Carson v Legal Services Commissioner
[2000] NSWCA 308
•3 November 2000
CITATION: CARSON v LEGAL SERVICES COMMISSIONER & ANOR [2000] NSWCA 308 FILE NUMBER(S): CA 40360/2000 HEARING DATE(S): 19 June 2000, 20 June 2000, 21 June 2000, 22 June 2000, 18 July 2000, 19 July 2000 JUDGMENT DATE:
3 November 2000PARTIES :
Nicholas Roderick Carson - Appellant
Legal Serices Commissioner - First Respondent
Administrative Decisions Tribunal - Second RespondentJUDGMENT OF: Sheller JA at 1; Giles JA at 292; Hodgson CJinEq at 293
LOWER COURT JURISDICTION : Supreme Court - Common Law Division LOWER COURT
FILE NUMBER(S) :12553/97 LOWER COURT
JUDICIAL OFFICER :Simpson J
COUNSEL: P LeG Brereton SC - Appellant
M J Joseph SC/ G P Craddock/F Clarke - RespondentsSOLICITORS: Atanaskovic Hartnell - Appellant
Crown Solicitor's Office - RespondentsCATCHWORDS: ADMINISTRATIVE LAW - Judicial review - Denial of natural justice - Void/voidable decisions - Discretion to set aside decision. - LEGAL PRACTITIONERS - Legal disciplinary authorities and proceedings - Legal Services Commission of New South Wales - Allegations of professional misconduct - Commissioner’s decision to institute proceedings against practitioner before Legal Services Tribunal in contravention of natural justice - Consequences of contravention - Whether decision void - Court’s discretion to set aside decision. - LEGAL PRACTITIONERS - Professional misconduct - Whether misconduct in instituting proceedings on clients’ behalf - Whether proceedings brought for improper purpose - Whether improper to bring proceedings to terminate grant of legal aid of opponents in litigation - Whether misconduct in giving inaccurate evidence - Requirement of knowledge. - PROCEDURE - Stay of proceedings in disciplinary tribunal - Abuse of process of tribunal - Breach of natural justice - Whether proceedings foredoomed to fail - Delay in making complaint and instituting proceedings - Improperly obtained evidence - Whether pending contempt proceedings raise same issues as legal disciplinary proceedings. - PROCEDURE - Discovery - Use of documents for collateral or ulterior purpose - Implied undertaking by party to whom documents produced - Use in making a complaint to legal disciplinary authority. - PROCEDURE - Parties - Joinder of parties - Where complainant applied during hearing of appeal to be joined as party to proceedings between legal practitioner and Legal Services Commissioner - Complainant’s role under Legal Profession Act 1987. - PROCEDURE - Amicus curiae - Where complainant applied during hearing of appeal to be heard as amicus curiae in proceedings between legal practitioner and Legal Services Commissioner. D LEGISLATION CITED: Administrative Decisions Legislation Amendment Act 1997
Legal Profession Act 1987
Suitors’ Fund Act 1951
Supreme Court Rules 1970CASES CITED: Ainsworth v Hanrahan (1991) 25 NSWLR 155
ASC v Ampolex (1996) 14 ACLC 81
Barwick v Law Society of New South Wales (2000) 74 ALJR 419
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Calvin v Carr [1979] 1 NSWLR 1
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44
Dowling v Colonial Mutual Life Assurance Society Limited (1915) 20 CLR 509
Egger v Viscount Chelmsford [1965] 1 QB 248
Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134
Forbes v New South Wales Trotting Club Limited (1979) 143 CLR 242
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Goldsmith v Sperrings Ltd [1977] 1 WLR 478
Hammersley Iron Pty Ltd v Lovell (1998) 19 WAR 316
Hill v Green (1999) 48 NSWLR 161
In re Majory [1955] Ch 600
John Fairfax & Sons Ltd v Carson (1991) 24 NSWLR 259
King v Henderson [1898] AC 720
Macksville & District Hospital v Mayze (1987) 10 NSWLR 708
Murray v Legal Services Commissioner (1999) 46 NSWLR 224
National Australia Bank Limited v Hokit Pty Limited (1996) 39 NSWLR 377
Packer v Meagher [1984] 3 NSWLR 486
Parkes Rural Distributions Pty Ltd v Glasson (1986) 7 NSWLR 332
Rajski v Carson (1986) 4 NSWLR 735
Rajski v Computer Manufacture & Design Pty Limited ("CMAD") [1982] 2 NSWLR 443
Raybos Australia Pty Limited v Tectran (No 4) (1986) 6 NSWLR 674
Riddick v Thames Board Mills Limited [1977] QB 881
Stead v State Government Insurance Commission (1986) 161 CLR 141
Twist v The Council of the Municipality of Randwick (1976) 136 CLR 106
Walton v Gardiner (1993) 177 CLR 378
White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169
Williams v Spautz (1992) 174 CLR 509DECISION: 1. Appeal allowed; 2. Cross-appeal dismissed; 3. Set aside orders 3, 4 and 5 made by Simpson J on 12 May 2000; 4. In lieu thereof; "3. Declare that the decision of the first opponent under the Legal Profession Act s155(2) to institute proceedings before the Tribunal with respect to the complaint against the claimant was void."; 4. Order that the proceedings No 43 of 1996 before the second respondent be permanently stayed; 5. Order that the first opponent and respondent pay the costs of the claimant and appellant of the proceedings before Simpson J and of this appeal but have a certificate under the Suitors’ Fund Act 1951 if so qualified.
THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40360/00
CL 12553/97
SHELLER JA
GILES JA
HODGSON CJ in EQ
CARSON v LEGAL SERVICES COMMISSIONER & ANORIn 1996, the Legal Services Commissioner filed a complaint in the Legal Services Tribunal alleging that the appellant legal practitioner was guilty of professional misconduct in relation to conduct alleged to have taken place between 1985 and 1989 when the appellant’s clients and the complainant were involved in litigation.
Prior to deciding to institute proceedings before the Tribunal, the Commissioner afforded the appellant no opportunity to be heard. He did not cause a record of his decision and its reasons to be kept and he did not notify the appellant in accordance with the Legal Profession Act 1987.
The trial Judge made a declaration that the Commissioner’s decision was made in contravention of natural justice. Her Honour then considered the substance of the complaint before the Tribunal and made orders permanently staying certain aspects of it. Other aspects of the complaint were allowed to proceed.
In his appeal, the appellant argued that her Honour erred in not holding the Commissioner’s decision void and that the proceedings in the Tribunal were an abuse of process and should have been permanently stayed. The Commissioner cross-appealed against her Honour’s decision that certain allegations in the complaint could not amount to professional misconduct and that particular aspects of the complaint should be permanently stayed.
During the hearing of the appeal the complainant unsuccessfully applied to be joined as party to the appeal and his motion to be heard as amicus curiae was dismissed.
Held (by Sheller JA allowing the appeal and dismissing the cross-appeal, Giles JA agreeing with Sheller JA, and Hodgson CJ in Eq allowing the appeal in part and dismissing the cross-appeal):-
Avoidance of proceedings
The Court has a discretion whether or not to set aside a decision reached without adherence to the requirements of procedural fairness. The Commissioner’s duty under s155(2) of the Act included a duty that he gave reasons. The Commissioner did not comply with this duty and it was a duty which the trial Judge could not and did not perform. Accordingly, the Commissioner’s decision should have been set aside (by Sheller JA, Giles JA agreeing with Sheller JA, Hodgson CJ in Eq agreeing to the avoidance of the Commissioner’s decision to institute proceedings as the remedy for the denial of natural justice).
Calvin v Carr [1979] 1 NSWLR 1, applied; Forbes v New South Wales Trotting Club Limited (1979) 143 CLR 242, applied; Hill v Green (1999) 48 NSWLR 161, referred to.
Abuse of process - whether complaint foredoomed to fail
Proceedings may be stayed as an abuse of process on the ground that the Commissioner’s case before the Tribunal was so clearly untenable that it could not possibly succeed. Proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail (by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing).
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, applied; Walton v Gardiner (1993) 177 CLR 378, applied.
Whether misconduct in bringing or threatening to bring proceedings
1. If a plaintiff sues to redress a genuine grievance, no object which the plaintiff may seek to obtain in the proceedings can be condemned as a collateral advantage, and to that extent improper, if it is reasonably related to the provision of redress for that grievance. If a plaintiff with a genuine cause of action, which the plaintiff would wish to pursue in any event, can be shown also to have an ulterior purpose as a by product of the litigation, the plaintiff cannot be debarred from proceeding. However, a plaintiff’s pursuit of an ulterior purpose unrelated to the subject matter of the litigation which, but for the ulterior purpose, the plaintiff would not have begun, is an abuse of process (by Sheller JA, Giles JA agreeing).In re Majory [1955] Ch 600, referred to; Goldsmith v Sperrings Limited [1977] 1 WLR 478, referred to; Williams v Spautz (1992) 174 CLR 509, applied.
2. Ordinarily, the solicitor who begins proceedings on a client’s instructions does so for the client’s purpose. If the client’s immediate purpose is within the scope of the proceedings and the proceedings are not futile or foredoomed to fail, there is no impropriety by the solicitor or the client in instituting them (by Sheller JA, Giles JA agreeing).White Industries (Qld) Pty Limited v Flower & Hart (a firm) (1998) 156 ALR 169, referred to.
3. The appellant’s clients had a legitimate interest in the existence of the complainant’s legal aid grant. There was reason to believe the complainant had obtained legal aid without fully disclosing his assets. There was no impropriety in the appellant or his clients seeking to have the grant terminated (by Sheller JA, Giles JA agreeing).
4. If the object of the proceedings is within the scope of the remedy itself or a consequence of obtaining the remedy, then there is no impropriety in seeking the remedy. Therefore even if the appellant had the object of defeating a valid claim by depriving litigants of representation, that was an object to be achieved only as a consequence of obtaining a remedy which the law provided, and a remedy for which there were reasonable grounds (by Hodgson CJ in Eq).
5. The complaint that the appellant put improper pressure on the complainant’s solicitors was foredoomed to fail because proceedings instituted by the appellant and the correspondence associated with such proceedings flowed naturally from the solicitors’ letter to the Stock Exchange which was defamatory of the appellant’s clients (by Sheller JA, Giles JA agreeing, Hodgson CJ in Eq dissenting).
6. The complaint that the appellant threatened the complainant’s medical witness with defamation proceedings in an attempt to intimidate him had no prospect of success. There was no impropriety in the appellant’s attempt to have excluded from the witness’s medical report material which could not have been a legitimate part of an expert report and which unnecessarily defamed the law firm to which the appellant belonged clients (by Sheller JA, Giles JA agreeing, Hodgson CJ in Eq dissenting).Whether misconduct in giving inaccurate evidence
The giving of inaccurate evidence could not of itself amount to professional misconduct. Knowledge of the inaccuracy of the evidence is required and there was no evidence of such knowledge in this case clients (by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing).
Other grounds of alleged misconduct
(by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing)
1. There was no evidence that the appellant took any formal steps towards commencing bankruptcy proceedings against the complainant.
2. There was no misconduct in the appellant’s attempt to have the complainant declared mentally disable and to have a tutor appointed to conduct his litigation.Abuse of process - delay in making and investigating complaint
Having accepted the complaint so far out of time it was the Commissioner’s duty to investigate it and to make a decision as expeditiously as possible. The delay was gross and inexcusable and, together with the Commissioner’s other conduct (lack of communication with the appellant and other persons able to shed light on complaint, filing complaint prior to an arranged meeting with appellant’s solicitors, failing to give reasons), presented a powerful case that the Commissioner’s conduct was an abuse of process (by Sheller JA, Giles JA agreeing, Hodgson CJ in Eq dissenting).
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, referred to.
Abuse of process - improperly obtained evidence
1. The Commissioner cannot resort to documents produced to the complainant on discovery and subject to the complainant’s undertaking not to use them for any ulterior purpose unless steps had been taken to vary the undertaking (by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing).Ainsworth v Hanrahan (1991) 25 NSWLR 155, referred to; Riddick v Thames Board Mills Limited [1977] QB 881, referred to.
2. There was no direct evidence to show that the Commissioner had relied upon improperly obtained evidence, that is, evidence obtained as a result of a breach of the discovery undertaking (by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing).Abuse of process - pending proceedings raising same issues
The existence of outstanding contempt proceedings does not prevent proceedings raising the same allegations being heard by the Tribunal as these latter proceedings are concerned with the appellant’s fitness as a legal practitioner and are designed to protect the public. Such proceedings cannot be deferred to await the outcome of the contempt proceedings (by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing).
Lack of evidence before trial Judge
1. The trial Judge was entitled to proceed upon the basis that all the evidence that could have been put before her was put before her. It was fair to infer that the Commissioner had no other evidence in circumstances where he did not indicate what contrary evidence he wished to rely upon (by Sheller JA, Giles JA agreeing).
2. In an application to permanently stay a matter on the ground that it is foredoomed to fail, the onus lies on the applicant to make out that position on the basis of the evidence before the Court hearing the application. The respondent does not have to call the evidence upon which it would rely at the hearing. But if it wishes the Court to have regard to the availability of certain evidence, it may have an evidentiary onus to prove that such evidence is available and would be called, or at least should ensure that it is in a position to rely on evidence from which that inference can be drawn. The applicant’s onus may be discharged if all the respondent can do is to invite the Court to speculate (by Hodgson CJ in Eq).The complainant’s role
(by Sheller JA, Giles JA and Hodgson CJ in Eq agreeing)
1. The conduct of the appeal was a matter for the Commissioner. There was no reason why, given the adjournment granted, the Commissioner should not have been able to deal completely and as he saw appropriate with the appeal. Accordingly, there was no reason to add the complainant as party to the appeal.
2. Intervention as amicus curiae by the complainant in the circumstances would not have assisted the Court, would have unnecessarily occupied time and would have added inappropriately to the costs of the appeal.National Australia Bank Limited v Hokit Pty Limited (1996) 39 NSWLR 377, referred to.
Legislation:
Administrative Decisions Legislation Amendment Act 1997
Legal Profession Act 1987
Medical Practitioners Act 1938 (NSW)
Suitors’ Fund Act 1951
Supreme Court Rules 1970Cases Cited:
Ainsworth v Hanrahan (1991) 25 NSWLR 155
ASC v Ampolex (1996) 14 ACLC 81
Barwick v Law Society of New South Wales (2000) 74 ALJR 419
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Calvin v Carr [1979] 1 NSWLR 1
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44
Dowling v Colonial Mutual Life Assurance Society Limited (1915) 20 CLR 509
Egger v Viscount Chelmsford [1965] 1 QB 248
Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134
Forbes v New South Wales Trotting Club Limited (1979) 143 CLR 242
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Goldsmith v Sperrings Limited [1977] 1 WLR 478
Hammersley Iron Pty Ltd v Lovell
Hill v Green (1999) 48 NSWLR 161
In re Majory [1955] Ch 600
John Fairfax & Sons Ltd v Carson (1991) 24 NSWLR 259
King v Henderson [1898] AC 720
Macksville & District Hospital v Mayze (1987) 10 NSWLR 708
Murray v Legal Services Commissioner (1999) 46 NSWLR 224
National Australia Bank Limited v Hokit Pty Limited (1996) 39 NSWLR 377
Packer v Meagher [1984] 3 NSWLR 486
Parkes Rural Distributions Pty Ltd v Glasson (1986) 7 NSWLR 332
Rajski v Carson (1986) 4 NSWLR 735
Rajski v ComputerManufacture & Design Pty Limited (“CMAD”) [1982] 2 NSWLR 443
Raybos Australia Pty Limited v Tectran (No 4) (1986) 6 NSWLR 674
Riddick v Thames Board Mills Limited [1977] QB 881
Stead v State Government Insurance Commission (1986) 161 CLR 141
Twist v The Council of the Municipality of Randwick (1976) 136 CLR 106
Walton v Gardiner (1993) 177 CLR 378
White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169
Williams v Spautz (1992) 174 CLR 509Publications:
Aronson & Dyer, Judicial Review of Administrative Action, 2nd ed, at 377
De Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th ed, para 5-044ORDERS
1. Appeal allowed;
2. Cross-appeal dismissed;
3. Set aside orders 3, 4 and 5 made by Simpson J on 12 May 2000;
4. In lieu thereof:
“3. Declare that the decision of the first opponent under the Legal Profession Act s155(2) to institute proceedings before the Tribunal with respect to the complaint against the claimant was void.”
4. Order that the proceedings No 43 of 1996 before the second respondent be permanently stayed.
5. Order that the first opponent and respondent pay the costs of the claimant and appellant of the proceedings before Simpson J and of this appeal but have a certificate under the Suitors’ Fund Act 1951 if so qualified.
*****THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40360/00
CL 12553/97
SHELLER JA
GILES JA
HODGSON CJ in EQ
Friday, 3 November 2000
CARSON v LEGAL SERVICES COMMISSIONER & ANORJUDGMENT
SHELLER JA:1. Introduction
1 On 17 December 1996 the first respondent, Legal Services Commissioner (“the Commissioner”), filed in the Legal Services Tribunal (“the Tribunal”), then constituted under s162 in Pt 10 Div 7 of the Legal Profession Act 1987 (“the Act”), an Information complaining to the Tribunal that the appellant, Nicholas Roderick Carson, a legal practitioner, to whom I shall refer throughout this judgment as “the appellant”, was guilty of conduct which constituted either professional misconduct or unsatisfactory professional conduct. There were seven grounds of complaint, some with sub-grounds. At all material times the appellant was a partner in the firm of solicitors then known as Dawson Waldron (now Blake Dawson Waldron). The Tribunal was abolished with the repeal of s162 by the Administrative Decisions Legislation Amendment Act 1997 which commenced on 6 October 1998. Its jurisdiction was transferred to the Administrative Decisions Tribunal which is the second respondent to this appeal. However, it is appropriate to continue to refer to the Legal Services Tribunal as “the Tribunal”.
2 The complaint against the appellant was lodged with the Commissioner by Leszek John Rajski (“Rajski”) on 8 July 1994 pursuant to s134 of the Act. The complaint was extensive and detailed in a “complaint book” that ran to 175 pages. It concerned conduct of the appellant alleged to have taken place between 1985 and 1989. Section 138(1) of the Act provided that a complaint might only be made within three years after the conduct was alleged to have occurred. Section 138(2) enabled the Commissioner to accept a complaint made after that time if satisfied either that it was just and fair to do so having regard to the delay and the reason for the delay or that the complaint concerned an allegation of professional misconduct and that it was necessary in the public interest to investigate the complaint.
3 On 22 September 1994 the Commissioner met Rajski. One matter discussed was the exercise of the Commissioner’s discretion under s138(2). On 20 January 1995 the Commissioner wrote to the appellant advising him that Rajski had lodged a complaint against him to be investigated “by this office”. The Commissioner’s letter continued:
“The complaint relates to alleged conduct between 1985-1988 when you acted in litigation representing Tectran Corporation and others against Raybos Australia Pty Ltd and Dr Rajski”
4 The litigation referred to embraced various proceedings between Raybos Australia Pty Limited (“Raybos”) and its director and shareholder Rajski on the one hand, and the appellant’s clients, the Arunta companies on the other. The Arunta companies, so far as material, consisted of:
· Arunta Properties (NSW) Pty Limited (“Arunta Properties”),
· Arunta Investments Pty Limited (“Arunta Investments”),
· Scitec Corporation Pty Limited (“new Scitec”),
· Tectran Corporation Pty Limited (“Tectran”), and
· Gavemer Properties Pty Limited (“Gavemer”).5 Arunta Properties was formerly known as Scitec Corporation Pty Limited (“old Scitec” or “Scitec”). On 1 July 1983, Codeco Thirty-Nine Pty Limited (“Codeco Thirty-Nine”) acquired certain assets and liabilities of old Scitec. Subsequently, old Scitec changed its name to Arunta Properties (NSW) Pty Limited and Codeco Thirty-Nine changed its name to Scitec Corporation Pty Limited. The key personnel associated with these companies, whom it is pertinent to mention in this judgment, were Garry Richardson (“Richardson”), the Chairman of the Arunta companies, and Moshe Yerushalmy (“Yerushalmy”), the Managing Director of Tectran, Scitec and new Scitec.
6 Attached to the Commissioner’s letter of 20 January 1995 was a brief outline of the complaints. These included “threatening Dr Metcalf with defamation” in “an attempt to intimidate a witness in the proceedings”, putting “improper pressure on the Legal Aid Commission and the firm of solicitors Carneys, who were acting for Dr Rajski at the time” and conspiring with a client, Yerushalmy, to avoid service of a summons. The Commissioner referred to his discretion under s138(2) and wrote, “I now wish to give you the opportunity to provide your views on the matter before I make a decision on whether to exercise the discretion.”
7 On 24 January 1995 the Commissioner wrote to Rajski summarising advice he had received from counsel and informing Rajski that “in the interests of fairness and natural justice”, he had sought the views of the appellant on the consideration of the exercise of his discretion. On 30 January 1995 the appellant wrote to the Commissioner acknowledging the letter of 20 January 1995 and stating that a detailed response to the substance of it would be prepared and sent to the Commissioner shortly. The letter said, “In the meantime would you please note that the allegations are denied and that they were conceded to be false in the litigation to which you refer.”
8 On 6 February 1995 the appellant replied to the letter of 20 January 1995 noting that “although you do not forward a copy of the complaint or refer to its date, you say that it is out of time under Section 138(1), not having been made within three years after the alleged conduct.” The appellant pointed out that for the Commissioner to accept the complaint made out of time under s138(2)(b), he had to be satisfied of two matters, namely that the complaint concerned an allegation of professional misconduct and that it was necessary in the public interest to investigate the complaint. The appellant continued:
“You say that you are satisfied as to the first matter namely that the complaint concerns an allegation in professional misconduct. I can hardly argue to the contrary as it was the publication of imputations to the like effect which forced me to sue John Fairfax & Sons Pty Limited and its journalist, Mr John Slee. In those proceedings I alleged that the imputations were of conduct amounting, among other things, to professional misconduct. The proceedings were fought on the basis that the imputations were false and Fairfax, in its final apology, asserted that they were.”
9 The letter went on to deal with various background matters and the particular complaints as summarised, set out extracts from the judgments of the Court of Appeal in John Fairfax & Sons Ltd v Carson (1991) 24 NSWLR 259 and of the High Court in the appeal therefrom, Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 (“the Fairfax defamation proceedings”), and referred to charges of contempt brought by Rajski against various persons. The letter concluded with the appellant’s submissions.
10 On 17 February 1995 the Commissioner wrote to the appellant thanking him for his letter of 6 February. The last paragraph of the letter was as follows:
“Please note that prior to me making a formal determination as to whether or not to accept the complaint, I will contact the parties for the purpose of clarifying any further matters or to seek final submissions if necessary.”
11 On 28 February 1995 the Commissioner wrote to the appellant enclosing a copy of Rajski’s response to the appellant’s letter dated 21 February 1995 and annexures thereto. Also enclosed was a copy of the original complaint book and the letter from the Commissioner to Rajski dated 24 January 1995. Further submissions were invited. The appellant sought and was granted an extension of time and wrote again on 24 March 1995 submitting that it could not be necessary in the public interest for the Commissioner to investigate the complaints.
12 On 30 March 1995 the Commissioner wrote to the appellant stating that he had decided to exercise the discretion conferred by s138(2)(b) of the Act and to accept the complaint out of time. The letter concluded:
“I shall be in contact with you shortly as to the next step and the procedure as to how I intend to conduct the investigation.”
13 Nothing further was heard by the appellant or his advisers from the Commissioner about “the next step” or the procedure to be adopted.
14 On 10 December 1996 Mr Pavlakis, a partner of Blake Dawson Waldron, who was acting for the appellant, wrote to the Commissioner as follows:
“ Carson - Complaint by Mr L Rajski
I refer to our telephone conversation this morning and confirm that I act on behalf of Mr Carson.
The complaints by Mr Rajski were referred to Mr Carson by your office under cover of letter of 20 January 1995. It appears that the complaints were first received by your office in July 1994. As you would appreciate, a considerable time has passed since the lodgment of the complaints with your office and indeed from the time of the referral of the complaints to Mr Carson.
I welcome the opportunity to meet with you at your office on 18 December 1996 at 10 am in order to discuss these matters. As discussed, Mr Craig Murray from this office will also attend in view of his background knowledge of the litigation involving Mr Rajski.”15 As has already been said, on 17 December 1996, the day before the proposed meeting, and without any further correspondence or notice, the Commissioner filed the Information in the Tribunal.
16 Section 155(1) of the Act provided that after the Commissioner had completed an investigation into a complaint against a legal practitioner, the complaint was to be dealt with in accordance with the section. Section 155(2), (3), (4) provided, so far as material, as follows:
“(2) …. the Commissioner must institute proceedings in the Tribunal with respect to the complaint against the legal practitioner ….. if satisfied that there is a reasonable likelihood that the legal practitioner ….. will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct.
(3) However, if ….. the Commissioner is satisfied that there is a reasonable likelihood that the legal practitioner ….. will be found guilty by the Tribunal of unsatisfactory professional conduct (but not professional misconduct), ….. the Commissioner may instead:
(a) reprimand the legal practitioner …. if the legal practitioner …. consents to the reprimand, or
(b) dismiss the complaint if satisfied that the legal practitioner …. is generally competent and diligent and that no other material complaints have been made against the legal practitioner…..
(4) ….. the Commissioner is to dismiss the complaint against the legal practitioner …. if satisfied that there is no reasonable likelihood that the legal practitioner ….will be found guilty by the Tribunal of either unsatisfactory professional conduct or professional misconduct.”17 Section 156 of the Act required the Commissioner to cause a record of “its decision with respect to a complaint, together with the reasons for the decision” to be kept in respect of each investigation conducted. The Commissioner conceded that he afforded the appellant no opportunity to be heard before deciding to file the Information against him, and apparently did not cause a record of his decision with respect to the complaint, together with the reasons for the decision, to be kept, or to be notified to the appellant pursuant to s171J(1) of the Act.
18 In Murray v Legal Services Commissioner (1999) 46 NSWLR 224 this Court held that the performance of the duty and the proper exercise of the powers conferred on the Commissioner by s155 required that, before the Commissioner completed an investigation into the complaint against the legal practitioner and decided how the complaint was to be dealt with in accordance with that section, the legal practitioner be given the opportunity to see a copy of the complaint, to answer it and to advance argument against it. The Court held further that the failure so to perform the duty and exercise the powers vitiated the institution of the proceedings under s155 (at 247-8 per Sheller JA with whom Priestley and Stein JJA agreed). At 250 I observed that a failure to comply with the statute by furnishing the legal practitioner with reasons for the decision, in this case to file an Information in the Tribunal, meant that the legal practitioner had no means of knowing, as the legislature intended the practitioner should, whether the decision making power had been properly exercised. The importance of the Commissioner complying with these statutory mandates is well illustrated by the course of these proceedings.
2. Appellant’s Summons
19 On 4 February 1997 the appellant issued a summons in the Court of Appeal for declarations and an order prohibiting the Tribunal from proceeding to conduct a hearing into the allegations particularised in the Information or, alternatively, a permanent stay of the proceedings. The defendants were the Commissioner and the Tribunal. On 26 August 1997 the Court remitted the whole of the summons for hearing in the Common Law Division. The hearing before Simpson J extended over 17 days in May and June 1998.
20 Before Simpson J, the appellant relied upon two affidavits sworn by him, one on 28 February 1997 and the other on 13 March 1998. To these were annexed or exhibited a considerable number of documents. He also relied on an affidavit sworn by his solicitor, Diana Angela Chang, on 28 February 1997 to which were exhibited documents. Ms Chang gave evidence of twelve persons to whom she had spoken. She had asked each of them whether they had been contacted by anyone from the Commissioner in relation to a complaint lodged against the appellant by Rajski. Each of the persons replied to the effect “no”. Also in evidence before Simpson J was a four volume working bundle of documents and a series of additional exhibits. The appellant was required to attend for cross-examination and was cross-examined over some seven days by the Commissioner’s counsel.
21 On 18 June 1998, having granted leave on the previous day to amend the summons in one respect, Simpson J reserved her decision. Her Honour published her reasons for judgment on 23 February 2000, shortly after the High Court gave its decision on 3 February 2000 in Barwick v Law Society of New South Wales (2000) 74 ALJR 419. Her Honour gave the parties an opportunity to be heard on the form any order should take. On 6 April 2000 Simpson J heard a notice of motion dated 24 March 2000 in which the appellant sought reconsideration of one aspect of the judgment. Her Honour delivered judgment on the notice of motion on 19 April 2000 dismissing it.
22 In her reasons for judgment of 23 February 2000, Simpson J pointed out that cl 37 of Schedule 8 of the Act provided that Pt 10 applied to conduct occurring either before or after the commencement of the Act on 1 January 1988 but not so as to include unsatisfactory professional conduct occurring before that commencement. In the result this precluded the Tribunal finding that the appellant’s conduct, other than that covered by ground 6 of the Information, amounted to unsatisfactory professional conduct so that the words alleging such conduct in the Information in grounds 1-5 and 7 should be deleted. Her Honour regarded that as a matter for amendment in the Tribunal.
23 Simpson J dismissed the appellant’s challenge to the Commissioner’s acceptance of the complaint out of time, holding that the requirements of procedural fairness had been met and that the decision to accept the complaint out of time was not unreasonable in the relevant sense. The appellant has not challenged this conclusion by her Honour.
24 Simpson J found that the Commissioner’s decision to file the Information in the Tribunal had been made in contravention of the rules of natural justice, and that the Commissioner had failed to cause a record of his decision and the reasons for it to be kept and or notified to the appellant. She nonetheless declined to stay proceedings on the Information in consequence of these matters.
25 On the authority of the decision of the Court of Appeal in Barwick v Law Society of New South Wales Simpson J held that, since it was common ground that the conduct the subject of grounds 1, 4, 7(i), 7(iv), 7(v) and 7(viii) of the Information was not included in the complaint made by Rajski, the Tribunal was without jurisdiction to conduct a hearing into those grounds in the Information. The Commissioner has not challenged this conclusion. Even so her Honour considered it appropriate to deal with the other challenges to these grounds.
26 In summary, on the other challenges to the grounds of the Information Simpson J held that it would not be open to the Tribunal to find the appellant guilty of professional misconduct as alleged in grounds 1, 4, 6, 7(i), 7(iv), 7(v), 7(vi) and 7(viii). That left extant grounds 2, 3, 5, 7(ii), 7(iii) and 7(vii).
27 On 12 May 2000 her Honour made the following orders:-
“1. Declare that the decision of the [Commissioner] under Legal Profession Act , s155(2), to institute proceedings before the [Tribunal] with respect to the complaint against the [appellant] (“the Decision”) was made in contravention of the rules of natural justice.
2. Declare that the [Commissioner]:
2.1 failed to record the Decision and the reasons for it, as required by Legal Profession Act , s156;
2.2 failed to notify the [appellant] of the Decision and the reasons for it, as required by Legal Profession Act .
3. Order that the Proceedings No 43 of 1996 before the [Tribunal] in respect of grounds 1, 4, 6, 7(i), (iv), (v), (vi) and (viii) of the Information filed by the [Commissioner] on 17 December 1996, be permanently stayed.
4. Order that the [Commissioner] pay one half of the [appellant’s] costs of these proceedings.
5. Order that the summons be otherwise dismissed.”
3. Appeal and cross-appeal
28 The appellant appealed against her Honour’s decision not to stay proceedings on the Information even though the rules of natural justice had been contravened and the requirements of the Act to record the decision and notify the appellant had not been complied with. The appellant claimed that the Commissioner’s decision to institute proceedings in the Tribunal, having been made in contravention of the rules of natural justice, was void, and that the proceedings were an abuse of process and should be prohibited or permanently stayed. The appellant submitted that Simpson J, having made the declarations in orders 1 and 2, should have declared the s155 decision void and prohibited proceedings in the Tribunal on the grounds of denial of natural justice and failure to give reasons.
