Sinking of the Voyager survivors

Lawyer hollows out Voyager compo awards ... Receiver's costs balloon as Vic Supremes and LSB chew-up victims' proceeds ... Tom Westbrook reports on the latest twists in the David Forster case

HMAS Voyager: loss of 82 livesDavid Forster, the solicitor alleged to have overcharged victims of the Melbourne-Voyager naval disaster, is fighting off receivers and the Bureau de Spank in a protracted struggle that so far has chewed up $1.5 million in costs.

Ultimately, it may be too little too late for many of his ageing former clients.

Forster is presently stalling his way through preliminary attempts by the Legal Services Board to recover missing money - which court documents suggest is as much as $10 million - that would appear to belong to clients for whom he secured compensation.

HMAS Voyager crashed into HMAS Melbourne off Jervis Bay in 1964. Eighty-two sailors died in the accident, which resulted in 214 compensation claims.

David Forster handled 89 of them out of his Frankston law shop, Hollows.

Initially, Forster was cast as a hero, appearing on radio and TV defending his clients' interests, while the government was the villain, dragging its heels on the payouts.

However, as the cases went on – and they did go on, for decades, as the Commonwealth fought tooth and nail – Forster's billing methods began to attract suspicion and the ire of clients.

A complaint by a former employee in 2007 led to an investigation by the Law Institute of Victoria, which in turn led to the Legal Services Board appointing receivers in April last year and refusing to renew Forster's ticket in September.

The receivers, Hall & Wilcox, called in forensic accountants from Deloittes. As a preliminary step Deloittes looked into ten of the 89 Voyager compensation cases that Forster had run.

Only one client out of those ten had received more than 10 percent of the money awarded by the court.

Deloittes said that in nine cases it was likely that Forster had breached the trust account rules.

He had clients sign multiple fee agreements and allegedly double charged them for the same costs, removing money from funds held in trust and again from the final settlement.

There was the old chestnut of charging multiple clients for the same work: Hollows once billed 66 hours in a single day, for a conference with six clients.

HMAS Melbourne: 47 years agoForster described the Deloittes investigation as, "selective ... unfairly ... biased and improper".

The ABC's 7.30 Report ran a story on Forster last November, which featured one of one of his former clients, Barry Spaulding.

Spaulding, who knew nothing of the proceedings against Forster until the 7.30 Peport came knocking, and had no idea that Hollows was in receivership, had been awarded $250,000 in a settlement for post traumatic stress disorder.

He saw only $29,000 of it.

"I thought, 'Well okay, he's ripped me off and, you know, there's nothing I can do about it'," Mr Spaulding told the 7.30 Report.

Another client, Russell Norrish, received $72,000 from a $412,000 settlement.

The receivers have subsequently written to another 49 of Forster's clients and 46 have indicated they would like their dealings with him to be examined.

The LSB and Forster are presently locked in a Victorian Supreme Court battle before Justice Karen Emerton.

On Tuesday (June 7) Forster had a victory of sorts, when Emerton made a preliminary ruling that makes life more difficult for the receivers.

Hollows' receivers had been seeking to subpoena Forster's accountant, John Lombardo, and extract a number of financial documents from Forster and his wife.

They think Forster might have tucked the money away in superannuation.

However, Justice Emerton said that because "the receivers are not at the point where any recovery action is even mooted [it was] premature and unnecessary at this stage" for Forster to hand over the documents or for Lombardo to appear before the court.

The LSB will have to "ascertain by other means" whether Forster holds any ill-gotten assets which could be recovered.

Forster claims to have no assets and his lawyers (he is being represented by a former Hollows' colleague Nelson Pinto) have said that the trusts accounts deficiencies have been "created" by the receivers.

Earlier in the case Justice Emerton rejected Forster's attempts to halt proceedings on the grounds of mental incapacity. She said that the legal arguments could go ahead in his absence.

She has adjourned the matter to June 23 and instructed the parties to attend a case conference on June 16 before Associate Justice Daly.

Forster is also before VCAT (on June 20) fighting the refusal by the LSB to renew his ticket. he says he is entitled to remain a solicitor until the matter before the Supreme Court is settled.

Each day this protracted struggle drags on more and more money that may rightfully belong to Forster's former clients is being chewed-up.

The receiver's costs presently total $937,161.46 and the LSB's in excess of $400,000.