LEGAL PROFESSION COMPLAINTS COMMITTEE and METAXAS - [2018] WASAT 28

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: LEGAL PROFESSION ACT 2008 (WA)
CITATION:   LEGAL PROFESSION COMPLAINTS COMMITTEE and METAXAS [2018] WASAT 28
MEMBER:   PRESIDENT, JUSTICE J C CURTHOYS
SENIOR MEMBER C WALLACE
MR P DE VILLIERS (MEMBER)

HEARD:   24 AND 25 JANUARY 2018
DELIVERED          :   26 APRIL 2018
FILE NO/S:   VR 124 of 2017
BETWEEN:   LEGAL PROFESSION COMPLAINTS COMMITTEE
Applicant
AND
ARTHUR METAXAS
Respondent

Catchwords:

Professional misconduct - Failure to take all necessary steps to ensure proper factual basis - Notice of appeal - Oral submissions to Court of Appeal

Legislation:

Legal Profession Act 2008 (WA), s 401, s 401(b), s 402, s 403, s 428(1), Pt 13

Result:

Practitioner engaged in professional misconduct

Category: B

Representation:

Counsel:

Applicant	:	P Cahill SC with C Patterson
Respondent	:	A Schlicht

Solicitors:

Applicant	:	Legal Profession Complaints Committee
Respondent	:	Metaxas & Hager

Case(s) referred to in decision(s):

Briginshaw v Briginshaw (1938) 60 CLR 336
Giudice v Legal Profession Complaints Committee [2014] WASCA 115
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Korda [2015] WASCA 101
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Korda [2015] WASCA 101 (S)
Legal Profession Complaints Committee and Wells [2014] WASAT 112
Legal Profession Complaints Committee v Brickhill [2013] WASC 369
Legal Professional Complaints Committee and Park [2017] WASAT 89
Lloyd v Faraone [1989] WAR 154
NOM v Director of Public Prosecutions (2012) 38 VR
Rayney and Legal Practice Board of Western Australia [2016] WASAT 7
Rejfek v McElroy (1965) 112 CLR 517

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 30 June 2017, the Legal Profession Complaints Committee (the Committee) made an application to the Tribunal pursuant to s 428(1) of the Legal Profession Act 2008 (WA) (LP Act) in relation to a practitioner Arthur Metaxas. Mr Metaxas was admitted to the legal profession in December 1975.
On 4 September 2009, Huntingdale Village Pty Ltd (Receivers and Managers appointed) and others (the Westpoint Companies) filed proceedings against Perpetual Nominees Ltd and Korda and Winterbottom and others (the Receivers) in COR 223 of 2009. A statement of claim was filed by the Westpoint Companies in COR 223 of 2009.
On 18 May 2010, Mr Metaxas' firm Metaxas and Hager took over the conduct of the Westpoint Companies cases (Exhibit C page 713). Mr Metaxas had the personal carriage of the matter from 2010 and throughout the relevant period.
The Committee's application arises out of a hearing of an application for security for costs in COR 223 of 2009 at first instance before Le Miere J on 21 and 23 May 2014 at which Mr Metaxas appeared, the filing of a notice of appeal prepared and filed by Mr Metaxas against Le Miere J's decision, CACV 79 of 2014, and other submissions made to the Court of Appeal in those proceedings.
On 23 January 2018, the Committee submitted a minute of Amended Annexure A to its application. The Ground set out in the application was:
That the practitioner, Arthur Metaxas between about 23 July 2014 and about 17 March 2015 engaged in professional misconduct within the meaning of sections 403 and 438 of the Legal Profession Act 2008 (WA) (Act) in that his conduct of an application for leave to appeal and of an appeal to the Court of Appeal substantially or consistently fell short of the standard of competence that a member of the public is entitled to expect of a reasonably competent legal practitioner because the Mr Metaxas failed to take all necessary steps to ensure that there was a proper factual basis for:
(a)a proposed ground of appeal;
(b)oral submissions made to the Court of Appeal in support of the application for leave to appeal and the appeal.
The complaint about Mr Metaxas' conduct does not relate to the hearing before Le Miere J but to the grounds he set out in the notice of appeal and in oral statements to the Court of Appeal.

