00:00In the last video, we revealed how the Victorian Legal Services Board
00:04and its appointed external manager, Howard Rapke,
00:07collaborated with the firm's opponents,
00:10disclosing confidential files and assisting in the humiliation of their clients,
00:14all caught on camera.
00:15In this video, we go deeper,
00:18exposing how Mr. Rapke and the LSB may have exploited the Public Purpose Fund,
00:22operating with little to no oversight or accountability.
00:26Let's go back to August 22, 2022,
00:28the day Mr. Rapke came to take over the office.
00:32While looking around, he found one of Lulu's old business cards that said she was a director.
00:37Sorry.
00:37You might want to have one of those momentos.
00:40You're a director. That's interesting, isn't it?
00:43Why don't you read documents?
00:45Another director. And you're a director, too. That's right.
00:49Mr. Rapke was still bitter that Lulu didn't open the door when they arrived,
00:53even though she clearly told them she wasn't an authorized person.
00:56Here's the background.
00:59Lulu was the firm's director from July 2021 to May 2022.
01:03So when Mr. Howard Rapke arrived to take over,
01:06she was no longer in that role.
01:08Yet he still felt the need to defend his pride over it.
01:12Lulu?
01:13Mm-hmm?
01:14Sorry, I'm taking some medical...
01:15Here's the time of this just in case you forget you're a director, okay?
01:18Can you check the...
01:20Please do some homework.
01:22Did Mr. Rapke do his homework before showing up?
01:26Well, the invoice he issued suggests he started background research as early as August 15, 2022.
01:31This is one week before he came to the office.
01:36On August 17th, he ran two InfoTrack search on PeopleShop Proprietary Limited.
01:41From August 16 to August 31, 2022, the firm was billed a staggering $92,035.37 by Mr. Rapke.
01:50The hours?
01:52Completely arbitrary.
01:5350 hours for a partner, that is Mr. Rapke, at $475 an hour,
01:5873 hours for a solicitor at $280 an hour,
02:02and special counsel, Kylie Hall billed for 61.9 hours at $425 an hour.
02:08You'd think there'd be an itemized breakdown of the bill, right?
02:11But no.
02:12Scroll down, and there's nothing.
02:14Just a list of reimbursements.
02:17That's it.
02:18Let's be fair.
02:19Maybe Mr. Rapke simply forgot who the director was at the time when he took over the firm.
02:24But for a firm charging $92,000 for just two weeks of work,
02:28including a whole week of dedicated research,
02:31Mr. Rapke and his team should have known that Maria and Shivish were the firm's clients.
02:35The following month, we received yet another invoice,
02:38this time for $48,851.05.
02:43It included a few taxi bills,
02:45five hours billed by Mr. Rapke,
02:47over 55 hours from two paralegals,
02:50and 61 hours from special counsel, Kylie Hall.
02:53Still, no real explanation of what any of them had actually done for an entire month.
02:59Third bill that came four weeks later, same.
03:01No explanation on any of the charges whatsoever.
03:03So, is it actually legitimate for Mr. Rapke to invoice the firm this amount?
03:09Let's take a look at the Legal Services Board's appointment letter to find out.
03:12In this cover letter, Mr. Howard Bowles,
03:17the LSB's Manager of Intervention and Enforcement, writes,
03:20Under Section 365 of the Uniform Law,
03:23the fees, costs, and expenses of the manager are payable
03:26in accordance with the Legal Profession Uniform General Rules 2015
03:29and are payable by and recoverable from the law practice.
03:33If you have any questions about this matter,
03:35please contact the manager on 0419-376-525 or Joanne Jenkins, etc.
03:41The Instrument of Appointment of Manager,
03:43signed by the Director of Investigations, Mr. Matthew Anstey,
03:46includes a statement at paragraph 6, where he says,
03:49The fees payable by way of remuneration to the manager for performing his functions
03:53shall be at the hourly rate of $4.75 plus GST.
03:57And paragraph 8.
03:59To the extent that the fees, costs, and expenses referred to in paragraph 7 of this instrument
04:03are not paid by the law practice,
04:06they are payable from the Public Purpose Fund,
04:08in accordance with Section 365 of the Uniform Law,
04:11and are recoverable from the law practice.
04:14According to this instrument,
04:16only Mr. Rapke is authorized to charge $475 per hour
04:20for performing his duties as the appointed manager of the firm.