29 The appellant also appealed against her Honour’s decision so far as she held that grounds 2, 3, 5, 7(ii), 7(iii) and 7(vii) should be left to the Tribunal. He contended that it would not be open to the Tribunal to find him guilty of professional misconduct on those grounds and, accordingly, the proceedings in relation to those grounds also ought ot have been stayed as an abuse of process.
30 The Commissioner cross-appealed against order 3. He abandoned the ground of his cross-appeal to the effect that Simpson J should not have gone on to deal with the challenges to grounds 1, 4, 7(i), 7(iv), 7(v) and 7(viii) after holding that the Tribunal was without jurisdiction to conduct a hearing into them. In the original cross-appeal the Commissioner contended that her Honour erred in particular aspects of the decisions permanently to stay grounds 6(b) and (c) and 7(vi) and in the decisions themselves. In the amended cross-appeal the Commissioner also contended that her Honour erred in holding that the allegations in grounds 1, 4, 6, 7(i), 7(iv), 7(v) and 7(vi) could not be held by the Tribunal to amount to professional misconduct. That left unchallenged her Honour’s conclusion that the allegations in ground 7(viii) could not be held by the Tribunal to amount to professional misconduct.
31 Both the appellant and the Commissioner challenged Simpson J’s costs order.
32 On 21 June 2000, the third day of the hearing before this Court, the complainant, Rajski, applied by notice of motion to be joined as a party to the appeal. The Court refused this application and said that reasons would be given with the reasons for judgment on the appeal. On 18 July 2000, the day to which argument on the appeal was adjourned to enable the Commissioner to respond fully to the appellant’s submissions, Rajski, on short notice to the Court and to the appellant, applied by notice of motion to be heard on the appeal and cross-appeal as amicus curiae. The Court refused this application and indicated that reasons would be given with the reasons for judgment on the appeal.33 Having held that the Commissioner’s decision to institute proceedings before the Tribunal was made in contravention of the rules of natural justice, in her reasons for judgment of 23 February 2000, Simpson J said:
4. Contravention of the rules of natural justice - avoidance
34 Having then held that there had been legal error in that the Commissioner had failed to record his decision and the reasons for it and to notify the appellant accordingly, Simpson J said:
“130 The question which now arises is what, in the circumstances of this case, flows from the conclusion I have reached. Had the [appellant] limited himself, in the summons, to the contention that he had been denied procedural fairness, the appropriate course would have been to remit the matter to the [Commissioner] to be dealt with in accordance with those rules. But the [appellant] did not so limit himself. In arguing that the decision to institute proceedings in the Tribunal was unreasonable or an abuse of process he must be taken to have put before me the entirety of material he would, given the opportunity, have put before the [Commissioner]. I have already mentioned the volume of evidentiary material put forward by the parties. I am satisfied that it is correct that merely to declare the s155 decision void and remit the matter to the [Commissioner] to be dealt with in accordance with my conclusion would be inappropriate. Having regard to all the material, the only reasonable and practical course is to proceed to deal with what I have called the substantive matters.
131 In reaching this conclusion I have not overlooked the alternative possibility of requiring the [Commissioner] to refer the complaint to the Council of the Law Society for independent investigation, but I have concluded that to take that course at this late stage would do no more than prolong these already protracted proceedings. The detailed examination in relation to the grounds in the [appellant’s] summons alleging that the filing of the Information constitutes an abuse of process renders any further preliminary investigation superfluous.
132 The circumstances are analogous with those recognised by the Privy Council in Calvin v Carr [1979] 1 NSWLR 1, in which three classes of case were identified - at one extreme, those cases in which a defective hearing at first instance may be superseded by a subsequent fair hearing; at the other extreme, those in which nothing less than a fair hearing at first instance will suffice, even though some form of review hearing may be seen to offer a cure for the original defect; and intermediate cases dependent on their own circumstances in which it is necessary to decide whether the parties should be taken to have agreed to accept the subsequent hearing and decision in place of the original.
133 In the present case the course initiated by the [appellant], in putting all the issues he has before me, has placed this case in that intermediate category (if not in the first) and that it would be quite inappropriate to remit the matter to the LSC (or the Council of the Law Society) for further examination.”
The appellant correctly submitted that the protraction of the proceedings was through no fault of his.
35 The appellant sought reconsideration by her Honour of these aspects of the judgment in the notice of motion of 24 March 2000. In declining to do so Simpson J rejected the submission that the Commissioner’s decision was void rather than voidable, and held that she had a discretion to grant or refuse relief following a denial of procedural fairness. In the reasons of 19 April 2000 her Honour affirmed what she had said in relation to Calvin v Carr in her earlier reasons and added, “Perhaps I should state more explicitly what I intended to say”. Referring to the conclusion that the Commissioner did not give the appellant an opportunity to be heard, her Honour said:
“While the [appellant] has succeeded in establishing procedural error on the part of the [Commissioner], that error has been superseded by the course these proceedings have taken. At this stage no consequences flow from those errors.”
36 Lord Wilberforce, giving the judgment of the Privy Council in Calvin v Carr said at 8:
“Ordinarily, that conclusion would result in a declaration that the decision was void and an order staying or prohibiting the proceedings in the Tribunal until such an opportunity had been afforded (or orders to similar effect). However, because the [appellant] had not stopped, in the proceedings before me (and for very good reasons - see Port of Melbourne Authority v Anshun Pty Ltd (1980) 147 CLR 35) at his claim in relation to the procedure adopted, and had pursued the substantive grounds of his application, a most comprehensive examination of the allegations against him was undertaken. Everything that could have been put before the [Commissioner] was, I assumed and assume, put before me. That did not mean that I applied the same test as the [Commissioner] was required to apply. It was not for me to determine whether there was a reasonable likelihood that the Tribunal would find the [appellant] guilty of professional misconduct. I appreciate that this leaves open something of a gap. There is no valid conclusion by the [Commissioner] that such a reasonable likelihood existed. The finding of such a reasonable likelihood is a different and arguably more demanding test than that which it was appropriate for me to apply. It should not be assumed that, after all the evidence was given, if the [Commissioner] were required again to consider whether to institute proceedings in the Tribunal, he would necessarily make the same decision. But I consider myself obliged to determine all issues before me, and these included the substantive grounds, that is, the grounds asserting that institution of the proceedings in the Tribunal was an abuse of process or unreasonable because doomed to fail. After analysis of all the evidence and argument in that respect, it seemed to me that there was little realistic prospect of a different decision being made. Little, if anything, would be achieved except even longer delay in the resolution of these very old proceedings.”
37 In Forbes v New South Wales Trotting Club Limited (1979) 143 CLR 242 Aickin J said at 277:
“Their Lordships’ opinion would be, if it became necessary to fix upon one or other of these expressions [ie void or voidable], that a decision made contrary to natural justice is void, but that, until it is so declared by a competent body or court, it may have some effect, or existence, in law. This condition might be better expressed by saying that the decision is invalid or vitiated.”
“That which is done without compliance with applicable principles of natural justice, in circumstances where the relevant authority is obliged to comply with such principles, is not to be regarded as void ab initio so that what purports to be an act done is totally ineffective for all purposes. Such an act is valid and operative unless and until duly challenged but upon such challenge being upheld it is void, not merely from the time of a decision to that effect by a court, but from its inception. Thus, though it is merely voidable, when it is declared to be contrary to natural justice the consequence is that it is deemed to have been void ab initio. Accordingly, it does not follow from the fact that an act is done without compliance with the principles of natural justice that it must be regarded as no act at all and supportable (if at all) as an effective act only on some other basis.”
See also Aronson & Dyer, Judicial Review of Administrative Action , 2nd ed, at 377; Parkes Rural Distributions Pty Ltd v Glasson (1986) 7 NSWLR 332 at 335-336 and Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 at 718 and 729-30.
38 In De Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th ed, para 5-044, it is pointed out that behind the simple dichotomy of void and voidable acts (invalid and valid until declared to be invalid) lie terminological and conceptual problems of excruciating complexity. The preferred view in England is to presume that all official decisions are valid until set aside or otherwise held to be invalid by a court of competent jurisdiction; see para 5-048. It is not necessary, in my view, to take up these problems in this appeal. Nor is it necessary to address the appellant’s submission, founded on the reasons of the High Court in Barwick v Law Society of New South Wales, that the Commissioner’s failure to record his decision and the reasons for it and to notify the appellant accordingly necessarily deprived the Tribunal of jurisdiction. With due respect to Simpson J, it is very difficult to say that, because part of the appellant’s case was to show that the proceedings were doomed to fail and their institution therefore involved an abuse of process, the appellant should be treated as if his proceedings in the Supreme Court superseded the defective process of investigation before the Commissioner and provided a subsequent fair hearing or that he should be taken to have agreed to accept the hearing in the Supreme Court and its decision in place of the defective process.
39 The appellant’s amended summons had claimed relief on the ground that the proceedings before the Tribunal were an abuse of process and vexatious and oppressive inter alia because there were not reasonable prospects that the appellant would be found guilty of professional misconduct. That was what Simpson J must have meant by “the substantive matters” when her Honour said that, rather than remit the matter to the Commissioner, the only reasonable and practical course was to deal with the substantive matters. It was of course necessary in any event for her Honour to consider whether the proceedings before the Tribunal were an abuse of process, and, as part of that, whether there were not reasonable prospects that the appellant would be found guilty of professional misconduct. But such consideration was not properly a substitute for the Commissioner’s consideration after affording the appellant procedural fairness.
40 In her reasons of 23 February 2000 Simpson J equated the question of whether there were reasonable prospects that the appellant would be found guilty of professional misconduct with the question whether the proceedings were “foredoomed to fail”. She said that in the ordinary course the test to be applied would be whether the Commissioner’s case, “taken at its highest, and in the absence of explanatory, mitigatory or exculpatory material given by [the appellant] is capable of providing the foundation for a finding of professional misconduct”. Her Honour considered that approach “unrealistic and unduly restrictive” when the appellant had given “evidence that would be given by way of defence in the Tribunal upon a hearing”, and said -
“Nevertheless, I bear in mind the limited nature of the exercise in which I am engaged. It is not for this Court to usurp the functions of the Tribunal. If, on all the evidence that is before me, I conclude that it would be open to the Tribunal charged by statute with the determination of matters of the professional conduct of legal practitioners to find the [appellant] guilty of professional misconduct in relation to any of the grounds of the Information, then the appropriate and proper course is to leave the decision in relation to that ground to the Tribunal.”
41 In the passage from the reasons of 19 April 2000 set out above, her Honour repeated that it was not for her to determine whether there was a reasonable likelihood that the Tribunal would find the appellant guilty of professional misconduct, and recognised “something of a gap” in that the test to be applied by the Commissioner was arguably more demanding than the test her Honour was to apply. She nonetheless considered that there was “little realistic prospect of a different decision being made”, and again referred to the delay in the resolution of the matter.
42 The task undertaken by Simpson J in the proceedings before her, in so far as those proceedings investigated the evidence relevant to the various charges in the Information, was equivalent to determining whether the case for the Commissioner was so clearly untenable that it could not possibly succeed; see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130. Her Honour’s statement of the test to be applied in the ordinary course may be questioned, but, even when taking into account the so-called defence evidence, the test enunciated by her Honour was whether it would be open to the Tribunal to find the appellant guilty of professional misconduct: so in saying that a ground should be left to the Tribunal, her Honour used words such as “it would be open to the Tribunal” to reach a particular conclusion.
43 The task for the Commissioner under s155(2) was different. As was pointed out in Murray v Legal Services Commissioner at 246-7, the Commissioner’s duty was to consider whether there was a reasonable likelihood that the appellant would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. This required the Commissioner to put himself in a position where he could endeavour to predict the outcome of a hearing in the Tribunal, and to predict the outcome on a test of reasonable likelihood. Even if the appellant’s evidence before Simpson J be taken to be the evidence that would be given by way of defence in the Tribunal upon a hearing, and further be taken to be the material which would have been ascertained by the Commissioner in order to make his decision, both of which are not necessarily so, the decision-maker is not the Commissioner and the test is different from whether it would be open to the Tribunal to reach a particular conclusion. Indeed, her Honour acknowledged the difference between the tests.
44 Simpson J found that that the Commissioner’s duty had never been performed, carrying as it did the requirement that the Commissioner give reasons. Her Honour appreciated that this left open “something of a gap”. In determining that certain grounds of the complaint should go forward for determination by the Tribunal, Simpson J was careful to point out that she was doing no more than considering whether it was open to the Tribunal to find the misconduct complained of. But this deprived the appellant of the Commissioner’s decision on a test more favourable to the appellant. To say that there was little realistic prospect of the Commissioner, on reconsideration, making a different decision did not, with respect, overcome this fundamental fact; compare Stead v State Government Insurance Commission (1986) 161 CLR 141 at 147 where the High Court said:
“All that the appellant needed to show was that the denial of natural justice deprived him of the possibility of a successful outcome. In order to negate that possibility, it was, as we have said, necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result.”
45 Nor, or course, did her Honour purport to apply the test which the Commissioner was required to apply. In my opinion, it cannot be said that the hearing in the Supreme Court satisfied in full or at all the duty of procedural fairness required of the Commissioner before instituting proceedings in the Tribunal; compare Twist v The Council of the Municipality of Randwick (1976) 136 CLR 106 at 113. I am prepared to accept that the Court has a discretion as to whether it will set aside a decision reached without adherence to the requirements of procedural fairness, and that the discretion may be exercised against the making of such an order in cases, for example, of delay by the applicant or cases where the voidable decision has been acted on to the detriment of third parties. But, in my opinion, her Honour’s decision not to set aside the Commissioner’s decision did not adequately pay regard to the duty which the Commissioner was bound to perform before instituting proceedings in the Tribunal and which her Honour could not and did not perform. The proceedings before her Honour were not, in law or in the task undertaken by her Honour, an appeal from or a subsequent hearing in place of the defective investigation process by the Commissioner within the principles discussed in Hill v Green (1999) 48 NSWLR 161 at 194-198 per Fitzgerald JA.
46 The Commissioner’s decision should have been held to be void upon the successful challenge to the procedural fairness of its making. This part of the appeal must therefore succeed.
47 This conclusion does not mean that this Court should not now deal with the appellant’s claim that the proceedings instituted in the Tribunal were an abuse of process. If, on re-investigation, the Commissioner decided to institute proceedings on any of the grounds of complaint the appellant has challenged and that ground of complaint was foredoomed to fail or vitiated by delay in the making or investigation of the complaint, the Court would be faced with re-hearing that part of the appellant’s case. The result would be further delay and cost. In my opinion, the appellant’s case, having been heard and dealt with by Simpson J, should also be dealt with in this Court despite my conclusion that the Commissioner’s decision was void.48 In the amended summons the appellant claimed that the proceedings were an abuse of process and vexatious and oppressive on the following grounds:
5. Abuse of process
49 Most of the evidence at the hearing before Simpson J was directed to ground 5.5. The appellant undertook an onus equivalent to demonstrating that the Commissioner’s case as formulated in the Information was so clearly untenable that to allow it to proceed would be futile. In General Steel Industries Inc v Commissioner for Railways (NSW) at 128-130 Barwick CJ described the circumstances in which the Court will exercise its jurisdiction summarily to terminate proceedings. The Chief Justice observed at 130:
“5.1 the jurisdiction of the [Tribunal] has been invoked irregularly [so far as presently material] by reason of [the decision of the Commissioner to institute proceedings in contravention of the rules of natural justice, without having first recorded his decision and the reasons for it and without having first notified the appellant of his decision];
5.2 there has been gross and inexcusable delay in the making and investigation of the complaint;
5.3 the investigation of the complaint has been conducted unfairly and improperly;
5.4 the evidence upon which the complaint is based has been obtained improperly;
5.5 there are not reasonable prospects that the [appellant] will be found guilty of professional misconduct;
5.6 the subject matter of the information is substantially the same as the subject of contempt proceedings by the complainant against the [appellant] in the Court of Appeal.”50 But proceedings may be stayed as an abuse of process on other grounds. Walton v Gardiner (1993) 177 CLR 378 was an appeal against a decision of the Court of Appeal ((1991) 25 NSWLR 190). By majority the Court of Appeal permanently stayed proceedings brought against three medical practitioners in the Medical Tribunal and based on complaints made between 1982 and 1986 of misconduct in the treatment of patients alleged to have occurred between 1973 and 1977. Affirming this decision, the majority of the High Court, Mason CJ, Deane and Dawson JJ, said at 392-3:
“Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”
51 It is appropriate first to explain in more detail the grounds of complaint in the Information, and to repeat the appeal or cross-appeal as to each.
“The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exists to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has been long established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail. [Their Honours referred to General Steel Industries at 128 - 130.] Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them. Yet again, proceedings before a court should be stayed as an abuse of process, if, not withstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of West Midlands Police [1982] AC 529 at 536 as ‘the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to the litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people.”
(a) The grounds of complaint in the Information
In this context, prolonged delay in making a complaint or bringing it to trial so as to produce an unfair trial is regarded as oppressive.
Ground 1: Wood and Donaldson
52 The Commissioner alleged that in late 1985 the appellant had made improper approaches to Adrian Wood and Alexander Donaldson who were witnesses for Raybos and Rajski in two sets of proceedings (“the litigation”).
53 The first proceedings were begun in 1980 by Tectran against Raybos and Rajski who cross-claimed (“the 1980 proceedings”). The second were begun in 1985 by Raybos and Rajski against Tectran and a number of other parties (“the 1985 proceedings”). Commencing on 26 November 1984 Miles J heard an application by Raybos and Rajski in the 1980 proceedings to amend the cross-claim by adding cross-defendants (including Arunta Properties, Richardson and Yerushalmy) and further causes of action alleging abuse of process, malicious prosecution and conspiracy, and by increasing the amount claimed from approximately $167 million to $800 million.
54 The appellant was said to have made the approach in each case in an attempt to have the witness change the evidence he had given in the litigation while knowing prior to the approach that the witness was a critical witness for Raybos and Rajski in the litigation and that the evidence had been given on their behalf before Miles J and accepted by Miles J after extensive cross-examination.
55 Simpson J held that it was not open to the Tribunal to find any impropriety in the conduct of the appellant in relation to this issue and that the ground should be deleted from the Information. In the course of doing so her Honour said: “It is quite wrong and misleading to say that the evidence of Wood and Donaldson had been accepted by Miles J.” In his amended notice of cross-appeal the Commissioner claimed that her Honour erred in holding that the allegations in this ground of complaint could not be held by the Tribunal to amount to professional misconduct.56 The Commissioner alleged that between late 1985 and early 1987 the appellant sought to procure the termination of the grant of legal aid for an improper purpose namely, to obstruct prevent or thwart Raybos and Rajski from pursuing their rights in the litigation against the appellant’s clients by the following means:
Ground 2: Legal Aid
57 Simpson J concluded that this ground of the Information should proceed before the Tribunal. The appellant challenged this conclusion.
(i) by corresponding with the LAC (Legal Aid Commission, formerly known as the Legal Services Commission of New South Wales), such correspondence containing false and/or misleading information and imputations,
(ii) by wrongfully intimidating Carneys in order to have Carneys cease to act for Raybos and Rajski in the litigation, and
(iii) by commencing and continuing proceedings against the LAC.
58 Ground 2 (ii) was connected to ground 3, in which the Commissioner alleged that between late 1985 and early 1986 the appellant took a number of actions against Carneys “designed to wrongfully intimidate Carneys, to cause that firm of solicitors to cease to act for Raybos and Rajski in the litigation.” Carneys was the name under which a firm of Sydney solicitors practised. The actions referred to were described as follows:
Ground 3: Carneys
59 Simpson J held that it would be open to the Tribunal to conclude that the appellant’s conduct was for the purpose alleged. The appellant challenged this conclusion.
“(i) commencing and continuing defamation proceedings on behalf of his clients against Carneys;
(ii) writing a letter dated March 11, 1986 to Carneys’ solicitors, Phillips Fox, and in such a letter:
(a) threatening to amend the statement of claim in the defamation proceedings to Carneys’ detriment if Mr Carney had given certain advice in relation to a letter written by Rajski to the Stock Exchange
(b) offering Carneys the opportunity to avoid further action in the defamation proceedings if Mr Carney would provide the [appellant’s] clients with a statutory declaration denying giving Rajski such advice, thereby effectively making Mr Carney a witness against his client Rajski.
(iii) making a false claim, in the same letter dated 11 March, 1986, that Carneys was liable for $25,000 per week in special damages;
(iv) writing a letter dated 20 March, 1986 addressed to Carneys and in such letter threatening that the [appellant] would seek an order that Carneys pay the costs of his clients and of his firm, in relation to the adjournment of the litigation which had been granted by the Chief Justice on 12 March, 1986.”
60 As framed, this ground was:
Ground 4: Yerushalmy
61 At the conference Yerushalmy had said that he could not remember an event described in an affidavit by Adrian Wood sworn in August 1984. The appellant gave his account and said that he did not intend to convey to Yerushalmy that he should give false evidence on this or any other issue but on the contrary sought to stress the need for him to give accurate evidence. Simpson J accepted that it would not be open to the Tribunal on the evidence to find that the advice the appellant had given to Yerushalmy amounted to an improper invitation to give false evidence or any other impropriety and held that this ground should be deleted from the Information. In his amended notice of cross-appeal the Commissioner claimed that her Honour erred in holding that the allegations in this ground of complaint could not be held by the Tribunal to amount to professional misconduct.
“That on 24 February 1986 the [appellant], in the course of a conference with a potential witness, Yerushalmy, was told by the witness that he had no recollection of an important event about which the [appellant] believed the witness would be required to give evidence in Court. The [appellant] said to the witness, words to the effect that the witness should not only say (in evidence), ‘I can’t remember’ but that he had to be absolutely sure, otherwise he would be tripped up in cross examination by his qualification of what he said. The words used to the witness were an improper invitation by the [appellant] to the witness to change the evidence he might give in Court to something other than his honest recollection and as such amounted to an interference with the administration of justice.”
62 The Commissioner alleged that in early 1987 the appellant improperly attempted to intimidate Dr Metcalf (“Metcalf”), a witness for Rajski in the litigation, by threatening him with the institution of defamation proceedings in respect of a medical report that Metcalf had prepared for and which was addressed to the Supreme Court of New South Wales. Simpson J held that it would be open to the Tribunal to conclude that the steps taken by the appellant in relation to Metcalf were taken for an improper purpose and amounted to professional misconduct. The appellant challenged this conclusion.
Ground 5: Dr Metcalf
Ground 6: The Fairfax defamation proceedings
63 In the Fairfax defamation proceedings brought by the appellant against the publishers of the Sydney Morning Herald, John Fairfax & Sons Limited, and John Slee the appellant gave evidence denying that he had ever been asked to accept service of criminal process on behalf of Yerushalmy. The Commissioner alleged that he said that he did not know what the summons issued against Yerushalmy was about.
64 In ground 6(a) the Commissioner alleged that the appellant gave evidence to the effect that he had never been asked to accept service of criminal process on behalf of Yerushalmy and that this evidence was false or misleading to his knowledge in that he knew in truth that a solicitor employed by the Office of the Solicitor for Public Prosecutions had asked him, through Christopher Davidson (“Davidson”) a senior associate who worked under the appellant’s supervision, whether they would accept service of the summons on Yerushalmy’s behalf.
65 In ground 6(b) the Commissioner alleged that the appellant gave evidence to the effect that in a meeting with Det Inspector Parsons (“Parsons”), Parsons had patted a file on his desk and said “I have also got another file about Yerushalmy where we have issued a summons”, and that Parsons was asked by the appellant “What is that about”, to which he replied “You will have to go to the DPP to find out.” It was alleged that this evidence was false or misleading to the appellant’s knowledge in that he knew that at a meeting on 17 March 1988, at which Davidson had also been present, Parsons had said that proceedings had been commenced against Yerushalmy for perjury.
66 In ground 6(c) the Commissioner alleged that the appellant gave evidence to the effect that he did not know that a summons issued against Yerushalmy alleged the indictable offence of perjury until after Dawson Waldron had written to the Director of Public Prosecutions to find out the nature of the charge, and that this evidence was false or misleading to the appellant’s knowledge in that he knew before writing the letter that proceedings had been commenced against Yerushalmy for perjury.
67 Simpson J held that there was no evidence capable of supporting a finding of professional misconduct in respect of all this evidence and that the ground must be deleted from the Information. In his original notice of cross-appeal the Commissioner claimed that her Honour, having held that there was a basis on which the Tribunal could conclude that evidence referred to in grounds 6(b) and (c) of the Information given by the appellant in the Fairfax defamation proceedings was inaccurate, erred in deciding permanently to stay those grounds. In his amended notice of cross-appeal the Commissioner also claimed that her Honour erred in holding that the allegation in this ground of complaint could not be held by the Tribunal to amount to professional misconduct.68 The Commissioner alleged that between 1985 and 1988 the appellant “conducted the litigation in such a way that his behaviour would be reasonably regarded as disgraceful or dishonourable by other members of the profession of good repute or standing or did not meet the required standards of competence and diligence in that he ….. acted without the due objectivity and detachment expected of a member of the profession in his conduct of the litigation and in his dealings with the Court and other members of the profession.” This allegation was particularised under eight separate heads. Five were referred to in the other grounds, namely,
Ground 7: The omnibus ground
69 Having dealt with the allegations made in grounds 1, 2, 3, 4 and 5 of the complaint in the Information Simpson J did not revisit those allegations in grounds 7(i), (ii), (iii), (iv), or (vii). Her Honour held that there was no basis upon which ground 7(v) could found a finding of professional misconduct or unsatisfactory professional conduct, that there was no basis in relation to the matters falling under the heading of ground 7(vi) for a finding of professional misconduct or unsatisfactory professional conduct, that there was no foundation in any of the material under ground 7(viii) for any adverse finding, and that these grounds must be deleted from the Information. In his original notice of cross-appeal, later amended, the Commissioner claimed that in relation to ground 7(vi) her Honour erred in failing to consider the allegation in the context of a “course of conduct” and in holding that an essential element of the Commissioner’s allegation was that the appellant applied for a tutor to be appointed. In his amended notice of cross-appeal the Commissioner claimed that her Honour erred in holding that the allegations in grounds 7(i), 7(iv), 7(v) and 7(vi) could not be held by the Tribunal to amount to professional misconduct. There was no cross-appeal against her Honour’s finding on ground 7(viii).
(i) the allegations concerning Wood and Donaldson;
(ii) the allegations concerning the attempts to secure the termination of the grant of legal aid;
(iii) the allegations concerning Carneys;
(iv) the allegations relating to the conference with Yerushalmy; and
(vii) the allegations concerning Metcalf;The other three allegations were as follows:
(v) costs in the defamation proceedings before Hunt J:(vi) tutor application:
“From June 1986 to August 1986 the [appellant], as a defendant in the defamation proceedings Leszek Rajski v N R Carson and Ors, and as a partner of the other defendants in the case sought to have bankruptcy proceedings commenced against Rajski in relation to $8,861.83 costs ordered to be paid by Justice Hunt in the case. The [appellant] sought to issue the bankruptcy proceedings knowing that Rajski had filed an application for leave to appeal against the decision of Justice Hunt. The [appellant] continued the attempt to bankrupt Rajski knowing that Rajski had obtained leave to file and had filed a Notice of Appeal from the decision of Justice Hunt. The purpose of the attempt to make Rajski bankrupt was not to obtain payment of the costs but to impede Rajski in his conduct of the litigation.”
“Between late 1986 and early 1987 the [appellant] attempted to have Rajski declared mentally disabled and to have a tutor appointed to conduct his litigation for the improper purpose of using such appointment as a means to hinder, obstruct or thwart Rajski in the further conduct of the litigation, by taking the following actions:
(a) On 23 October 1986, despite that until that day in the application for leave to appeal in the Court of Appeal the [appellant] and his partners having been represented by senior counsel, and as the Court of Appeal was about to announce its orders, the [appellant] announced to the Court that he would thenceforth appear for himself in the proceedings and wished to make a submission additional to that put to the Court by senior counsel previously appearing for him. He then improperly submitted to the Court, without having previously moved under Part 63 Rule 7 of the Supreme Court Rules and without any evidence to support the submission, that should the Court of Appeal grant an adjournment of the application for leave to appeal and order a stay of the litigation before Powell J then the Court also ‘must find that the plaintiff (Rajski) is mentally disabled within the meaning of Part 63 Rule 5(2) and the consequence of that is that the Court would then be bound to appoint a tutor’. The reason for the above application was said by the [appellant] to be that it would enable the litigation to be conducted in ‘a more reasonable way’, and
(b) between 15 December 1986 and 23 March 1987 the [appellant], on behalf of his clients and himself and his partners foreshadowed a possible motion that the Court of Appeal appoint a tutor for Rajski.”
(viii) costs in the application before Campbell J:
“In September 1988 the [appellant] on behalf of new Scitec improperly sought to obtain from Raybos and Rajski a total of $12,509.92 in respect of the costs order made by Justice Campbell in the judgment delivered on 18 March 1986 in relation to an application by Raybos and Rajski to join new Scitec as a defendant in the [1985 proceedings], the [appellant] knowing prior to seeking such costs from Raybos and Rajski that the LAC had acknowledged that legal aid was granted to Raybos and Rajski in respect of the application heard by Justice Campbell and knowing as such that no costs could be sought from Raybos and Rajski in accordance with section 47 of the Legal Aid Commission Act.”
(b) The institution or threat of proceedings - misconduct
70 In reliance upon Williams v Spautz (1992) 174 CLR 509 the appellant submitted that proceedings brought with the intention that they be prosecuted to finality to effect an object within the scope of the proceedings involved no misconduct, even though the motive or the purpose of the proceedings was to achieve other ulterior objects. The submission assumed that the proceedings were not hopeless or foredoomed to fail. The proceedings to terminate the grant of legal aid to Rajski and Raybos and the proceedings against Carneys for defamation were brought by the appellant on behalf of his clients. In each case, the clients had a legitimate interest in achieving the object of the proceedings.
71 At the heart of the complaint about the proceedings against the LAC was the allegation that they were intended to procure the termination of legal aid “for an improper purpose, namely, to obstruct, prevent or thwart Raybos and Rajski from pursuing their rights in the litigation against the [appellant’s] clients”. At the heart of the complaint about the proceedings against Carneys was the allegation that they were designed wrongfully to intimidate Carneys, to cause that firm of solicitors to cease to act for Raybos and Rajski in the litigation.
72 In both these cases the Commissioner alleged that the appellant had on behalf of his clients begun proceedings and engaged in correspondence which preceded or followed the institution of those proceedings for improper purposes. However, it was accepted that the appellant’s clients had an interest in having the grant of legal aid terminated and had been defamed by Carneys’ letter to the Stock Exchange.
73 The appellant’s argument was that his clients had legitimate interests in the termination of legal aid, wrote to the LAC to have it terminated and then took proceedings to achieve that object. It was submitted that there was no impropriety in doing so even if the object could be described in the pejorative terms of obstructing, preventing or thwarting Raybos and Rajski from pursuing their rights. As to Carneys, the appellant argued that his clients had legitimate interests in prosecuting claims for defamation and recovering wasted costs, and wrote the letters to achieve those objects. It was submitted that there was no impropriety in doing so even if a consequence, even the purpose, was to cause Carneys to cease to act for Raybos and Rajski in the litigation.
74 A related question of motive or purpose arises in relation to ground 7(v), at the heart of which complaint was the allegation that the purpose of the bankruptcy proceedings was not to obtain payment of costs but to impede Rajski in his conduct of the litigation.
75 The appellant’s submission can best be considered in the context of one of the complaints, and I will return to it when dealing with ground 2 of the complaint concerning legal aid.
76 Although the Commissioner cross-appealed against Simpson J’s conclusion that the allegations in grounds 1 and 4 could not be held by the Tribunal to amount to professional misconduct, no written or oral submissions were advanced in support of this contention. These grounds of the cross-appeal were not formally abandoned but, in the absence of any submissions, nothing appears to suggest that her Honour’s decisions about grounds 1 and 4 were wrong. Accordingly, it is unnecessary for me to say anything further about them or grounds 7(i) or (iv) in which the same allegations were made.