Onus and standard

The Committee bears the onus of proof. In Legal Profession Complaints Committee and Wells [2014] WASAT 112 at [8] and [9] the Tribunal stated:
The Committee bears the onus of proof. It is to the civil, not criminal standard but the principles of Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw) apply. That is, while needing to be proved only on the balance of probabilities, the nature and seriousness of the allegations are relevant to the question whether the issues are proved to the reasonable satisfaction of the Tribunal and the process by which reasonable satisfaction is attained.
By reason of the nature of the allegations, the Tribunal must feel an actual persuasion of the occurrence or existence of the relevant facts in determining whether or not the case against the practitioner is made out: Medical Board of Western Australia and Wright [2010] WASAT 48 at [31]; and see Medical Board of Western Australia and Bham [2006] WASAT 190 at [144].
(See also Rejfek v McElroy (1965) 112 CLR 517 (Rejfek))
In Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw) at 362, Dixon J, as he then was, observed '[i]n such matters ''reasonable satisfaction'' should not be produced by inexact proofs, indefinite testimony or indirect inferences'.
The standard of proof required in a civil case where serious allegations are made was stated in Rejfek v McElroy (1965) 112 CLR 517 where Barwick CJ, Kitto, Taylor, Menzies and Windyer JJ observed at 521 that:
The 'clarity' of the proof required, where so serious a matter as fraud is to be found, is an acknowledgment that the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved. …
But the standard of proof to be applied in a case and the relationship between the degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded are not to be confused.
In NOM v Director of Public Prosecutions (2012) 38 VR 618 at [124], the Victorian Court of Appeal stated:
… mere mechanical comparison and probabilities independent of a reasonable satisfaction will not justify a finding of fact. The fact finder must feel an actual persuasion of the occurrence or existence of the fact in issue before it can be found. Where, as in the present case, the standard of proof is to be applied to circumstantial evidence, satisfaction as to a reasonable and definite inference is required.
All findings made by the Tribunal are on the balance of probabilities applying the Briginshaw approach.
In making its findings in relation to Mr Metaxas' conduct in relation to the grounds of appeal and the oral statements to the Court of Appeal, the Tribunal is particularly conscious of the seriousness of such allegations.

Purposes of Part 13 of the LP Act

Section 401 of the LP Act provides that the purposes of Part 13 'Complaints and discipline' are:
(a)to provide for the discipline of the legal profession in this jurisdiction, in the interests of the administration of justice and for the protection of consumers of the services of the legal profession and the public generally;
(b)to promote and enforce the professional standards, competence and honesty of the legal profession;
(c)to provide a means of redress for complaints about lawyers.

Professional misconduct

'Professional misconduct' is defined by s 403 of the LP Act inclusively as follows:
(1)For the purposes of this Act
'professional misconduct' includes -
(a)unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and
(b)conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.
(2)For the purpose of finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the practitioner were an applicant for admission or for the grant or renewal of a local practising certificate.

Unsatisfactory professional conduct

Section 402 of the LP Act provides:
For the purposes of this Act -
unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

