000 2,200,000 2,200,000 2,200,000 Freehold Improvements at cost 33,488 – 33,488 – 2,233,488 2,200,000 2,233,488 2,200,000 Less Accumulated Depreciation on Buildings and Freehold Improvements 15,562 – 15,562 – 2,217,926 2,200,000 2,217,926 2,200,000 Furniture and Equipment at cost 1,294,499 1,224,448 1,294,499 1,224,448 Less Accumulated Depreciation 859,711 821,185 859,711 821,185 434,788 403,263 434,788 403,263 Motor Vehicles at Cost 148,881 141,846 148,881 141,846 Less Accumulated Depreciation 70,967 69,336 70,967 69,336 77,914 72,510 77,914 72,510 Total Property, Plant and Equipment 2,730,628 2,675,773 2,730,628 2,675,773
The revaluation of freehold land and buildings was based on the assessment of their current market value. The independent revaluation was carried out on 20 February 2000 by Messrs B.L. Smith and J.A. Perillo, Certified Practising Valuers of Knight Frank.
8. CREDITORS
Consolidated VLRPA 2000 1999 2000 1999 Current $ $ $ $ Trade Creditors and Accruals 512,241 397,664 512,241 397,664 Legal Practitioners Liability Committee – 120,072 – 120,072 Amount Owing to Australian Taxation Office in relation to GST 395,178 120,387 395,178 120,387 907,419 638,123 907,419 638,123
29 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
9. PROVISIONS
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ Current Employee Entitlements 770,213 730,599 770,213 730,599 770,213 730,599 770,213 730,599 Non Current Employee Entitlements 136,670 81,482 136,670 81,482 136,670 81,482 136,670 81,482 Aggregate Employee Entitlements 906,883 812,081 906,883 812,081
10. RESERVES
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ Asset Revaluation Reserve Opening Balance as at 1 January 2000 328,770 – 328,770 – Revaluation increment on freehold land and buildings and freehold improvements – 328,770 – 328,770 Closing Balance as at 31 December 2000 328,770 328,770 328,770 328,770
11. EXPENDITURE COMMITMENTS
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ (a) Capital expenditure commitments Capital expenditure commitments contracted for at balance date but not recognised as liabilities, payable: Not later than one year – – – – (b) Operating lease commitments Non-cancellable operating leases contracted for but not capitalised in the accounts. Payable: – not later than 1 year 212,041 122,536 212,041 122,536 – later than 1 year and not later than 5 years 226,807 314,687 226,807 314,687 438,848 437,223 438,848 437,223
30 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
12. LIMITATION OF MEMBERS’ LIABILITY The VLRPA is a company limited by guarantee and in accordance with the Memorandum of Association the liability of members in the event of the VLRPA being wound up would not exceed $10 per member.
13. RELATED PARTIES The names of the VLRPA Councillors in office during the year are disclosed on pages 2 to 3 of the Annual Report. With the exception of the office bearers’ expenses reimbursement or allocations disclosed below, no fees, salaries, bonuses or any other remuneration were paid to Councillors in their capacity as Councillors.
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ Office Bearers of Council General Expense Allocations 87,339 84,796 87,339 84,796 Overseas/Interstate Travel Allocations 58,299 56,601 58,299 56,601 145,638 141,397 145,638 141,397
Council Members’ Remuneration $0 15 16 15 16 $1 – $9,999 3 3 3 3 $10,000 – $19,999 1 1 1 1 $50,000 – $59,000 1 1 1 1 20 21 20 21
Other Transactions of VLRPA Councillors and VLRPA Councillor-Related Entities Mr John Corcoran, a member of Council, is a partner of Russell Kennedy Solicitors. During 2000 Russell Kennedy provided legal services, totalling $602, to the VLRPA on normal terms and conditions. Mr Simon Begg and Mr James Syme were, during 2000, employees of a company associated with Corrs Chambers Westgarth. The firm provided legal services, totalling $4,000, to the VLRPA during the year on normal terms and conditions. Mr Bill O’Shea, a member of Council, is a partner of Hunt & Hunt Solicitors. During 2000 Hunt & Hunt provided legal services to the VLRPA, totalling $990, on normal terms and conditions. Aggregate amount of transactions with Council members and their related entities were as follows:
Consolidated VLRPA 2000 1999 2000 1999 $ $ $ $ Legal services 5,592 5,720 5,592 5,720
Other transactions entered into during the year with other VLRPA Councillors, their firms or associated entities are within normal customer employee relationships on terms and conditions no more favourable to those available to other members, customers or employees and are of a trivial or domestic nature. During the year the VLRPA paid professional indemnity and directors’ and officers’ liability insurance in respect of its VLRPA Councillors, as listed on pages 2 to 3 of the Annual Report. The nature of the insurance contract providing this cover does not allow the VLRPA to disclose either the extent of cover or the premium paid.
