Ex-barrister Norman O’Bryan pleads guilty to fraud charge after Banksia Securities class action scandal

A retired nurse says she suffered a “deliberate campaign of intimidation” from high-powered lawyers after writing one letter to a court. Wendy Botsman was one of 16,000 Australian investors who lost their savings when Banksia Securities collapsed in 2012 owing $663m. But it was the conduct of an esteemed Senior Counsel, from one of Victoria’s most prominent legal families, that Ms Botsman said left her feeling targeted and “ill with the stress”. Ms Botsman’s account came in the Victorian County Court on Thursday after Norman O’Bryan, 68, pleaded guilty to a single charge of attempting to obtain a financial advantage. Outlining the circumstances surrounding O’Bryan’s offending, prosecutor Michael Stanton SC said the former barrister was briefed to lead a class action proceeding representing investors in the Banksia Securities collapse in November 2012. In late 2017, an in-principle settlement between the class action participants and Trust Co, which acted as the trustee for Banksia Securities, was reached for $64m. But several members of the class action raised concerns about $19.3m of claimed expenses, including legal fees, disbursements and litigation funding costs, and challenged the settlement. An investigation into the fees followed, which resulted in Supreme Court Judge John Dixon issuing a scathing judgment in 2021 finding several lawyers, including O’Bryan and the fraud’s architect Mark Elliott, had fraudulently inflated their claims for fees and misled the court in an effort to cover it up. Mr Stanton took the court through a series of draft invoices prepared by O’Bryan’s personal assistant and communications that showed him increasing his fees and billable hours for the settlement. In the first version, prepared on November 15, 2017, O’Bryan claimed 954 hours of work billed at $990 per hour or $9900 per day for a total of just over $1m covering June 2016 to November 2017. In various revised versions, O’Bryan’s rate fluctuated up to $1500 per hour and $15,000 per day and his billable hours doubled. In the final version, sent to cost consultant Peter Trimbos for the class actions' settlement in December 2017, he claimed $2.35m for 1876 hours. Mr Stanton told the court a later analysis found O’Bryan had not contemporaneously documented his hours worked and billed hours on days he was out of the country or working on other cases. He told the court the prosecution did not allege the first invoice reflected the true work performed and accepted O’Bryan had done “some additional work” between the first and final version of the invoice. “Accordingly, the alleged deception the subject of the charge before the court was the creation of false or misleading documentation designed to induce Trimbos and ultimately the Court to accept those documents as genuine and contemporaneous records of work done,” Mr Stanton said. “As a consequence, O’Bryan attempted to obtain a financial advantage, namely payment of a part of the settlement amount, to which he was not entitled.” The court was told O’Bryan was not ultimately paid out by the class action settlement and the total amount he’d fraudulently billed was unknown due to the lack of records. Two members of the class action, whose efforts to challenge the settlement ultimately exposed the fraud, provided victim impact statements to the court. Retired Australia Post licensee Keith Pillman told the court he had been “living and breathing” this case since 2017 to the point his wife said he was “obsessed by it”. The 90-year-old described the fraud as a “slow motion robbery” and said he didn’t understand how a lawyer of such high-standing thought he could get away with it. “It has been seven years of hell. The effect on me and my wife has been devastating,” he said. Ms Botsman told the court she sent a letter to the Supreme Court challenging the settlement in January 2018 while visiting her son Chris in Sydney. “The fees and commission being claimed seem deeply unfair for ordinary people who had invested their savings with Banksia,” she said. She said she returned home to find a letter sent by O’Bryan and Elliott, who has since died, which suggested she could be on the hook for $500,000 to $1m in legal expenses if she fought the settlement. “For objecting to what looked like overcharging, I was made to feel like I could lose my home,” she said. Ms Botsman said the experience felt like a campaign of intimidation from two powerful lawyers. O’Bryan’s barrister, Neil Clelland KC, was questioned by Judge Fran Dalziel on what his client’s motivation for the fraud was. “It’s not a good answer,” he responded. “Plainly, when the matter, settled Mr O’Bryan was not in a position to provide proper invoices and contemporaneous records of the work that he had done … He thereafter did what was alleged to falsify dates and even mark invoices as having been paid.” Mr Clelland told the court O’Bryan acknowledge his actions were the “gravest ethical failing”, but said his client had already been severely punished through the “catastrophic” fall out after the fraud was exposed. O’Bryan, he said, had lost his vocation, his income, his reputation, his standing in the community and many lifelong friends. Mr Clelland said his client had been shunned by the legal society, handed back his Order of Australia honour and been pushed out from his charitable pursuits. O’Bryan, he added, had also been declared bankrupt after being pursued for compensation and his wife Sue now describes him as a “shadow of the person he once was”. “He’s lost just about everything he had to lose,” he said. “He now leads a pretty unhappy existence.” Mr Clelland told the court that while his client’s reputation had been destroyed, he had led a life of significant community service, donating his time, expertise and money. He took the court through a series of references that described O’Bryan’s involvement in the community, from chairing the Baker Heart and Diabetes Institute, to fundraising and mentoring disadvantaged students and performing pro bono legal work. “Those materials, we respectfully submit, Mr O’Bryan was not by nature a rapacious and unethical lawyer,” he said. “It is not hyperbole to suggest many Victorians, and Australians, that are better off because of the contributions, the voluntary contributions, of Mr O’Bryan.” O’Bryan’s defence have called for him to be placed on a community corrections order with unpaid community service, while prosecutors have argued a jail sentence, followed by a corrections order, or solely a community corrections order, was appropriate. Judge Dalziel said she would have O’Bryan assessed for an order and would hand down her sentence on May 14.