The authorities

In Legal Professional Complaints Committee and Park [2017] WASAT 89 (Park) the Tribunal stated at [27][33]:
27Courts and tribunals rely heavily on practitioners in reaching their decisions.
28Practitioners must be scrupulously honest and accurate.
29Misleading conduct may be dishonest, reckless or careless. The end result of misleading conduct is that a court may not reach a proper decision. Dishonest conduct is obviously the most serious.
30Deliberately misleading a court or tribunal has a potentially corrosive effect on the administration of justice because the court or tribunal may proceed on an incorrect basis. Carelessly misleading a court or tribunal has the same potentially corrosive effect on the administration of justice because the court or tribunal may proceed on an incorrect basis. It is therefore imperative that practitioners ensure that evidence presented to the court is accurate. This is particularly so where it is their own evidence. The fact that a court or tribunal may not actually be misled does not reduce the seriousness of misleading conduct.
31In Legal Profession Complaints Committee and Bower [2017] WASAT 47, in relation to dishonest conduct, the Tribunal stated at [15]:
In Legal Profession Complaints Committee and Barber [2015] WASAT 99 at [26][27], the Tribunal accepted the Committee's submissions as to the principles in relation to a practitioner's duty of disclosure. These are set out below:
Nevertheless, it is a basic precept of the legal profession that lawyers owe a duty of honesty and candor to the court. It is the general duty of lawyers not to mislead the court by stating facts which are untrue, or mislead the judge as to the true facts, or conceal from the court facts which ought to be drawn to the judge's attention, or knowingly permit a client to deceive the court: Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190 at 193; Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at [6], [12], [13], [23], [66] [67]; Vogt v Legal Practitioners Complaints Committee [2009] WASCA 202 at [61]; Giudice v Legal Profession Complaints Committee [2014] WASCA 115 at [100].
The duty not to mislead the court is of fundamental importance in the due administration of justice, and is paramount and overrides any duty to the client: Kyle v Legal Practitioners Complaints Committee (supra) at [19], [23], [66].
It is a breach of that duty for a lawyer to produce a witness statement that the lawyer knows to be false or if the lawyer knows that the witness does not believe the statement to be true in all respects. The duty to correct a false witness statement continues after it is filed. Kyle v Legal Practitioners Complaints Committee (supra) at [13], [23].
Although expressed in terms of a duty to the 'court', there is no question that duty applies with equal force to proceedings in the Tribunal: see eg Clyne v The New South Wales Bar Association (1960) 104 CLR 186 at 200 (see also definition of 'court' in the Professional Conduct Rules in force at the relevant time).
The duty not to 'mislead' the court or tribunal is not limited to positive lies or misstatements. Halftruths, implying a false state of affairs, the creating of a misleading impression, or allowing the client to mislead the court will also be a breach of the duty: Kyle v Legal Practitioners Complaints Committee (supra) at [12], [23]; Vogt v Legal Practitioners Complaints Committee (supra) at [48]; Forster v Legal Services Board [2013] VSCA 73 at [161].
A practitioner's duty is not merely to not deceive the court or tribunal. He or she must be fully frank in what he or she does before it. This obligation takes precedence over the practitioner's duty to the client, to other practitioners and to himself or herself: Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 447.
Similarly, In Re Thom (1918) 18 SR (NSW) 70, Cullen CJ (with whom the other two members of the Full Court agreed) said (at 74 75):
'It is of the greatest importance than any mere casuistry in the presentation of evidence should be strictly avoided by those entrusted with the responsible duties of a legal practitioner. It is perhaps easy by casuistical reasoning to reconcile one's mind to a statement that is in fact misleading by considering that the deponent is not under any obligation to make a complete disclosure. By this means a practitioner may be led into presenting a statement of fact which, although it may not be capable of being pronounced directly untrue in one particular or another, still presents a body of information that is misleading, and conceals from the mind of the tribunal the true state of facts which the deponent is professing to place before it. For that reason it is proper on such an occasion as this to express condemnation of any such casuistical paltering with the exact truth of the case.'
32In Jemielita v The Medical Board of Western Australia (unreported, WASC, Library No 920584, 13 November 1992), Justice Owen stated:
[T]he concept of gross carelessness involves unacceptable conduct without any intentional wrong doing on the part of the practitioner. It also suggests that the practitioner is unable to give the care required or is indifferent to the need for such care notwithstanding that he may have the intellectual and technical ability to supply the care that is required.
…
[T]he concept of 'carelessness' may not be endemic to the practitioner's affairs generally. It may be limited to individual, perhaps sporadic,incidents[.]
33In A Practitioner v The Medical Board of Western Australia [2005] WASC 198 at [88], Justice Kenneth Martin, then siting as a Commissioner, stated:
[I] reiterate that where appropriate, a finding of improper conduct of a serious enough kind, or indeed even gross carelessness of a serious enough kind, may well justify the most severe disciplinary sanction[.]
In Rayney and Legal Practice Board of Western Australia [2016] WASAT 7 (Rayney), the Tribunal stated at [17][20]:
Fitness to practise law requires that the practitioner must command the personal confidence of clients, fellow practitioners and judges see: In re Davis (1947) 75 CLR 409 (In re Davis) at 420; Legal Profession Complaints Committee v Bachmann [2011] WASC 309 at [46]; Dixon v Legal Practice Board of Western Australia [2012] WASC 79 (Dixon) at [19].
Unprofessional conduct includes conduct that would be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence, which includes, but is not confined to, conduct which occurs in the course of legal practice (Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at [61]).
The assessment of fitness and propriety in legal practitioners involves a range of broad public interest considerations. The relevant interests are the interests of the public, the interests of the Court and the maintenance of the high reputation and standards in the legal profession (Dixon at [27]).
In Prothonotary of the Supreme Court of New South Wales v Da Rocha [2013] NSWCA 151 (Prothonotary) the Court stated at [29]:
In Foreman, the Court of Appeal indicated that in determining whether someone is a fit and proper person to be a solicitor the relevant considerations may include: the protection of the public against similar conduct, the character of the solicitor, and the effect which an order will have on the understanding (within the profession and amongst the public), of the standard of behaviour required of solicitors, the effect upon relationships which must exist between solicitors and the circumstances surrounding the impugned conduct.
In Legal Profession Complaints Committee v Brickhill [2013] WASC 369, the Full Court stated at [21]:
Integrity and honesty are essential characteristics expected of a practitioner, and therefore, the court has generally taken a very serious approach when dealing with dishonesty by a practitioner: Brennan [15]; Legal Profession Complaints Committee v Bachmann [2011] WASC 309 [47] (Martin CJ, EM Heenan and Jenkins JJ); Legal Practitioners Complaints Committee v Palumbo [2005] WASCA 129 [22] - [23] (Steytler P, Wheeler and McLure JJA agreeing); Kyle v Legal Practitioners Complaints Committee [1999] WASCA 115; (1999) 21 WAR 56 [69] (Parker J); Re Maraj (25) (Malcolm CJ, Kennedy and Franklyn JJ agreeing). In Barristers' Board v Darveniza, Thomas JA observed that:
[T]he quality most likely to result in striking off is conduct which undermines the trustworthiness of the practitioner, or which suggests a lack of integrity or that the practitioner cannot be trusted to deal fairly within the system which he or she practices [33].