31 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
14. PARTICULARS IN RELATION TO CONTROLLED ENTITY Victorian Lawyers RPA Limited
Cost/Book Value Class of Equity Interest of Investment Share 2000 1999 2000 1999 % % $ $ Controlled Entity Lawyers Information Network Pty Ltd (a) Details of Controlled Entity Ordinary 100 100 2 2
Consolidated 2000 1999 $ $ (b) Contribution to Consolidated Surplus Victorian Lawyers RPA Limited (292,025) (495,352) Lawyers Information Network Pty Ltd – – (292,025) (495,352)
VLRPA 2000 1999 $ $ (c) Intercompany Indebtedness Amount owing by the Controlled Entity 2,715,954 2,715,954 Less Provision (2,715,954) (2,715,954) – –
15. SUPERANNUATION COMMITMENTS The VLRPA contributes to two employee superannuation funds managed by external fund managers, of which both are accumulation/defined contribution funds. Members of the funds are entitled to benefits on retirement, disability or death. Employees contribute to the funds at various percentages of their gross salaries. The VLRPA contributions are legally enforceable in Australia to the extent required by the Superannuation Guarantee legislation. However, the VLRPA and its controlled entities are under no legal obligation to make up any shortfall in the funds’ assets to meet payments due to employees.
32 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
16. FINANCIAL INSTRUMENTS (a) Credit Risk Exposures The credit risk on financial assets of the economic entity which have been recognised in the Balance Sheet is generally the carrying amount, net of any provisions for loss. (b) Interest Rate Risk Exposures The economic entity's exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below. Exposures arise predominantly from assets and liabilities bearing variable interest rates as the economic entity intends to hold fixed rate assets and liabilities to maturity.
Floating Variable Fixed Interest Maturing in: Interest Interest 1 year Over 1 year Non Interest Rate Rate or less to 5 years Bearing Total $ $ $ $ $ $
2000 Financial Assets Cash & Deposits 1,205,669 4,973,586 – – 6,179,255 Receivables – – – 2,270,6482,270,648 – 1,205,669 4,973,586 – 2,270,648 8,449,903 Weighted average interest rate 5.07% 6.26% Financial Liabilities Trade Creditors & Accruals – – – 907,419 907,419 Subscription Fees and Other Prepaid Income – – – 3,154,771 3,154,771 – – – – 4,062,1904,062,190 Net Financial Assets (Liabilities) – 1,205,669 4,973,586 – (1,791,542) 4,387,713
1999 Financial Assets Cash & Deposits – 892,516 5,559,762 – – 6,452,278 Receivables – – – – 1,403,8251,403,825 – 892,516 5,559,762 – 1,403,825 7,856,103 Weighted average interest rate 4.77% 5.13%
Financial Liabilities Trade Creditors & Accruals – – – – 638,123 638,123 Subscription Fees and Other Prepaid Income – – – – 2,706,700 2,706,700 – – – – 3,344,8233,344,823 Net Financial Assets (Liabilities) – 892,516 5,559,762 – (1,940,998) 4,511,280
33 Victorian Lawyers RPA Ltd Annual Report 2000
Notes to and forming part of the Financial Statements for the year ended 31 December 2000
Reconciliation of Net Financial Assets to Net Assets
2000 1999 $ $ Net Financial Assets (Liabilities) as above 4,387,713 4,511,280 Non Financial Assets and Liabilities Inventories 114,284 109,585 Investments 12 12 Prepayments 254,901 97,420 Property, Plant and Equipment 2,730,628 2,675,773 Provisions (906,883) (812,081) Net Assets per Balance Sheet 6,580,655 6,581,989
(c) Net Fair Value of Financial Assets and Liabilities The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximates their carrying value. The net fair value of other monetary financial assets and financial liabilities is based on market prices where a market exists or by discounting expected future cash flows by the current interest rates for assets and liabilities with similar risk properties. For unlisted equity investments, the net fair value is an assessment by the Council members based on the underlying net assets, future maintainable earnings and any special circumstances pertaining to a particular investment. The carrying amounts and net fair values of financial assets and liabilities at balance date are as follows:
2000 1999 Carrying Net Fair Carrying Net Fair Amount Value Amount Value $$ $$
On-Balance Sheet Financial Assets Cash and deposits 6,179,255 6,179,255 6,452,278 6,452,278 Receivables 2,270,648 2,270,648 1,403,825 1,403,825 8,449,903 8,449,903 7,856,103 7,856,103 Financial Liabilities Creditors 907,419 907,419 638,123 638,123 Subscription fees and other prepaid income 3,154,771 3,154,771 2,706,700 2,706,700 4,062,190 4,062,190 3,344,823 3,344,823
17. SEGMENT INFORMATION The VLRPA and its controlled entities operate in one industry being as a professional association of lawyers. The VLRPA operates predominantly in one geographic segment, Australia.