04:24So how, and since when,
04:26does that authorization extend to bringing in his colleagues
04:29and charging $425, $280, $215 an hour, and so on,
04:34for their time?
04:35Over the next four months, another five invoices came in,
04:38adding up to more than $30,000.
04:41And what exactly did they do for the firm's clients?
04:44Nothing good.
04:45Only damage.
04:46First, Mr. Rapke filed notices of intention
04:50to cease acting as solicitor across multiple courts,
04:53then abandoned the cases right before critical hearings.
04:56He withheld both physical and electronic files,
04:59leading to serious default judgments against his own clients.
05:03If the Legal Services Board's goal was to inflict maximum damage,
05:07then for $200,000, Mr. Rapke certainly delivered.
05:11We're not the only ones.
05:13Since April 2025, Chavesh and Peter were contacted
05:17by Mr. Glenn Thexton,
05:18who introduced them to other lawyers and individuals
05:21with serious concerns about how the Victorian Legal Services Board
05:24was acting.
05:25Among them were Mr. Thexton himself and Mr. Thomas Flittner.
05:29Both shared stories that were shockingly similar to ours.
05:34Both reported that, under the management of Nick Curran,
05:38another external manager appointed by the VLSB,
05:41their firms were subjected to aggressive
05:43and questionable billing practices
05:45that ultimately left their businesses dismantled and destroyed.
05:50In 2020, the Victorian Legal Services Board
05:53suspended Glenn Thexton's practicing certificate
05:55and appointed Nick Curran from Thompson Gear
05:58as external manager of his law firm.
06:01Later that year, Mr. Thexton filed a case
06:04in the Supreme Court Costs Court
06:05to challenge hundreds of thousands of dollars
06:07in invoices issued by Thompson Gear.
06:09He was never consulted on the charges
06:12or allowed to review them.
06:15But soon after filing the case,
06:16Thompson Gear offered to settle,
06:18asking him to drop it and sign a release
06:20to prevent any future claims.
06:23They also confirmed that the invoices
06:25had now been reissued to the VLSB
06:27and that the VLSB had paid them
06:29from the Public Purpose Fund.
06:31Instead of defending the charges in court,
06:34they redirected the cost to the Public Purpose Fund
06:36and tried to make the dispute quietly disappear.
06:40A few months later,
06:42Glenn Thexton's firm, Thexton Lawyers,
06:45received a tax invoice
06:46from the Victorian Legal Services Board.
06:49In response, Mr. Thexton filed applications
06:51for cost assessment in the Supreme Court Costs Court,
06:55formally challenging the validity,
06:57reasonableness, and legal basis
06:59of the charges incurred
07:00under the external management of his firm.
07:02In his submissions to the cost court,
07:05Mr. Thexton set out that within just six months,
07:07Thompson Gear had billed his firm
07:09a staggering $607,825.
07:13The submission states,
07:14an average of $101,304 per month,
07:18or about $16,930 per week.
07:22And this wasn't just Curran.
07:23The invoices included fees for an entire team.
07:26Jody Blows,
07:28Michelle Likiardopoulos,
07:30Rachel Van Gemmert,
07:31Laura Hook,
07:32Mark Brannigan,
07:33and others,
07:34both legal and paralegal.
07:37What's worse,
07:38Thexton wasn't given any real opportunity
07:40to dispute the bills.
07:41As stated in the submissions,
07:43Mr. Curran did not cause Thexton Lawyers
07:45to pay Thompson Gear's bills,
07:47even though he was Thexton Lawyers' manager,
07:49and Mr. Thexton had no authority
07:51to cause Thexton Lawyers to pay them,
07:53and Thompson Gear then reissued each bill
07:55to the Victorian Legal Services Board
07:57a month or two after they were originally dated,
08:00but without withdrawing the original bills.
08:02Then came the most outrageous part.
08:05Curran and his team charged Thexton's firm
08:07for preparing affidavits
08:08and giving evidence in court against him.
08:11The submission says,
08:13It is apparent from the bills
08:14that Thompson Gear charged Thexton Lawyers
08:17for the work and its staff members
08:18giving evidence in those proceedings,
08:20the costs of which,
08:21including witness expenses,
08:22are the subject of an indemnity costs order
08:24made in favor of the Victorian Legal Services Board
08:27against Mr. Thexton.