The requisite intent

In Giudice v Legal Profession Complaints Committee [2014] WASCA 115 (Giudice), Martin CJ stated at [8]:
As this court has pointed out [Fidock v Legal Profession Complaints Committee [2013] WASCA 108] when a practitioner provides information or makes a statement to a court which is false or misleading, there are (at least) three categories of case in which that conduct will constitute either professional misconduct or unsatisfactory professional conduct. First, the practitioner might know that the statement or information is false or misleading. Second, the practitioner might have a reckless disregard to the question of whether the statement or information is false or misleading, and third, the practitioner might be negligent or careless. Because the first two categories will only apply if, assessed subjectively, the practitioner is either aware that the statement or information is false or misleading, or wilfully indifferent to its truth, in the absence of special circumstances one would ordinarily expect a finding of either category of conduct to be characterised as a substantial departure from the standards of conduct reasonably expected of a practitioner such as to constitute professional misconduct, within the taxonomy of the Act[.]

The duty to take all necessary steps

As the Court of Appeal stated in Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Korda [2015] WASCA 101 (Huntingdale Village) at [39]:
As advocacy is a human process, it is inevitable that inadvertent mistakes will be made by counsel from time to time. However, counsel's duty to not mislead the court carries a positive and correlative responsibility to take all necessary steps to ensure that there is a proper factual basis for submissions put to the court. The terms of proposed ground 2 and the oral submissions put in support of that ground represent a significant departure from that duty.

