BESTER & BESTER - [2012] FMCAfam 1239

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BESTER & BESTER

[2012] FMCAfam 1239

FAMILY LAW – Conduct of advocates before the court – duty not to mislead to court – referral of conduct of a solicitor to the legal services commissioner.

Model Rules of Professional Conduct and Practice 2002
Australian Solicitors’ Conduct Rules 2011
Revised Professional Conduct and Practice Rules 1995 (NSW)
Legal Profession (Solicitors) Rule 2007 (QLD)
Rules of Professional Conduct and Practice (SA)
Professional Conduct and Practice Rules 2005 (VIC)
Rules of Professional Conduct and Practice (NT)
Legal Profession (Solicitors) Rules (ACT)
Legal Profession National Rules: Barrister’s Rule 2010
New South Wales Barristers’ Rules
Barristers Rule 2007 (QLD)
Barristers’ Conduct Rules 2010 (SA)
Victorian Bar Practice Rules (VIC)
Conduct Rules (WA)
Legal Profession (Barristers) Rules2008 (ACT)
Legal Profession Act2004

Giannarelli v Wraith (1988) 165 CLR 543 a
Rondel v Worsley [1969] 1 AC 191
New South Wales Bar Association v Thomas [No.2] (1989) 18 NSWLR 193
Gruzman (1968) 70 SR (NSW) 316
Meek v Fleming [1961] 2 QB 366
Kyle v Legal Practitioners’ Complaints Committee [1999] WASCA 115
RE A Barrister [2012] FMCAfam 823
RE B (A Solicitor) [2012] FMCAfam 997

Applicant:

MS BESTER

Respondent:

MR BESTER

File Number:

SYC 5006 of 2012

Judgment of:

Myers FM

Hearing date:

11 September 2012

Date of Last Submission:

11 September 2012

Delivered at:

Newcastle

Delivered on:

15 November 2012

REPRESENTATION

Solicitors for the Applicant:

[E] & Company Family Lawyers

Solicitors for the Respondent:

[W] Lawyers

ORDERS

That the Registrar or the Registry Manager of the Federal Magistrates Court of Australia be requested to take all necessary steps to refer the transcript of the proceeding in this matter of 11 September 2012 and reasons for judgement to the Legal Service Commissioner of New South Wales.
That the matter be transferred to the Sydney Registry of the Federal Magistrates Court of New South Wales to be listed for directions on a date and time as advised by the Sydney Registry.

IT IS NOTED that publication of this judgment under the pseudonym Bester & Bester is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT NEWCASTLE