08:29It seems very likely, therefore,
08:30that the Victorian Legal Services Board
08:32will seek these costs twice,
08:34once from Mr. Thexton
08:35and once from Thexton Lawyers,
08:37a scandalous situation.
08:38And the submission doesn't hold back.
08:40It declares,
08:42Something has obviously gone awfully awry here.
08:44It then lays out a series of failures
08:46and questionable practices,
08:48not just poor oversight,
08:50but systemic mismanagement.
08:53The respondents seem to have acted
08:54on the erroneous assumption
08:55that Thompson Gear,
08:56rather than Nick Curran,
08:57had been appointed as manager,
08:59such that lawyers and non-lawyers alike
09:01are free to manage Thexton Lawyers
09:02so long as they were notionally supervised
09:04by Nick Curran or one of his partners.
09:06In plain terms,
09:08it alleges that lawyers and non-lawyers alike
09:10were left to run Thexton's firm
09:11under Thompson Gear's name
09:13without legal authority,
09:15while Curran nominally oversaw it.
09:17The bills also included costs
09:20for work done in Queensland
09:21and Western Australia,
09:23even though the submission points out
09:25those services were outside the scope
09:26of the Victorian appointment.
09:28It says,
09:29Thompson Gear has invoiced
09:31the Victorian Legal Services Board
09:32for work,
09:33done pursuant to external interventions
09:35on behalf of other jurisdictions' regulators,
09:37which claims are properly made
09:39to those other regulators,
09:40and the Victorian Legal Services Board
09:42now seeks to require Thexton lawyers
09:44to pay those claims to it.
09:46The regulator that should have been
09:47watching closely did absolutely nothing.
09:50The submission points the finger squarely
09:52at the Victorian Legal Services Board,
09:54saying it failed to act
09:56even when it knew something
09:57was seriously wrong.
09:59The submission says,
10:00Despite all of the above,
10:01the LSB,
10:02which might be thought uniquely placed
10:04to appreciate these issues,
10:05has for reasons which are unexplained,
10:07apparently not taken any issue
10:09with what has happened.
10:10And despite knowing
10:11of the Thexton lawyers' dissatisfaction
10:13with the Thompson Gear's claims,
10:15has not exercised its rights
10:16under S.103-2
10:18of the Uniform General Rules
10:19to seek taxation or assessment,
10:21perhaps because no account
10:22has in fact been given
10:23by Mr. Curran
10:24as opposed to the Thompson Gear.
10:27This submission was prepared
10:29by Barrister Stephen Warren,
10:30acting for Mr. Thexton.
10:33In it,
10:33he forcefully took aim
10:34at the Legal Services Board
10:36over an invoice they issued
10:37on May 28, 2021,
10:40one that totaled
10:41more than $600,000.
10:43Just weeks later,
10:44on June 15, 2021,
10:47in a related Supreme Court case,
10:49Glenn Thexton had the chance
10:50to cross-examine
10:51a staff member
10:51from the Legal Services
10:53Commissioner's Office.
10:54What you're about to hear
10:55is a voice recreation
10:56using AI
10:57based on the official transcript.
11:00It reveals how a payment
11:01exceeding half a million dollars
11:02was approved.
11:06Thank you, Your Honor.
11:07Thank you, Ms. Small.
11:08Just by way of further background,
11:10Ms. Small,
11:10can you explain to the court
11:11in terms of your role
11:12at the Legal Services Board,
11:13am I correct to say
11:14that you were working
11:15for the Legal Services Board?
11:16Ah, I'm employed by the apply.
11:18I was employed by the Commissioner.
11:20The Commissioner employs
11:21all staff of the Legal Services Board
11:22and the Legal Services Commission.
11:24Ah, Commissioner.
11:25But most of my work
11:26was performed
11:27for the Legal Services Board.
11:28So I was the assistant manager
11:30of the intervention
11:30and enforcement team.
11:31And the role of the intervention
11:33and enforcement team
11:33in these circumstances
11:34is to ask the board
11:35to appoint a manager
11:36to a practice.
11:37And then once that manager
11:38is appointed,
11:39then the team oversees,
11:41you know, liaises with the manager
11:42about the progress
11:43of that management.
11:44As the assistant manager,
11:45that was primarily
11:46my role with the assistance
11:48of another staff member
11:49and under the supervision
11:50of my manager.
11:50And so, Miss Small,
11:52can you tell the court
11:53what the total of the balance
11:54of the monies that were paid
11:55by Legal Services Board
11:56to Thompson Gear?