The oral submissions

The Committee submitted that:
In terms of a failure to take all necessary steps to this contemplates that a practitioner has to do more than just act honestly but actually has to objectively go some way to ensure the reliability of the information that is put before the court because of the importance of a court having the confidence that the information before it is reliable that it is being asked to adjudicate upon is terribly important to the effective administration of justice.
A failure to discharge the responsibility, therefore, can be and should be viewed just as seriously as the intentional or reckless elements.
(ts 1112, 24 January 2018)
- - - factually, here and that's an important point. What I was trying to convey and perhaps I went too far in a submission to say they are it is just as serious. My intention was to convey the notion that failure to take necessary steps is a serious matter because of its potential effect on the administration of justice. Whether or not it is just a serious as an intention or a reckless misleading, I accept your Honour's question that hangs over that.
(ts 13, 24 January 2018)
- - - or a tribunal was. Yes. In any event, the we say that if one is distinguishing between reckless and your Honour has put it as careless misleading we say, not taking the necessary steps to adhere strictly to the formulation of the Court of Appeal, the we respectfully agree that factually in a particular given case it might be difficult to distinguish between the two, but the tests are quite different. One doesn't have the Giudice test of having to attend to the question of whether or not there was an awareness that the statement might not be true and a conscious disregard of that risk.
Here, instead, in a nonecessary steps environment, the test, we say, is an objective one and doesn't include an element of mental intent at all and, more importantly, a practitioner can be (indistinct) with conduct that attracts a disciplinary sanction in circumstances where they may be convinced of their honest belief as to a proper foundation, but they have not done all that is necessary to ensure that is so and that really is the essence of the case that we put today.
(ts 14, 24 January 2018)

The Tribunal accepts the Committee's submissions that intention is not relevant in determining whether there is a breach of the duty to take all nececcsary steps to ensure the reliability of the information, that is, the Giudice test does not apply. The test is objective.

Mr Metaxas' contention

Mr Metaxas' counsel submitted:
So to say that there was no factual basis for making that assertion or allegation in the appeal, it's just simply wrong and for these charges to get to first base, it has to be shown that what the respondent was doing had no factual basis. He didn't have to prove that he's right, even though he offers his own opinion to the appeal. That's not necessarily relevant, as my learned friend quite rightly points out, nor does the tribunal need to trouble itself with it. The high jump bar is much lower than that.
He only has to show that there was a factual basis of what he was contending was present. Now, in respect of this ground, which is the failure to give reasons issue, there was he only has to show that there was a factual basis of what he was contending was present. Now, in respect of this ground, which is the failure to give reasons issue, there was because there was no factual no reasons given for the vacation of the previous orders and he didn't oppose it, it can't be implicitly asserted that he opposed it and one queries what relevance that has to a charge of professional misconduct.
(ts 47, 24 January 2018)
The Tribunal rejects the submission that Mr Metaxas only had to establish that there was a factual basis for what he was contending. The duty is to ensure that the facts are accurate.