Decisions on Ground 1 - Wood and Donaldson - and Ground 4 - Yerushalmy
(c) The decisions on the grounds of complaint
77 At the beginning of her reasons in relation to ground 2, Simpson J said:
The decision on Ground 2 of the Complaint - Legal Aid
78 The first decision Simpson J cited was an appeal by Rajski and Raybos from a decision of Holland J in Rajski v ComputerManufacture & Design Pty Limited (“CMAD”) [1982] 2 NSWLR 443, ordering that proceedings brought by Rajski and Raybos against CMAD and another be stayed until they provided security in the sum of $30,000 towards the costs of the defendants. Holland J found that Rajski had so manipulated the financial affairs of Raybos as to put its assets out of the reach of a creditor, though they remained in the hands and under the control of the two directors, Rajski and his mother, and that Rajski’s own lack of assets and income were self-inflicted (at 452). His Honour said (at 454):
“232 A preliminary question emerges. The first is whether it is necessarily improper for a solicitor to seek, on behalf of a client, the termination of a grant of legal aid to the opposing party. If it is, then there can be no quarrel with the [Commissioner’s] decision to refer this matter to the Tribunal.
233 Of great significance in the answer to this question is the existence of s47 of the [ Legal Aid Commission Act 1979]. That section has the effect of limiting, to a relatively low amount, the quantum of costs that can be recovered by a successful opponent against a legally aided party. In any litigation, that section necessarily creates in the non-legally aided party a very real interest in the existence and consequences of the grant of legal aid. That interest becomes more intense according to the complexity, anticipated duration, and consequent cost, of the proceedings. The non legally aided party, even if successful, may be very substantially out of pocket at the end of the proceedings. This is consistent with the views expressed by Moffitt P in Rajski v CMAD [1983] 2 NSWLR 122 at 127, with which Samuels JA agreed; see also Tectran Corporation Pty Limited v Legal Aid Commission of NSW (1986) 7 NSWLR 340; Wentworth v Rogers(No.12) (1987) 9 NSWLR 400. I am satisfied that there is no necessary impropriety in a legal practitioner, acting for litigation opponents of a legally aided party, seeking review or termination of the grant of legal aid. Whether the course adopted is improper depends upon analysis of all the relevant facts and circumstances.”79 In the Court of Appeal (1983) 2 NSWLR 122, the only ground argued was the jurisdiction of the Court to order security for costs against persons who were legally assisted. At 127-8 Moffitt P observed:
“On an application for security for costs the court has an opportunity to look at the whole of the circumstances of the legally assisted person, the nature of the litigation, the position of other parties joined in it and their respective financial resources. If, as here, a legally assisted person appears to have but elects not to use access to funds or has organized his financial affairs to denude himself of assets that might otherwise have been available to pay costs, then the inability of another party, because of the Legal Services Commission Act , to recover more than $5,000 costs if that party is successful, would, in my opinion, clearly be a reason for staying the proceedings until the security was found.”
80 In a part of his judgment not included in the New South Wales Law Reports, Moffitt P said:
“What is presently relevant and is of concern to a court in the exercise of its jurisdiction is that a person may have received unjustifiably an immunity from the operation of the court’s procedures and the sanctions which arise from their operation and that in a particular case this could prevent the court from doing justice between the parties. It may become the concern of the court, if what occurs or is occurring is interfering with its ability justly to determine the proceedings before it. Protracted litigation, particularly that unjustifiably extended by a person against whom the court has no costs sanction, coupled with an unjust procurement of an immunity from costs ordered against him, is capable of producing unfairness to the point that one side not legally assisted is forced to withdraw or compromise because of the unequal situation.”
“Finally I should say that I find it somewhat surprising, having regard to the findings and detailed and careful judgment of Holland J, made after a hearing of some days during which there was a detailed examination and cross-examination of Dr Rajski then represented by counsel, that the legal aid given to Dr Rajski has been continued. In saying this my remarks are not directed to whether Dr Rajski or Raybos has a prima facie case, but to his true financial position and the receipt of the very substantial moneys from the respondents and his various manipulations of the affairs of Raybos detailed by Holland J.
While of course it is not known what material other than his written application was before the Commission, it is difficult to think that it could be in a position to come to a different conclusion to that of Holland J as to the true facts as found by him and as to the inferences to be drawn from them aided as he was by the extensive examination and cross-examination of Dr Rajski in an adversary situation in which each party including him was represented by counsel.
It is clear from the course of proceedings before this Court, including the adjournments on his application, that Dr Rajski having the immunity of a legally assisted person, which arose from legal aid being granted in respect of this appeal, was prepared to exploit it by unjustified delays and adjournments over many months, the Court being met on any question of the exercise of the costs sanction by the claim and reality that such is of no avail because he is legally aided. On a date fixed well in advance for the hearing of this appeal and after earlier adjournments, he frustrated the determination of this Court to proceed on the appointed date with the hearing, by withdrawing instructions of senior counsel then briefed and of his then solicitor and demanded by a note read to the Court by that solicitor that there be an adjournment of some months to enable another particular senior counsel preferred by him to appear. The respondents appearing by junior counsel were left to bear the expense of legal appearances on that day when the Court, faced with the alternative of hearing the appellant in person on an appeal granted by leave because of its general importance, granted a short adjournment to another day, on the application of the new solicitor who had been just retained that he be allowed time to acquaint himself with the appeal. Thus to the financial detriment of the respondents, Dr Rajski abused his immunity from liability to pay costs ordered against him.”
81 In dismissing Rajski and Raybos’s appeal his Honour directed the Registrar to send a copy of the judgment and that of Holland J to the Secretary of Legal Services Commission.
82 The evidence before Simpson J about the legal aid complaint included many documents. According to a file note on 23 September 1985 the appellant and officers and employees of the Arunta companies attended a conference during which it was indicated that Dawson Waldron were going to write to the LAC requesting a review of the grant of legal aid to Rajski and Raybos. The file note continued:83 Those present discussed whether an application would be made to the Supreme Court if the LAC did not review the grant of legal aid. The file note continued “If legal aid was withdrawn from either Rajski or Raybos or both, then the person from whom it was withdrawn would have to put up security for costs and thereby the actions may die.” The file note ended as follows.
“As the basis for the review, we would direct the [LAC] to the judgment of Holland J where he discusses the transfer of assets by Rajski out of the jurisdiction and the fact that Rajski had not made full disclosure to the [LAC] in his second legal aid application, to the transcript of those proceedings and to any material which is obtained by the private investigator.”
84 On 14 October 1985 Dawson Waldron wrote to the director of the LAC requesting the LAC to review and terminate the grant of legal aid. The letter was written by Davidson and covered eight pages. Relevantly, it contained the following:
“[The appellant] concluded by saying that at this stage the important points are:
…
(2) withdrawal of legal aid;”
“Messrs Carneys, the solicitors for Raybos Australia Pty Limited (‘Raybos’) and Leszek John Rajski (‘Rajski’) (the defendants and cross-claimant in the first action and the plaintiffs in the second action) have informed us that their clients have been granted legal aid by the Legal Aid Commission of New South Wales in both actions.
We are instructed that the cross-claim and the second action are without substance and will fail. In that event, because Raybos and Rajski are legally assisted our client’s entitlement to costs will be limited to the amount provided by section 47 of the Legal Services Commission Act 1979 (the ‘Act’). In addition, if the actions proceed, our clients will incur substantial costs, expenses and loss of time which will not in the ordinary course be recoverable.
The matter is exacerbated by the manner in which the cross-claimant/plaintiffs have chosen to conduct their litigation. Rather than bring the main claim to a hearing, they have sought to engage in a series of interlocutory and other procedures each of which must be defended or otherwise dealt with by our client.
Our clients request that the grant of legal aid to Raybos and Rajski be reviewed on the following grounds:
1. That Rajski has not made complete disclosure of his assets and financial affairs in his application to the [LAC] for legal aid and that if he did, he would not satisfy the means test requirements of section 35 of the Act.
2. That Raybos has not made complete disclosure of its assets and financial position in its application to the [LAC] for legal aid and that if it did, it would not satisfy the means test requirements of section 35 of the Act. In particular, we are instructed to draw the [LAC’s] attention to the fact that Raybos received $222,800 from Tectran Corporation Pty Limited and Scitec Corporation Pty Limited in the period February to November 1980. There is no acceptable explanation as to the dimunition [sic] of these funds in the hands of Raybos. In February 1982 accounts for Raybos for the year ending 30 June, 1980 and 30 June, 1981 had not been prepared.
3. The power of the [LAC] to grant legal aid to a corporation is limited by paragraph 37(1)(b) of the Act to protecting, that is, defending, the interests of persons themselves eligible for legal aid (Rajski, and/or members of his family assuming for the purpose of this ground of review that any such relevant person is entitled to receive legal aid). Legal aid is not available to a corporation to pursue an alleged entitlement to damages.
4. The findings of his Honour Mr Justice Holland in a judgment delivered in the proceedings Rajski and Ors v Computer Manufacture and Design Pty Limited and Ors in the Equity Division of the Supreme Court of New South Wales dated 25 October, 1982. We enclose a copy of his Honour’s judgment as well as a copy of the transcript of the proceedings before Holland J. We are instructed to bring to the attention of the Commission the following parts of the judgment of Holland J.”
85 Nine passages from Holland J’s judgment were set out. These related amongst other things, to the “channelling away of Raybos money from Raybos”, the ready access of Rajski and Raybos to funds held in Rajski’s mother’s name, a statement by Holland J, in a part of his judgment not reported, that “[i]f the application form was all that the legal aid authorities had to go on as to Dr Rajski’s current and potential future financial position, it would seem to me that Dr Rajski’s answers were less than frank”, the evidence of Rajski and whether as a matter of discretion an order should be made against Raybos for security for costs. In the letter Dawson Waldron quoted a sentence from Holland J’s judgment at 452 which stated that “ [Rajski’s] lack of assets and income is self inflicted.” Enclosed were copies of the 1980 and 1981 annual returns for Raybos. These were not tendered in evidence before Simpson J. They were said to be the only annual returns currently on the public Corporate Affairs Office file of Raybos.
86 A thirteen page response dated 22 October 1985 and addressed to Dawson Waldron was received from Carneys. This letter denied the substance of the allegations and presented what Simpson J described as “a significantly different version of the relevant circumstances.” Carneys claimed that the assertion that Rajski and Raybos had not made complete disclosure of their assets were on their instructions false. It appeared that the LAC had already decided to continue the grant of legal aid to Rajski. On 25 October Dawson Waldron replied to Carneys’ letter saying, amongst others things: “the threats in your letter are rejected. The making of them does you no credit.” Simpson J said that she could discern no “threats” in the letter written by Carneys.
87 On 25 October 1985 Dawson Waldron wrote to the Director of the LAC advising that an application by their clients in the 1985 proceedings for security for costs against Rajski and Raybos had been fixed for hearing during the week commencing 2 December. The letter continued: “In passing, the court was informed by Mr Rajski’s solicitor that Mr Rajski will be travelling to the United States of America in December. Presumably the [LAC] is aware of the source of the funds for that trip.” On 7 November 1985 the LAC responded that it was satisfied that the grants of legal aid should not be terminated. On 15 November Dawson Waldron wrote to the LAC asking for further information which on 28 November the LAC said it was not prepared to give.
88 On 17 December 1985 Dawson Waldron wrote again to the LAC enclosing a draft summons to be filed in the Administrative Law Division of the Court seeking review of the decision to continue the grant of legal aid to Rajski and Raybos and requesting that the LAC reconsider its decision. On 12 February 1986 a summons was filed by Dawson Waldron for Tectran in a representative capacity against the LAC (“the LAC proceedings”). According to a file note, a conference took place on 24 February 1986 attended by the appellant and other employees of Dawson Waldron and executives of the Arunta companies. The file note recorded that one of the Arunta executives, Verne Wilkinson, asked about priorities between various proceedings and described the legal aid question as one which “goes to the jugular”. The grounds of the action against the LAC were discussed and various steps proposed for pursuing it.
89 On 21 March 1986 Carneys served notices of ceasing to act in the litigation. It is not known for what reasons this took place. Following receipt of those notices, on 26 March 1986 Dawson Waldron wrote again to the LAC noting that Carneys had ceased to act and continuing:
“We presume that, in accordance with usual practice, the grants of legal aid to Raybos and Rajski were made on terms and conditions specifying the legally aided person’s solicitor, namely Mr Arthur Carney. The breach of that term and condition presumably terminates the grants or requires a variation of the terms and conditions.”
90 A request was made that if any further application for legal aid were made by Rajski or Raybos including any application for variation of the terms and conditions, Tectran be informed and given the opportunity of being heard.
91 In the meanwhile, Dawson Waldron issued a subpoena to the LAC for production of material. LAC succeeded in having the subpoena set aside. Tectran unsuccessfully sought leave to appeal to the Court of Appeal and then applied for special leave to appeal to the High Court.
92 On 30 October 1986 the Crown Solicitor, who acted for the LAC, advised Dawson Waldron that the grants of legal aid in relation to the 1980 and 1985 proceedings had been terminated but that the grant of legal aid to Rajski for the LAC proceedings remained on foot. However, Rajski apparently had sought review of the decision to terminate the grant of legal aid and further consideration was being given by the LAC to that question. Notwithstanding the Crown Solicitor’s letter, the application for special leave to appeal to the High Court remained on foot. Correspondence followed with the Crown Solicitor and on 28 April 1987 the appellant wrote to the Crown Solicitor:93 In her reasons for judgment, Simpson J said:
“The termination of the grants of Legal Aid to Rajski and Raybos Australia Pty Limited makes the prosecution of these proceedings unnecessary… We confirm the agreement between Tectran Corporation Pty Limited and the [LAC] that Tectran and the [LAC] will pay their own cost [sic] of these proceedings.”
On 29 April 1987 the application for special leave was discontinued.
94 The Commissioner also relied upon passages in other documents. On 14 November 1985 one of the items on the agenda of a meeting between the appellant and representatives of the Arunta companies was the legal aid grant. In the course of that meeting it was recorded that:
“256 The activity outlined above was unequivocally and admittedly a direct attempt to secure the cessation of funding to Rajski and Raybos in the Tectran litigation. The [Commissioner] alleges that the claimant also employed a less direct means to achieve the same object. This concerned the commencement of the Carneys defamation proceedings in which the partners of the legal firm representing Rajski and Raybos were sued for defamation by Arunta Companies and executives arising out of Carneys’ letter to the Stock Exchange. Something of this has been said above. The circumstances surrounding the commencement of the Carneys defamation proceedings constitute a separate ground in the Information and will be examined in detail in the consideration of ground 3 of the Information below. The [Commissioner] alleges that the commencement of those proceedings was a devious and improper ploy to ensure that Carneys would cease to represent Rajski and Raybos. This may have more significance than would initially appear. There was evidence that, at the time, it was the practice of the LAC to require, as a condition of a grant of legal aid, that the legally aided person’s solicitor be a solicitor nominated in the grant. Thus, should that solicitor cease to represent the legally aided person(s) the grant would automatically come to an end, or at least require review and variation of the terms and conditions. This explains the letter written by [Dawson Waldron] to the LAC on 26 March 1986 ….
257 The [Commissioner] asserts that, by reason of the facts set out above, and inferences properly to be drawn from them, there is a reasonable likelihood that the [appellant] would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct.
258 In particularising the Information in the Tribunal the [Commissioner] claims:-
(i) that the [appellant] attempted to coerce the LAC by the threat to commence legal proceedings against it; and that the threat should not have been made as the purpose of the threatened proceedings was the improper purpose of securing the termination of the grant of legal aid, in order to assist his clients to early victory in the Tectran litigation;
(ii) that the initiation of the Carneys defamation proceedings was designed to intimidate the partners of that firm and cause them to cease acting for Rajski and Raybos with the consequent effect on the grant of legal aid;
(iii) that, in the letter of 26 March 1986, following Carneys’ withdrawal, the [appellant] wrote to the LAC, suggesting, misleadingly, that it was Rajski and Raybos who were the cause of Carneys’ withdrawal whereas, in truth, it was the [appellant’s] own action (on behalf of his clients) in commencing proceedings against Carneys that had caused their withdrawal;
(iv) that the [appellant] wrongfully maintained pressure on the LAC by persisting in the application for special leave to appeal to the High Court in relation to the subpoena question, persisting in that application until satisfied that the grants of legal aid had been terminated absolutely;
(v) that the agreement with the LAC that on discontinuance of the High Court application each party would pay its own costs both retrospectively confirmed and demonstrated that the application was pursued for an improper purpose, and itself was improper as, properly construed, an offer of financial advantage to the LAC to terminate the legal aid grant;
(vi) that all these steps were taken by the [appellant] to ‘obstruct, prevent or thwart Rajski and Raybos from pursuing their rights in the litigation’ and were ‘an improper interference in the litigation and ... were steps which could amount to contempt and/or an abuse of process of the Court’, and were, accordingly, improper.”
95 In the record of a discussion about the defamation proceedings brought by Rajski against the appellant and Dawson Waldron there appeared:
“[Davidson] mentioned that Raybos did not receive legal aid until July, 1985. We may be able to wind Raybos up. [The appellant] mentioned that it was for us to keep the pressure on Rajski by making positive moves, not just responding to him.”
96 A further meeting took place on 24 February 1986. The file note recorded some discussion about the possibility of obtaining an injunction against Rajski from writing letters of the kind he had written in relation to the Scitec float and which were allegedly defamatory. It went on:
“[The appellant] said that tactically there are two thrusts. Firstly, the primary issue was whether Raybol worked or not. Secondly, Dawsons and the clients are not to be put off by peripheral issues but should add to them to stretch Rajski. We must keep the pressure on Rajski. [The appellant] said that although he does not wish to squander the resources of the client, it is worth it to push Rajski and his legal advisers.”
97 In an affidavit of 9 April 1986 to be filed in contempt proceedings begun on 28 November 1985 by Rajski against the appellant (“the first contempt proceedings”) the appellant deposed:
“[The appellant] agreed that we should sue Rajski for an injunction. Even if we do not get the injunction it will show that we are serious about the defamation. [The appellant] said that he would double check with Hughes [Mr T E F Hughes QC] in case he thinks we are being silly by seeking an injunction. …
……
[The appellant] said that the next possibility was that without legal aid, Rajski will flounder. We will begin to get judgments in our favour. If Rajski brings further proceedings, then he will be declared a vexatious litigant. [The appellant] referred to examples of other vexatious litigants. [The appellant] said there is a difference between lay representatives and lawyers representing clients. The Judge knows that when a lawyer gets up in Court to make a statement, he has looked at the grounding for that statement. When a lay person makes a statement no lawyer has yet looked at it so the Judge is the only lawyer and he must look at it.”
98 On 19 June 1986 a further meeting took place between the representatives of Dawson Waldron and the Arunta group of companies. In relation to the question of legal aid, the file note recorded:
“6. My approach to the litigation in the light of my client’s instructions was to seek to bring it to a resolution as early and as cheaply as possible. In October 1985 I believed that an impediment to such an early resolution was that Rajski and his company had legal aid. I believed that the grant of legal aid increased the prospect that he would be able, without penalty, to engage in unlimited diversionary litigation and avoid a final hearing on the merits.”
99 The proceedings before Lee J were two interlocutory proceedings concerning the subpoena issued to the LAC by Tectran and the LAC’s motion for dismissal of Tectran’s summons. Simpson J said that in an affidavit sworn on 16 July 1986, Davidson deposed:
“[The appellant] then proceeded to discuss the two proceedings which we have initiated. Firstly the legal aid proceedings, which he felt was only proper for us to initiate, and secondly the defamation proceedings, again only proper in that genuine loss had been suffered. The outcome of the defamation proceedings being that Carneys no longer act for Rajski so that he has been deprived of legal representation. Garry Richardson [the Chairman of the board of Tectran, Scitec and Arunta] then asked [the appellant] whether he still thought it was appropriate for us to pursue the legal aid issue. [The appellant] felt that it definitely was, and that if we lose before Lee J we may choose to appeal, (which could be heard and over by August) or wait and leave the matter in limbo.”
100 In the course of a report dated 2 February 1987 to Dawson Waldron after a psychiatric examination of Rajski, Dr John Shand (“Shand”) wrote:
“Without the material which [Tectran] seeks to have the [LAC] produce on subpoena, [Tectran] would have no reasonable prospect of succeeding were it to continue with the proceedings to review the decision of the [LAC].”
101 In the reasoning which followed, Simpson J, after referring to the legitimate interest of a litigant in the existence of a grant of legal aid to the opposing party and the consequences that might flow from that in terms of the burgeoning of proceedings, said:
“However, there is no doubt in my mind that for the primary case to have any chance of completion, let alone the other ones, he must have adequate legal representation in court, whatever the source may be.”
102 Simpson J went on the refer to the judgments of Goldberg J in White Industries (Qld) Pty Limited v Flower & Hart (a firm) (1998) 156 ALR 169 and the Full Federal Court on appeal in Flower & Hart (a firm) v White Industries (Qld) Pty Limited (1999) 87 FCR 134. Her Honour said that so far as the evidence went, the idea of the LAC proceedings came from the appellant during the first conference of which there was evidence after he took over conduct of the Tectran/Arunta litigation. She continued:
“273 There is, however, another side to this coin. To deprive an impecunious party of legal aid may be the death of that party’s legitimate and proper claim or defence. In any litigation, but particularly complex commercial litigation, legal representation is virtually essential if the issues and evidence are to be properly, fully and effectively presented and litigated. A party which is able to provide its own legal representation, but whose opponent is deprived of legal aid, and therefore of legal representation, is placed in a position of immeasurable relative strength. For that reason, it is legitimate to look with scepticism, if not suspicion, on a party that is able to provide for its own legal representation, but which seeks to place its opponent in the disadvantaged position of litigating without representation.
274 It is for these reasons that the [appellant’s] motivation and conduct in what can fairly be described as his strenuous attempts to bring about the termination of the legal aid grant to Rajski and Raybos must be scrutinised with great care. In his February 1997 affidavit the [appellant] referred to senior and junior counsel who had been briefed in relation to the LAC proceedings, and said that none of them had ever suggested any impropriety in the bringing of the proceedings. He said that he was aware of evidence that had been given in the proceedings before Holland J as to transfer of funds by Rajski to his mother or an alleged aunt in South America, and said he had available objective material to warrant his claim that Rajski and Raybos had not made complete disclosure of their assets and financial position. He explained the letter to the LAC by saying that it was his view that it was proper to write a letter before action.
275 There may be a fine distinction between the adoption of tactics designed to squeeze an opponent into a position of weakness, of which unfair advantage might be taken to secure resolution of the outstanding litigation in favour of one party, and the adoption of tactics designed to prevent oppression coming from the opposing party. That, as I see it, encapsulates the present issue. The [Commissioner’s] position is that the evidence leaves open the interpretation that the [appellant’s] tactics were of the former kind; he relies on the evidence I have referred to above. If that is correct, then the appropriate order is one that will leave this question (subject to the other matters already dealt with) in the hands of the Tribunal.
276 There is, however, some evidence that the latter was, if not the dominant, at least one of the [appellant’s] motives. This is principally to be found in the transcript of the [appellant’s] oral evidence. He accepted the proposition that, in late 1985 he had taken the view that one difficulty facing his client was the ability that Rajski and Raybos had to continue with what was described as ‘a multitude of litigation’ because they were legally aided, and he seemed to assent to the proposition that one way to overcome that problem was to attack ‘the fundamental issue, that is the propriety of the legal aid’. He added:
‘And there was also, the client was very upset that it had spent nearly a million dollars by the time they got to us and that was in 1985 on costs and their opponents were funded by the public purse and they were very upset about that.’
277 A little later, when asked about tactics adopted to ‘stretch’ Rajski and his legal advisers, the [appellant] said:
‘There was certainly the intention to put pressure on them to stop the peripheral things and get the main action on ... It was to try and get the case on and in that context the interlocutory application we wanted to pursue was the application for the tapes. ...’
279 There is also some material to found a conclusion that the [appellant] did not intend to attempt settlement negotiations with Rajski and Raybos while the legal aid grant was in force. The file note of the meeting of 23 September 1985 records:
278 And Shand’s advice, that the proceedings would not come to an end unless Rajski and Raybos had adequate representation should not be overlooked.
‘[the appellant] re-iterated that [Dawson Waldron] are not yet in a position to look at settlement. He advised the clients not to talk to Carney’s (sic) in relation to settlement at this stage. These circumstances may change if the other side are able to get a QC who is willing to take the case at the legal aid rate ($600.00).’
281 A file note made by another solicitor during the course of what was obviously a rather lengthy and wide ranging conference involving a number of individuals, particularly when the maker of the file note is not called to give evidence, is a fairly fragile basis for a finding of improper motives. The qualification placed by the claimant on the context in which the remark is recorded has a good deal of validity. Alone, this piece of evidence would be quite insufficient to justify any adverse conclusions being drawn against the [appellant]. However, it does not exist in isolation. Together with the other matters to which senior counsel for the [Commissioner] has pointed, it is a factor available in an enquiry into whether the claimant, in acting as he did in relation to the grant of legal aid, acted improperly and went beyond the legitimate protection of his clients’ interests. If such a conclusion were drawn, I am of the view that the Tribunal could then find that the claimant was guilty of professional misconduct.”
280 This file note was not made by the [appellant], and in his oral evidence he doubted that the file note accurately reflected the context in which he had made the statement, observing that the following passages in the file note showed that his view was that settlement discussions could not really be commenced until an expert report was available as to the effectiveness of Raybol.
“282 …. The principle that a legal practitioner ought not participate in unmeritorious litigation will not always be easy to apply. The principle is capable of conflicting with its corollary, enshrined most formally in the rule of ethics applicable to barristers, and known colloquially as ‘the cab rank rule’, that even an unpopular litigant, a litigant whose cause is unpopular, or whose prospects of success do not appeal to the legal practitioner, is entitled to representation. The distinction between a claim or defence with some, but slim prospects of success (pursuit of which would not be an abuse of process) and one without any prospects of success (persistence in which would or might be an abuse of process) is not clear cut, and will in many cases depend upon individual perception and judgment. But the point here is not a claim that the [appellant] persisted in an untenable claim. The inquiry is whether, on behalf of his client Tectran, he initiated the LAC proceeding for the improper purpose of depriving Rajski and Raybos of legal aid and forcing them into negotiation in which they would be disadvantaged.
283 It is necessary here to emphasis [sic] that it is not my function to reach a conclusion about whether or not the [appellant’s] conduct did cross the line between legitimate attention to his clients’ cause and improper conduct. My function is limited to determining whether, in the light of the whole of the evidence before me, it would be open to the Tribunal to conclude that it did so. The Tribunal is the body charged by statute with such a determination. If the evidence is capable of establishing that he did so then it would be wrong for me to trespass on the Tribunal’s function.
284 Because of my conclusion in regard to the [appellant’s] dealings with the LAC it is unnecessary further to consider, in relation to this ground, the allegations in relation to the proceedings against Carneys. Those facts would, however, be available in the Tribunal’s deliberations.
285 I do not find that the commencement of proceedings in this respect constituted an abuse of process.”103 In para 275 Simpson J said that there might be a fine distinction between the adoption of tactics designed to squeeze an opponent into a position of weakness of which unfair advantage might be taken and the adoption of tactics designed to prevent oppression coming from the opposing party. As she saw it, that encapsulated the present issue. The Commissioner’s position was that the evidence left open the interpretation that the appellant’s tactics were of the former kind. In para 282 her Honour described the inquiry as “whether, on behalf of his client Tectran, [the appellant] initiated the LAC proceeding for the improper purpose of depriving Rajski and Raybos of legal aid and forcing them into negotiation in which they would be disadvantaged”. This statement may be explained, in the context of what her Honour referred to as “a finding of improper motives”, by her earlier statement about “an enquiry into whether [the appellant], in acting as he did in relation to the grant of legal aid, acted improperly and went beyond the legitimate protection of his clients’ interests.” In Simpson J’s view, if such a conclusion were drawn the Tribunal could then find that the appellant was guilty of professional misconduct. In this reasoning there is some blurring between the concepts of “motive” and “purpose”.
104 In In re Majory [1955] Ch 600 at 623-624 Lord Evershed MR, in delivering the judgment of the Court, spoke of a general rule “that court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exist”. Goldsmith v Sperrings Limited [1977] 1 WLR 478 concerned defamation proceedings taken not only against the publisher and editor but also the main distributors of “Private Eye”. Some of the distributors unsuccessfully applied to have the proceedings against them stayed as an abuse of process. By a majority the distributors’ appeal to the Court of Appeal failed. At 503 Bridge LJ, one of the majority, referred to Lord Evershed’s general rule and asked what was meant by a “collateral advantage”. His Lordship said:
“The phrase manifestly cannot embrace every advantage sought or obtained by a litigant which it is beyond the court’s power to grant him. Actions are settled quite properly every day on terms which a court could not itself impose upon an unwilling defendant. An apology in libel, an agreement to adhere to a contract of which the court could not order specific performance, an agreement after obstruction of an existing right of way to grant an alternative right of way over the defendant’s land — these are a few obvious examples of such proper settlements. In my judgment, one can certainly go so far as to say that when a litigant sues to redress a grievance no object which he may seek to obtain can be condemned as a collateral advantage if it is reasonably related to the provision of some form of redress for that grievance. On the other hand, if it can be shown that a litigant is pursuing an ulterior purpose unrelated to the subject matter of the litigation and that, but for his ulterior purpose, he would not have commenced proceedings at all, that is an abuse of process. These two cases are plain; but there is, I think, a difficult area in between. What if a litigant with a genuine cause of action, which he would wish to pursue in any event, can be shown also to have an ulterior purpose in view as a desired by-product of the litigation? Can he on that ground be debarred from proceeding? I very much doubt it. ”
105 Williams v Spautz, which the appellant relied on before Simpson J but which her Honour did not refer to, concerned the power of a court to stay proceedings to prevent an abuse of process. In that case the abuse of process alleged was the laying of informations against various university officers for various offences. The Court considered the propriety of proceedings brought for an improper purpose and proceedings which appeared to be entirely proper and correct but were used for an improper purpose.
106 At 522 Mason CJ, Dawson, Toohey and McHugh JJ referred to the difficult area that Bridge LJ identified in Goldsmith v Sperrings Limited and said that they too very much doubted whether on that ground the litigant could be debarred from proceeding. Their Honours continued:107 It follows that if a litigant has a genuine cause of action which the litigant wishes to pursue in any event to a conclusion, there is no abuse or impropriety in prosecuting that cause of action because the litigant may also have an ulterior purpose in view as a desired by-product of the litigation. When discussing the tort of collateral abuse of process, the four Justices who delivered the joint judgment in Williams v Spautz at 524-5 quoted from the judgment of Isaacs J in Dowling v Colonial Mutual Life Assurance Society Limited (1915) 20 CLR 509 at 521-522, referred to the advice given by the Privy Council in King v Henderson [1898] AC 720 at 731, and said:
“But his Lordship, by implication, evidently sees no difficulty with the case in which the plaintiff does not wish to pursue his or her cause of action to a conclusion because he or she intends to use the proceedings for a collateral and improper purpose.
In our view, the power must extend to the prevention of an abuse of process resulting in oppression, even if the moving party has a prima facie case or must be assumed to have a prima facie case. Take, for example, a situation in which the moving party commences criminal proceedings. He or she can establish a prima facie case against the defendant but has no intention of prosecuting the proceedings to a conclusion because he or she wishes to use them only as a means of extorting a pecuniary benefit from the defendant. It would be extraordinary if the court lacked power to prevent the abuse of process in these circumstances.”
108 At 526-7 their Honours went on:
“the Privy Council was doing no more than saying that the existence of an unworthy or reprehensible motive for bringing the action was not enough and that it must appear that the purpose sought to be effected by the litigant in bringing the proceedings was not within its scope and was improper.”