11:57The total of the balance?
11:58What do you mean?
11:59How much was paid?
12:00I could not give you...
12:01I think it was...
12:02It was certainly over $400,000.
12:04I'm not sure whether
12:05it was $500,000.
12:06I can't recall the total figure.
12:08And you haven't seen
12:08any reissued invoices.
12:09I just want to clarify that.
12:11I believe I have along the way,
12:12but I can't recall
12:13seeing that one specifically.
12:14Okay.
12:15Now, in relation to the appointment
12:16of a manager
12:17in your experience,
12:18in your role
12:19with the Legal Services Board,
12:20is it common
12:21that simply invoices,
12:22be it the reissued invoices,
12:23are simply paid
12:24without challenge or contest?
12:25The finance team
12:26sends the invoice
12:27to the manager
12:27of the intervention
12:28and enforcement team
12:29and he considers it.
12:31He may ask team members
12:32for comment on whether
12:32this seems proportionate
12:33to the work done,
12:34and if so,
12:35he will approve
12:35or send it to the next level
12:36for approval of payment.
12:38All right.
12:38And that was done
12:39in the case of
12:40Thexton Lawyers Pty Ltd,
12:41correct?
12:42From time to time,
12:43the manager would...
12:44Sorry, well,
12:44the manager of the intervention
12:45and enforcement team
12:46would ask Miss Pickering or I
12:47if, you know,
12:48this looks proportionate
12:49and we would respond.
12:50We potentially scan the invoices
12:51to ensure that everything
12:52was reflective of the work
12:53we knew was proceeding.
12:54That would not happen
12:55necessarily every time,
12:57but it would certainly happen
12:57from time to time.
12:58Okay.
12:59So that was your job
12:59and you were doing your job.
13:01In relation, Miss Small,
13:02to the invoices
13:03in undertaking that exercise,
13:04you would pick out
13:05certain line items
13:05and say,
13:06well, that's not proportionate.
13:07We're prepared to pay you
13:07this much,
13:08but we won't pay you
13:09the full amount of the invoice.
13:11That's the usual course?
13:12Ah, it would tend to be
13:13more kind of
13:15bigger picture things.
13:16I wouldn't know
13:16how many hours
13:17a particular matter aspect
13:18had taken,
13:19but it was something
13:20that appeared to be
13:20unnecessary for a manager
13:21to be pursuing or doing,
13:23or if we thought
13:23they could do it
13:24in a more efficient way,
13:25we would raise that.
13:26The Victorian Legal Services Board,
13:28a regulator entrusted
13:29with oversight,
13:30yet in court,
13:31its own officer
13:32admits invoices
13:33for hundreds of thousands
13:34of dollars were paid
13:35with little scrutiny.
13:36Thompson Gear received
13:37over $600,000
13:38for Thexton Lawyers Management,
13:41maybe more,
13:42and those bills.
13:44Reviewed only from time to time,
13:45often without questioning
13:47line items or costs.
13:49We'd scan them,
13:51said Ms. Small.
13:52Sometimes,
13:53not always.
13:55Thomas Flittner
13:56faced the same problem.
13:57Nick Curran,
13:58appointed by the Legal Services Board,
14:00billed over $200,000
14:02without any breakdown
14:03or justification.
14:05Instead of managing the firm,
14:06he told clients
14:07to go elsewhere,
14:08offering no help
14:09or file transfers.
14:11The firm fell into chaos,
14:12clients were abandoned,
14:13and a 20-year practice collapsed.
14:16Appointed to act
14:17in the public interest,
14:18Curran protected nothing,
14:20except his own profit.
14:21Let's take a closer look.
14:23Just from our firm,
14:25PeopleShop,
14:26Mr. Rapke was paid
14:27nearly $200,000
14:28from the Public Purpose Fund.
14:31Nick Curran received
14:32over $600,000
14:33for managing Thexton Lawyers,
14:35and more than $200,000
14:37connected to Mr. Flittner's firm.
14:40Altogether,
14:40$1 million was drawn
14:42from a fund
14:42meant to serve the public.
14:44The issue?
14:45Those bills were challenged.
14:47These invoices were disputed,
14:49questioned,
14:50and in several cases
14:51appeared to lack
14:52any clear legal
14:53or factual basis.
14:55Yet the Victorian Legal Services Board
14:57approved them
14:57without hesitation.