The history of COR 223 of 2009

COR 223 of 2009 was related to another action commenced by the Westpoint Companies COR 173 of 2009. The history of those two matters to 2 August 2010 is set out in the affidavit of Ms Kirsty Sutherland sworn on 2 August 2010 (Exhibit C pages 639719). COR 173 of 2009 was prioritised for hearing by the Court. COR 223 of 2009 was to await the outcome of COR 173 of 2009.
On 25 June 2010 the Receivers filed an application for security for costs in COR 223 of 2009 (Exhibit C pages 212215). The application was supported by an affidavit of Mr Carl Ellinghaus sworn on 20 December 2010 (Exhibit C pages 720765).
Paragraph 22 of Mr Ellinghaus' affidavit stated:
The receivers seek orders that the filing of further affidavits in support of and in opposition to the security for costs application be dispensed with until further order to enable the extant disallowance and joinder applications to be determined in the meantime, as such determination will affect the scope of the security sought and the further evidence to be filed in support of the security for costs application.
A minute of proposed orders relating to the further conduct of the security for costs application was attached to the Ellinghaus affidavit (Exhibit C pages 762763).
The application for security for costs in COR 223 of 2009 together with a number of related matters was listed for directions before Le Miere J on 21 December 2010 (Exhibit C pages 2754). Le Miere J accepted the Receivers' submissions that the application for security for costs should not be decided pending the outcome of related matters (Exhibit C pages 3941).
The application for security for costs then went into a long hiatus.
On 4 April 2014 the Westpoint Companies filed a reamended statement of claim (Exhibit C pages 216321). The relief sought by the Westpoint Companies in the reamended statement of claim was:
Part V Relief
306The plaintiffs claim against Perpetual:
306.1an order that Perpetual discharge the Charges;
306.2an order that Perpetual assign the Charges and any other securities held by it in respect of the Loan Agreement to Paragon, alternatively to each plaintiff jointly;
306.3orders that the first defendant cause the second and third defendants to do the things set out in paragraphs 307.2 and 307.3;
306.4such other orders as the Court considers appropriate: and
306.5costs.
307The plaintiffs claim against the Receivers:
307.1An enquiry into the conduct of the Receivers pursuant to section 423 of the Corporations Act 2001, and as part of the inquiry, orders compelling the second and third defendants to provide the plaintiffs with:
(a)a complete itemisation of costs and expenses, including legal costs, in respect of each receivership within 14 days; and
(b)copies of any terms of engagement or costs agreements concerning the costs of the Receivers and any lawyers costs concerning any of the receiverships within 7 days.
307.2Orders pursuant to sections 423, 434 or 1324 of the Corporations Act 2001, alternatively section 87 of the Trade Practices Act 1974, alternatively section 12GD of the Australian Securities and Investments Commission Act 2001 alternatively section 23 of the Federal Court of Australia Act 1976 that the second and third defendants be removed as receivers of each plaintiff and that they give up possession and control of the property of each plaintiff.
307.3Alternatively to 307.2:
(a)orders that the second and third defendants certify the amount remaining due to the first defendant under the Charges;
(b)orders that, within such time as the court deems appropriate, the second and third defendant pay to the first defendant from the proceeds of the receiverships the amount certified to be due under the Charges;
(c)orders that, upon such payment, the second and third defendants be removed as receivers of each plaintiff and that they give up possession and control of the property of each plaintiff.
D~~Alternatively, orders that tho first defendant cause the second and third defendants to do tho things sot out in paragraphs B or C~~.
E~~Orders that the first defendant discharge the Charges.~~
F~~Orders that the first defendant assign the Charges and any other securities held by it in respect of the Loan Agreement to Paragon, alternatively to each plaintiff jointly.~~
307.4An order that the Receivers repay to each plaintiff all remuneration and expenses charged in respect of the relevant receivership for the period commencing 23 January 2008 or such other date as the Court deems appropriate.
307.5An order that the Receivers otherwise account to the Borrowers and the Guarantors ~~each plaintiff and the fourth defendant~~ for any remuneration unreasonably charged or expenses unreasonably incurred during the course of the relevant receivership.
307.6Damages at law and pursuant to section 82 of the Trade Practices Act 1974 and section 12GF of the Australian Securities and Investments Commission Act 2001.
307.7An order pursuant to section 1317H of the Corporations Act 2001 that the Receivers compensate the Borrowers and the Guarantors ~~alternatively, the plaintiffs~~, for the damage suffered by them as a result of the Receivers' contraventions of sections 180 and 181.
307.8Interest on any monies ordered to be paid by the Receivers to the Borrowers and the Guarantors at 6% per annum from such dates as the Court thinks fit to the date of judgment pursuant to section 32 of the Supreme Court Act.
307.9Such other orders as the Court considers appropriate.
307.10Costs.
The Tribunal has set out the relief sought by the Westpoint Companies in the reamended statement of claim to place some of the statements in the transcript of the hearing before Le Miere J referred to below in context. In particular, Mr Metaxas proposed to reduce the scope of the relief sought by the Westpoint Companies from that set out above.