109 At 535-6 Brennan J, who was one of the members of the majority, said:
“The observations of the Privy Council in King v Henderson and those of Isaacs J in Dowling , to which we referred earlier, represent an attempt to achieve a formulation which keeps the concept of abuse of process within reasonable bounds. To say that a purpose of a litigant in bringing proceedings which is not within the scope of the proceedings constitutes, without more, an abuse of process might unduly expand the concept. The purpose of a litigant may be to bring the proceedings to a successful conclusion so as to take advantage of an entitlement or benefit which the law gives the litigant in that event.
Thus, to take an example mentioned in argument, an alderman prosecutes another alderman who is a political opponent for failure to disclose a relevant pecuniary interest when voting to approve a contract, intending to secure the opponent’s conviction so that he or she will then be disqualified from office as an alderman by reason of that conviction, pursuant to local government legislation regulating the holding of such offices. The ultimate purpose of bringing about disqualification is not within the scope of the criminal process instituted by the prosecutor. But the immediate purpose of the prosecutor is within that scope. And the existence of the ultimate purpose cannot constitute an abuse of process when that purpose is to bring about a result for which the law provides in the event that the proceedings terminate in the prosecutor’s favour.
It is otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed ( In re Majory at 623-624) or some collateral advantage beyond what the law offers ( Goldsmith v SperringsLimited at 498-499; see also Varawav Howard Smith & Co Limited (1911) 13 CLR 35 at 91). So, in Dowling at 524, Isaacs J pointed out that ‘if, for instance, it had been shown that the Society had simply threatened Dowling that unless he did what they had no right to demand from him, namely, give up certain names, they would proceed to sequestration, and they had proceeded accordingly, there would have been in law an abuse of the process’. However, because the Society wished to use the process for the very purpose for which it was designed, there was no abuse of process.”
110 Brennan J then referred to the judgment of Bridge LJ in Goldsmith v Sperrings Limited at 503 and at 537 said:
“There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose - or motive - which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce. To amount to an abuse of process, the commencement or maintenance of the proceeding must be for a purpose which does not include - at least to any substantial extent - the obtaining of relief within the scope of the remedy. As Isaacs J said in Varawa v Howard Smith Co Limited at 91:
‘the term ‘abuse of process’ connotes that the process is employed for some purpose other than the attainment of the claim in the action. If the proceedings are merely a stalking-horse to coerce the defendant in some way entirely outside the ambit of the legal claim upon which the Court is asked to adjudicate they are regarded as an abuse of process for this purpose.’
Putting to one side, then, the cases where the plaintiff intends to obtain relief within the scope of the remedy, the problematic cases arise when the plaintiff’s purpose is to obtain some benefit, to impose some obligation or to affect some relationship otherwise than by verdict, by order or by compromise of the particular claims made in the proceeding. These are cases where the plaintiff’s objective lies outside the relief which, if the proceeding were prosecuted to completion, might be obtained by verdict or by order. The general principle applicable when a plaintiff intends to obtain a result outside the scope of the remedy was stated by Lord Evershed in Re Majory at 623- 4.”
“For these reasons, I would hold that an abuse of process occurs when the only substantial intention of a plaintiff is to obtain an advantage or other benefit, to impose a burden or to create a situation that is not reasonably related to a verdict that might be returned or an order that might be made in the proceeding.”111 The key question is whether the proceedings are instituted or maintained to achieve at their conclusion the result or remedy which the proceedings provide. If this be the intention, it can be of no significance that, during their course, the proceedings are withdrawn or settled. Even if the plaintiff can be shown also to have an ulterior purpose in view as a desired by product of the litigation, the plaintiff cannot be debarred from proceeding. On the other hand, a plaintiff’s pursuit of an ulterior purpose unrelated to the subject matter of the litigation which, but for the plaintiff’s ulterior purpose, the plaintiff would not have begun, is an abuse of process.
112 In White Industries (Qld) Pty Limited v Flower & Hart (a firm) at 202 Goldberg J said:
“It is important to distinguish between the purpose a client has for a proposed proceeding and the purpose which either the solicitor has in instituting the proceeding or seeing the client’s purpose served. Mr Pearce said that Mr Herscu’s purpose and therefore that of the corporate entity Caboolture Park was to ensure that he did not have to pay any more money and to resist any claim by White. However, it does not follow that Mr Meadows [their solicitor] had the same purpose. It is possible conceptually for a client to have one purpose for litigation and his solicitor to have another purpose for the same litigation. For example, (and this is not the case before me) a client may believe it has a genuine claim but the solicitor may believe that the claim is absolutely untenable yet run the proceeding for the purpose of running up the costs to be paid to him. Similarly, a client may believe it has a genuine claim and have a belief albeit misconceived that it has been wronged but the solicitor instituting the proceeding for the client may have a purpose of running the proceedings fully believing that the proceeding will fail but wanting, at least, to give the client a moratorium for payment, that is to say, seeking to defer the date for payment of the amount due for as long as possible.”
113 While one can visualise such examples of impropriety, ordinarily the solicitor who begins proceedings on the client’s instructions does so for the purpose of the client. If the client’s immediate purpose is within the scope of the proceedings instituted and assuming the proceedings are not futile or foredoomed to fail, there can be no impropriety by either the client or the solicitor in instituting them. It is the solicitor’s duty to institute the proceedings in accordance with the client’s instructions. How the solicitor serves the client’s purpose other than in instituting the proceedings is another matter and may, of course, in itself, be improper.
114 It follows that her Honour’s inquiry into whether, on behalf of his clients, the appellant initiated the LAC proceedings for the purpose of depriving Rajski and Raybos of legal aid and forcing them into negotiation in which they would be disadvantaged, would not necessarily have disclosed an improper purpose. Simpson J earlier had acknowledged that the complaint called for a wider inquiry as to whether the appellant “in acting as he did in relation to the grant of legal aid, acted improperly and went beyond the legitimate protection of his clients’ interests.”
115 It is necessary to return to the fundamental allegation that the appellant sought to procure the termination of the grant of legal aid for the improper purpose of obstructing, preventing or thwarting Raybos and Rajski from pursuing their rights in the litigation against the appellant’s clients. The third of the means particularised was the commencement and continuance of the proceedings against the LAC. The true inquiry was into whether on behalf of his clients, the appellant initiated the LAC proceedings in order to achieve the result or remedy for which they provided, and, if he did, it matters not that as a result, even in fulfilment of an ulterior purpose, Raybos and Rajski would be hindered in pursuing their rights in the litigation. The appellant’s purpose would not be improper.
116 Simpson J correctly accepted that Tectran had a legitimate interest in the existence of the grant of legal aid to Raybos and Rajski. The finding of Holland J which I have quoted raised legitimate concerns about the entitlement of Raybos and Rajski to legal aid on which Tectran was perfectly entitled to rely. It is but recognising the obvious to say that if Rajski and Raybos had had their legal aid withdrawn their ability to prosecute their claim may have been affected. That may have been a matter to be weighed by the LAC in the same way that a court weighs such matters when considering whether to order security for costs.
117 The ability of the appellant’s client to recover costs if successful was substantially constrained if Raybos and Rajski had the benefit of legal aid. There was reason to believe Raybos and Rajski had obtained legal aid without fully disclosing their assets. I can see no impropriety in either Tectran or its solicitor the appellant seeking to have the legal aid certificate set aside and taking the steps to that end that they did. Such proceedings did not become improper because it was recognised that success might affect the capacity of Rajski and Raybos to pursue the litigation, or if that was another purpose or motive of Tectran which the appellant served by bringing the proceedings. With due respect, I do not agree that the LAC proceedings might be regarded as having been begun “for the improper purpose of depriving Rajski and Raybos of legal aid and forcing them into negotiation in which they would be disadvantaged”, if by that Simpson J meant that the LAC proceedings were not begun for the legitimate purpose of having the legal aid grant reviewed and terminated.
118 As I have sought to indicate, the institution of proceedings to have the legal aid certificate set aside was quite proper. The proceedings were pursued until the certificate was withdrawn. Thereafter there was obviously no point in pursuing the proceedings. I do not see how any impropriety could possibly arise in relation to a decision as to whether or not to negotiate and, if so, when. It can hardly be suggested that the decision of the LAC to terminate the grant of legal aid was in some way improper.
119 It is necessary to consider the other means by which it was alleged the appellant sought to procure the grant of legal aid for the improper purpose, to see whether the conduct involved could have been engaged in in order to procure the termination for the improper purpose.
120 The second of the means particularised was the intimidation of Carneys in order to have them cease to act for Raybos and Rajski in the litigation. The Commissioner’s case was that if Carneys ceased to act then legal aid would be terminated because the grant was to that particular firm. This is best dealt with when considering ground 3, but in anticipation of what is there said in my opinion it would not be open to the Tribunal to find that Carneys were wrongfully intimidated in order to have them cease to act for Raybos and Rajski in the litigation.
121 The first of the means particularised was the correspondence with the LAC said to contain false or misleading information and imputations. In the particulars of the complaint the Commissioner said that the letter of 14 October 1985 was false and/or at least misleading in that it was submitted to the LAC that the cross-claim and the 1985 proceedings were without substance and would fail, in that the appellant claimed that Raybos and Rajski had not made complete disclosure of their assets and financial position in their legal aid applications to the LAC when he knew that he was in possession of no objective material warranting such an allegation, and in that the appellant alleged that the last annual return filed by Raybos was for 1981 when the returns for 1982-1984 were clearly in his possession and showed that Raybos had no income or assets other than the product the subject of the litigation.
122 There is some imprecision in the first of these particulars. The appellant did not state in the letter of 14 October 1985 that the cross-claim and the 1985 proceedings were without substance and would fail. He wrote: “We are instructed that the cross-claim and the second action are without substance and will fail.” What was written was alleged to have been false or at least misleading because in a judgment delivered on 5 June 1985 Miles J had found that there was a prima facie case in the 1985 proceedings against Tectran and its then solicitors, not being Dawson Waldron, for conspiracy and abuse of process in the institution and maintenance of the 1980 proceedings; the appellant, it was said, had “omitted … to mention the judgment” in the letter. It is hard to believe that the LAC was not aware of the judgment, but in any event there is no inconsistency between the finding of a prima facie case and the assertion, expressed to be on instructions, that on a full hearing the case will be found to be without substance and will fail. This part of the letter amounted to no more than that, and in my opinion it is fanciful to regard it as false or misleading.
123 As to the claim that Raybos and Rajski had not made complete disclosure of their assets and financial position in their applications to LAC for legal aid, and the allegation that the letter was misleading in relation to the filing of annual returns, the letter stated:
The letter went on that the 1980 and 1981 returns had not been prepared until 19 April 1985, and that “it may be that the Commission does not have copies of these. These are the only annual returns currently on the public Corporate Affairs Office file of Raybos.”
“In particular, we are instructed to draw the Commission’s attention to the fact that Raybos received $222,800 from Tectran Corporation Pty Limited and Scitec Corporation Pty Limited in the period February to November 1980. There is no acceptable explanation as to the dimunition [sic] of these funds in the hands of Raybos. In February 1982 accounts for Raybos for the year ending 30 June, 1980 and 30 June, 1981 had not been prepared.”
124 The allegation as to the filing of annual returns can immediately be put aside. The Commissioner’s assertion in argument that the letter said that Raybos had not prepared its accounts for the years ended 30 June 1980 and 30 June 1981 misstates the terms of the letter. The point being made was that in February 1982, just before the proceedings before Holland J were heard, the accounts showing the receipt of the $222,800 had not been prepared; the disclosure in the accounts was therefore additional to the material before Holland J. The letter may have been incorrect so far as it said that the 1981 return was the last return filed, but it is impossible to see in the error any foundation for a finding of professional misconduct.
125 As to disclosure of the assets and financial position of Raybos and Rajski, the Commissioner referred to Davidson’s affidavit of 16 July 1986 deposing, according to Simpson J, to the action against LAC for review of the grant being without reasonable prospects of success absent the materials sought on subpoena. The appellant conceded in cross-examination that it was not known whether the LAC had been properly informed. The Commissioner submitted that these matters provided a basis for the complaint in that the letter to the LAC was false and misleading.
126 The appellant submitted that while it might be that non-disclosure to the LAC could not be proved in the proceedings without access to the materials sought on subpoena, the combination of the findings of Holland J referred to in the letter, the observations of Moffitt P in the Court of Appeal, and the solicitor’s knowledge of the legal aid guidelines provided ample reason to conclude that, assuming that the LAC were acting and applying a means test regularly, a proper disclosure had not been made. Perhaps more to the point, in my opinion these matters provided ample reason to submit to the LAC that a proper disclosure had not been made. Again I do not think there was any foundation for finding professional misconduct.
127 All the matters on which the Commissioner relied must of course be taken together. I do not think that the alleged intimidation of Carneys or the correspondence with the LAC could change the complexion of the application to have the legal aid certificate set aside, or that the combination of the matters on which the Commissioner relied could provide an illegitimate purpose. In my opinion ground 2 of the complaint is untenable and foredoomed to fail.128 On 25 November 1985 Carneys wrote the following letter to the Chairman of the Stock Exchange in relation to the proposed float of new Scitec:
The decision on Ground 3 of the Complaint - Carneys
129 On 9 December 1985 Dawson Waldron wrote the following letter to the Manager of Companies, the Stock Exchange of Sydney Limited:
“We act for Dr Rajski and Raybos Australia Pty Limited. We noticed in recent articles in the Financial Review dated 23 September, 1985 and Sydney Morning Herald dated 19 September, 1985 that Scitec Corporation Pty Ltd will in the near future seek stock exchange listing.
We draw your attention to the following matters in respect of Scitec:
1. Scitec’s major shareholders are Arunta Investments Pty Ltd, G Richardson and M Yerushalmy.
2. Scitec’s directors include G Richardson, M Yerushalmy.
3. Our clients instituted proceedings in the Supreme Court of NSW against various defendants including M Yerushalmy, G Richardson, Arunta Properties (NSW) Pty Ltd and Arunta Investment Pty Ltd alleging conspiracy to abuse the process of the Court, pervert the course of justice and to defraud our clients.
4. the amount of damage suffered by our clients was quantified at in excess of $600 million.
5. His Honour Mr Justice Miles made the following comments in his judgement handed down on 5 June 1985 in respect of directors of Scitec, Messrs Yerushalmy and Richardson.
(a) ‘In my view the inference is open that, at the time of giving the instructions to sue, the dominant purpose contemplated by Mr Richardson in concert with Mr Yerushalmy was not to recover the damages sought in the statement of claim but to either force Raybos to the bargaining table where it’s [sic] position would be substantially weakened or alternatively to put Raybos out of business by protracted lengthy litigation. On the evidence as it stands there is an arguable case that Mr Richardson is liable for the tort of abuse of process or, if the commission of that tort be not proved, then the tort of conspiracy’.
(b) ‘Accordingly the inference is open that at the time of the commencement of the proceedings it was the intention of Mr Yerushalmy in concert with Mr Richardson to use those proceedings not for the recovery of the damages sought in the statement of claim but either to force Raybos to the bargaining table where it’s [sic] position would be substantially weakened or alternatively to put it out of business. An arguable case against Mr Yerushalmy for abuse of process or conspiracy as at the time of the filing of the statement of claim has been made out. If it was found that there was a separate conspiracy which post dated the filing of the statement of claim Mr Yerushalmy could be liable for both causes of action’.
6. Arunta Investments disposed of approximately $15 million worth of assets during the past five years thereby reducing its capacity to satisfy any future judgment.
(a) on 6 September 1983 Scitec Corporation Pty Ltd changed its’ [sic] name to Arunta Properties (NSW) Pty Ltd (hereinafter called Scitec).
(b) until September 1983 Scitec has suffered accumulated losses of $8,542,572.
(c) on 6 September 1983 Codeco 39 Pty Ltd changed its’ [sic] name to Scitec Corporation Pty Ltd (hereinafter called new Scitec ).
(d) all the assets of Scitec were transferred to new Scitec.
(e) all the losses of Scitec were left with Scitec.
(f) the matters set out in paragraphs (a) to (e) above appear to be analogous to the bottom of the harbour schemes in which the Taxation Commissioner was left with worthless companies unable to pay tax. In this case out clients could be left with a worthless defendant.
7. By reason of the matters referred to above my clients recently filed in the Supreme Court of NSW an application restraining Scitec, new Scitec , Arunta Investments, G Richardson, M Yerushalmy from selling, disposing of, assigning, transferring, negotiating, mortgaging, charging or otherwise encumbering or in any way dealing with their businesses, investments, undertakings, shares, monies, fixed assets or any other assets whatsoever otherwise than with the consent of our clients or by order of the Court.”
130 On 9 December 1985 Arunta Investments, Gavemer Properties, Richardson and Yerushalmy commenced separate proceedings for defamation against Carneys on the basis of the letter. Each corporate plaintiff alleged that the letter carried the following imputations:
“SCITEC CORPORATION PTY LIMITED
We act for the Arunta Group of Companies (‘Arunta’), which group includes Scitec Corporation Pty Limited (‘new Scitec’), Arunta Investments Pty Limited (‘Arunta Investments’) and Arunta Properties (NSW) Pty Limited (‘Arunta Properties’) formerly known as Scitec Corporation Pty Limited (‘old Scitec’). We also act for Mr G Richardson, Chairman of the Arunta Group and for Mr M Yerushalmy, Managing Director of new Scitec.
Arunta has sent to us a copy of a letter from Messrs Carneys to the Chairman of the Stock Exchange dated 25 November, 1985. We have been instructed to write to you commenting upon the statements and assertions of fact made in that letter.
For convenience, we shall adopt the same notation as Carneys’ letter.
1. New Scitec’s major shareholders are Arunta Investments Pty Limited and M Yerushalmy. G Richardson is not a shareholder of new Scitec.
2. True.
3. The proceedings have been instituted but have not been determined by the Court. We are instructed that the action is without substance and will fail.
4. The plaintiffs do claim damages of $600,000,000. Not only is it not correct to say the damage has been ‘quantified’ at that amount but, if the issue does fall for determination, the ‘claim’ will be defended.
5. The judgment of Miles J was handed down after the hearing of an application by Rajski and Raybos which sought to add a number of parties to a cross claim filed by them in proceedings which had been commenced by a company within the Arunta Group known as Tectran Corporation Pty Limited (‘Tectran’). (Tectran alleges a breach of contract by Raybos and Rajski and seeks an order for damages. Tectran’s action is yet to be heard by the Court).
His Honour Mr Justice Miles in his judgment said:
‘It is not my function to make findings of fact. If in this judgment I appear to be stating findings as to facts, that is not my intention. What I intend to state are the facts as they are open to be found by a tribunal of fact at a trial, on the evidence as it now stands’.
On legal advice, the respondents to the application, which included Messrs Richardson and Yerushalmy, did not adduce any evidence in reply to the evidence presented by Rajski and Raybos.
6. The letter fails to take account of the purchase of assets and the application of funds by Arunta Investments in the past five years. We are instructed that in the period 1 July, 1980 - 30 June, 1985 funds generated by the group’s day to day business exceeded $19 million while funds applied were in excess of $25 million. The difference represents an increase in the group’s borrowings of more than $6 million.
Messrs Richardson and Yerushalmy deny the allegations made against them by Rajski and Raybos.
On 1 July, 1983 Codeco Thirty-Nine Pty Limited acquired certain of the assets and liabilities and the business operations of old Scitec. The acquisition was undertaken to facilitate the marketing and investment plans of the Arunta Group.
Old Scitec subsequently changed its name to Arunta Properties (NSW) Pty Limited, and Codeco Thirty-Nine Pty Limited subsequently changed its name to Scitec Corporation Pty Limited.
We are instructed that all requirements of the Corporate Affairs Commission of New South Wales were satisfied.
7. The application has not been heard by the Court. No injunction has been granted restraining new or old Scitec, Arunta Investments, Messrs Richardson or Yerushalmy or any companies or individuals related or associated with them. Again, we are instructed that the application is without substance and will fail.
Our clients, having consulted senior counsel are about to commence proceedings against Carneys for damages for defamation.
We submit that the Stock Exchange is under no obligation to release Carneys’ letter, pursuant to its Listing Requirements, and out clients seek your assurance that the letter will not be republished.”
(a) that the plaintiff had abused the process of the Court;
(b) that the plaintiff had attempted to pervert the course of justice;
(c) that the plaintiff had participated in a conspiracy to pervert the course of justice;
(d) that the plaintiff had participated in a conspiracy to commit fraud;
(e) that the plaintiff had unlawfully disposed of its assets in order to defeat the ends of justice.
131 The imputations alleged to have been conveyed concerning the individual plaintiffs were in substantially parallel terms. Each plaintiff claimed general and aggravated damages, alleging that Carneys had knowingly or recklessly misrepresented the effect of the judgment of Miles J by omitting to mention that his Honour was not making findings of fact. The plaintiffs did not claim special damages.
132 The appellant acted for all the plaintiffs in these proceedings. The statements of claim were drafted within Dawson Waldron, by a solicitor or solicitors in the relevant department of the firm.
133 On 12 December 1985 the appellant wrote to the director of Law Cover, the insurance organisation by or through which professional indemnity insurance was provided to solicitors in New South Wales. In 1985 the appellant was a director of Law Cover or a member of its management committee. Simpson J said:134 The letter was as follows:
“As, on at least one view, the Carneys letter was written in the course of, and as part of, their legal representation of Rajski and Raybos, it might have been expected that they would look to their insurance cover for representation in relation to the defamation claim … Anticipating that Carneys might make a claim on Lawcover for indemnity and for legal representation in the defamation proceedings, the [appellant] wrote to Lawcover to draw attention to a potential conflict of interest consequent upon his role in acting for the Arunta Companies and individuals, and his position in Lawcover.”
“ RICHARDSON AND OTHERS - v - CARNEYS
We act for Mr G Richardson, Mr M Yerushalmy, Arunta Investments Pty Limited and Gavemer Pty Limited each of which is a plaintiff in proceedings claiming damages from the partners of the firm Carneys.
The defamation alleged is the publication by Carneys of a letter to the Chairman of the Sydney Stock Exchange. On the face of the letter, it is written by Carneys themselves rather than on behalf of their clients in which case their liability would not arise from practise [sic] as a solicitor and they would not be entitled to indemnity under the policy. On the other hand, it may be that they will say that they were instructed to write the letter and that they were acting as solicitors and they may seek indemnity under the policy.
As I have become very much entwined in the various proceedings between my clients and the clients of Carneys, in the event that a claim is made by Carneys under the policy, would you please ensure that I am kept isolated from any material relating to it.”135 The appellant’s expressed desire that he be kept isolated from any material relating to a claim by Carneys to indemnity under the policy was said to make the second paragraph superfluous. Carneys’ letter of 25 November 1985 began with the sentence “We act for Dr Rajski and Raybos Australia Pty Limited.”
136 On 17 December 1985 Mr Sackar (“Sackar”), then of junior counsel, settled a letter to be sent by Dawson Waldron to Carneys. Sackar said he was happy with the statement of claim and suggested various amendments.
137 On 18 December 1985 Dawson Waldron wrote to Carneys separately (but in identical terms) in relation to each statement of claim, in the terms of the letter settled by Sackar. In part the letter read:138 The proceedings came before Hunt J on 20 December 1985 for directions. According to a file note about that mention, counsel for Carneys, Mr A S Martin (“Martin”), indicated that he had been instructed to file a notice of motion seeking that the proceedings be struck out as being an abuse of process. The file note continued -
“On our instructions, one of the consequences of your letter, if steps are not taken to correct it, is that our client will suffer significant financial damage. Indeed, it appears that this was the purpose of the letter. There is nothing on the face of the letter to indicate any other reason why you regarded it as appropriate to draw the attention of the Chairman of the Stock Exchange to the matters set out in your letter.”
Carneys were invited to write to the Chairman of the Stock Exchange before further damage was done correcting the errors. A draft suggested letter was attached.
139 On 6 January 1986 Phillips Fox, acting for Carneys in the defamation litigation, wrote to the Chairman of the Stock Exchange as follows:
“His Honour then made some remarks which he indicated were made in response to this statement by Mr Martin. He asked what justification there was for his clients writing the letter to the Stock Exchange. He stated that the defendants knew or must have known that the allegations made were utterly false, and that the judgment of Mr Justice Miles was completely misstated. (Subsequently, Mr Martin began to suggest that what was said was true, in response to which Mr Justice Hunt said that irrespective of how cleverly the letter may have been worded it clearly would be likely to give rise to misunderstanding.)
He commented that the defendants were in a fragile situation to commence proceedings for abuse of process.
He asked what was the purpose of bringing to the attention of the Stock Exchange that there was an arguable case against the plaintiffs. Mr Martin responded that the defendants (?) had made an application for listing of a Company. The listing would have affected the plaintiffs because it would have put in doubt as to whether any judgment against the Company would be recoverable in the light of the company’s change in constitution.
His Honour said that even if this was so, it did not justify failing to point out that the remarks made by His Honour were made on the express basis that they were not findings of facts etc. He said that this was quite improper (subsequently he said that at the least it was a highly unfortunate omission and at most it was very improper). Mr Martin said that on his instructions that [sic] the dominant purpose of the defamation proceedings was not a proper one. His Honour replied that recent Court of Appeal pronouncements indicated that they were totally unconcerned about proceedings being taken against solicitors and about stop Writs.”
Later Hunt J is recorded as saying that “the letter cried out for proper explanation”. His Honour then fixed a time table for the hearing for the period up to 4 July 1986.
“SCITEC CORPORATION PTY LIMITED AND ORS
OUR CLIENTS: CARNEYS
OUR REF: JDW
We act on behalf of Mr John Carney, Mr Arthur Carney and Mr Wallace Meakes, the principals of the firm of solicitors known as Carneys and we refer to Mr Arthur Carney’s telephone conversation with you on 2 January 1986 concerning a letter sent by Carneys to The Chairman, Stock Exchange, 20 Bond Street, Sydney dated 25 November 1985 which we understand has been supplied to you.
We confirm the advice given to you by Mr Carney that the letter has recently been made the subject of defamation litigation commenced against our clients and Mr Carney’s instructions in the above mentioned conversation that the letter and its contents should not be further disclosed to anyone without prior authorization. We note your advice to Mr Carney that the only persons at the Sydney Stock Exchange who have read the letter to date are yourself, Ann Probert, Pam Breakspear, and Tina Barnham, and your assurance that you will not disclose the letter further.
In the proceedings brought against our clients it is alleged by Arunta Properties (NSW) Pty Limited, G Richardson, M Yerushalmy and Arunta Investments Pty Limited that our clients published the following defamatory imputations by means of the above letter:-
(a) that the plaintiff had abused the process of the Court;
(b) that the plaintiff had attempted to pervert the course of justice;
(c) that the plaintiff had participated in a conspiracy to pervert the course of justice;
(d) that the plaintiff had participated in a conspiracy to commit fraud;
(e) that the plaintiff had unlawfully disposed of its assets in order to defeat the ends of justice.
It was not the intention of our clients to convey these defamatory imputations and we do not agree that the letter in fact does convey such defamatory imputations. However in the event that the letter has been so misunderstood our clients regret this misunderstanding and apologise. Further we would draw to your attention the following matters, and we refer to the numbered paragraphs in the abovementioned letter dated 25 November 1985:-
1. As to paragraph 1, Mr G Richardson is not a major shareholder of Scitec Corporation Pty Limited.
2. As to paragraph 3, the allegations made by Raybos Australia Pty Limited and Rajski are denied by M Yerushalmy, G Richardson, Arunta Properties (NSW) Pty Limited and Arunta Investment Pty Limited.
3. As to paragraph 4, while Raybos Australia Pty Limited and Rajski have asserted a loss in excess of $600,000,000.00 that claim is denied and is defended. The claim has not been determined by the Court and in no relevant sense can the claim be said to have been quantified by the Court. The amount of damage suffered by Raybos Australia Pty Limited and Rajski was quantified at in excess of $600,000,000.00 by experts retained by Raybos and Rajski. The claim for damages has not been determined by the Court.
4. As to paragraph 5, the passages quoted appear on pages 44 and 46 of the Judgment of his Honour Mr Justice Miles. His Honour had earlier in his Judgment at page 10 made the following statement:-
‘In the light of what was said in the Qantas case [ Qantas Airways Limited v A F Little Pty Limited [1981] 2 NSWLR 34] and in view of the seriousness of the allegations in the proposed amendments I have adopted the approach that the applicants must show an appropriately arguable case on a tenable evidentiary basis. It is not my function to make findings of fact. If in this judgment I appear to be stating findings as to facts, that is not my intention. What I intend to state are the facts as they are open to be found by a tribunal of fact at a trial, on evidence as it now stands.’
We enclose a copy of His Honour’s Judgment.
5. As to paragraph 6, the letter referred only to a disposal of assets by Arunta Investments Pty Limited. The letter did not include any reference to the purchase of assets by the Arunta Group nor did it make any reference to the net asset position of the Arunta Group during the 1980/1985 period.
6. As to paragraph 7, the application has not been heard by the Court. No injunction has been granted restraining Arunta Properties (NSW) Pty Limited, Arunta Investments Pty Limited, G Richardson, M Yerushalmy or any company or individual related or associated with the previous mentioned persons or companies. When the application is to be heard it is to be defended, in particular, on the basis that there is no evidence to found such an order.
We thank you for your co-operation in this matter and would be grateful if you could kindly acknowledge receipt of this letter.”
140 In their letter on behalf of Carneys, Phillips Fox acknowledged what was erroneous and misleading in Carneys’ letter and did not assert that their client was doing no more than pass on the instructions of Raybos or Rajski. It was accepted that if the imputations claimed were open, they were defamatory and an apology was proffered. Furthermore, corrections were made in broad terms as the appellant had requested.
141 On 7 January 1986 the Stock Exchange wrote to Phillips Fox:
“We refer to your letter dated 6th January 1986 addressed to the writer and have noted that the letter dated 25th November 1985 sent by Carneys to the Chairman of the Exchange should not be further disclosed to anyone without prior authorisation.
142 On 9 January 1986 Dawson Waldron wrote to Phillips Fox in the following terms:
If the Exchange receives an application for listing from Scitec Corporation Pty Limited or its successors we would feel an obligation to table your client’s letter at the Board meeting at which the application for listing is considered, in order that members of the Board shall be in possession of all relevant information when making their decision.
If your client is of the opinion that his letter need not be taken into account when the Board considers an application for listing from Scitec we would wish to have confirmation to that effect.”
“ G RICHARDSON - V - JOHN ARTHUR CARNEY & ORS
No 18636 of 1985
We refer to the Notices of Change of Solicitor filed by you on 7 January, 1986.
The letter was signed by the appellant.
We note that at the directions hearing on 20 December, 1985 Counsel instructed by your clients’ former solicitors informed the Court that he was instructed to file a Notice of Motion to strike out the Statement of Claim as an abuse of process. He stated that on his instructions the dominant purpose of the proceedings was improper.
We are instructed that there is no basis for any assertion that the purpose of bringing the proceedings was improper or that the proceedings are an abuse of process. Our client will claim aggravated damages in respect of the statements made by counsel on behalf of your clients.”
143 On 31 January 1986 Phillips Fox wrote back to the Stock Exchange referring to a letter of 24 January 1986 and stating that “you do not have [our client’s] permission to table their letter of 25 November 1985 at the relevant board meeting.”
144 On 4 February 1986 Rajski wrote to the Stock Exchange as follows:145 On the same day Rajski wrote a letter to the Stock Exchange which Simpson J described as “in terms largely similar to, but more expansive than, those of Carneys’ letter” of 25 November 1986. It included the statement:
“ Scitec Corporation Pty Limited & Ors
I refer to the letter dated 25th November, 1985 from Carneys to The Chairman, The Stock Exchange (see annexure ‘A’ herein).
On 1 February, 1986 I received from Mr A Carney a copy of letter dated 6th of January, 1986 from J D Wotton of Phillips-Fox [sic] to Mr A Hewson (see annexure ‘B’ herein). The said letter was written under blackmail of litigation against Carneys and at request of solicitors of Scitec Corporation Pty Ltd, Gavemer Properties Pty Ltd, Arunta Investments Pty Ltd, Richardson and Yerushalmy in hope by Messrs Carneys that as a result of this letter Gavemer Properties (formerly known as Arunta Properties (NSW)), Arunta Investments, Richardson and Yerushalmy will discontinue action against Carneys. I enclose herein copies of letters (see annexures C and D respectively herein) written by solicitors of Gavemer Properties and Richardson to Messrs Carneys with the request to write a letter in terms as written to you by Phillips-Fox on 6 January, 1986.