SYC 5006 of 2012

MS BESTER

Applicant

And

MR BESTER

Respondent

REASONS FOR JUDGMENT

Introduction

This is a matter that came before the court on an urgent basis the day following the wife having filed an initiating application. In the initiating application the wife sought final orders for a property settlement and interim injunctive orders restraining the husband from spending, transferring, alienating or otherwise dealing with the sum of $897,757.00. During the course of hearing the application for injunctive orders on 11 September 2012 submissions were made by the solicitor for the wife and the solicitor for the husband. It was alleged by the solicitor for the wife that during the course of the proceedings the solicitor for the husband misled the court. By the time the interim hearing had concluded the solicitors for the wife had sought additional orders from the court that are the subject of this judgement namely:
“10. That a principal of the firm [W], within (7) days make, file and swear an affidavit detailing the events occurring between the time of authoring a letter dated 10 September, 2012 under the hand of Mr D of that firm, which stated, to the Solicitor for the Applicant Wife, inter alia, “We suggest that an adjournment of your client’s application is appropriate in these circumstances. Given that there was not any failure on our client’s part to disclose his receipt of funds, nor has he taken any steps to remove them from our trust account, there is no urgency for Orders to be made in relation what amount, if any, should be preserved.” And the release by internet banking, of funds totalling or about $600,000 and $100,000 to the general account of the solicitors for the Respondent Husband.
11. That a transcript of the proceedings and any Affidavit filed pursuant to Order 10 be referred to the Legal Services Commissioner.”
The court must now consider whether it is appropriate to require a principal of the husband’s solicitor’s firm to file an affidavit in the terms proposed by the solicitor for the wife and whether such affidavit and the transcript ought be forwarded to the Legal Services Commissioner.
By way of history of the matter the wife deposed in her affidavit that prior to the breakdown of the parties marriage the husband had been a successful [occupation omitted]; that the husband was seriously assaulted by two men whist the husband was [omitted] with the parties son at [omitted] on the Central Coast; that the husband suffered a significant head injury; that the head injury was an open head injury involving the husband suffering a fractured skull and the loss of cerebrospinal fluid and that the injury resulted in the husband developing meningitis.
The wife deposes that the injury suffered by the husband had a massive impact the mental state of the husband and that one of the husband’s [relationship omitted] scheduled the husband as an involuntary patient of the New South Wales mental health service. Ultimately the parties ended their relationship
The wife sets out in her affidavit that she had discovered through the parties’ accountant that the husband had received a significant monetary payout of a total and permanent disability insurance claim. The wife annexed to her affidavit a letter from the parties’ joint accountant that had been forwarded to the wife. The letter contains a warning to the wife that states the husband
“had previously sought advice from his Sydney accountants as to how he may relocate himself offshore for the purposes of not paying any income tax on the proceeds and ensuring that you do not get access for matrimonial purpose”.
The wife further annexed to her affidavit a report on the husband prepared by consultant psychiatrist Dr D of 8 pages in length.
Dr D sets out his opinion of the husband having suffered a mental impairment.
The matter came before the court at approximately 10.00 am on 11 September 2012. In the opening moments of the case a course of discussions occurred between the bench and the solicitors for the wife and the husband that are found at page 2 paragraphs 20 – 40 of the transcript of the proceedings. The exchange is set out below:
Husband’s solicitor - “we will probably be in a position to be able to put our documents on within seven days”.
Myers FM - “all right. If I can say this, the terms of the orders sought by the applicant are done on the basis that there is an urgent need to prevent your client dissipating funds because he has got, according to the applicant, some – well, I could probably term them as even, perhaps, mental health issues.
Husband’s solicitor - “Well, your Honour, those funds have been in our client’s control for a month. The wife, I understand is aware of that situation. I don’t understand why suddenly the matter is so urgent and the funds haven’t dissipated to date. My client suffered a brain injury as a result of ….”
Myers FM – “A [omitted] accident.”
Husband’s solicitor – “a [omitted] accident…..”
Myers FM: “Yes. I understand that. Okay. I will hear from Mr E”.
The solicitor for the wife then made submissions and discussions took place between the bench and the solicitor for wife and then the solicitor for the husband lasting some two pages of transcript.
It should be noted that the transcript incorrectly spells the name of the solicitor for the husband as Ms D when in fact the spelling is Ms D. The transcript as referred to in the judgment corrects the spelling of the husband’s solicitor’s name.
At page 4 paragraphs 25 – 46 of the transcript a further exchange occurred between the bench and the solicitor for the husband. The exchange set out below took place following submissions by the solicitor for the wife:
FM Myers – “All right. I understand. I understand the case. Ms D, you’ve had a chance, presumably to read the affidavit of Ms Bester sworn 6 September 2012 and, in particular, annexure B to that affidavit, being a letter of [omitted] & Co, chartered accountants, dated 3 September 2012?”