The hearing of 21 and 23 May 2014 before Le Miere J

The application for security for costs was revived in April 2014, seemingly in response to the reamended statement of claim of 4 April.
The application for security for costs was heard before Le Miere J on 21 and 23 May 2014 (Exhibit C pages 440613). Mr Metaxas appeared for the Westpoint Companies and Mr Thompson appeared for the defendants.
Mr Thompson identified two applications for determination by His Honour. Firstly, an application from costs arising out of the 'disallowance application'. The disallowance application related to the costs of a successful application by the Receivers' for the costs of resisting previous amendments to the statement of claim. It is not relevant for present purposes. Secondly, an application for security for costs in relation to the Westpoint Companies reamended statement of claim filed on 4 April 2014.
Much of the first day of hearing, 21 May 2009, was taken up with the 'disallowance application'.
The Court turned to the application for security for costs in the midafternoon of 21 May 2014 (Exhibit C page 521). At about 4 pm on 21 May 2014 the matter was adjourned to 23 May 2014.
Mr Thompson criticised the form of the further reamended statement of claim filed on 4 April 2014. He stated:
THOMPSON, MR: … Can I say something about the new pleading. The new pleading - and I don't propose to subject the new pleading to anything like a strike out application or anything of that nature, but there are a couple of matters that need to be said about the new pleading, just so your Honour has a flavour of whether this is a case which has reasonable prospects of success or not.
The first thing I would mention to your Honour - yes, sorry. Mr Feutrill quite rightly reminds me that what I'm saying is that we're not making the strike out application now. It may be that it, depending on how matters unfold, an application to strike out might be made down the track.
LE MIERE J: I thought it had been made.
THOMSON,MR: In respect of the new pleading?
LE MIERE J: Yes. No.
THOMSON,MR: No, I don't think it has.
METAXAS,MR: And you're out of time.
THOMSON, MR: Well, your Honour will see that in which this litigation unfolds, there are things to be said one way or the other about timing issues.
LE MIERE J: Well, it hasn't been made.
THOMSON, MR: Yes. That's right. But can I make these points just briefly about the new pleading. If I can just take your Honour to paragraph 19, which is the subject of some comments in your Honour's reasoning in the previous decision. Paragraph 19G has been removed, and the strike out was directed at paragraph 19G, but I'm not sure if your Honour has paragraph 23 of your reasons on the strike out application. In that, your Honour says in respect of paragraph 19G, that:
The pleading formulates the receiver's duty as the positive duty to act in the interests of the companies. Such a formulation of a receiver's duty goes beyond a duty to act in good faith, without fraud, and without wilfully or recklessly sacrificing the interests of the company, and is not a duty recognised by the general law. Giogla is not authority for the proposition that the receiver owes a positive duty to act in the interests of the companies.
So your Honour has said expressly that there is no positive duty to act in the interests of the companies. Notwithstanding that it's not been the subject of a particular application previously, your Honour perceives paragraph 19B of the pleading - it is in the same formats it was previously, but while we would accept that there is a duty to exercise powers and discharge duties in good faith, the rest' of that subparagraph seems directly inconsistent with your Honour's statement of principle at paragraph 23 of the judgment. It alleges a positive duty to act in the best interests of the company.
Some other matters I should raise are, your Honour did not, as I have said before, disallow any aspect of the relief paragraphs at part 5 and following. Those appear to have been wholly picked up and retained within the pleading, and - this is at paragraphs 306 and following - and therefore there are claims for relief which are based upon the Trade Practices Act, the Australian Securities and Investments Commission Act. There are claims for damages under section 82 of the Trade Practices Act, claims for orders under section 1317H the Corporations Act, claims asking for the removal of the receivers. All of those are matters that seem to go well beyond the scope of an inquiry, and as far as I can detect, there are no other references to the Trade Practices Act, the Australian Securities and Commission Act, or the Corporations Act in section - in reference to section 1317H, contained in the remainder of the pleading. So, once more, the scope of the pleading is somewhat difficult to pin down.
My friend has said that there is a formula that is used, or was used, in the last pleading. A similar formula may have been adopted in this pleading - or formulaic approach. If I can take your Honour to an example of the formulaic approach mark 2. If your Honour can go to page 23, for example. This is contained in part I of the statement of claim, which is related to the Huntingdale receivership. There are other parts that relate to the receiverships for the other companies, the other five plaintiffs, or the other four plaintiffs. And the formula appears to be - to plead a number of charges from invoices which are listed in paragraph 73A through to. 73M. The amounts involved, your Honour will perceive, are not large in this instance. Your Honour will also notice that the amounts seem to relate to the months of January and - - -