The same requests were also made by solicitors of Yerushalmy and Arunta Investments Pty Ltd which copies are in possession of Messrs Carneys and Phillip-Fox [sic].
Mr A Carney is fully aware that statements made in paragraphs 2, 3, 5 and 6 are false.
In support of that fact I enclose copy of letter dated 23rd December 1985 from A Carney to the Claims Director Law Cover (see annexure ‘E’ herein). In particular I draw your attention to paragraphs 1 and 3 on pages 1 and 2 of that letter.
Paragraph 1 says: ‘All the allegations in our letter 25 November 1985 (to The Stock Exchange) are substantially true.’
Paragraph 3 says: ‘The proceedings against this firm (Carneys) are of themselves a continuation of the conspiracy pleaded in the causes of action between the various Plaintiffs (Arunta Investment, Gavemer Properties, Richardson, Yerushalmy) and our clients (Rajski, Raybos) and in addition are an abuse of the Court process.
Further Mr A Carney stated on page 2 of this letter the following:
‘We consider that the primary motive behind the proceedings (against Carneys) is to force this firm to withdraw from the principal action, a consequence of which Dr Rajski and Raybos Australia Pty Limited would probably lose their grant of Legal Aid, may not be able to find other solicitors prepared to do their case and would thus be precluded from pursuing their rights through the Court.’ ”
146 On 28 February 1986 Phillips Fox wrote to the Stock Exchange:
“Mr A Carney drew my attention to 2nd paragraph of your letter [of 24 January 1986 to Phillips Fox] and advised that I and Raybos Australia Pty Limited (‘Raybos’) should write a letter in similar terms as his letter dated 25th November, 1985 to The Sydney Stock Exchange and request that this letter to be tabled at the relevant Board Meeting on Friday, 7 February 1986.”
The letter included additional allegations about a director of Scitec, and referred to the evidence before Miles J which was said to stand uncontradicted.
147 On 11 March 1986 Dawson Waldron wrote to Phillips Fox in part as follows:
“We note your advice that your earlier undertakings in this matter still hold good. In particular the letter dated 25 November 1985 from Carneys to the Chairman of the Sydney Stock Exchange will not be further disclosed to anyone without Carneys’ authorisation, and that the letter will not be tabled at any meeting which considers an application for listing by a successor to Scitec Corporation Pty Limited.”
148 By letter dated 4 September 1986 to Phillips Fox, Dawson Waldron wrote:
“2. We attach a copy of a letter from L. Rajski to the Stock Exchange dated 4 February, 1986 and direct your attention to the advice attributed to your client, Mr A Carney, in the second paragraph. We are instructed to enquire:
(a) Did Mr Carney give that advice? If so, the plaintiff will seek to amend the Statement of Claim accordingly.
(b) If Mr Carney denies giving that advice, did he have any relevant communication with Rajski and, if so, what was the date, form and content of that communication?
In the circumstances of this case, we are instructed to require any denial to be provided by the statutory declaration of Mr Carney accompanied by his authority to our client to make such use of that declaration as it sees fit and that such declaration to be available by 4 pm tomorrow, Wednesday, 12 March.
3. We are instructed that the damage to our client caused by the delay to the flotation of Scitec Corporation Pty Limited is running at the rate of approximately $25,000 per week. You will be furnished with more detailed particulars in due course.”149 Of this correspondence Simpson J said:
“On 17 February, when providing particulars of our client’s claim, we put you on notice that while our client was not at that stage claiming special damages, it may subsequently do so, depending in part on the outcome of an application by Scitec Corporation Pty Limited (know known as Scitec Communication Systems Limited) for Stock Exchange listing. Our client’s position on this aspect of the matter has not changed.”
150 On 12 March 1986 the 1980 proceedings Tectran and Others v Raybos and Rajski and the 1985 proceedings Raybos and Rajski v Tectran and Others were listed before Street CJ. Carneys applied for an adjournment of proceedings on the basis that Mr McAlary QC (“McAlary”), who was briefed to appear for Rajski and Raybos, was unavailable. The adjournment was granted. On 20 March 1986 Dawson Waldron wrote to Carneys as follows:
“299 Arthur Carney did not ever deny giving the advice but the statements of claim were never amended in the fashion suggested in the letter.
300 The clear implication of the letter, particularly the final paragraph claiming that damage to Scitec arising from the delay in the float was running at $25,000 per week, was that Carneys would be held liable for the alleged defamation in Rajski's letter, and consequently for losses in that amount, and that special damages would accordingly be claimed in the defamation actions already commenced. This was contrary to [Dawson Waldron’s] earlier statement that the plaintiffs were not seeking special damages. Phillips Fox, acting for Carneys, on a number of occasions requested particulars of the foreshadowed claim. No particulars were ever supplied. Insofar as answers were given to the request, [Dawson Waldron] reiterated the original position that special damages were not claimed. After 26 September 1986 the Carneys defamation proceedings were not pursued.”
151 Simpson J referred to other evidence on which the Commissioner relied to establish that the Carneys defamation proceedings were commenced for an improper purpose. She referred to the file note of the conference of 19 June 1986 and the file note of the conference on 14 November 1985, both of which I have already set out. A file note of a conference of 26 February 1986 contained the following:
“ Tectran v Raybos & Rajski No 16938/1980
Raybos & Rajski v Tectran & Others No 14716/1985
On 24 October, 1985 Mr Carney informed Mr Justice Enderby that your clients’ counsel ‘are likely to be Mr Nigel Cotman and Mr Frank McAlary QC’.
On 4 March, 1986 when the actions came before Mr Justice Campbell, Mr Carney sought to defer all matters until May 1986 when, he said, Mr McAlary would be available. His Honour rejected that submission and fixed 12 March for hearing of your clients’ application that he disqualify himself and for directions as to the further conduct of the actions.
On 12 March the actions came before the Chief Justice. Mr McAlary appeared for your clients and informed the court:-
(a) That he was first informed the matter was in the list at 9.30 that morning.
(b) That he had not read any material (other than newspaper reports) regarding the matter.
(c) That he had not spoken to your client.
(d) That he could not consider the material until after Easter.
Solely because of Mr McAlary’s lack of instruction, the Chief Justice adjourned the proceedings to 7 April. As a result, our clients, and our firm, have thrown away the costs of the hearing of 12 March and otherwise incurred costs and suffered loss.
You are hereby given notice that on 7 April or at the earliest date convenient to the Court thereafter, our clients and this firm will seek orders: -
1. That our clients’ costs occasioned by the adjournment be paid by your clients.
2. That this firm’s costs occasioned by the adjournment in respect of your clients’ notice of motion of 3 March and our notice of motion of 7 March (in respect of which there is no grant of legal aid) be paid by your clients.
3. That the Court require such costs to be paid forthwith (Part 52 Rule 5(2)).
4. That such costs be paid by your firm (Part 52 Rule 66, Myers v Elman (1940) AC 282).”
“[The appellant] noted the other proceedings - the Court of Appeal contempt proceedings against Jones, the defamation proceedings by Arunta against Carneys and the defamation proceedings by Rajski against Dawsons. Carneys are not acting in the contempt proceedings, though they still act in the first and second action.”
152 The Commissioner argued that the sentence in the file note of 19 June 1986 “[t]he outcome of the defamation proceedings being that Carneys no longer act for Rajski so that he has been deprived of legal representation” should be interpreted as an acknowledgment that this was the original intention when the proceedings were commenced, and that the stated intentions to “stretch”, “push” and “keep the pressure on” Rajski supported that conclusion.
153 Simpson J observed that:154 Her Honour said:
“ … the [Commissioner] sought to show that the Carneys defamation proceedings had no prospects of success because the allegations contained in the letter to the Stock Exchange were true; that the threat to amend the statements of claim by seeking to make Carneys liable for the subsequent Rajski letter to the Stock Exchange could retrospectively be seen to have been empty and intimidatory because the amendment was never made; that the threat to seek special damages quantified at $25,000 per week, again from Carneys personally, was untenable because, the documentation showed, the [appellant] was well aware that his clients would not be in a position to establish any such losses (even if proved) were causally related to the publication of the Carneys letter; and that the threat to seek costs against Carneys personally in relation to the adjournment granted by the Chief Justice was based upon falsely stated premises.”
“307 In relation to the first of these matters, the claim that it should or could be inferred that the Carneys defamation proceedings were commenced for an improper purpose because, the facts asserted in the Carneys letter being true, the claim could not succeed, it is sufficient to say that that approach denotes an over-simplification of the law of defamation. I am satisfied that Carneys’ letter was, on its face, defamatory, and, had the matter proceeded to trial, the issues would have been whether Carneys could have established any defences which they might have pleaded. Proof of the truth of the imputations conveyed in the letter would be one significant step towards establishing relevant defences under the Defamation Act 1974 , but it is not possible in these proceedings to reach a conclusion that the claims as framed were so untenable as to permit an inference, from that fact alone, that their purpose was other than the purpose that appears on the face of the claims. That is, it would not be open to the Tribunal to conclude solely from the material relating to the Carneys defamation proceedings that they had been commenced for an improper purpose.
308 However, what does emerge is that, almost from the time the [appellant] took over the litigation on behalf of the Tectran/Arunta Companies, the steps adopted by and on behalf of his clients drew Rajski’s and Raybos’ legal representatives personally into the litigation in a way that is almost certainly unprecedented and which must inevitably have created a conflict between the lawyers and their clients. A single action, taken in isolation, might be insufficient to demonstrate an improper purpose; a pattern of conduct, however, may do so.
309 Of particular concern is the letter to Lawcover. The last paragraph, drawing attention to the [appellant’s] involvement in the litigation and the need therefore to quarantine him from Lawcover decisions in relation to any claim made on their policy by Carneys, is quite unexceptionable and indeed very proper. The preceding paragraph, however, is inexplicable in terms other than an attempt to draw to the attention of the directors of Lawcover a basis on which they might refuse indemnity (and representation) to Carneys and further to enmesh Carneys personally in the dispute between Rajski on the one hand and the Tectran/Arunta Companies on the other. The [appellant’s] oral evidence in this respect I found unsatisfactory. He was asked directly about the purpose of that paragraph, and it was put to him that his stated purpose could have been achieved without the inclusion of that paragraph. His reply was:
‘No. I mean, it may be that no claim would be made, the first thing. The second thing is that my clients had a substantial claim for damages at that stage against Carneys. They were suffering considerable loss by reason of the delay of the prospectus and if Carneys had insurance, there was a fund to pay it. If they didn’t have insurance, there wasn’t. So that I didn’t want to be saying to Lawcover: ‘Look, this is a claim which you have got to meet’. I just put that on its face, they have done it personally, but they may well say they were acting as solicitors.’
311 I have come to the view that, on the whole of the evidence, it would be open to the Tribunal to conclude that the [appellant’s] conduct was for the purpose alleged. I do not think it would be appropriate, therefore, to embark upon a complete analysis of the evidence, which could only result in the expression of a conclusion that could usurp the function of the Tribunal.”
310 The answer does not address the proposition that was put in the question, nor the obvious inference to be drawn from the paragraph. I accept that the letter provides some evidence on which a conclusion may be drawn that the [appellant’s] conduct overall was directed to the purpose alleged. That is, of course, far from the only conclusion that could be drawn, but, as it is an available inference, it is a matter for the Tribunal.155 Her Honour accepted that the Carneys letter was on its face defamatory. Whoever wrote it could hardly have expected that those it defamed would sit by and do nothing. Her Honour seems to have regarded as significant that from the time the appellant took over the litigation on behalf of the Arunta companies, the steps adopted by and on behalf of the clients drew Rajski and Raybos’s legal representatives personally into the litigation in a way that was almost certainly unprecedented. She referred to this as a pattern of conduct. But the ground of complaint was directed only, as I read it, to the defamation proceedings against Carneys and the appellant’s actions after those proceedings were instituted. These proceedings followed naturally from the terms of the letter of 25 November 1985 to the Stock Exchange.
156 There is a further difficulty with her Honour’s statement that the steps adopted by and on behalf of the appellant’s clients drew Rajski and Raybos’s legal representatives personally into the litigation in a way that was almost certainly unprecedented.
157 It is not clear whether in saying this her Honour had recollected that until 1985 Allen Allen and Hemsley (“Allens”) had acted for the Arunta companies. On 30 July 1985 Rajski began the 1985 proceedings alleging that Tectran’s 1980 proceedings were an abuse of process and alleging a conspiracy between the Arunta companies and their solicitors, as a result of which Allens ceased to act for the Arunta companies in the 1980 proceedings and Dawson Waldron accepted instructions in their place.
158 On 22 October 1985 Carneys wrote to Dawson Waldron saying that they were instructed that the action commenced by Tectran was without any substance whatsoever and was in furtherance of a conspiracy to abuse the process of the Court and to defraud Carneys’ clients. The letter continued: “No doubt you are aware that the basis of that assertion has been thoroughly tested before the Supreme Court.” On the last page of that letter Carneys wrote:
“D The instructions given by your clients to you and referred to in your letter to the Legal Aid Commission of NSW are false. By reason thereof we draw your attention to the comments made by Miles J in his judgement handed down on 5 June, 1985:
(a) it is sufficient to say I think that there maybe cases and that this maybe one of them in which the instructions given are so questionable as to expose a solicitor who accepts them to a charge of being a party to pervert the course of justice and further to liability in an action for conspiracy if the client’s predominant motive is known to be the commercial destruction of the client’s opponent.
(b) it is arguable that solicitors who turn a blind eye to questionable conduct on the part of their client cannot later profess ignorance.”
159 Further, on 28 November 1985 Rajski began proceedings against the appellant alleging contempt of court in relation to the correspondence from Dawson Waldron to the LAC and communications between Dawson Waldron and Wood and Donaldson, ex-employees of the Arunta companies.
160 In the context of the litigation it is not correct to say that the proceedings against Carneys were “unprecedented”. This may have coloured her Honour’s judgment. But in any event, it is irrelevant to whether or not the proceedings against Carneys were begun and continued for the purpose of causing that firm to cease to act for Raybos and Rajski in the litigation which was the substance of the Commissioner’s allegations.
161 To repeat, the actions relied on to support this ground of the complaint were commencing and continuing the defamation proceedings, writing the letter dated 11 March 1986 to Carneys’ solicitors threatening to amend the statement of claim if Carney had given certain advice to Rajski and offering Carneys the opportunity to avoid further action if Carney would provide the appellant’s clients with a statutory declaration denying giving Rajski such advice; making a false claim in the letter that Carneys was liable for $25,000 per week in special damages, and writing the letter dated 20 March 1986 threatening that the appellant would seek an order that Carneys pay the costs of his clients and of his firm of the adjournment granted by the Chief Justice on 12 March 1986.
162 A file note of 6 December 1985 records a consultation with Mr Hughes QC (“Hughes”) about Carneys’ letter of 25 November 1985. In the course of this consultation, Hughes told Dawson Waldron that the letter was disgraceful and that if the letter had influence it was a huge defamation. His advice was that there was no harm in taking action, that it was a good idea and a great chance of assuming the offensive. The only defence was qualified privilege.
163 Simpson J was particularly concerned by the letter to Law Cover, which she considered provided “some evidence” of improper purpose beyond the material relating to the defamation proceedings on which alone it would not be open to conclude that the proceedings had been commenced for an improper purpose. The appellant was cross-examined about his letter to Law Cover. This was as follows.164 A little further on the following cross-examination took place:
“Q. You conclude the letter in this way:
‘As I have become very much entwined in the various proceedings between my clients and the clients of Carneys, in the event that a claim is made by Carneys under the policy would you please ensure that I am kept isolated from any material relating to it.’
A. Yes, it says that, yes.
Q. In light of that last paragraph, why was the letter written at all? A. I thought it was perfectly obvious, for that very reason.
Q. You see, if you were so close to the proceedings as to make it at least unwise to be involved in Law Cover activities in relation to the proceedings, why write the letter at all? A. So that they didn’t send me, for the monthly Claims Committee meeting, a copy of the correspondence and perhaps Carneys’ letter saying ‘this is our version of it’ or whatever, so that I would be then seeing the private documents of Carneys and I am saying ‘don’t do that’.
Q. If that was your purpose, Mr Carson, why is the middle paragraph in the letter? You see that purpose could have been achieved by deleting that middle paragraph? A. No. I mean, it may be that no claim would be made, the first thing. The second thing is that my clients had a substantial claim for damages at that stage against Carneys. They were suffering considerable loss by reason of the delay of the prospectus and if Carneys had insurance, there was a fund to pay it. If they didn’t have insurance, there wasn’t. So that I didn’t want to be saying to Law Cover: ‘Look, this is a claim which you have got to meet’. I just put that on its face, they have done it personally, but they may well say they were acting as solicitors.”
Q. Is it you recollection that when you wrote this letter on 12 December 1985 there was damage being caused to your clients in the float because, firstly, the prospectus couldn’t issue? A. Yes.
Q. And what other damage? A. Well, there were general damages for defamation. I mean, it was a disgraceful letter.
Q. Even so, why was it necessary for you to draw to the director of Law Cover, draw to the attention of Law Cover your view that, on the face of the letter, Carneys were acting on their own behalf and may not have any indemnity under the policy? A. I just answered that and I will answer again if you wish me to. That sets out the background to it. It may be that there was a fund, an insurance fund available to meet the claim. Maybe there wasn’t.
Q. You were seeking, by this letter, to have at least some investigation made by Law Cover to see if Carneys should or should not have the benefit of the indemnity? A. No, I wasn’t seeking to have anything investigated. That was - as a matter of course Law Cover always investigates whether it comes within the policy. In those days Law Cover had no financial interest in the policy, it was run by a syndicate from Lloyds and in fact it was the syndicate that made the ultimate decision as to whether or not indemnity was granted.”
165 Part of this cross-examination is set out in the passage I have quoted from Simpson J’s judgment. Her Honour said that she found the appellant’s oral evidence unsatisfactory in this respect and that the answer she quoted did not address the proposition that his stated purpose could have been achieved without the inclusion of the middle paragraph. She said that she accepted the letter provided some of the evidence on which a conclusion might be drawn that the appellant’s conduct overall was directed to the purpose alleged, namely the wrongful intimidation of Carneys so as to cause that firm to cease to act for Raybos and Rajski in the litigation.
166 With due respect, bearing in mind that the appellant had received advice from senior counsel that the letter was disgraceful and defamatory and his quite proper desire to avoid being sent, as he said, material about a claim by Carneys on the insurance fund in case it enclosed Carneys’ version of the claim, I find it impossible to regard the paragraph fixed upon by her Honour as supporting the claim of wrongful intimidation. It was particularised as “attempting to influence Law Cover not to provide indemnity cover to Carneys in relation to the defamation proceedings and thereby attempting to put additional improper pressure on Carneys.” It was a matter for the other members of the committee how they would deal with any claim by Carneys. As the appellant indicated, the grant of assistance would be of benefit to Dawson Waldron’s clients claiming against Carneys. The paragraph, perhaps unnecessarily, put any potential claim in context by indicating that there may or may not be a claim under the policy.
167 I return to the events following Rajski’s letters to the Stock Exchange. On 19 March 1986 a conference took place between Hughes, Sackar and Mr Major (“Major”), a solicitor at Dawson Waldron, and subsequently the appellant. During the course of the conference, Hughes and Sackar indicated that they would not rule out the possibility of a defence of qualified privilege succeeding in the proceedings. There was probably a much better prospect in relation to the letter sent by Rajski. Reference was made to Egger v Viscount Chelmsford [1965] 1 QB 248 where it was held that the malice of a principal cannot be attributed to its agent. Hughes’ view was that Rajski’s assertion, that Carneys had advised him to send the letter, was a very slender basis for founding an allegation against Carneys. He believed that it was more likely than not that Rajski’s statement was not true. However, with some reservations, he believed that it was not improper to make such an allegation. Hughes suggested that Rajski be joined as a defendant and that the present claim against Carneys be amended to plead publication of his letter and aggravation.
168 On 20 March 1986 Major sent a memorandum to the appellant which outlined the advantages and disadvantages of joining Rajski in the proceedings. At the bottom of the memorandum the appellant had written:
“1. Don’t join R.
2. What about proceedings against R for criminal libel?”
169 On 21 March 1986 Carneys ceased to act for Rajski and Raybos.
170 On 3 April 1986 a conference with the clients was documented in which Yerushalmy instructed that the damages being suffered included:
1. $25,000 per week interest/holding charges,
2. Valuation of publicly floated company will be left considerably less than $34 million and possibly only $20 million,
3. Expenses of $100,000 - $150,000,
4. The longer the float is delayed, the increased probability that it will not be successful and, more particularly, a failure.
171 On 21 May 1986 the appellant had a further conference with Hughes and Sackar. Hughes expressed grave reservations about suing Carneys “re Rajski’s publication to the Stock Exchange” and referred to Packer v Meagher [1984] 3 NSWLR 486. There was reference to the need to establish a causal connection between Carneys’ letter and the problems associated with the float and, in particular, the decision of the underwriters not to proceed with the float. “It must be established that the real cause of the special damage was the refusal of the underwriters to sign the underwriting agreement between [sic because] of Carney’s letter of 25 November.”
172 File notes in November and December of 1986 proved that as late as December 1986, about 9 months after Carneys had ceased to act, Dawson Waldron were still considering how they were going to prove damages and causation against Carneys.
173 On 27 October 1986 the appellant conferred with the clients. A number of matters were discussed including the following:
“[Davidson] commented that this had not advanced very far due to the length of the proceedings before Mr Justice Powell. Garry Richardson then questioned whether it was worthwhile continuing the action in view of the fact that damages cannot be clearly established, ie prove whether Carneys’ involvement or the proceedings themselves caused the delay of the Scitec float. As to the present status of the prospectus Moshe Yerushalmy stated that the float is not going ahead as Scitec would have to note the existence of the litigation in pages 1 or 2 of the prospectus. The Scitec proceedings have been stood over until the 15th December 1986. [The appellant] on the issue of damages, suggested that we could settle the proceedings for a nominal sum re Carneys’ allegations that Arunta was involved in ‘bottom of the harbour’ schemes. Garry Richardson queried whether the matter should not be just stoodover: [the appellant] considered that this would be the subject of formal review and formal advice in the near future. Re the advice of Mr Warwick Evans on damages, [Davidson] noted that in Evans’ view, Carneys’ letter played only a small part in the eventual delay of the Scitec float.”
174 Carneys’ letter of 25 November 1985 to the Chairman of the Stock Exchange was in a form which made it mischievous and irresponsible. In terms the letter went beyond notifying the Chairman of the Stock Exchange that Rajski and Raybos had a claim for damages against Arunta Investments the recovery of which might be affected by changes in its constitution. The Commissioner did not lead evidence of material available to him which could justify the terms of the letter. Carneys was not of course a party to the proceedings and could not put submissions about the letter.
175 The letter was also defamatory. It invited a reaction from the appellant’s clients. The mischief was exacerbated by Rajski’s letters of 4 February 1986 to the Stock Exchange after Carneys’ solicitors, Phillips Fox, had sought to reduce the potential damage by correction and by apologising on behalf of Carneys. Carneys’ irresponsibility was greater if Rajski wrote truthfully when he said that Carney had advised him and Raybos to write a letter in terms similar to Carneys’ letter of 25 November 1985. The appellant had a duty on behalf of his clients to attempt to limit the extent of potential damage to them, which was obvious, and to recover compensation in the form of damages to the extent this could not be achieved. In the correspondence, Phillips Fox did not suggest that Carneys had made the defamatory statements on the instructions of Rajski or Raybos. Rajski said that Carney had told him to write a letter to the Stock Exchange which only fuelled the fire. The appellant was entitled to question Carneys about whether this was true. It was a matter for Carneys whether they responded. But the situation or predicament in which Carneys found themselves was entirely the making of their own irresponsible actions and the irresponsible actions of Rajski. Both Carneys and Rajski must have realised that the letters they wrote to the Stock Exchange could cause damage to the appellant’s clients. There is a strong inference available that the letters were written to achieve just that object.
176 Having set in train this course of action I find it hard to suppose that Carneys would have been intimidated by the obvious reaction. However, the reaction and any consequences for their continuing to act for their clients were of their own doing. The complaint that by commencing and continuing the defamation proceedings on behalf of his clients against Carneys the appellant was acting wrongfully has no merit and must be rejected. I do not think it would be open to the Tribunal to find that there was an improper purpose in bringing and continuing the proceedings. The purpose of the proceedings was plainly to deal, by way of correction, apology, and compensation, with what Hughes described as a disgraceful letter which, if it had influence, was a huge defamation.
177 The letter of 11 March 1986 was provoked by Rajski’s letter of 4 February 1986 to the Stock Exchange referring to Carney’s advice to Rajski and Raybos. The situation it created was either the doing of Carney if he gave such advice or, if he did not, Rajski’s false statement to the Stock Exchange. Clearly, if Carney did give the advice, that was pertinent to the appellant’s clients’ case in defamation. The attempt in the complaint to suggest that this was an improper action effectively to make Carney a witness against his client is without any merit. I repeat that the situation in which Carneys found themselves was of their own making, the result of having written a mischievous and irresponsible letter. They were under no compulsion to answer the questions. If their position as adviser was compromised, it was they who had compromised it.
178 So far as the complaint was on the basis that in the letter of 11 March 1986 the appellant made “a false claim” that Carneys was liable for $25,000 per week in special damages, it misstated what the letter said. The letter said:
“We are instructed that the damage to our client caused by the delay to the flotation of Scitec Corporation Pty Limited is running at the rate of approximately $25,000 per week. You will be furnished with more detailed particulars in due course.”
179 At a conference on 3 April 1986, after the letter was written, Yerushalmy said that the damages being suffered included $25,000 per week interest/holding charges. There is nothing to suggest that these were not the appellant’s instructions on 11 March 1986. That being so, there was no impropriety in the appellant so informing Phillips Fox. But what matters is that there was no basis for the complaint that the appellant was making a false claim that Carneys was liable for $25,000 per week in special damages. This simply misstated what the appellant wrote.
180 In the extensive further particulars of the complaint the Commissioner referred to requests by Phillips Fox to the appellant for particulars to support “the special damages claim for $25,000 per week made in his letter of 11 March 1986”. It was said that no such particulars were ever provided and the claim was disavowed and abandoned after Carneys ceased to act.
181 The problem, as the material makes clear, was proving that any damage which flowed as a result of the delay of the float was caused by Carneys’ or Rajski’s defamatory statements. On 4 September 1986 the appellant referred to a letter of 17 February 1986 in which he said that his client “was not at that stage claiming special damages” and wrote that his client’s “position on this aspect of the matter has not changed” and that “special damage is not at this point in issue”. Further pressed by Phillips Fox on 11 September 1986, the appellant replied on 18 September 1986 (the Commissioner alleged “[d]espite the plain words to the contrary in his letter of 11 March 1986”):
“Our letter of 4 September 1986 in the proceedings Arunta Investments Pty Limited v Carneys is unequivocal. There is no present claim for special damage and any documents relevant to that matter are not relevant to those proceedings….”
182 On 24 September 1986 Phillips Fox sought to confirm that the claim for special damages made in the appellant’s letter of 11 March 1986 was withdrawn. The appellant did not reply.
183 The Commissioner said that after 26 September 1986 no further action was taken by the appellant’s clients in the defamation proceedings against Carneys. The Commissioner alleged:
“The claim that Carneys was liable for $25,000 a week in special damages was apparently concocted and was made to intimidate Carneys. It should never have been made.”
184 Once again this allegation disregarded what the appellant had written on 11 March 1986. There was nothing to suggest that what the appellant wrote was concocted. The evidence was to the contrary.
185 The final matter relied on was the letter dated 20 March 1986. It was not suggested that anything said in that letter was other than correct. The further particulars of the complaint took exception to the terms of the letter in a footnote where it was said that the transcript of the proceedings did not support the claim that the Chief Justice adjourned the proceedings “[s]olely because of Mr McAlary’s lack of instruction.”
186 If the truth be, as the letter of 20 March 1986 asserted, that on 24 October 1985 Carney informed Enderby J that his clients’ counsel “are likely to be Mr Nigel Cotman and Mr Frank McAlary QC”, that on 4 March 1986 Carney sought to defer all matters until May 1986 when he said McAlary would be available and that the matter was then adjourned to 12 March for hearing “your clients’ application” that Campbell J disqualify himself, it is surprising that on that date McAlary informed the Court that he had been first informed the matter was in the list at 9.30 that morning, that he had not read any material (other than newspaper reports) regarding the matter and that he had not spoken to the client. If McAlary had been retained by Carney, there was on its face no apparent reason why he could not have been properly briefed to deal with the disqualification application on 12 March 1986. If McAlary had not been retained, Carneys should have ensured that some other counsel was properly briefed to deal with the disqualification application on that day.
187 An application by the appellant’s clients to have their costs and the costs of their solicitors, which were thrown away as a result of the adjournment, paid by Carneys’ clients or by Carneys, if they were at fault, was in the circumstances both reasonable and appropriate. The appellant was acting in the interests of his clients entirely properly and this ground of complaint must be rejected.
188 In my opinion, it would not be open to the Tribunal to find that the appellant’s actions at the time were not for the purpose of prosecuting the defamation proceedings to a conclusion in the interests of his client but for the illegitimate purpose of wrongfully intimidating Carneys, to cause that firm to cease to act for Raybos and Rajski in the litigation. Even if it was open to find that the latter was seen, even intended, as a consequence, ground 3 of the complaint was untenable and foredoomed to fail.
The decision on Ground 5 of the Complaint - Metcalf
189 In September 1986 the Raybos litigation was listed before Powell J for the hearing of various interlocutory applications. When the matter was part-heard, Rajski applied to have it adjourned and on 13 October 1986 Powell J refused the application. Rajski then applied for leave to appeal to the Court of Appeal.
190 In support of his application to the Court of Appeal (Raybos Australia Pty Limited v Tectran (No 4) (1986) 6 NSWLR 674), Rajski tendered a report by Metcalf dated 17 October 1986 which was prepared at short notice and was in fairly straightforward terms. The report was admitted over objection. It recorded that Rajski felt he was on the verge of a nervous breakdown. Metcalf said he agreed with this personal assessment and that Rajski needed rest and treatment. Metcalf gave oral evidence. Kirby P said he was an impressive witness. Metcalf considered that Rajski’s symptoms were the classic signs and symptoms of depression and anxiety.
191 At 688 Kirby P referred to the appellant’s announcement, as the Court was about to make its orders, that he would thenceforth appear for himself in the proceedings and wished to make a submission additional to that put to the Court by senior counsel previously appearing in his interest. The submission was to the effect that before granting an adjournment and ordering a stay, the Court should proceed to determine that Rajski was mentally disable within the meaning of the Supreme Court Rules Pt 63 r5(2). The consequence of a determination that Rajski had become a mentally disable person would be the necessity for the Court to appoint a tutor to conduct his litigation. Kirby P said that the last minute application by the appellant appeared to be misconceived in the present state of the evidence and certainly premature. At 694 Priestley JA said that, although he did not think that the matter had quite reached the point where the appellant’s submission should be upheld, it seemed to him to be a weighty one.
192 The Court stayed the proceedings before Powell J, ordered a further report from Metcalf and gave leave to the opponents to apply to have a medical examination of Rajski.
193 The matter came back before the Court of Appeal on 15 December 1986, and again on 2 February 1987 when there was discussion about a further report from Metcalf. Metcalf made a further report dated 15 February 1987 which dealt with various parts of a report prepared by another psychiatrist, Shand, by reciting in summary form Rajski’s allegations. On 11 March 1987 Dawson Waldron asked Shand to provide a further report on Rajski’s condition. It was apparent that there was a live issue about the bona fides of the condition from which Rajski claimed he was suffering.