Husband’s solicitor - “well the only response I have to that, your Honour, is that he doesn’t say in this letter how he has obtained that knowledge and my client hasn’t had the opportunity to respond to this.”
FM Myers – “it says, “as you’re aware, [Mr Bester] has approached a firm of Sydney accountants to attend to his future taxation needs”.”
Husband’s Solicitor – “How does this accountant know that?”
Wife’s Solicitor – “Well, if I can respond, there seems to be, putting it in context, in the last line of the paragraph 3 that it has actually been raised with the accountant personally and he has provided advice about it.”
Husband’s Solicitor – “I mean your Honour, I can understand that there is some urgency, but I haven’t obtained any instructions from my client in relation to this affidavit. The case that my friend has put before you also state that my client is entitled to procedural fairness when such an onerous injunction is sought. My client is not working. He relies on these funds, to pursue a second case and to live. Your Honour, I’m happy to have this matter listed, but before any orders be made I would ask that my client is given the opportunity to put his evidence on in response.”
FM Myers – “What I am minded to do is put in place – where are the funds at the moment, Ms D? Are they currently in your trust account?”
Husband’s solicitor – “No your Honour. They were, but they have been moved.”
Wife’s solicitor – “What?”
FM Myers – “When were they removed?”
Husband’s solicitor – “This morning.”
FM Myers – “Yes, that’s – the funds were removed from your trust account this morning?”
Husband’s solicitor – “Correct.”
FM Myers – “By Cheque?”
Husband’s solicitor – “I’m not sure. I would have to check that.”
FM Myers – “Well, I think you need to check because in circumstances where your firm was on notice that there were injunctive orders…..”
Husband’s solicitor – “Your Honour..”
FM Myers - …sought today with respect to those moneys and those funds have been paid out this morning, it raises real concerns for me.”
Husband’s solicitor – “I understand that, your Honour, but….”
FM Myers – “What I’m going to do is I’m going to stand the matter on a list. I want you to make inquiries with your bookkeeper section, whoever manages your accounts.”
Husband’s solicitor – “Yes.”
FM Myers – “Find out for me whether a cheque has been drawn this morning, whether there – how the funds have been dissipated from your trust account this morning, and tell me that when I bring the matter back on. How long do you think it will take for you to do that?”
Husband’s solicitor – “Not even 10 minutes.”
Wife’s solicitor – “Your Honour, would it be acceptable for a principal of the firm to be available to give your Honour evidence about what has happened with the funds?”
FM Myers – “Without – Ms D is on the record as a solicitor with charge of the matter. Is that case, Ms D? You”
Husband’s solicitor – “Under the supervision of the Family Law principal, yes.”
FM Myers – Is that Family Law principal available?”
Husband’s solicitor – “Mr D. I will check that whilst I’m checking the trust account information.”
FM Myers – “Can you understand why it raises some concerns for this court? There is an application on before this court seeking injunctive orders that moneys held in your trust account remain in your trust account. On the morning – you were on notice that this matter was before the court this morning with respect to those injunctive orders, and on the day the matter comes before this court so that we can deal with the application for those injunctive orders, the moneys are paid out of your trust account.”
As a matter of procedural fairness the court determined it was appropriate that the solicitor for the husband be given the opportunity to make written submissions in relation to the orders sought by the solicitor for the wife.
The husband’s solicitor then caused to file written submissions with respect to the orders sought by the solicitor for the wife. The submissions are dated 2 October 2012. I have read and considered the submissions. Paragraph 22 of those submissions deals with the issue of what was said by the solicitor for the husband with respect to the dissipation of funds and is set out below:
“It was not Ms D’s intention to leave the Court with the impression that the funds remained in the trust account. Had she continued the submissions which she began at p2 of the Transcript, she would have made that plain. It is true that a contrary objective meaning can be drawn from what she said, and that her choice of words if uncorrected would be misleading; but she did not anticipated that those words would stand on their own. She intended to go on to refer to the transfer from trust that had happened that morning. This is not to criticise his Honour for stopping her when he did in order to hear from the wife’s solicitor; that was a perfectly proper step, and his Honour was not to know that more needed to be said in order to present a full and accurate picture. The fact that the correction occurred in answer to a question from his Honour simply reflects the way that the dialogue between the bench and the solicitors developed.
Had the solicitor for the husband sought to correct her earlier statement at the first available opportunity such submission may have some weight. However it is clear from the transcript the solicitor for the husband did not seek to clarify her earlier statement and sought to agitate the court to delay making a decision in respect of the injunctive orders seeking time for her client to file documents.
It is well established that legal practitioners, in their role as officers of the court, owe a paramount duty to the court. That duty is the practitioner’s primary ethical duty and must rank above all other ethical duties.
In Giannarelli v Wraith (1988) 165 CLR 543 at 555-6 Mason CJ stated:
“A barrister’s duty to the court epitomizes the fact that the course of litigation depends on the exercise by counsel of an independent discretion or judgment in the conduct and management of a case in which he has an eye, not only to his client’s success, but also to the speedy and efficient administration of justice. In selecting and limiting the number of witnesses to be called, in deciding what questions will be asked in cross-examination, what topics will be covered in address and what points of law will be raised, counsel exercises an independent judgment so that the time of the court is not taken up unnecessarily, notwithstanding that the client may wish to chase every rabbit down its burrow. The administration of justice in our adversarial system depends in very large measure on the faithful exercise by barristers of this independent judgment in the conduct and management of the case.”
In Rondel v Worsley [1969] 1 AC 191 at 227 Lord Reid set out:
“[A]s an officer of the court concerned in the administration of justice [a legal practitioner] has an overriding duty to the court, to the standards of his profession, and to the public, which may and often does lead to a conflict with his client’s wishes or with what the client thinks are his personal interests.”
Brennan J in Giannarelli v Wraith (1988) 165 CLR 543 at 578 proposed that the practitioner’s role is not to merely push his or her client’s interests in the adversarial process, rather the practitioner has a duty to “assist the court in the doing of justice according to law.”.
The duty owed by practitioners to the court requires them to act with candour, competence and honesty exercise independent judgment in the conduct of the case, and not engage in conduct that is an abuse of process.
When exercising that duty, practitioners must not mislead the court, see New South Wales Bar Association v Thomas [No. 2] (1989) 18 NSWLR 193 and must be frank in their responses and disclosures to the court. Practitioners should at all times ensure that the law is applied correctly to the matter before the court, see Re Gruzman (1968) 70 SR (NSW) 316, at 323.
A practitioner will breach his or her duty to the Court if that practitioner disclose only limited factual information whist withholding relevant information. In Meek v Fleming [1961] 2 QB 366 Lord Justice Holroyd Pearce said at p.379:
“I appreciate that it is very hard at times for the advocate to see his path clearly between failure in his duty to the court and failure in his duty to his client. I accept that in the present case the decision to conceal the facts was not made lightly but after anxious consideration. But in my judgment the duty to the court was here unwarrantably subordinated to the duty to the client.”
Where a legal practitioner knowingly misleads the Court that practitioner may be found guilty of professional conduct. The basis for such a finding was set out by Ipp J in Kyle v Legal Practitioners’ Complaints Committee [1999] WASCA 115 as follows:
“It is the essence of a charge of unprofessional conduct involving misleading the court that the practitioner concerned is guilty of having done something dishonourable: In re G Mayor Cooke (1889) 5 TLR 407 (at 408 per Lord Esher MR, with whom Fry and Lopes LJJ agreed). The dishonourable quality lies in knowingly misleading the court: Tombling v Universal Bulb Company Ltd (1951) 2 TLR 289 at 297 per Denning LJ; Vernon v Bosley (No. 2) [1997] 3 WLR 683. A practitioner who knowingly misleads a court will do so dishonestly. Therein lies the unprofessional conduct. There can be no professional misconduct where a practitioner innocently misleads a court; that is, without knowledge that the court is being misled. I accept, therefore, the submissions made by senior counsel that an intention to deceive, or dishonesty, is a necessary element of misleading the court.”
The various professional conduct rules operating within the States and Territories of the Commonwealth of Australia provide that legal practitioners and counsel must not knowingly make, either in oral or written submissions, “a misleading statement to a court”, “a false statement to the opponent in relation to the case”, or “deceive or knowingly or recklessly mislead the court”. Further practitioners and counsel have an obligation to correct any misleading statements. See Law Council of Australia, Model Rules of Professional Conduct and Practice (2002) rules 14.1, 14.2; Australian Solicitors’ Conduct rules—Law Council of Australia (2011) rules 19.1, 19.2; Revised Professional Conduct and Practice Rules 1995 (NSW) rules 23-A.21, 23-A.22; Legal Profession (Solicitors) Rule 2007 (Qld) rules 14.1, 14.2; Rules of Professional Conduct and Practice (SA) rules 14.1, 14.2; Professional Conduct and Practice Rules 2005 (Vic) rules 14.1, 14.2; Rules of Professional Conduct and Practice (NT) rules 17.6, 17.7; Legal Profession (Solicitors) Rules (ACT) rules 18.1, 18.2. Barristers’ rules—Australian Bar Association, Legal Profession National Rules: Barristers’ Rules (2010) rules 26, 27; New South Wales Barristers’ Rules, rules 21, 22, 51, 52; Barristers Rule 2007 (Qld) rules 23, 24; Barristers’ Conduct Rules 2010 (SA) rules 26, 27, 48, 49; Victorian Bar Practice Rules (Vic) rules 19, 20; Conduct Rules (WA) rules 20, 21; Legal Profession (Barristers) Rules 2008 (ACT) rules 21, 22.
The orders sought by the wife in these proceedings if granted would see the court refer the conduct of the solicitor for the husband to the Legal Services Commissioner. The Legal Services Commissioner and the Office of the Legal Services Commissioner (OLSC) is an independent statutory body created in New South Wales pursuant to Chapter 7, Part 7.3 of the Legal Profession Act 2004 (NSW). The function and powers of the Legal Services Commissioner in New South Wales is found at s.688 of the Legal Profession Act 2004. Pursuant to s.688(1)(a) the Commissioner is able to receive complaints about unsatisfactory profession conduct or professional misconduct of a legal practitioner (referred to as an “Australian Lawyer” within the legislation).