34 Victorian Lawyers RPA Ltd Annual Report 2000
Directors’ Declaration Victorian Lawyers RPA Ltd and Controlled Entity
The directors of Victorian Lawyers RPA Ltd declare that: 1. The financial statements and notes set out on pages 23 to 34: (a) comply with the accounting standards and the Corporations Law; and (b) give a true and fair view of Victorian Lawyers RPA Ltd’s and the economic entity’s financial position as at 31 December 2000 and of its performance for the year ended on that date. 2. In the directors’ opinion there are reasonable grounds to believe that Victorian Lawyers RPA Ltd will be able to pay its debts as and when they become due and payable. Dated at Melbourne on 8 March 2001. Signed in accordance with a resolution of directors.
JOHN CORCORAN DAVID FARAM DIRECTOR DIRECTOR Report of the Council Members The Council members present their report on the consolidated accounts for the year ended 31 December 2000. Council members The Council members of the Victorian Lawyers RPA Ltd (VLRPA) in office at the date of this report are listed on pages 2 to 3 of the Annual Report together with their special responsibilities and attendance. Details of receipts or receipt entitlements of Council members of the VLRPA by reason of a contract made by the Council member or with a firm of which any Council member is a member or with a company in which any has a substantial financial interest are set out in Note 13 (Related Parties) to the Financial Statements of the Annual Report. During the year the VLRPA paid professional indemnity and directors’ and officers’ liability insurance for all of its Council members as listed on pages 2 to 3 of the Annual Report. The nature of the insurance contract providing this cover does not allow the VLRPA to disclose either the extent of cover or the premium paid. Principal activities The principal activities of the VLRPA and its controlled entities during the financial year remain unchanged and were twofold: (i) to operate as a professional association of lawyers providing high standards, continuing education, informed debate on issues within the areas of its professional competence, setting and maintaining the highest pro- fessional and technical standards and promoting the role of members for the benefit of the community; and (ii) to carry on the duties of a Recognised Professional Association as defined by the Legal Practice Act 1996. Consolidated results The consolidated deficit for the year attributable to the members of the VLRPA was $1,334 (a deficit of $495,352 in 1999). Review of operations A review of the operations of the economic entity during the financial year and the results of those operations are contained in the President’s Review and the CEO’s Review set out on pages 4 to 5 and 6 to 7 of the Annual Report. State of affairs In the opinion of the Council members there were no significant changes in the state of affairs of the economic entity that occurred during the financial year under review not otherwise disclosed in this report or the consolidated financial report.
35 Victorian Lawyers RPA Ltd Annual Report 2000
Matters subsequent to the end of the financial year No matter or circumstance has arisen since the end of the financial year to the date of this report which has significantly affected or may significantly affect the activities of the economic entity, the results of those activities or the state of affairs of the economic entity in the ensuing or any subsequent financial year. Likely developments Likely developments in the activities of the economic entity are noted elsewhere in the Annual Report, with the VLRPA continuing to work towards the achievement of its objectives for 2001. This report is signed for and on behalf of the Council members in accordance with a resolution of the Council of the Victorian Lawyers RPA Ltd. Dated at Melbourne on 8 March 2001. Signed in accordance with a resolution of Council.
DAVID FARAM JOHN CORCORAN DIRECTOR DIRECTOR Independent Auditors’ Report to Members of the Victorian Lawyers RPA Ltd Scope We have audited the financial report of the Victorian Lawyers RPA Ltd (VLRPA) for the year ended 31 December 2000 as set out on pages 23–34 and the Directors’ Declaration on page 35. The financial report includes the consolidated accounts of the economic entity comprising the VLRPA and the entity it controlled at the year’s end or from time to time during the financial year. The VLRPA’s Council members are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the VLRPA. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance that the financial report is free of material misstatement. Our procedures included examinations, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in reporting requirements so as to present a view which is consistent with our understanding of the VLRPA’s and the economic entity’s financial position, the results of their operations and their cash flows. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of the Victorian Lawyers RPA Ltd is in accordance with: (a) the provisions of the Corporations Law, including: (i) giving a true and fair view of the financial position as at 31 December 2000 and the surplus and deficit and cash flows for the financial year ended on that date of the Victorian Lawyers RPA Ltd and the economic entity; and (ii) complying with accounting standards and the Corporations Regulations; and (b) other mandatory professional reporting requirements. Dated at Melbourne on 9 March 2001.
PITCHER PARTNERS TJ BENFOLD PARTNER
36 Victorian Lawyers RPA Ltd Annual Report 2000
Victorian Lawyers RPA Ltd (ACN No 075 475 731)
Annual General Meeting
Thursday, 26 April 2001 6pm Waratah Room 5th Floor Medina Grand 189 Queen Street Melbourne
470 Bourke Street, Melbourne 3000 Postal address: GPO Box 263C, Melbourne 3001 DX 350 Melbourne Telephone: (03) 9607 9311 Facsimile: (03) 9602 5270 E-mail: [email protected] Internet: http://www.liv.asn.au
Printed by York Press Pty Ltd Victorian Lawyers RPA Ltd Annual Report 2000
Sponsorship Partners The Law Institute of Victoria proudly acknowledges the support of its Sponsorship Partners for 2001.
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