194 On 7 April 1987 Metcalf wrote the following letter addressed to the Supreme Court:
“re: DR L J RAJSKI
who has continued to see me for treatment. I refer to my report of the 16th March 1987, in particular the last paragraph of my report in which I say that in my opinion Dr Rajski is not capable of conducting his litigation by reason of his anxiety state brought about by mental exhaustion. I would consider that he is incapable of conducting any case which requires more than a 2 to 3 day hearing and which would require no more than 3 to 4 hours per day for preparation.
This opinion was arrived at following my examination of Dr Rajski on 30th March 1987 when he had been forced to prepare his case on very short notice over the weekend for a hearing on 30th March. He had had to read and reasearch [sic] an enormous volume of material. His emotional health was dramatically worsened in that he had developed severe headaches, fatigue and chest pains along with dizziness. Such was his distress channelled into his gastro-intestinal tract that he had been prone to vomiting. Whilst in my surgery he looked unwell, had a rapid pulse and was excitable.
Besides the volume of work which he has to prepare in order to conduct his litigation, he is also rendered more anxious due to his perception of Dawson Waldron’s conduct of their litigation. I was shown on 30th March various documents and transcripts concerning continuous attempts by Dawson Waldron, Solicitors, which clearly indicated an attempt on their part to present facts eroneously [sic] to the Court, in the form of misquoting Justice Miles’ judgment and deleting information from an affidavit.
I also noted that Dr Rajski had been accused by Dawson Waldron that he had falsely put to the Court that I myself was not able to appear in Court on 8th and 9th April, I cannot understand this conclusion. It does appear that a Solicitor from Dawson Waldron did phone my wife whilst I was in Melbourne to enquire whether I would be able to appear in Court on 8th and 9th April. As I usually am not in my office on Wednesdays, my wife said that it would be difficult for me to attend, but that I would be able to attend on the Thursday. She may have noted that if I were subpoenaed to attend on the Wednesday that I would have to appear.
As a result of Dawson Waldron’s tactics, Dr Rajski is forced to continually counter their false allegations which denies him any opportunity to rest so that he can conduct his litigation. In my opinion, Dr Rajski can only gradually get back to the conduct of his litigation and would need at least 2 months before he could return to any lengthy and complex litigation.”195 This was an unusual letter for a professional expert witness to write. Metcalf made statements about Dawson Waldron’s conduct which on their face were not statements of medical opinion or a record of the history given by the plaintiff of his complaint or generally. Although initially referring to Rajski’s perception of Dawson Waldron’s conduct of the litigation, Metcalf then made bald assertions about Dawson Waldron’s conduct, as matters of fact, in pejorative terms, for example, “misquoting Justice Miles’ judgment”, “deleting information from an affidavit” and making “false allegations”. As an expert, Metcalf was not competent to give evidence of this, and had no basis for doing so beyond (presumably) what Rajski told him or showed him.
196 The letter from Metcalf was delivered by Rajski to Murphy and Moloney and then attached to an affidavit sworn by Rajski which was filed in Court. When the letter was delivered to them, Murphy and Moloney were already acting for Dawson Waldron in proceedings brought by Rajski and Raybos against Dawson Waldron for conspiracy. The appellant retained Murphy and Moloney to act for Dawson Waldron in relation to the letter. He drafted a letter which was sent to Murphy and Moloney for their consideration.
197 In the draft letter prepared on 8 April 1987 it was alleged that Metcalf’s letter contained statements which were false and defamatory of Dawson Waldron namely:198 A file note of 10 April 1987 of a telephone attendance by Murphy and Moloney raised questions about the contents of the draft letter. Ultimately, Dawson Waldron agreed that the letter should go without the second numbered paragraph in it. The letter so amended was sent by Murphy and Moloney to Metcalf on 13 April 1987. The letter stated that Dawson Waldron required:
“1. ‘… continuous attempts by Dawson Waldron, Solicitors, which clearly indicated an attempt on their part to present facts erroneously to the Court, in the form of misquoting Justice Miles’ judgment and deleting information from an affidavit.’2. ‘I also noted that Dr Rajski had been accused by Dawson Waldron that he had falsely put to the Court that I myself was not able to appear in Court on 8th and 9th April.’
3. ‘As a result of Dawson Waldron’s tactics, Dr Rajski is forced to continually counter their false allegations.’ ”199 Metcalf instructed Mark O’Brien (“O’Brien”) of Turnbull McWilliam to act on his behalf. Simpson J said in her judgment:
“ … that by 4.00 pm on Wednesday, 15 April 1987, you:
(a) Inform us of the names and addresses of each person or institution to whom you published the letter.
(b) Withdraw the allegations against our clients, apologise to them and send a copy of that withdrawal and apology to each person to whom the letter was published.
(c) Undertake that you will publish no further matter defamatory of our clients.”
Murphy and Moloney advised Metcalf that in the absence of a satisfactory response by the time stipulated Dawson Waldron would take such action as they were advised without further notice to him. Another file note of 10 April 1987 showed that Dawson Waldron had requested Murphy and Moloney to account to them separately in this matter, as it would not be charged to the Arunta companies.
200 In his submissions the appellant pointed out that Simpson J did not mention that on 21 April 1987 Slee published an article in the Sydney Morning Herald which included the following:
“322 ……There followed some negotiations between the solicitors, evidenced by file notes of 14, 15 and 16 April, and eventually, senior and junior counsel were briefed to advise whether actionable defamation existed in Metcalf’s letter, and if so, to draw a statement of claim.
323 On 23 April 1987 the [appellant] attended a conference with his solicitors, Murphy and Moloney, and Nicholas QC. Notes of the conference were taken by John Ward (‘Ward’), the Murphy and Moloney solicitor handling the matter on behalf of [Dawson Waldron]. The notes taken are brief, but include the following:
‘Must stop this rot.
Alternatively - undertaking from Metcalf not to publish further material to the court without our approval.
Commence proceedings forthwith -
carry on in conventional way.
15 June X-exam Metcalf - would assist in assessing prospects of success of defamation action.
D Waldron must expect criticism that the action has been taken to stifle a witness.
AA&H have turned the other cheek. Merit of suing Metcalf is a matter of policy - maybe not sue - wait to attack M when he comes to court again.
...
S 13 - publication
to M and M no publication
to Rajski - no damage
to Court - probably no damage
DW gives Metcalf a fright but what else.
DW would have problems in giving particulars of publication in S of claim.
Query whether proper proceedings were against Rajski - with a further publication or to Slee
...
minimal prospects of success against M.’
324 In a typewritten note of the same conference, made by John Hewett (‘Hewett’), also of Murphy and Moloney, the following appears:
‘[the appellant] said he wanted to be a representative Plaintiff for the firm.
After consideration we all came to the view that chances of establishing prima facie case against Metcalf were very slim because he probably had not published it to anybody relevant. Publication to Murphy and Moloney is no good because it is [Dawson Waldron’s] alter ego.’
...
325 On 29 April 1987 [Dawson Waldron] wrote to Murphy and Moloney acknowledging receipt of copies of the correspondence that had passed between that firm and Turnbull McWilliam. They enclosed a draft letter for Murphy and Moloney’s approval and in the event of approval being given, for forwarding to Metcalf. In the draft letter [Dawson Waldron] proposed to maintain the suggestion that defamation proceedings against Metcalf would be taken by [Dawson Waldron]. The draft contained the following:
‘We also note that your client claims that he simply wrote what he was told by Mr Rajski. This can surely not be put forward as a justification for your client to make statements defamatory of our clients.
We are instructed by our clients to require of your client:
(a) That he apologise to our clients for the making of the defamatory statements.
(b) That he use his best endeavours to prevent further publication of the letter and, in particular, the defamatory parts of it.
(c) That he undertake in the future not to make or publish any matter defamatory of our clients.
If these requirements are met, our clients do not intend to take any action against your client.’
327 On 1 May Murphy and Moloney forwarded a letter, substantially in terms as drafted by the [appellant], to Metcalf. Of particular relevance, the demands with which [Dawson Waldron’s] draft had concluded were incorporated in the letter.”
326 There were also in evidence a series of file notes made by Hewett, on 15 April apparently recording telephone conversations. These cannot all be put in their correct chronological sequence. However, in two of the notes Hewett has recorded himself as having told Metcalf’s solicitor, O’Brien, that, the deadline imposed having expired without receipt of the response sought, he was instructed to proceed to issue a statement of claim. In oral evidence the [appellant] said that this was incorrect and that Murphy and Moloney did not have instructions to issue a statement of claim, and indeed, that such instructions could not have been given without a decision of [Dawson Waldron’s] Management Committee. The file notes are relied upon by the [Commissioner] as further evidence of pressure being applied by the [appellant] to Metcalf. As I have earlier noted, I generally accept the [appellant’s] evidence, and I do so on this occasion. In any event, there is no direct evidence that Murphy and Moloney in fact had the instructions referred to; all that is in evidence is the file notes, which prove only that O’Brien had made the statements he attributed to himself. Ordinarily, of course, a statement by a solicitor that he had instructions to undertake a stated course of action would be accepted as evidence that he did in fact have those instructions. However, misunderstandings can arise, and, in the face of directly conflicting evidence from the [appellant], it could not be concluded that such instructions had been given. The rationale given by the [appellant], that issue of the statement of claim would require a decision of [Dawson Waldron’s] Management Committee, is compelling.
“Dr Rajski has duly been consulting Dr William Metcalf a Macquarie Street specialist. Dr Metcalf has reported to the court that Dr Rajski is perfectly sane, but in need of rest.
In one of his latest reports to the court, however, Dr Metcalf has also reflected on the conduct of Mr Nick Carson, a partner of Dawson Waldron. (This is the firm which has been acting for Allen Allen and Hemsley, who are accused by Dr Rajski of abuse of process.) As a result of Dr Metcalf’s comments about him, Mr Carson has threatened to sue for defamation.
Now, it is a moot point whether Mr Carson can get anywhere with such an action, whatever uncomplimentary things Dr Metcalf might say about him. Generally, what an expert witness says for the purpose of court proceedings is privileged and cannot give rise to defamation proceedings.
In any event, Dr Rajski has not taken kindly to Mr Carson’s action against Dr Metcalf. He is seeking to have it declared part of a pattern of conduct that he alleges is in contempt of court.”
201 In the Fairfax defamation proceedings the jury found this article to be defamatory. One of the imputations pleaded was “The plaintiff wrongly attempted to intimidate Dr Metcalf by threatening to sue him for defamation in respect of a medical report written by him”, see generally, John Fairfax & Sons Limited v Carson, the decision of the Court of Appeal, at 267 and Carson v John Fairfax & Sons Limited, the decision of the High Court.
202 The appellant submitted that it was clear that by 21 April 1987 there had been some publication of the letter to the Sydney Morning Herald. At the time the letter was hand delivered by Rajski to Murphy and Moloney, it had not been tendered in any proceedings. After the delivery of Murphy and Moloney’s letter dated 13 April to Metcalf’s rooms on the morning of 14 April, Murphy and Moloney received a telephone call on or after 15 April from a solicitor acting on Metcalf’s behalf who informed Murphy and Moloney that the only person to whom his client had given a copy of the report (the original) was Rajski and that his client had requested its return. These matters were briefed to counsel for the conference of 23 April 1987, Nicholas QC (“Nicholas”), and to Sackar. The observations to counsel continued: “However, it is evident from John Slee’s column that it has been republished, presumably by Rajski.”
203 The appellant submitted that there was clearly not the slightest hint of an attempt to stop Metcalf giving evidence about Rajski’s mental, physical or nervous condition. The concern was about the statements Metcalf had made outside his province as an expert and critical of Dawson Waldron which appeared to be his interpretation of correspondence and documents. A file note of Murphy and Moloney of 27 April 1987 said:
“Dawsons are thinking of seeking particulars from Metcalf as to his grounds for coming to the views he has about Dawson Waldron’s conduct towards Rajski. If he gives the grounds then any inaccuracies or other relevant information can be supplied to him with a request that he reassess his views.”
204 On 28 April 1987 Rajski filed a notice of motion against “Tectran Corporation Pty Limited and others” including apparently the appellant, Dawson Waldron, and Powell J for declarations that they were guilty of contempt in a number of respects including “threatening or intimidating expert witness and/or Court appointed expert Dr Metcalf”.
205 The text of Murphy and Moloney’s letter of 1 May 1987 to Turnbull McWilliam was as follows:206 On 11 May 1987 Turnbull McWilliam replied:
“We acknowledge receipt of your letter of 21st April.
It follows that you are instructed that your client gave the letter of 7th April to Mr Rajski solely for the purpose of Mr Rajski’s tendering it in evidence before the Court of Appeal and in particular that your client denies authorising or contemplating any other publication of the letter.
It is, of course, clear that there has been other publication of the letter by Mr Rajski. For example, to this firm and to Mr Slee, a journalist who writes for the Sydney Morning Herald.
We also note that your client does not claim that he simply wrote what he was told by Mr Rajski. In any event, this can surely not be put forward as a justification for your client to make statements defamatory of our clients.
We are instructed by our clients to require of your client:
(a) That he apologise to our clients for the making of the defamatory statements.
(b) That he use his best endeavours to prevent further publication of the letter and, in particular, the defamatory parts of it.
(c) That he undertake in the future not to make or publish any matter defamatory of our clients.
If these requirements are met, our clients do not intend to take any action against your client.
We look forward to your early reply.”
“We refer to your letter of the 1st May, 1987.
The letter was published by Dr Metcalf on an occasion of qualified privilege in the course of proceedings still before the Court.
In our view any further discussion of that report should take place in the current proceedings.
To this extent the letter is ‘sub judice’ and it is not appropriate to discuss the question of an apology.”
207 Murphy and Moloney sent the reply on to Dawson Waldron. On 22 May 1987 Dawson Waldron wrote to Murphy and Moloney stating that they did not wish to take any further action “at this stage”. No proceedings were taken by Dawson Waldron. The only proceedings to arise out of the matter were Rajski’s contempt proceedings which still await hearing.
208 Simpson J rejected the suggestion that the appellant on this occasion was acting not as a legal practitioner but as a client. Of a submission that, in relation to the proceedings, the appellant acted at all times “with the benefit of the advice of independent solicitors and Nicholas QC, senior counsel very experienced in the field,” her Honour said:209 As to the submission that proceedings were not ultimately instituted and the argument that Dawson Waldron were entitled to request an apology, her Honour said:
“332 It is interesting to note that it was not submitted that the [appellant] acted on or in accordance with the advice of independent solicitors and counsel. The documentation to which I have referred makes it reasonably plain that the [appellant] himself took a very substantial role in the preparation of correspondence. The file notes show a great deal of caution and reservation on the part of his counsel.”
210 Her Honour rejected a submission that no impropriety was involved in a lawyer acting for a client in proceedings even if they were known by the lawyer to be hopeless and a fortiori if he did not know them to be hopeless. Simpson J continued:
“335 The fact that proceedings were not ultimately instituted does not assist the [appellant]. It is the threat of proceedings, and the context in which the threat was made, that is significant. It must always have been apparent that a report, written by a medical practitioner for a court would, other than in exceptional circumstances showing some form of mala fides on the part of the practitioner, be privileged.”
“339 The composite submission provides no answer to the [Commissioner’s] claim. Firstly, the authorities cited do not support the first of the general propositions, that there is no impropriety in a lawyer acting for a client in a cause known to be hopeless. By way of example, the passage cited in Rajski v Bainton (1990) 22 NSWLR 125 at p146A merely records an argument advanced in that case on which the court did not finally rule.
340 Secondly, a letter was sent to Metcalf containing demands of withdrawal and apology and a threat of legal action. This was sent well before the conference with senior counsel. Thirdly, the question is not whether the [appellant], either as litigant or lawyer, wrongly pursued a hopeless cause. The question is whether, in making the threat to sue Metcalf, his purpose was to attempt to intimidate the doctor and circumvent his support for Rajski.
341 A further argument for the claimant was that, in so far as it is alleged that he sought to intimate Metcalf, it is not contended that he was in fact intimidated, and no complaint to that effect was made at the time by Metcalf or his lawyers. I do not consider this a relevant consideration. If, successfully or unsuccessfully, a legal practitioner set out to intimate a witness in any proceeding, that is capable of amounting to professional misconduct.
342 The final argument was that the correspondence directed to Metcalf and his lawyers distinguished between use of the report in evidence before the court and any other publication of the letter, such that it could not reasonably be concluded that whatever the [appellant] was seeking to do, it included preventing Metcalf giving evidence in court in accordance with his report. In my view that submission is inconsistent with the clear words of the correspondence. In the first letter Metcalf was required to
‘withdraw the allegations….and send a copy of that withdrawal and apology to each person to whom the letter was published’
and undertake not to publish any further matter defamatory to [Dawson Waldron]. In the second he was required to use his best endeavours to prevent further publication of his letter, and undertake in the future not to make or publish any matter defamatory of [Dawson Waldron].
343 The letters contain no clear or implied exclusion of publication to the court and, in my view, the clear tone of the letters is to require Metcalf to abandon those parts of his report which the [appellant] asserted defamed [Dawson Waldron].
344 It is important not to lose sight of the quite extraordinary action that was threatened, or contemplated by the [appellant]. This was to sue a medical practitioner for statements made in a report to a court, essentially detailing a history of a patient relevant to the formation of the medical practitioner’s opinion. The extraordinary nature of the contemplated action is relevant in an assessment of its bona fides .
345 It would be open to the Tribunal to conclude that the steps taken by the [appellant] in relation to Metcalf were taken for an improper purpose and amounted to professional misconduct.”
211 The appellant’s submissions started with emphasis on the extraordinary nature of the report prepared by Metcalf, which alleged “continuous attempts by Dawson Waldron, Solicitors, which clearly indicated an attempt on their part to present facts erroneously to the Court, in the form of misquoting Justice Miles’ judgment and deleting information from an affidavit” and tactics as a result of which “Dr Rajski is forced to continually counter their false allegations which denies him any opportunity to rest so that he can conduct his litigation.”
212 According to Metcalf, he published the letter only to Rajski. Rajski saw fit, apparently, to send it to Murphy and Moloney. Someone, apparently, either sent it to Slee or published to Slee what Slee described as “one of his latest reports to the court” in which “Dr Metcalf has also reflected on the conduct of Mr Nick Carson, a partner of Dawson Waldron.” Undoubtedly, the report was, quite unnecessarily in terms of an expert opinion about Rajski’s health, defamatory of Dawson Waldron, though perhaps not of the appellant individually. Since the report was intended to be for the Supreme Court and was addressed to the Supreme Court, its publication for the purpose of the litigation was privileged. But it was published otherwise than for the purpose of the litigation.
213 The cause of the problem was Metcalf’s letter. The reaction to it was not surprising, and in the letters to Metcalf and his solicitors - including the letter of 13 April 1987, as to which Dawson Waldron accepted an amendment suggested to the draft letter - the appellant took the advice of Murphy and Moloney and senior and junior counsel. Yet Simpson J describes it as “quite extraordinary action that was threatened or contemplated by the [appellant]”. The two passages from Metcalf’s letter her Honour quoted without comment.
214 In the context of this case, borne out by the events which subsequently happened, I see nothing improper in seeking to establish (as the letter of 13 April 1987 did) to whom the letter had been published and requiring the corrective action as to persons to whom it had been published and that no further publication be made. Murphy and Moloney saw no impropriety in this. With the utmost respect, I think it clear that the letter, and all that followed, was not concerned with publication to the Court, and did not convey any deterrence to Metcalf to continue to act as medical consultant to Rajski. Turnbull McWilliam did not suggest that the requirements made upon Metcalf were seen as improperly directed to the continuance of his role as such consultant or his reporting to the Court.
215 Dawson Waldron were advised on 23 April 1987 that, because of the limited publication (as it was then known) the prospects of success in proceedings against Metcalf were slim. The letter of 1 May 1987 then put altered requirements to Metcalf, again the letter being approved by Murphy and Moloney. By the time of this letter, the article had been published in the Sydney Morning Herald, and there was a new dimension of republication of the letter to and by Slee which, from the observations to counsel and notes of the conference of 23 April 1987, had been raised but not fully considered. The letter of 1 May 1987 was essentially forward-looking, directed to preventing further publication or repetition, and in the circumstances this was in my view understandable and could not properly be criticised.
216 Simpson J said that the letters contained no clear or implied exclusion of publication to the Court. In her Honour’s view “the clear tone of the letters is to require Metcalf to abandon those parts of his report which the [appellant] asserted defamed [Dawson Waldron].” In my opinion, it is impossible to assert that protest by Dawson Waldron, about material in Metcalf’s letter which could not be any legitimate part of an expert report, could involve impropriety. The problem was of Metcalf’s making by including the material in his report, and then Rajski, without the consent of Metcalf, publishing that material other than to the intended recipient, the Court.
217 Dawson Waldron did not receive the apology and undertaking to which the letter of 1 May 1987 referred, and did not take proceedings against Metcalf. In the light of the advice, that is understandable, and it does not mean that the letters were not properly sent to Metcalf and his solicitors; more to the point, it does not mean that the letters were sent, as the complaint required, as an improper attempt to intimidate Metcalf as a witness for Rajski in the litigation. I do not think that it could be found that the appellant was guilty of professional misconduct in that respect, and in my opinion the complaint on this ground should have been stayed as having no prospect of success.
The decision on Ground 6 of the Complaint - the Fairfax complaint
218 The substance of this ground as alleged in the Information was that the appellant gave evidence which was false or misleading to his knowledge on 6 June 1989 in the Fairfax defamation proceedings in relation to two articles written by Slee and published in the Sydney Morning Herald. The claims of defamation were heard together in a trial that began on 6 June 1989 before Loveday J and a jury.
219 Simpson J observed, I think correctly, that giving inaccurate evidence could not, of itself, amount to professional misconduct. Hence the allegations went beyond inaccuracy, to say the evidence was false or misleading to the appellant’s knowledge, that is, that it was deliberately false or misleading. Her Honour said:220 The appellant’s evidence at the trial on which the Commissioner relied was -
“370 There is no evidence capable of supporting a finding of professional misconduct in respect of the evidence given in the Fairfax proceedings. This ground must be deleted from the Information.
371 I should add that senior counsel for the [Commissioner] put a final submission, to the effect that this court had not had the benefit of the potential evidence of Parsons or Davidson, an advantage which may be available to the Tribunal: s171(1).
372 I do not accept that the present decision should be made by speculating about evidence that might become available. Firstly, although he may not have had powers of compulsion, there was nothing to stop the [Commissioner] seeking information from either Parsons or Davidson in the course of his investigation; there was no evidence that he sought to take this course. There was no reason why either or both of those gentlemen should not have been required, by subpoena if necessary, to attend at this Court for the purpose of giving any relevant evidence they may have been able to give. It would be quite wrong to determine that there is adequate evidence to go to the Tribunal on the basis that some additional information may be forthcoming. I reject the submission.”
Ground 6(a)
The sub-grounds 6(a), 6(b) and 6(c) have been described earlier in these reasons. The matters said to show that the appellant’s evidence was deliberately false and misleading were as follows.
221 A file note was prepared by Davidson on 11 May 1988 about a meeting on 17 March 1988 at which were present Parsons, the appellant and Davidson. This file note was prepared from other notes made during the meeting on 17 March. The subject matter of the file note was “Yerushalmy - Perjury”. The note further recorded:
“Q. Had you ever been asked to accept service of criminal process on behalf of Yerushalmy? A. No.”
222 On 5 April 1988 Davidson rang Mr Dart (“Dart”) at the Office of the Solicitor for Public Prosecutions. The file note read:
“The meeting was convened at the request of BDW
Re Parsons [sic] request that Cowper attend an interview concerning his evidence in 1981 as to his qualifications, experience and his report of October 1980.
Parsons acts on the instructions of Dart of the DPP.
During discussions re Cowper, Parsons stated proceedings had been commenced against Yerushalmy for perjury.
Parsons suggested BDW contact Dart for further information.”
223 On 29 April 1988 Blake Dawson Waldron wrote to Dart in relation to Yerushalmy. The letter said in part:
“TO PHIL DART - Enquired whether we might obtain a copy of the summons issued and to be served on Yerushalmy. I noted that we had no instructions to accept service of that summons. Dart does not have a copy and suggested that I telephone Parsons.”
224 On 2 May 1988 the Office of the Solicitor for Public Prosecutions wrote to Blake Dawson Waldron noting in part:
“We understand that process has issued against Mr Yerushalmy by the Director of Public Prosecutions but has not been served. We are instructed to make representations in the nature of a ‘No Bill’ application that the summons be withdrawn. Before we do we need to know the nature of the charge and the particulars relied upon.”
225 On 10 May 1988 Blake Dawson Waldron replied noting in part:
“I note that you decline to accept service of the Summons on Mr Yerushalmy’s behalf.”
226 The Commissioner’s complaint as particularised was that the file note of 5 April 1988 made it clear “that during the conversation Mr Dart must have asked whether Blake Dawson Waldron would accept service of the summons.” The Commissioner further asserted with reference to the note from the letter of 2 May 1988 that “[s]uch a refusal must have followed an inquiry to the same effect.” Ultimately the Commissioner submitted in relation to ground 6(a):
“In your letter you say that we declined to accept service of the summons on behalf of our client. Mr Davidson did inform Mr Dart that we did not have instructions to accept service of the summons. You did not ask us to seek such instructions.”
“It is clear from the correspondence that the [appellant] through his junior solicitor, Mr Davidson, was asked to accept service of the summons on behalf of Yerushalmy. It was false or at least misleading for the [appellant] to respond to the Court otherwise.”
227 I regard the complaint on such a flimsy base as totally without merit. The allegation in the complaint was not as to the fact of no instructions to accept service, or as to saying that there were no instructions to accept service, but as to being asked to accept service. Davidson told Dart that Blake Dawson Waldron did not have instructions to accept service, but there was nothing to show that he was asked to accept service. For all that appeared, because of what he was told by Davidson Dart never asked, and that is what the letter of 10 May 1988 indicates.
228 The evidence the appellant gave about his meeting with Parsons was said to be false and misleading in light of the file note of the meeting of 17 March 1988. Her Honour Simpson J was satisfied that it would not be open to the Tribunal to reach a conclusion, on the material relied upon by the Commissioner, that a request to accept service was made. In my opinion her Honour was correct.229 The appellant’s evidence at the trial on which the Commissioner relied for ground 6(b) was -
Grounds 6(b) and 6(c)
230 The appellant’s evidence at the trial on which the Commissioner relied for ground 6(c) was -
“Q. Do you recall visiting in connection with a case of Mr Cowper, who is mentioned in that second article, that is Ex. E, attending at the office of the Director of Public Prosecutions in Sydney? A. Yes.
Q. Did you speak to anyone there? A. I spoke to Detective Inspector Parsons.
Q. Did you speak to him about Cowper? A. Yes.
Q. In the course of the conversation about Cowper was another name mentioned? A. Yes.
Q. What was said? A. He patted a file on his desk and said, ‘I have also got another file about Yerushalmy where we have issued a summons’.
Q. Was anything more said than that about Yerushalmy? A. Yes, I said, ‘What is that about?’ and he said, ‘You will have to go to the DPP to find out’.”
“Q. Mr Davidson acted under your directions, did he? A. Broadly, yes. I mean I was the responsible partner.
Q. To your knowledge did Mr Davidson ever inform the Director of Public Prosecution’s Office that your firm had no instructions to accept service of the summons issued against Mr Yerushalmy? A. Yes. I think he did, because that was the fact.
Q. There is no obligation on a solicitor to accept service of such a summons at all, is there? (Objected to; allowed)
Q. It would be your understanding that there is no obligation on a solicitor to accept service of such a summons? A. First of all, we didn’t know what summons it was at that stage. That is what we were trying to find out
…
McPHEE: Q. Is it your understanding that there is no obligation on a solicitor to seek instructions to accept service?
HUGHES: Of criminal process.
McPHEE: Q. Of criminal process.
HUGHES: Charging an indictable office.
WITNESS: A. He can’t accept service of a summons charging an indictable offence but if it is a summary matter it’s fine generally to avoid embarrassment to the client. The only obligation I would say would be to say to the client ‘Look, if you give me instructions to accept service that will save you the embarrassment of someone turning up at your place”.
McPHEE: Q. There is no obligation on a solicitor to seek those instructions, is there? A. In respect of what sort of process?
Q. The process we are concerned with here. A. What we now know to be an indictable offence?
Q. Yes. A. He can’t. It’s just not good service. So it doesn’t arise.”
231 The Commissioner claimed that Simpson J, having held that there was a basis on which the Tribunal could conclude that the evidence given by the appellant in the Fairfax defamation proceedings as referred to in those two grounds was inaccurate, erred in holding that there was no evidence capable of supporting a finding of professional misconduct and that it would not be open to the Tribunal to find the appellant guilty of professional misconduct.
232 Simpson J said that to sustain these allegations the Commissioner relied upon the notes made by Davidson during the conference on 17 March 1988. The file note prepared by Davidson on 11 May 1988 was headed “Yerushalmy - Perjury” and said, amongst other things, “During discussion re Cowper, Parsons stated proceedings had been commenced against Yerushalmy for perjury.” Her Honour observed that the last two words were important and did not appear in the notes taken contemporaneously. The note prepared on 17 March 1988 said only “proceedings commenced against Yerushalmy”. It did not identify the nature of the proceedings, which was a matter of obvious significance.
233 Another file note, bearing Davidson’s initials, was dated 31 March 1988 and was headed “Arunta Investments Pty Limited Re Yerushalmy - Perjury”. Another, also bearing Davidson’s initials, dated 5 April 1988 was headed “Arunta Investments Pty Limited Re Rajski v Yerushalmy - Perjury”. It recorded an inquiry made by Davidson of Dart to which I have already referred. The letter from the Solicitor for Public Prosecutions to Dawson Waldron of 2 May 1988, confirming that an Information alleging perjury against Yerushalmy had been laid and that difficulties were being experienced in serving the summons, concludes with the reference to Dawson Waldron declining to accept service of the summons.
234 Simpson J said that the Commissioner’s argument about grounds 6(b) and (c) depended entirely upon inferences to be drawn from the various documents which I have extracted. Her Honour said:
“366 [The Commissioner] relies upon the file note of the conference of 17 March 1988 prepared by Davidson. It is to be remembered that this file note was prepared on 11 May 1988 - almost two months later - from contemporaneous notes made at the conference. There is a significant discrepancy between the two. The later file note states that Parsons has referred to proceedings commenced against Yerushalmy for perjury ; in the contemporaneous note, although it is noted that proceedings had been commenced against Yerushalmy, the charge was not identified. Further, the later file note is headed ‘Yerushalmy - Perjury’; the contemporaneous note has no such heading. There is nothing in the contemporaneous note to show that, at the time of the conference, those present were aware specifically of the nature of the charge. The two file notes of 31 March and 5 April are also each headed ‘Perjury’, and there is no suggestion that they were not made on the dates they bear. Certainly, by those dates, it may be taken that Davidson was aware, in general terms, of the charge that would be laid against Yerushalmy.
367 While Davidson’s knowledge does not necessarily imply that the [appellant] was aware of the general nature of the charge, given the close supervision which the [appellant] gave to all matters concerning Arunta, Tectran and their associated companies and individuals, I think it is a reasonable inference that he had substantially the same information and knowledge as Davidson had.
368 There is, therefore, a basis on which the Tribunal could conclude that the evidence he gave in these two respects was inaccurate.”
235 This was the basis from which, in the Commissioner’s submission, her Honour erred in going on to find that there was no evidence capable of supporting a finding of professional misconduct and that it would not be open to the Tribunal to find the appellant guilty of professional misconduct. However, I think the submission misunderstands her Honour’s reasons.
236 Simpson J went on -237 The Commissioner put his arguments in support of the cross-appeal as follows:
“369 Giving inaccurate evidence could not, of itself, amount to professional misconduct, and this is recognised by the [Commissioner] in the formulation of the Information, which alleges that the evidence went beyond inaccuracy, and was false or misleading - implying, at least, knowledge of its inaccuracy, and an intention to mislead the court. Merely to give mistaken evidence could not amount to professional misconduct.