This court has on occasion referred the conduct of practitioners and also counsel before it to the Office of the Legal Service Commissioner for investigation, see RE A Barrister [2012] FMCAfam 823 and RE B (A Solicitor) [2012] FMCAfam 997. The referral of a practitioner to the Legal Services Commissioner is not something that is taken lightly by this court.
If a complaint to the legal Services Commissioner raises a question of misconduct on the part of the practitioner, the complaint will be investigated. In New South Wales the Office of the (OLSC) may refer such complaints to the Law Society of NSW or the NSW Bar Association for investigation. The OLSC monitors investigations by these bodies and occasionally intervenes to re-examine matters.
Complaints as to a practitioner’s conduct may be dismissed or disciplinary action may be taken. In the event that the Commissioner is satisfied that there is a reasonable likelihood that the practitioner will be found guilty of professional misconduct by the Administrative Decisions Tribunal (“Tribunal”), the OLSC or the Professional Associations must initiate proceedings in the Tribunal.
The court is of the view that the submission made by the solicitor for the husband that the “fund haven’t dissipated to date” was misleading in circumstances where the husband’s solicitor was seeking time from the court to put on evidence from the husband and in effect delay the court from making injunctive orders. The submissions made by the husband’s solicitor at paragraph 22 concede if only in part that such a statement could be misleading. An excuse is proffered as to what the solicitor for the husband had intended to do. It is not a matter for this court to make a determination with respect to that excuse nor make any finding that the solicitor for the husband knowingly mislead the court. It is the view of this court that there is on the face of the transcript a legitimate complaint to be made to the Legal Services Commissioner about the conduct of the solicitor for the husband with respect to whether she misled the court. This court does not consider that it is appropriate for a principal of the solicitor for the Husband’s firm to be required to put on an affidavit in the form suggested by the solicitor for the wife. What occurred following the sending of a letter by the solicitor for the husband to the wife on 10 September 2012 will the court expects be the subject of further enquiry and possibly findings in another place in the fullness of time.
The right to appear as an advocate before the court is a privilege that is not easily earned and not easily bestowed. Such right occurs after what are often many years of study and the passing of a significant series of gruelling exams. It is not however the study of law that confers upon a person the obligations and duties owed by a practitioner to the court. The Hon. Marilyn Warren AC presenting a paper to the Judicial Conference of Australia Colloquium in Melbourne on 9 October 2009 commenting on this issue stated:
“To become a legal practitioner, that is to say, a lawyer who may represent the modern client, a graduate must present for admission and take either an oath or make an affirmation. In Victoria and similarly in other jurisdictions, this oath or affirmation requires the candidate to declare that they will well and honestly conduct themselves in the practise of their profession, as a member of the legal profession and officers of the court. It is the taking of the oath or affirmation, and the signing of the roll that marks the transition from simply holding a law degree to being a lawyer. It is on this occasion that a lawyer’s duty to the court is enlivened.”
When counsel or a practitioner appears before the court they do so in the knowledge that they are acting as an officer of the court. They must never confuse their duty to their client as having primacy over their duty to the court. Submissions made by counsel or a practitioner to the court often carry with them serious consequence. It is for this reason that Counsel and practitioners must choose their words carefully when appearing in court.
I make the following orders based upon the above reasons.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Myers FM

Date: 15 November 2012