14:59What Nick Curran did
15:00was calculated.
15:02He got the LSB
15:02to pay him first.
15:04Then the board turned around
15:06and threatened to recover
15:06the cost from the firms.
15:08And when the lawyers
15:09tried to object,
15:10they may be told,
15:12You're not the client.
15:13You have no standing
15:14to challenge the charges.
15:16Wait,
15:16this is actually
15:17exactly what he is saying.
15:20Maybe that's what
15:21they really want.
15:22Bills paid
15:23from the Public Purpose Fund,
15:24but no way
15:24for anyone to challenge them.
15:26No questions,
15:27no objections,
15:28just silence.
15:30So what is
15:30the Public Purpose Fund?
15:32It's a statutory fund
15:33in Victoria,
15:34meant to support
15:35the regulation
15:36of the legal profession
15:37and improve access
15:38to justice.
15:39It's funded largely
15:40from interest earned
15:41on client trust accounts,
15:43and it's supposed to go
15:44toward things like
15:44legal aid,
15:45community legal services,
15:47law reform,
15:48and judicial education,
15:49not to bankroll
15:50inflated invoices
15:51from private contractors.
15:53What most people
15:54don't realize
15:54is that Victoria Legal Aid
15:56isn't just funded
15:56by government grants.
15:58It also relies
15:59on this very fund.
16:01Yet when someone
16:01applies for legal aid,
16:02the process is long
16:04and invasive.
16:05Applicants must submit
16:07detailed records,
16:08bank statements,
16:09income,
16:09expenses,
16:10even housing costs,
16:11just to be considered.
16:13And still,
16:14many are turned away.
16:16Not because they aren't
16:17in need,
16:17but because the system
16:18is set up to make access
16:19difficult and selective.
16:22Meanwhile,
16:22the same Public Purpose Fund
16:24is used by the Legal Services Board
16:25to pay private law firms
16:27it appoints
16:28as external managers,
16:29often in secretive
16:30takeovers of other firms.
16:31Those payments?
16:34No means test,
16:35no scrutiny,
16:36no public interest threshold,
16:38just invoices paid
16:39often in the hundreds
16:40of thousands
16:40without question.
16:42Remember what Ms. Small
16:43says in court?
16:45How much was paid?
16:46It was certainly
16:47over $400,000.
16:49I'm not sure
16:50whether it was $500,000.
16:51I can't recall
16:52the total figure.
16:53Is it common
16:54that simply invoices,
16:55be it the reissued invoices,
16:57are simply paid
16:58without challenge
16:59or contest?
16:59We potentially scan
17:00the invoices
17:01to ensure
17:01that everything
17:02was reflective
17:03of the work
17:03we knew was proceeding.
17:05That would not happen
17:05necessarily every time,
17:07but it would certainly
17:08happen from time to time.
17:09According to the LSB's
17:112024 annual report,
17:13at 30th of June 2024,
17:15the total value
17:16of the Public Purpose Fund
17:17was $3.2 billion.
17:19Yet despite the size
17:21of the fund,
17:21there is practically
17:22no supervision
17:23or accountability
17:24over how the Legal Services Board
17:26uses it.
17:28The Victorian Legal Services Board
17:30decides how to allocate money
17:31from Public Purpose Fund
17:32based on its own
17:33internal plans and policies.
17:36But the process
17:36is entirely opaque.
17:39There's no independent oversight,
17:40no public audit,
17:42and no transparency
17:42on how the money
17:43is actually spent.
17:45While the Attorney General
17:47must approve the payments
17:48under Section 144
17:49of the Legal Profession
17:50Uniform Law Application Act,
17:53that approval appears
17:53purely administrative.
17:55There's no requirement
17:56to scrutinize
17:57whether the amounts,
17:58sometimes hundreds
17:59of thousands of dollars
18:00for vague
18:01or inflated services,
18:03are fair,
18:04reasonable,
18:04or even legitimate.
18:06How could the Attorney General
18:08possibly verify invoices
18:10like those issued
18:11to PeopleShop,
18:12Flittner,
18:12or Thexton
18:13when even they weren't allowed
18:14to properly examine the bills?
18:16With no real accountability
18:18and no external checks,
18:20the system leaves
18:20public funds
18:21wide open to misuse,
18:23while those who challenge it
18:24are threatened,
18:25silenced,
18:26or bankrupted.