370 There is no evidence capable of supporting a finding of professional misconduct in respect of the evidence given in the Fairfax proceedings. This ground must be deleted from the Information.”
“(a) Mr Davidson’s diary note dated 17 March 1988 which was discovered in the Fairfax proceedings… notes that it was ‘prepared on 11 May 1988 from notes made on 17 March 1988 during meeting with Parsons’. The discovered diary note dated 17 March 1988 is titled ‘Re: Yerushalmy - Perjury’ and the persons present at this meeting were Detective Chief Inspector Parsons, [the appellant] and [Davidson]. The discovered diary note dated 17 March 1988 records that ‘During discussions re Cowper, Parsons stated proceedings had been commenced against Yerushalmy for perjury . Parsons suggested [Dawson Waldron] contact Dart for further information’.
(b) The discovered diary note dated 17 March 1988 is corroborated by the file notes dated 31 March 1988 and 5 April 1988 prepared by Mr Davidson …. which are both titled ‘…Yerushalmy - Perjury’. It is apparent from the contents of those file notes that Mr Davidson’s knowledge of the perjury charge against Yerushalmy did not come from what occurred on 31 March 1988 and 5 April 1988. The files notes of those dates record all contacts between Mr Davidson and Detective Parsons and Mr Dart (of the DPP) between 17 March 1988 and 5 April 1988: see cross-examination of the [appellant] at T404 lines 10-24. Accordingly, Mr Davidson’s knowledge that the charge was for perjury could only have come from the 17 March 1988 meeting with Detective Parsons, attended also by the [appellant].”
238 With due respect, these submissions miss the point that Simpson J made. Her Honour distinguished between inaccuracy and that which was necessary for the grounds of complaint, that the evidence was false or misleading to the appellant’s knowledge in that he knew the true positions. Accepting, as her Honour did, that the appellant’s evidence as particularised in these grounds could be found to have been inaccurate in that on 17 March 1988 Parsons had said that proceedings had been commenced against Yerushalmy for perjury and the appellant knew at that time that Yerushalmy had been charged with perjury, it is a far cry from establishing that the evidence the appellant gave on 6 June 1989 was false or misleading to his knowledge.
239 Bridging the gap is all the more difficult when the evidence of 6 June 1989 was not directly to the contrary of the knowledge now said to have made the evidence false or misleading. In the evidence on which the Commissioner relied for ground 6(b) the appellant relevantly said that Parsons told him he would have to go to the Director of Public Prosecutions to find out what the summons issued in relation to Yerushalmy was about. The relevant discrepancy could only be that Parsons in fact said that the charge was perjury and it could easily be that the appellant misrecollected the full conversation or failed to recall that Parsons later identified the charge as perjury. In the evidence on which the Commissioner relied for ground 6(c) the appellant relevantly said that he did not know what sort of summons it was at that stage, which does not necessarily refer to whether the offence was perjury.
240 To my mind, grounds 6(b) and (c) were foredoomed to fail in the Tribunal. I agree with Simpson J’s findings. The complaint, the result of dredging through the transcript of a lengthy case to find such discrepancies, particularly without any proper investigation of the matter, was untenable. A solicitor should not be charged with professional misconduct on such a flimsy basis.241 Grounds 7(i), 7(ii), 7(iii), 7(iv) and 7(vii) will follow the fortunes of grounds 1, 2, 3, 4 and 5. Ground 7(viii) was stayed, and there was no cross-appeal challenging the stay.
The decisions on Ground 7 of the Complaint - the omnibus ground
Ground 7(v) - Costs in the defamation proceedings before Hunt J
242 In 1985 Rajski sued the partners of Dawson Waldron for defamation. Dawson Waldron applied, successfully in the first instance, for summary dismissal of the claim. On 16 May 1986 Hunt J directed entry of judgment in favour of Dawson Waldron and ordered Rajski to pay their costs (Rajski v Carson (1986) 4 NSWLR 735). On 7 July 1986 the Court of Appeal granted Rajski leave to appeal from that decision. On 21 July 1986 he filed a notice of appeal.
243 Notwithstanding the grant of leave and the filing of the notice of appeal, on 30 July 1986 Dawson Waldron’s solicitors, Murphy and Moloney, served Rajski with a certificate of taxation of costs quantified in the amount specified. On 11 August 1986 Murphy and Moloney demanded payment of the costs by 18 August with a threat of legal action in the event of non-payment. On the same day Rajski wrote to Murphy and Moloney seeking consent to orders setting aside the certificate of costs and staying Hunt J’s order for costs pending the hearing of the appeal. On 18 August the Court of Appeal stayed the costs order pending the hearing of the appeal.
244 Simpson J said:245 It is disturbing that the Commissioner in making a complaint to the Tribunal about a legal practitioner alleging professional misconduct should make a misleading allegation such as that referred to by Simpson J. I agree with her Honour’s conclusions.
“379 There is no evidence that either the [appellant] or [Dawson Waldron] or their clients took any formal steps towards commencing bankruptcy proceedings against Rajski. The sole evidence concerning any consideration of bankruptcy proceedings is to be found in a file note of the conference of 19 June 1986, to which reference has been made in relation to ground 3. The file note discloses that the [appellant] reported on the status of the defamation proceeding, that Rajski had sought leave to appeal, and that, in the [appellant’s] view, Rajski would ultimately lodge an appeal. It was following that report that the question of bankruptcy arose. The file note records the following:
‘[The appellant] also mentioned that when we get a certificate as to costs we will then move to send Rajski bankrupt. Garry Richardson asked whether there would be any advantages re the main proceedings if Rajski is bankrupt. [The appellant] replied that only so far as asking the question where Rajski’s money has gone and what assets he does have …
[The appellant] was hopeful that within a couple of weeks we would have a certificate on which we could base the bankruptcy notice. [The appellant] then noted that he would need to get the [Dawson Waldron] general committee to approve issuing a bankruptcy notice.’
380 The [Commissioner] also relied on the evidence, earlier referred to, of the [appellant’s] intention to maintain pressure on Rajski, to ‘push’ him, or to ‘stretch’ him….
381 Later, from a file note recording a conference of 27 October 1986 … it is clear that further consideration was being given to the same action. Under the sub heading ‘Re Items to Action’ appears the following:
‘So far as orders for costs were concerned Bainton QC had advised it was worthwhile bankrupting Rajski. [The appellant] said that we should get the orders for costs before the High Court taxed and noted that the orders for costs in the defamation matter against [Dawson Waldron] had been taxed but the Court of Appeal had stayed that order….
Garry Richardson then enquired re the effect of bankrupting Rajski and Raybos? [The appellant] explained that if the company is wound up the court appointed liquidator would stand in for Rajski and presumably that the liquidator would need to be funded; but legal aid may cover this action.’
382 Senior counsel appearing for the [Commissioner] observed that, while there did not appear to be any formal move towards bankruptcy proceedings, there was a contradiction in the way in which the claimant and the employed solicitors from [Dawson Waldron] were thinking. He contrasted the consideration being given to bankruptcy and liquidation proceedings, necessarily based upon the impecuniosity of Rajski and Raybos, with the letter to the LAC suggesting that neither had disclosed his or its true financial position, and that each was in possession of substantially more assets than those which they had disclosed to the LAC. I find this immaterial. The simple fact is that, whatever discussions took place during the numerous conferences concerning the litigation, no bankruptcy action was taken against Rajski. It is misleading to allege, as [the Commissioner] does, that the [appellant] ‘sought to have bankruptcy proceedings taken against Rajski’. The most he did, so far as the evidence goes, was to give consideration to and to discuss such a course of action, and to consider the possible foundation for such action. There is no basis on which ground 7(v) could found a finding of professional misconduct or unsatisfactory professional conduct. It should be deleted from the Information.”
Ground 7(vi) - Tutor application
246 The Commissioner alleged that between late 1986 and early 1987 the appellant attempted to have Rajski declared mentally disable and to have a tutor appointed to conduct his litigation for the improper purpose of hindering, obstructing or thwarting Rajski in the conduct of the litigation, by taking the actions set out earlier in these reasons.
247 The factual material relates back to Powell J’s refusal to grant an adjournment and the application that followed by Rajski and Raybos for leave to appeal from this refusal. Metcalf’s report of 17 October 1986 and his oral evidence in the Court of Appeal was summarised by Kirby P in Raybos Australia Pty Ltd v Tectran Corporation (No 4) at 681. The transcript recorded the appellant as saying:248 Some questions were put by members of the Court, and Kirby P and Priestley JA made the remarks to which I have already referred. Subsequently, active consideration was given by the appellant to the possibility of seeking such a declaration. A file note of a conference on 27 October 1986, speaking of general issues discussed, said:
“My submission is that the application should be allowed to proceed and not be adjourned, for two reasons which were not mentioned before your Honours yesterday. The first is that there is a benefit to me in either event, whether the application succeeds or fails. If, as I understood the Court to indicate, you were minded to reject the application then of course the case can proceed, which is in my interest, both because of a resolution of the civil charge which lies against me and because that would then enable the criminal charge under which I suffer to be resolved more speedily.
…
Secondly, if the application succeeds it is my submission that the Court must find that the plaintiff [Rajski] is mentally disabled within the meaning of Part 63 Rule 5(2) and the consequence of that is that the Court would then be bound to appoint a tutor. That would then enable the litigation to be conducted in what, in my submission, would be a more reasonable way.”
“1. Psychiatric evidence : [the appellant] pointed out that if Dr Metcalf comes to the conclusion that Rajski is disable, Tectran may then apply to have a tutor appointed to conduct his litigation.”
249 On 15 December 1986 Mr Bainton QC (“Bainton”), who appeared for Tectran and the Dawson Waldron parties other than the appellant, sought and was granted an order that Rajski submit himself to psychiatric examination on behalf of those Bainton represented. A report was obtained from Shand dated 2 February 1987. Shand did not detect any signs of significant psychiatric disorder other than the possibility that Rajski had delusions of conspiracy and persecution by some members of the “opposition”.
250 When the proceedings were before the Court of Appeal on 2 February 1987. Kirby P described his understanding of the reason for the examination by Shand in the terms:251 The proceedings were next before the Court of Appeal on 23 February 1987. Kirby P asked whether the parties for whom Bainton appeared “were going to pursue the application for the appointment of a tutor”, noting that a report had just been received from Metcalf. Bainton said that he would need to consider Metcalf’s report and speak to Shand. The transcript then records:
“The purpose of the examination was for the opponents to consider whether or not they wish to make any application in the light of the report of Dr Shand to have you [Rajski] dealt with under the law as a disabled person. That is my understanding of what the purpose of the examination was.”
Davidson said that the examination by Shand was firstly in relation to the appointment of a tutor and secondly in response to the evidence of Metcalf. Further material was submitted to Shand and questions were put to him on behalf of Dawson Waldron.
252 The first contempt proceedings were listed for mention and directions on 23 March 1987. The appellant appeared on behalf of all the Dawson Waldron defendants including himself. A matter to be dealt with was whether any of the opponents wished to make an application to have a tutor appointed. On that matter the appellant said -
“KIRBY P: The fact the part heard hearing has to go over until April means there would be time for the parties to make that consultation and for your side to report to the Court before April in a mention of the matter whether or not you intended to make that application, and we could set aside time, both for that application, if it is to proceed and the conclusion of the part heard case. Is that roughly the position in your client’s eyes at this stage?
BAINTON: I would think so.”
253 Simpson J said:
“I think the question of appointment of a tutor is perhaps a red herring. It arose in these circumstances. About last October or November evidence was being put forward by Mr Rajski that he was incapable of conducting this case. It seemed to us either he was capable of running the case or he was incapable. If he was incapable, the Court was bound to appoint a tutor. It is not a question of our application to appoint a tutor. If the Court finds he is incapable of conducting litigation, then by the rules it is bound to appoint a tutor.”
254 Ground 3 of the Commissioner’s cross-appeal was that Simpson J erred in
“402 No application for appointment of a tutor was ever made. The [Commissioner’s] case in this respect is, again, that ‘the application ….. for appointment of a tutor’ was made for an improper purpose. It is for this reason that I have emphasised no formal application was ever made. The [Commissioner] overstates the case in referring to ‘an application’.
403 A legal practitioner - or a party to litigation - is entitled to explore the possibilities of causes of action which mature consideration reveals to be untenable. It is not, and cannot be, professional misconduct or unsatisfactory professional conduct merely to consider a course of action, or even to take active steps to ascertain whether it is practicable or viable. The nearest the [appellant] ever came to making an application for the appointment of a tutor occurred on 23 October when he raised with the Court of Appeal as a matter relevant to Rajski’s adjournment application a possible consequence of acceptance of Metcalf’s opinion about Rajski’s emotional or mental condition. While Kirby P considered the suggestion ‘misconceived’ - at least on the evidence as it then stood - Priestley JA considered, having observed the proceedings to that point, that the [appellant’s] submission was ‘a weighty one’.
404 It is necessary to distinguish what the [appellant] in fact did from what he contemplated or discussed doing or even planned to do. When that is thrown properly into relief it can be seen that all the [appellant] actually did was to make what was, in my view, a misguided submission to the Court of Appeal. He made no application for appointment of a tutor. An essential element of the [Commissioner’s] allegation is that the [appellant] applied for a tutor to be appointed. Proof of the allegation in the Tribunal would depend upon proof of a fact the negative of which is clearly, on the evidence, established. That is, the essential fact cannot be proved. This allegation is therefore doomed to failure. To pursue it would constitute an abuse of the processes of the Tribunal.
405 I am satisfied that there is no basis, in relation to the matters here set out, for a finding of professional misconduct or unsatisfactory professional conduct. This ground must be deleted from the Information.”
255 The Commissioner’s written submissions, which were not expanded orally, were:
“3.1 failing to consider the allegation in the context of a ‘course of conduct’;
3.2 holding that an essential element of the [Commissioner’s] allegation is that the [appellant] applied for a tutor to be appointed; and
3.3 deciding to permanently stay Ground 7(vi).”
“15. With respect to Ground 7(vi) alone the [Commissioner] does not alleged that the [appellant’s] conduct constituted either unsatisfactory professional conduct or professional misconduct. This sub-ground is part of Ground 7 which relies globally upon various sub-grounds to establish a ‘course of conduct’ on the part of the [appellant] with respect to his conduct of the Raybos v Tectran litigation.
16. Her Honour erred in holding that an essential element of the [Commissioner] allegation is that the [appellant] applied for a tutor to be appointed…. Ground 7(vi) alleges that between 1986 and early 1987 the [appellant] took a number of specified actions to attempt to have Rajski declared mentally disabled and to have a tutor appointed to conduct his litigation for the improper purpose of using such appointment as a means of hindering, obstructing or thwarting Rajski in the further conduct of the litigation. Ground 7(vi) does not allege that a formal application for the appointment of a tutor was made by the [appellant]; see Ground 7(vi) of the Information.”
256 The second paragraph of this submission referred to what Simpson J said in para 404 of her judgment. It is true that the complaint was that the appellant “attempted to have Rajski declared mentally disabled and to have a tutor appointed to conduct his litigation.” I have some difficulty in seeing any significant difference between the concepts of attempting to have a tutor appointed and applying for a tutor to be appointed, when that attempt was made before a Court and could only be made by making an application to the Court and when part of the allegation in the complaint is that the appellant had failed to comply with procedural requirements. The Commissioner concedes that standing alone the conduct alleged did not constitute professional misconduct. Looking at the ground of complaint globally gives it no greater significance since the other sub-grounds did not constitute professional misconduct.
257 In my opinion, Simpson J arrived at the correct conclusion and this ground of complaint was untenable.
258 It follows from the conclusions of Simpson J, with which I agree, on those grounds of the complaint in respect of which her Honour said the proceedings before the Tribunal should be permanently stayed, and from the opinion that I have formed that grounds 2, 3, 5 and 7 (v) and (vi) are also untenable, that nothing remains of the complaint. In my opinion, every ground of complaint alleged by the Commissioner was foredoomed to fail and accordingly the proceedings brought by Information before the Tribunal were an abuse of process and should be permanently stayed.
259 Save as to the appeal as to costs this determines the result of the appeal, which wholly succeeds. However, in the circumstances, I regard it as important to consider the other aspects of abuse of process on which the appellant relies.
260 The appellant claimed that her Honour was in error:
· in failing to infer that there was no explanation available for Rajski’s delay in filing the complaint (ground 3 in the notice of appeal);
· in failing to hold that the Commissioner’s investigation of the complaint was unfair and improper (ground 4 in the notice of appeal);
· in holding that there was no basis for a conclusion that the Commissioner relied upon improperly obtained evidence and in failing to hold that much of the documentary evidentiary material relied upon by the Commissioner had been improperly obtained (ground 5 in the notice of appeal); and
· in failing to hold that, having regard to the several and cumulative effect of the irregular manner in which the jurisdiction of the Tribunal had been invoked, the gross and inexcusable delay in the making and investigation of the complaint, the unfair and improper investigation of the complaint, the improper obtaining of evidence upon which the complaint was based, the pendency of contempt proceedings in respect of substantially the same subject matter, and the absence of reasonable prospects that the appellant would be found guilty of professional misconduct, the whole of the proceedings were an abuse of process and ought to be permanently stayed (ground 9 in the notice of appeal).
Delay in the making and investigation of the complaint
261 The appellant relied upon delay in filing the Information being such as to amount to an abuse of proceedings. Almost all the relevant conduct complained of took place between 1985 and 1988. Although Rajski was well aware of it, as demonstrated by the first contempt proceedings brought by him as early as November 1985 in respect of aspects of the conduct, no complaint was made to the Commissioner or its relevant predecessor, the Law Society, until 8 July 1994. This constitutes a delay of between six and nine years. No explanation was put forward for that delay. Accordingly, on the material before Simpson J it should, I think, be inferred that there was none. Thereafter, the Commissioner delayed until 20 January 1995 before informing the appellant of the receipt of the complaint and seeking his comments as to whether it should be accepted out of time. Between 20 January 1995 and 24 March 1995 the Commissioner received submissions on that issue, and he notified his decision to accept the complaint out of time by letter dated 30 March 1995. There was then a period of nearly twenty-one months, from 30 March 1995 to 17 December 1996, before the Commissioner instituted the proceedings before the Tribunal. No explanation was provided for the passage of time.
262 Simpson J held that because actual prejudice was not proved, there was no abuse of process on account of delay despite “serious questions about the conduct of the office of the [Commissioner].” Her Honour effectively put aside any question of presumptive prejudice occasioned by such enormous delay.
263 In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551 McHugh J, speaking of the general perception that where there is delay the whole quality of justice deteriorates, said:
“Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo (1972) 407 US 514 at 532, ‘what has been forgotten can rarely be shown’. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now ‘knowing’ that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.”
264 No doubt recognising the general perception which McHugh J discusses, s154 of the Act provides that an investigation by the Commissioner is to be conducted as expeditiously as possible. The delay suggests that this section was not complied with and nothing has been advanced to suggest otherwise. However, it is true that, pursuant to s138(2), the Commissioner accepted the complaint even though it was made more than three years after the conduct was alleged to have occurred and Simpson J rejected the appellant’s claim that the acceptance of the complaint out of time was unreasonable. The appellant has not challenged this part of Simpson J’s decision.
265 However, in my opinion, having accepted a complaint so far out of time it is the duty of the Commissioner to investigate it and, when the investigation has been completed, to make a decision under s155 as expeditiously as reasonably possible. The delay between 30 March 1995 and 17 December 1996 leads, in my mind, to the inevitable inference that the investigation was not conducted expeditiously and that the delay over this period was unacceptable. To this must be added the lack of any communication with the appellant and the other persons referred to in the affidavit of Ms Chang of 28 February 1997. Those persons were likely to be able to throw light on the validity of some of the complaints. During this period none of them was ever contacted by anyone from the Legal Services Commission about the complaints. To this may be added the circumstances in which the Information was filed hours before an arranged appointment with the appellant’s legal advisers and the failure of the Commissioner to comply with the statutory requirements to give reasons. Against this background and in the context of the statutory requirements there is, on the ground of this delay alone, a powerful case to say that the conduct of the Commissioner was oppressive and an abuse of process.
Evidence improperly obtained
266 Ground 5 of in the notice of appeal was directed to Simpson J’s finding that there was no basis for a conclusion that the Commissioner relied upon improperly obtained evidence in deciding to institute proceedings in the Tribunal. Her Honour noted that an enormous volume of documentation had been produced by the parties before her, much of it by the Commissioner. That material, to which the Commissioner had access, and on which he relied in deciding to institute the proceedings, included Dawson Waldron file notes made by solicitors in that firm in relation to the various proceedings in which they were engaged. Simpson J acknowledged that such documents were prima facie privileged and said that their possession by the Commissioner was unexplained.
267 The appellant hypothesised that such documents would only have been released by Dawson Waldron in circumstances such as, for example, producing them on discovery in relation to the Fairfax defamation proceedings in such a way as would have attracted an implied undertaking not to use them for extraneous purposes; see Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 162-167. The appellant invited Simpson J to draw the inference that the documents were improperly obtained “most probably by Rajski, or, if not by him, by somebody on his behalf, or less probably, by the [Commissioner] himself.” Simpson J said:268 The appellant relied upon the principle stated in Riddick v Thames Board Mills Limited [1977] QB 881 by Stephenson LJ at 901-2 as follows:
“184 I am not prepared to draw that inference. The evidence does not disclose the source of the material that was in the possession of the [Commissioner], and there may be a number of legitimate or illegitimate means by which those documents came into his possession. There was no direct evidence from any solicitor in [Dawson Waldron], including the [appellant], that the documents had not been provided in such a way as to be available to Rajski or the [Commissioner], and there was no evidence from any of [Dawson Waldron’s] clients to eliminate any possibility that they had somehow disclosed the documents in such a way that they came into the hands either of Rajski or the [Commissioner].”
“But the authorities cited by Mr Hoolahan on the use of such a document [a document produced on discovery to one of the parties in the course of other proceedings] otherwise than in the proceeding in which it is disclosed establish that the party so using it is in breach of an implied obligation not to use it so, which will sometimes be enforced by an undertaking to the court as a condition of its production: Richardson v Hastings (1844) 7 Beav 354; Hopkinson v Lord Burghley (1867) LR 2 Ch App 447; Altersky v Scott [1948] 1 All ER 469 and Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613. Those authorities, particularly the admirable statement of the principle by Talbot J in the last case at p 621, indicate that the obligation is owed to the party who produces the document on discovery and to the court; that party is entitled to the protection of the court against the use of the document otherwise than in the action in which it is disclosed; and that protection is necessary for the proper administration of justice; it is important to the public and in the public interest that the protection should be enforced against anybody who makes improper use of it.”
269 The appellant referred to a subpoena to produce documents issued by Rajski on 2 March 1992 to Mallesons Stephen Jaques requiring that firm to produce “original and copies of files [sic] notes of Dawson Waldron dated 24 February 1986 in relation to conference between Mr Carson, Davidson with their clients Messrs Richardson, Yerushalmy, Wilkinson and J O’Halloran in respect of the Rajski litigation”. The subpoena was issued pursuant to leave granted by Rolfe J on 2 March 1992 to Rajski in the course of dealing with five proceedings in which Tectran, Raybos, Scitec and the appellant were involved. On 3 March 1992 Rajski called on the subpoena. The documents produced were described as “documents which were produced on discovery in proceedings where the plaintiff was Mr Nicholas Carson and the defendant was John Fairfax & Sons Limited, a defamation action.”
270 On that day Blake Dawson Waldron wrote to Mallesons Stephen Jaques as follows:271 On the same day Mallesons Stephen Jaques wrote back referring to that facsimile communication saying:
“These actions were before Mr Justice Rolfe yesterday. Mr Rajski, who appears for himself, produced copies of two file notes of this firm bearing dates 24 February 1986 and 19 June 1986. These file notes were the subject of discovery in the litigation between Mr Carson and your clients, John Fairfax & Sons Limited and Mr Slee, being part of Item 21(j) of the List of Documents dated 13 October 1988.
We, of course, assume that your firm did not make copies of these documents available to Mr Rajski. So that we may enquire who did make them available, would you please let us know to whom copies were given by your firm.”
272 It would, of course, be quite wrong for the Commissioner to resort for any purpose to documents produced to a complainant on discovery and therefore subject to an undertaking by the complainant not to use the documents for any ulterior purpose, unless steps had been taken to discharge or vary appropriately the undertaking. While suspicions could arise about the circumstances in which the documents came into the hands of Rajski and hence into the hands of the Commissioner, I think that Simpson J was right when she said there was no direct evidence available upon which the Court could conclude that the Commissioner relied upon improperly obtained evidence. In my opinion, this ground of appeal fails.
“The information you seek is protected by legal professional privilege. Our client, John Fairfax & Sons Limited, has instructed us not to waive that privilege.”
The existence of contempt proceedings raising the same issues as the Information
273 Simpson J said that the matters raised in grounds 1- Wood and Donaldson, 2 - legal aid and 3 - Carneys, replicated allegations Rajski made in the first contempt proceedings. Those proceedings have never been heard. The same allegations were made in proceedings begun by Rajski and Raybos in May 1986 which named the appellant and Dawson Waldron as defendants and alleged conspiracy in the conduct of the 1980 and the 1985 proceedings. Ground 5 in the Information, intimidating Metcalf, concerned an allegation Rajski raised in contempt proceedings begun in the Court of Appeal on 28 April 1987 against the appellant (“the second contempt proceedings”). Neither of these proceedings have been brought on for hearing. Thus, her Honour said, so far as grounds 1, 2, 3 and 5 were concerned, judicial proceedings already on foot elsewhere raised the very same issues or so it was argued.
274 The appellant argued that finalisation of those issues would ventilate and resolve the issues raised by the grounds in the Information and satisfy the public interest in seeing serious allegations of impropriety against a legal practitioner determined. Accordingly it could not reasonably be held to be necessary that they be investigated by the Commissioner. Her Honour noted a minor factual premise in this argument that required correction. The appellant’s counsel acknowledged that the Court of Appeal had ruled that the hearing of both contempt proceedings should be deferred until after the conclusion of the substantive proceedings. Accordingly it was not within Rajski’s power to bring those matters on for hearing. The appellant argued that the preferred course where allegations were properly characterised as ones of contempt was to deal with them in the contempt proceedings rather than as disciplinary matters.
275 The same arguments were pressed before this Court though it is not clear to me under which ground of appeal that was done. However, in my opinion, the existence of the outstanding contempt proceedings does not prevent proceedings raising the same allegations being instituted and heard by the Tribunal. The proceedings before the Tribunal were concerned with the fitness of the appellant as a legal practitioner and if he were found to be guilty of professional misconduct or unsatisfactory professional conduct what, if anything, should be done about his continuing in practice. The remedies available are remedies which substantially protect the public at large. The proceedings and the questions they throw up are different and separate from the issues in the contempt proceedings. To illustrate the point if the appellant were found guilty of professional misconduct, the Tribunal might well take the view that he should not be permitted to continue to practise. That decision which, as I have said, is designed for the protection of the public cannot be deferred to await the outcome of the contempt proceedings. Accordingly, in my opinion, the existence of the contempt proceedings or other proceedings against the appellant does not show that to institute these proceedings in the Tribunal was an abuse of process.
276 Except for one submission which remains for consideration and the cross-appeal as to costs, the cross-appeal wholly fails. The excepted matter is as follows.
277 In her reasons for judgment of 19 April 2000, when dealing with the appellant’s application to reconsider one aspect of her judgment, Simpson J said that “a most comprehensive examination of the allegations against [the appellant] was undertaken. Everything that could have been put before the [Commissioner] was, I assumed and assume, put before me.” As I understand it the Commissioner contended that her Honour acted effectively only on material that the appellant placed before her and that, in the absence of other evidence that he might wish to put before the Tribunal, her Honour should not have concluded that grounds of the complaint were foredoomed to fail. The argument could, it seems to me, extend to my conclusions that grounds of the complaint were foredoomed to fail, although it was not put in that context.
278 The Commissioner did not indicate what other evidence he wished to rely upon. The grounds of complaint were amply particularised, and the particularised matters were largely documentary. The appellant was cross-examined at length. The Commissioner could have called evidence. He chose not to. The issues before Simpson J explicitly included whether the complaint or the various grounds of the complaint were untenable and so an abuse of process. Her Honour was obliged to decide that issue on the evidence before her and not on the basis that there might have been other evidence which could be put before the Tribunal. There was no evidence of any other material the Commissioner could have put before the Tribunal. In these circumstances, Simpson J was entitled to proceed upon the assumption she did and on the evidence placed before her. In my opinion, it would be fair to infer that the Commissioner has no other evidence. The submission should not be accepted.
6. Costs
279 Both the appellant and the Commissioner appealed from Simpson J’s costs order. Since the appeal, in my opinion, succeeds, and the cross-appeal fails, the Commissioner must pay the appellant’s costs of the hearing before Simpson J. It is unnecessary to consider the arguments advanced about costs on the basis that Simpson J’s orders were otherwise left standing.
280 The cross-appeal should be dismissed with costs.
7. Rajski’s applications to be joined as a party to the appeal and to be heard as amicus curiae
281 On 21 June 2000, the third day of the hearing of this appeal, Rajski applied to be joined as a party to the proceedings and on 18 July 2000, the adjourned date for further hearing, he applied to be heard as amicus curiae. The Court refused both those applications.
282 The merits of the applications need to be considered in the context of the nature of the proceedings. Part 10 of the Act concerned complaints and discipline. Division 3 dealt with complaints about legal practitioners and allowed any person to make a complaint to the Commissioner about the conduct of a legal practitioner. Division 3 also contemplated complaints made by or to the Bar Council or the Law Society Council and complaints made by the Commissioner. Division 5 concerned the investigation of complaints by the Commissioner and by a Council, ie the Bar Council or the Law Society Council. Section 155 provided for the institution of proceedings in the Tribunal with respect to a complaint, for the dismissal of a complaint by a Council or the Commissioner and for various other ways in which a Council or the Commissioner may deal with the complaint. Division 7 concerned the constitution of the Tribunal. Division 8 was headed “Hearing and determination by Tribunal”. Within this division, s167(1) provided that proceedings might be instituted in the Tribunal with respect to a complaint against a legal practitioner by an information laid by the appropriate Council or the Commissioner in accordance with Pt 10.
283 In brief form, when a person such as Rajski made a complaint to the Commissioner, it was for the Commissioner to investigate it and, after the Commissioner had completed an investigation into the complaint, to deal with it in accordance with s155. If the Commissioner instituted proceedings in the Tribunal with respect to a complaint, the Commissioner undertook the conduct of those proceedings. Section 169 of the Act, which was concerned with parties, allowed a complainant to appear at a hearing conducted by the Tribunal, subject to subs (2) which provided: “Unless a complainant is granted leave to appear at the hearing by the Tribunal, the complainant’s entitlement to appear is limited to those aspects of the hearing that relate to a request by the complainant for a compensation order.”
284 Part 8 r8 of the Supreme Court Rules 1970 deals with the addition of parties and Pt 51 r9(2) enables this Court to order the addition of any person as a party appellant or respondent to an appeal. Persons have been joined as parties in cases where the interests of the person will be directly or, perhaps, indirectly affected by any order which may be made in the proceedings. In this appeal the matter in issue is whether the proceedings instituted in the Tribunal by the Commissioner should proceed. The Information was directed to the question whether the appellant had been guilty of conduct which constituted either professional misconduct or unsatisfactory professional conduct. Under s123 of the Act the general objects of Pt 10 are to redress the consumer complaints of users of legal services, to ensure compliance by individual legal practitioners with the necessary standards of honesty, competence and diligence and to maintain at a sufficiently high level the ethical and practice standards of the legal profession as a whole. These are general public purposes which it is the Commissioner’s function to pursue. Ordinarily, the person making the complaint to the Commissioner will not be a proper party to proceedings instituted to achieve those objects.
285 At the hearing before Simpson J the Commissioner was represented by Mr Haylen QC and Mr M Marien. At the hearing of the appeal the Commissioner was represented on the first four days from 19 June to 22 June 2000 by Mr Joseph SC and Mr Craddock. On 21 June 2000 they were joined by Ms F Clarke.
286 On the second day, 20 June 2000, at the close of the appellant’s submissions, Mr Joseph referred to the fact that the hearing of the appeal had been expedited and set down for hearing on 19 June 2000 and that on 30 May an application had been made before Stein JA to vacate the hearing which his Honour refused to do. Mr Joseph said that in agreeing to expedition, the Commissioner had not appreciated that the matter would be listed for hearing so quickly. No notice had been given of any further application for an adjournment. Mr Joseph had only received his instructions to apply for an adjournment that morning. He pointed out, however, that Stein JA had reserved liberty to apply and indicated that it was open to the Commissioner to renew an application before the Court on 19 June if he saw fit to do so.
287 Mr Joseph’s concern was that he did not have sufficient opportunity to refer to the factual material, particularly documents, on which Mr Brereton SC for the appellant had relied. The Court indicated that Mr Joseph should proceed with his argument which he did for the remaining hearing time on that day.
288 Rajski’s application was based on a concern that the Commissioner, through his representatives, would not be able to put his case fully. However, the Court had indicated to Mr Joseph that an adjournment would be granted to deal with the problem he raised and his argument proceeded on 21 and 22 June taking account of the proposal to give him the opportunity he sought to meet Mr Brereton’s arguments on the evidence on 18 July. This being so, there was no good reason why Rajski should be joined as a party. There was no reason at all why the Commissioner should not be able to deal completely and as he thought appropriate with the appeal. The way the appeal was conducted was a matter entirely for the Commissioner and not for Rajski. For these reasons, the Court refused to add Rajski as a party to the proceedings.
289 A court may allow a person to be heard as an amicus curiae. The functions of an amicus curiae and the circumstances in which persons may be heard in that role have been the subject of discussion in several cases without any clear definition emerging. The matter is entirely one for the discretion of the Court. Among the questions relevant to a decision whether to allow such appearances are whether the appearance is apt to assist the Court in the resolution of the proceedings (for example, by dealing with a point the parties have declined to argue), whether the appearance is in the interests of the parties, whether the appearance will occupy time unnecessarily and whether the appearance will add inappropriately to the cost of the proceedings. It is now generally recognised that the participation of a person in that role is a matter that depends on the circumstances of the particular case. See generally National Australia Bank Limited v Hokit Pty Limited (1996) 39 NSWLR 377 at 381.
290 On the issues raised in the appeal and cross-appeal I was entirely satisfied that the proposed intervention by Rajski was not apt to assist the Court in deciding the appeal and cross-appeal, would occupy time unnecessarily and would add, by lengthening the hearing of the appeal, inappropriately to its costs. There were, in my opinion, no circumstances which justified such intervention.291 In my opinion, the following orders should be made:
8. Orders
1. Appeal allowed;
2. Cross-appeal dismissed;
3. Set aside orders 3, 4 and 5 made by Simpson J on 12 May 2000;
4. In lieu thereof:
“3. Declare that the decision of the first opponent under the Legal Profession Act s155(2) to institute proceedings before the Tribunal with respect to the complaint against the claimant was void.”
4. Order that the proceedings No 43 of 1996 before the second respondent be permanently stayed.
5. Order that the first opponent and respondent pay the costs of the claimant and appellant of the proceedings before Simpson J and of this appeal but have a certificate under the Suitors’ Fund Act 1951 if so qualified.
292 GILES JA: I agree with Sheller JA.
293 HODGSON CJ in Eq: The facts and circumstances involved in this appeal, and the basic contentions of the parties, are set out in the judgment of Sheller JA, which I have had the advantage of reading. I agree substantially with Sheller JA’s conclusions and reasons on matters apart from those concerning Grounds 3 and 5 of the Information, and corresponding items in Ground 7. However, I will shortly state my own approach to the main issues raised in this appeal. I use the same abbreviations as Sheller JA.294 There is no dispute that the appellant was denied natural justice by the Commissioner. If the denial of natural justice were the only issue in the case, I could have proceeded directly to the question of what, if any, substantive remedy should be granted. However, both before Simpson J and on appeal, the appellant has contended that all Grounds included in the Information were “foredoomed to fail”, and that for this and other reasons all proceedings before the Tribunal based on the Information should be permanently stayed. Simpson J acceded to that contention, except in relation to Grounds 2, 3 and 5 of the Information, and corresponding items in Ground 7. The Commissioner, in support of his cross-appeal, has claimed that Simpson J erred in relation to some of the other grounds, in particular in that she assumed the Commissioner had put forward before her all evidence upon which he would rely before the Tribunal. In those circumstances, I find it convenient to deal with the issues in the following order.
ISSUES
THE CORRECT APPROACH
1. What is the correct approach in considering the application made by the appellant for a permanent stay on the basis that proceedings based upon Grounds in the Information are foredoomed to fail? In particular, what onus lies on a person in the position of the Commissioner to call evidence on which it is intended to rely at the hearing of the proceedings?
2. On that correct approach, has either the appellant or the cross-appellant made out that Simpson J erred in her decision concerning any of the Grounds? I will deal in turn with Ground 2 (legal aid), Grounds 3 and 5 (Carneys and Metcalf), and the other Grounds.
3. If any of the Grounds are not foredoomed to fail, was Simpson J in error in deciding that, despite the denial of natural justice, the remaining Grounds should go straight to the Tribunal?
4. If any Grounds do survive, should they be stayed as an abuse of process? The possible grounds for such a stay are delay, use of improperly obtained material, duplication, weakness, and all of these factors together.
295 In my opinion, in an application to permanently stay a matter on the ground that it is foredoomed to fail, the onus lies on the applicant to make out that position on the basis of the evidence before the Court hearing the application. In those circumstances, the respondent does not have to call the evidence upon which the respondent would rely at the hearing; but if the respondent wishes the Court to have regard to the availability of certain evidence, the respondent may have an evidentiary onus to prove that such evidence is available and would be called, or at least should ensure that it is in a position to rely on evidence from which that inference can be drawn. Although the applicant for the relief bears the onus of proof, that onus may be discharged if all the respondent can do is to invite the Court to speculate.
296 The credibility of witnesses is generally not an issue on such an application: that is a question for the hearing. In some cases it may be possible to satisfy the Court that a witness’s evidence is such that no reasonable tribunal could rely on it. On the other hand, it would be extremely rare that a Court could be satisfied that no reasonable tribunal could fail to accept a person’s evidence. In this case, in my opinion, it would be wrong to approach the matter on the basis that no reasonable tribunal could fail to accept the appellant’s evidence.297 Ground 2 of the Information was in the following terms:
LEGAL AID
2. Between late 1985 and early 1987 the Legal Practitioner, sought to procure the termination of the grant of legal aid for an improper purpose, namely, to obstruct, prevent or thwart Raybos and Rajski from pursuing their rights in the litigation against the Legal Practitioner’s clients by the following means:
(i) by corresponding with the LAC (Legal Aid Commission), such correspondence containing false and/or misleading information and imputations,
(ii) by wrongfully intimidating Carneys in order to have Carneys cease to act for Raybos and Rajski in the litigation, and
(iii) by commencing and continuing proceedings against the LAC.
It is important to note that the Ground is limited to seeking to procure the termination of the grant of legal aid for an improper purpose and by specified means. The means are not specified as themselves amounting to professional misconduct. Accordingly, in my opinion, the matter must be approached on the basis that, if the taking of steps to procure the termination of the grant of legal aid could not amount to professional misconduct, whatever the motive for doing so, then proceedings based on the ground in question would have to fail. The matter should not be approached on the basis that the proceedings might succeed if some aspect of the means employed could amount to professional misconduct, because the Ground does not specify any aspect of the means as itself amounting to a ground of complaint.
298 In my opinion, substantially for the reasons given by Sheller JA, the appellant and his clients were entitled to seek to procure the termination of legal aid. The clients had a legitimate interest in doing so, in particular to avoid what might be a prejudicial result in the event that a costs order was made in favour of the clients. This was a remedy which the clients were entitled to seek, by legal proceedings if necessary, so long as the clients had reasonable grounds to do so. In this case, no question is raised about the clients having reasonable grounds to seek to have the legal aid terminated.
299 Accordingly, even if the appellant and his clients sought the termination of legal aid in order to defeat the opposing litigants’ claim by depriving them of legal representation, this would be a result of obtaining the remedy itself, and not collateral to it; and accordingly the appellant’s involvement could not be professional misconduct: see Williams v Spautz (1992) 174 CLR 509 at 535 per Brennan J.
300 The cross-appellant Commissioner contended that a different view had been supported by Mason CJ and Dawson, Toohey and McHugh JJ at p529, namely that there would be an abuse of process if there was a predominant improper purpose. However, in my opinion, it is clear from the discussion in that judgment at pp526-27 that the view of these judges was that if the object is either within the scope of the remedy itself or a consequence of obtaining the remedy, then there is no impropriety in seeking the remedy. It would be otherwise if the alleged improper purpose was not within the scope of the remedy or a consequence of obtaining the remedy, but rather something collateral to the remedy, and possibly obtainable even if the remedy itself were not to be obtained.
301 On that approach, even if the appellant had the object or motive of defeating a claim of apparent substance by depriving litigants of representation, that was an object to be achieved only as a consequence of obtaining a remedy which the law provided, and a remedy for which there were reasonable grounds. For those reasons, in my opinion, Simpson J was in error in relation to this matter, and the complaint in respect of Ground 2 in the Information was bound to fail. However, the evidence relied on by the Commissioner as showing an improper purpose in relation to termination of legal aid may be relevant to other Grounds, particularly Ground 3. If it could be inferred that a substantial purpose of the appellant in seeking termination of legal aid was to deprive litigants of legal representation, that may assist an inference that this was the purpose of taking proceedings against Carneys.
CARNEYS AND METCALF
302 In relation to these matters, I respectfully differ from Sheller JA.
303 Ground 3 in the Information is in the following terms:
3. Between late 1985 and early 1986 the Legal Practitioner took a number of actions against Carneys, designed to wrongfully intimidate Carneys, to cause that firm of solicitors to cease to act for Raybos and Rajski in the litigation. The actions referred to are:
(i) commencing and continuing defamation proceedings on behalf of his clients against Carneys’
(ii) writing a letter dated 11 March, 1986 to Carneys’ solicitors, Phillips Fox, and in such letter:(a) threatening to amend the statement of claim in the defamation proceedings to Carneys detriment if Mr Carney had given certain advice in relation to a letter written by Rajski to the Stock Exchange;
(iii) making a false claim, in the same letter dated 11 March, 1986, that Carneys was liable for $25,000 per week in special damages;
(b) offering Carneys the opportunity to avoid further action in the defamation proceedings if Mr Carney would provide the Legal Practitioner’s clients with a statutory declaration denying giving Rajski such advice, thereby effectively making Mr Carney a witness against his client Rajski;
(iv) writing a letter dated 20 March, 1986 addressed to Carneys and in such letter threatening that the Legal Practitioner would seek an order that Carneys pay the costs of his clients and of his firm, in relation to the adjournment of the litigation which had been granted by the Chief Justice on 12 March, 1986.304 The origin of the actions complained of was the Carneys letter of 25 November 1985 to the Chairman of the Stock Exchange. I consider that this letter was capable of carrying the defamatory imputations alleged in the defamation proceedings and referred to in the Phillips Fox letter of 6 January 1986; and that, although the only plainly false express statement was the relatively innocuous one about Mr Richardson being a major shareholder of Scitec Corporation Pty Limited, there were a number of statements that could have conveyed a misleading impression because of what was omitted. Furthermore, the references in the letter to damage being ‘quantified at in excess of $600 million’, and to an application ‘restraining’ Scitec and others, were potentially misleading because of the way they were expressed, and the reference in the letter to bottom-of-the-harbour schemes seems to have been wholly inappropriate.
305 On the other hand, it would be wrong in my opinion to view the Carneys letter as gratuitous mischief-making. If Carneys’ clients were successful in their claims, and if they were later to seek to set aside transfers of assets to Scitec Corporation Pty Limited, such an application could be defeated if the constitution of that company had been changed and members of the public had purchased shares in it, without notice of the claims made by Carneys’ clients and of the claims concerning transfer of assets.
306 Furthermore, there is a significant difference between this Ground and the legal aid Ground. As noted earlier, the alleged improper purpose in seeking termination of legal aid was one which would be achieved only through the obtaining of a remedy provided by law and for which there were reasonable grounds; whereas in relation to this Ground, the alleged improper purpose of intimidating Carneys and causing them to cease to act was collateral to the remedy for defamation provided by the law, and achievable whether or not that remedy was pursued to completion and ultimately obtained.
307 In those circumstances, in my opinion, if the predominant purpose of the appellant in causing the defamation proceedings to be commenced and continued was that of intimidating Carneys and causing them to cease to act, then his actions in this regard could amount to professional misconduct.
308 Now I do not have to consider whether or not there is a reasonable likelihood that the appellant would be found guilty of professional misconduct, within the meaning of s155(2) of the Legal Profession Act. That is a question for the Commissioner or the Council, not for this Court. The only question for this Court is whether the complaint should be stayed permanently because it could not possibly succeed. On that matter, I am not satisfied that Simpson J was in error.
309 There is force in Sheller JA’s comment that the action against the legal representatives was far from being unprecedented in connection with the litigation in question. However, in my opinion, there is material from which an inference could be drawn that the appellant’s predominant purpose was the improper one of causing Carneys to cease to act, in particular the following.
310 Firstly, there is the evidence that, about four weeks before the commencement of the defamation proceedings, the appellant at a conference said words to the effect recorded in the memorandum of the conference of 14 November 1985, as follows:
... Dawsons and the clients are not to be put off by peripheral issues but should add to them to stretch Rajski. We must keep the pressure on Rajski. NRC said that although he does not wish to squander the resources of the client, it is worth it to push Rajski and his legal advisers.
311 Secondly there is the circumstance that, although the Carneys letter of 25 November 1985, except in an immaterial respect, was substantially accurate in what it expressly alleged, but could be misleading through what it omitted and through poor expression, no request was made to Carneys to correct the letter, but rather defamation proceedings were commenced without warning on 9 December 1985.
312 Thirdly, on 12 December 1985, the appellant wrote the following letter to Lawcover:
RICHARDSON AND OTHERS -V- CARNEYS
We act for Mr G. Richardson, Mr M. Yerushalmy, Arunta Investments Pty Limited and Gavemer Pty Limited each of which is a plaintiff in proceedings claiming damages from the partners of the firm Carneys.The defamation alleged is the publication by Carneys of a letter to the Chairman of the Sydney Stock Exchange. On the face of the letter, it is written by Carneys themselves rather than on behalf of their clients in which case their liability would not arise from practise [sic] as a solicitor and they would not be entitled to indemnity under the policy. On the other hand, it may be that they will say that they were instructed to write the letter and that they were acting as solicitors and they may seek indemnity under the policy.
As I have become very much entwined in the various proceedings between my clients and the clients of Carneys, in the event that a claim is made by Carneys under the policy, would you please ensure that I am kept isolated from any material relating to it.
As noted by Simpson J, the last paragraph, drawing attention to the need to quarantine the appellant from material concerning any decision Lawcover might have to make on Carneys’ policy, was very proper. The appellant sought to explain the second paragraph as indicating the question Lawcover might face, and as making sure Lawcover did not have the impression that the appellant was telling it, on behalf of his clients, that it should meet any claim.
313 Simpson J found that explanation unsatisfactory. I do not make that finding: I believe that issues such as that would be for the Tribunal. However, in my opinion, it would certainly be open to the Tribunal to find the explanation unsatisfactory.
314 There was no need whatsoever to question Carneys’ entitlement to an indemnity, the denial of which could, as the appellant noted, actually prejudice the appellant’s own clients. The statement that Carneys’ letter, which commenced “We act for Dr Rajski and Raybos Australia Pty Limited”, on its face was not written on behalf of their clients, could be seen as a disingenuous attempt to get Lawcover to consider a far from obvious question about indemnity, which might not otherwise have occurred to it. The inference is open, in my opinion, that the appellant’s intention in writing that paragraph was to put further pressure on Carneys by having their insurer question indemnity.
315 Fourthly, in a conference on 24 February 1986, the appellant is recorded as saying the following, concerning what was sought to be achieved by seeking termination of legal aid:316 Fifthly, on 11 March 1986, the appellant wrote to solicitors acting for Carneys asking whether Mr Arthur Carney had given advice to Dr Rajski to the effect that he should write a letter to the Stock Exchange in similar terms to Carneys’ letter of 25 November 1985; and stating that if so, the plaintiff would “seek to amend the Statement of Claim accordingly”. The letter went on to state that, if Mr Carney denied giving such advice, any such denial should “be provided by statutory declaration of Mr Carney accompanied by his authority to our client to make such use of that declaration as it sees fit”. The letter went on to assert:
NRC said that the next possibility was that without legal aid, Rajski will flounder. We will begin to get judgements in our favour. If Rajski brings further proceedings, then he will be declared a vexatious litigant. NRC said that there is a difference between lay representatives and lawyers representing clients. The judge knows that when a lawyer get up in Court to make a statement, he has looked at the grounding for that statement. When a lay person makes a statement no lawyer has yet looked at it so the judge is the only lawyer and he must look at it.
This could support an inference that it was an objective of the appellant, at around this time, to bring about a position where Dr Rajski was unrepresented; and that inference could extend to the intention of the appellant at the time of commencement of the defamation proceedings against Carneys.
We are instructed that the damage to our client caused by the delay to the flotation of Scitec Corporation Pty Limited is running at the rate of approximately $25,000.00 per week. You will be furnished with more detailed particulars in due course.
317 This letter was written after Phillips Fox on behalf of Carneys had written on 6 January 1986 to the Stock Exchange, referring to the defamatory imputations alleged to have been conveyed in the Carneys’ letter, asserting that Carneys had no intention to convey those implications and apologised if the letter had been so misunderstood, and drawing attention to matters, the omission of which from the Carneys’ letter could have made it misleading; and after Dr Rajski had on 4 February 1986 written to the Stock Exchange a letter in terms similar to the Carneys’ letter, asserting that he had done so on the advice of Mr Carney, and also a letter disavowing the concessions made in the Phillips Fox letter.
318 It also followed a letter of 17 February 1986 from the appellant to Phillips Fox in which he said “his client was not at that stage claiming special damages”. Notwithstanding that, when requests were made for particulars of the claim for $25,000.00 per week, that claim was not disavowed until 4 September 1986, when the appellant wrote referring to the 17 February 1986 letter and asserting that his client’s “position on this aspect of the matter has not changed” and that “special damages is not at this point in issue”. By this time, Carneys had already ceased to act for Dr Rajski and Raybos.
319 Having regard to the letter from Phillips Fox of 6 January 1986, it is unlikely in the extreme that any additional damage could have been caused to the appellant’s clients by Dr Rajski’s letters of 4 February 1986; and in my opinion, in all the circumstances, it could possibly be inferred that the object of the threat to amend and of the demand for the statutory declaration was to ferment a conflict between Carneys and Dr Rajski.
320 Furthermore, the claim for $25,000.00 per week had no reasonable basis: any delays to the flotation were plainly the result of the existence of the proceedings involving Scitec, not of any defamatory imputations in the letters from Carneys and Dr Rajski. Although the reference to $25,000.00 per week was expressed in terms of instructions, plainly it conveyed an assertion that this loss was being suffered as a result of the alleged defamation and would be claimed as damages, thereby displacing the prior assertion that the client was not “at that stage” claiming special damages. In all the circumstances, it could be inferred that the purpose of making such an unjustifiable claim was intimidation.
321 Sixthly, after Carneys had ceased to act on 21 March 1986, the appellant wrote to the Legal Aid Commission on 26 March 1986, advising of this, and continuing:
We presume that, in accordance with usual practice, the grants of legal aid to Raybos and Rajski were made on terms and conditions specifying the legally-aided person’s solicitor, namely Mr Arthur Carney. The breach of that term and condition presumably terminates the grants or requires a variation of the terms and conditions.
322 And on 19 June 1986, in a conference with his clients, the appellant noted that “the outcome of the defamation proceedings being that Carneys no longer act for Rajski so that he has been deprived of legal representation”. Thereafter the proceedings against Carneys were not pursued.
323 In my opinion, in all the circumstances, these matters could support an inference that the purpose of the Carneys’ proceedings, as of the challenge to legal aid, was to deprive Dr Rajski of representation. As noted earlier, this was not improper in connection with the legal aid matter, but if this was the predominant purpose of the Carneys proceedings, it could amount to professional misconduct. It is true that the Carneys proceedings were still in contemplation over a year after Carneys had ceased to act, but that is not necessarily inconsistent with the inference to which I have referred, because once proceedings had been commenced, to discontinue them would at least involve liability for costs.
324 As shown by Sheller JA’s judgment, there are substantial arguments for not drawing the inference to which I have referred, but the question is not whether the inference should be drawn but whether it could properly be drawn. In my opinion, it could be, and Simpson J’s finding to this effect is not shown to be in error.
325 Turning to the matter concerning Dr Metcalf, Ground 5 of the Information is in the following terms:
5. In early 1987 the Legal Practitioner improperly attempted to intimidate Dr Metcalf, a witness for Rajski in the litigation, by threatening him with the institution of defamation proceedings in respect of a medical report that Dr Metcalf had prepared for and which was addressed to the Supreme Court of New South Wales.
326 As with the previous Ground, the intimidation of Dr Metcalf, if intended, was a purpose which could be achieved independently of obtaining any remedy for defamation provided by the law. Accordingly, in my opinion, Spautz does not prevent this Ground being made out. The question is whether an inference of intention to intimidate is open.
327 For the appellant, it was submitted that the letter of 13 April 1987 from Murphy & Maloney was an unsurprising response to an extraordinary report from Dr Metcalf. However, the report was extraordinary essentially in that it directly asserted criticisms of Dawson Waldron, rather than asserting them as complaints made by Dr Rajski relevant to Dr Rajski’s medical condition: the latter would have been appropriate in such a report, assuming, as seems obvious, such complaints were in fact made by Dr Rajski to Dr Metcalf.
328 I agree with Simpson J that for the appellant or his firm to sue Dr Metcalf for defamation would have been extraordinary. Further, to require that Dr Metcalf undertake not to make or publish any matter defamatory of Dawson Waldron was to require him not to include in future reports or evidence even statements to the effect that Dr Rajski alleged matters of the kind referred to in the letter of 13 April 1987: the mere fact that defamatory material is put as someone else’s assertion does not prevent it being defamatory. Yet plainly such perceptions of Dr Rajski were relevant to Dr Rajski’s problems about which Dr Metcalf was giving evidence. The letter of 13 April 1987 contained no explicit threat of defamation proceedings, but in my opinion, such a threat was implicit in its reference to taking such action as advised without further notice to Dr Metcalf. So Murphy & Maloney was saying, on the appellant’s instructions, that Dawson Waldron may sue Dr Metcalf unless Dr Metcalf gave them an undertaking which would in fact have the effect of preventing him from giving relevant evidence in support of Dr Rajski.
329 It may be that this was not intended. However, it could possibly be inferred that it was intended; and in my opinion, it could be inferred that the predominant purpose of the implicit threat to sue Dr Metcalf was to intimidate him. Such an inference may have some support also from the material referred to in relation to Carneys, and may more readily be drawn if the inference of improper purpose is drawn in that matter. I do not think the publication in the Sydney Morning Herald of defamatory material, apparently based on Dr Metcalf’s report, counts against this inference: although it would be unsurprising if that publication gave rise to consideration of defamation proceedings, the publication occurred subsequently to the letter of 13 April 1987.
330 As before, I am not finding that there is a reasonable likelihood that the appellant would be found guilty of professional misconduct; I am merely finding that Simpson J’s conclusion that such an inference could be drawn has not been shown to be in error.
OTHER GROUNDS
331 In relation to other Grounds in the Information, the subject of the cross-appeal, I agree with Simpson J and Sheller JA.
332 I have carefully considered whether Simpson J’s decision that these Grounds could not succeed depended upon her accepting the appellant’s evidence, in circumstances where the assessment of that evidence would be a matter for the Tribunal; but I have concluded that in fact her Honour decided that, leaving aside the appellant’s evidence, an inference of professional misconduct could not be drawn from the material relied on by the Commissioner. On the appeal, it was submitted that there might be further evidence called before the Tribunal, such as evidence from Mr Wood (in relation to Ground 1 of the Information) or from Detective Inspector Parsons (in relation to Ground 6). However, s155 of the Legal Profession Act requires that proceedings be instituted in the Tribunal only after investigation; and in the absence of any material concerning what evidence such witnesses could give or any investigation into that matter, the submission amounts to an invitation to the Court to speculate, and in my opinion it should be rejected.
REMEDY FOR DENIAL OF NATURAL JUSTICE
333 As noted earlier, proceedings must be instituted before the Tribunal if the Council or Commissioner is satisfied that there is a reasonable likelihood that a legal practitioner would be found guilty of professional misconduct. The question of whether such reasonable likelihood exists is not a question for this Court, and has not been considered or decided. In those circumstances, in my opinion it is clear that the matter cannot proceed in the Tribunal until there has been a proper consideration and determination of this question by the Council or the Commissioner.
334 Accordingly, the remedy for the denial of natural justice must be the avoidance of the decision of the Commissioner to institute the proceedings. Furthermore, having regard to the Commissioner’s involvement in these proceedings, it seems probable that any reconsideration of the matter, if a permanent stay is not granted, would have to be by the Council.
ABUSE OF PROCESS
335 As noted earlier, it was submitted for the appellant that any proceedings based on the Grounds in the Information should be permanently stayed as an abuse of process, on a number of bases. It is convenient to consider in turn the alleged reliance on improperly obtained material, duplication, weakness of the case, and the totality including delay.
336 It is clear that certain documents recording conferences between the appellant and his clients and between the appellant and Counsel were discovered in defamation proceedings between the appellant and John Fairfax & Sons Limited, and between the appellant and John Slee, and also that privilege was not claimed for them in those proceedings. In those circumstances, there was an implied undertaking to the appellant and to the Court by John Fairfax & Sons Limited and by Mr Slee that those documents would not be used otherwise than for the purpose of those proceedings.
337 Copies of some of those documents were produced by Dr Rajski in proceedings before Rolfe J in March 1992, involving the appellant’s clients and in relation to which the appellant’s firm was acting for them and the appellant attended at Court. Although there was some suggestion that the documents must have been obtained in breach of discovery undertakings, no application was made to restrain Dr Rajski from using them.
338 Some of the documents were referred to in particulars of the Grounds in the Information, provided to the appellant on 28 February 1995. However, the point that these documents had been improperly obtained was raised for the first time in the appellant’s affidavit in these proceedings dated 28 February 1997.
339 In that affidavit, the appellant gave evidence that, to his knowledge, the documents had not been released or disclosed otherwise than by discovery in the defamation proceedings. However, there was no evidence to that effect from the clients in those proceedings, or from other solicitors or persons involved in that litigation.
340 In my opinion, the appellant as the litigant in the defamation proceedings had the benefit of the implied undertaking by John Fairfax & Sons Limited and by Mr Slee: the legal professional privilege belonged to the clients, but that is a different question. Notwithstanding that, the appellant did nothing to uphold that undertaking between March 1992 and February 1997. Furthermore, the material in question is only a small part of the material relied on in support of the Information, and was to some extent relied on by the appellant in showing that he acted with the benefit of Counsel’s advice. It is very difficult to disentangle that reliance on the documents from other material in the case.
341 Accordingly, this case is very different from previous cases in which effect has been given to such implied undertakings. In Riddick v Thames Board Mills [1997] 1 QB 881, an actual litigant in previous proceedings sought to rely on a discovered document in order to base defamation proceedings against the person discovering the document. In Hammersley Iron Pty Ltd v Lovell (1998) 19 WAR 316, an employee of a litigant disclosed the contents of a discovered document over the radio.
342 It is doubtful whether an inference should be drawn that the documents were obtained by the Commissioner as a result of a breach of the discovery undertaking; and even more doubtful whether an inference can be drawn that the Commissioner had notice of that. I do not dissent from the views of Simpson J and Sheller JA that such inferences should not be drawn. But even if such an inference were drawn, in the circumstances I have indicated I do not think the appellant is entitled to have the proceedings stayed as an abuse of process.
343 I note that it was submitted also for the Commissioner that s152 of the Legal Profession Act gives powers to the Commissioner to require production of documents, which overcome legal professional privilege, and reliance was placed on ASC v Ampolex (1996) 14 ACLC 81 at 101. I do not need to deal with that submission.
344 For reasons given by Simpson J and Sheller JA, in my opinion there is no substance whatsoever in the submission that there is some duplication involved in these proceedings. As for the weakness of the case, I have already given my view on whether the relevant inferences could be drawn against the appellant, and in my opinion it is not appropriate to deal with that matter any further.
345 The reliance on delay and associated matters is the most substantial basis for a permanent stay, in my opinion. The delay in question is not merely delay up to the present, because the result of my decision, if it prevailed, would be that there would have to be an investigation and decision on the matter, presumably by the Council, before proceedings could be instituted in the Tribunal. If the Council were then not satisfied that there was a reasonable likelihood of a finding of professional misconduct, there would not be any such proceedings. However, if the Council were satisfied, the proceedings would, unless stayed by this Court, take place, but only after the lapse of some further time.
346 If this was purely a matter inter-parties between the Commissioner and the appellant, there would be much force in the contention that the proceedings involved the grossest unfairness to the appellant. Although the Commissioner gave leave for the making of the complaint many years after the event, the Commissioner was thereafter guilty of gross delay in conducting the investigation, and apparently even so, made no enquires about the matter from anyone else apart from Dr Rajski. The Commissioner failed to give natural justice to the appellant, and despite the request by the appellant to be heard and the making of an appointment, the Commissioner instituted the proceedings without giving the appellant any opportunity to make submissions. The Commissioner failed to give reasons for his decision, as required by the Legal Profession Act. The long delays will add to the difficulties for the appellant in dealing with serious charges against him, because of the inevitable fading of memory.
347 However, the matter is not purely inter parties: there is a substantial public interest involved in the investigation of complaints against solicitors. I do not accept the submission that the events of so many years ago would be of little relevance to the appellant’s present fitness to practice. The allegations are serious, and the appellant’s position is that he did nothing wrong. If the Grounds are made out, in my opinion they could reflect on the appellant’s present fitness to practice.
348 In his minority judgment in Walton v Gardiner (1993) 177 CLR 378, Brennan J pointed out that the Courts should not be too ready to prevent officials and tribunals doing what the legislature requires them to do. That case concerned the Medical Practitioners Act 1938 (NSW), s31 of which provided that, in certain circumstances, the New South Wales Medical Board “shall refer” complaints to the Medical Tribunal; and s32O of which provided that members of the Tribunal “shall conduct an enquiry” into such matters.
349 The Legal Profession Act 1987 is if anything more forceful. Section 155 provides that the Council or Commissioner “must” institute proceedings in the Tribunal, if satisfied that there is a reasonable likelihood that a legal practitioner will be found guilty of misconduct. Section 167 provides that the Tribunal “is to” conduct a hearing into allegations particularised in Informations placed before it.
350 The decision of the majority in Walton v Gardiner was that the Supreme Court can stay proceedings under the Medical Practitioners Act if satisfied that their continuation would involve unacceptable injustice or unfairness, not limited to cases of improper purpose or impossibility of fair trial. I accept that that decision applies to proceedings under the Legal Profession Act. However, I consider that the usual basis for any such intervention would be improper purpose or impossibility of fair trial, and that intervention for other reasons would be exceptional.
351 In this case, there is no suggestion of improper purpose. Although the lapse of time will inevitably cause difficulty to the appellant, and perhaps also to the Commissioner or Council, I am not satisfied that there could not be a fair hearing of the complaints by the Tribunal. In all the circumstances, I do not think a case is made out for a permanent stay on the basis of delay, or on the basis of all the considerations put on behalf of the appellant.352 For those reasons, I would propose that the appeal be allowed to the extent that there should be a permanent stay in respect of the legal aid Ground and that the Commissioner’s decision should be avoided; and that the cross-appeal should be dismissed.
CONCLUSION
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