LE MIERE J: Which paragraph are you on?
THOMSON, MR: 73A and following.
LE MIERE J: 73A.
THOMSON, MR: I'm using a clean version of the - - -
LE MIERE J: That's why the page numbers are different.
THOMSON, MR: Yes, that might be - that might be the problem.
LE MIERE J: Yes. Okay.
THOMSON, MR: Your Honour will see that there are allegations about invoices and services provided. I was saying that they occur in the months of January through March 06. One might infer that either there was nothing else that was wrong, or that potentially the invoices that were provided in the middle of last year still have not generated anything more that could or ought to be pleaded beyond about March 06. The amounts involved are comparatively small in this instance. And then there is - in effect, this global allegation that occurs in paragraph 75, which says:
By reason of the facts, matters, acts, and things pleaded in part I above, there should be an inquiry into the conduct of the receivers as regards whether they charged and were paid excessive or unreasonably incurred fees or disbursements in relation to Huntingdale and the sale or settlement of the Huntingdale centre, whether the manner in which the receivers accounted for their fees was contrary to section 421B.
And then if the - 76 says:
If upon inquiry it is found that there was excessive or unreasonably incurred fees, those amounts should be repaid.
The point that I seek to make is that, in substance, there has been no allegation in a proper form of a duty, a breach of duty, and then a basis for an inquiry based upon that. Now, I just make those points because much was made by Mr Metaxas in the submissions, that this is a surefire winner of a case.
(Exhibit C pages 526 529)
Mr Thompson's criticisms of the reamended statement of claim must have struck home because at the commencement of the hearing on 23 May 2014 Mr Metaxas stated:
I undertake to file an amended statement of claim making clear that the other relief is dependent upon an order being made for an enquiry, because we don't see how these matters can be said to progress or can be the application will not have been brought under section 423 except if it was made for an enquiry so I will undertake to file an Affidavit and amended pleading within seven days.
(Exhibit C page 540)
Seven days would have been 30 May 2014.
The following exchange subsequently took place:
LE MIERE J: So I still haven't got completely clear in my mind the amendment that you propose; will it be to will there be any allegations of breaches of the Trade Practices Act?
METAXAS, MR: No.
LE MIERE J: That will simply go?
METAXAS, MR: Yes. This is about overcharging.
LE MIERE J: All right.
METAXAS, MR: Overcharging and charging improperly and failing to act diligently in relation to the conduct of the solicitors; in other words, not really taking any efforts to scrutinize what was happening as regards the legal costs.
LE MIERE J: So the what you intend is to set out the factual allegations
METAXAS, MR: Yes.
LE MIERE J: of overcharging.
METAXAS, MR: Yes.
LE MIERE J: And that's it?
METAXAS, MR: Well, it's beyond overcharging; it's charging when you had no entitlement as well.
LE MIERE J: Yes.
(Exhibit C pages 541542)
It is clear from this exchange that it was Mr Metaxas' intention to reduce the scope of the statement of claim. Since the application for security for costs was based on a statement of claim which was wider in scope, an amendment to the statement of claim as proposed by Mr Metaxas had the potential to reduce the amount awarded in an application for security for costs compared to the statement of claim as it then stood.
Later on the following exchange took place:
LE MIERE J: If things did proceed in that way then security for costs on that approach would be ordered for the first stage only.
METAXAS, MR: If they were ordered at all, yes.
LE MIERE J: Well, that's what you're addressing me about, I assume?
METAXAS, MR: Yes. I - what we say fundamentally is the proposition that given the nature of the application we should now be speculating about what is required for the second stage is just - it's just unproductive. It involves this massive amount of speculation about what will the nature of the allegations be and what will be the receiver's response to the allegations?
LE MIERE J: If I was to make an order for security for costs and if it was confined on what I think you're saying to me, to this first stage, and if an inquiry was then ordered presumably the receivers would then come back again and apply for security for costs for the next stage; now, there might be argument about that, but that would have to be then the next stage, would it not?
METAXAS, MR: I agree.
LE MIERE J: I see.
METAXAS, MR: And that's the only logical way this can be done because otherwise we're just - I mean in applications for security for costs where I have been involved, and there haven't been many, but there is a bill of costs put up, but it goes beyond mere speculation about the nature of the proceeding and what might be required. There is usually some definition to the claim by a statement of claim in the defence.
LE MIERE J: Now, a problem then that immediately arises is that you're asking that the security for costs application be considered on the basis of the proceeding proceeding in a way in which, on the current orders and pleadings, it's not proceeding.
METAXAS, MR: No. I'm not, with respect. Your Honour has made the order that the matter proceed with pleadings, if unless - - -
LE MIERE J: Yes. You don't intend to - - -
(Exhibit C pages 544545)
LE MIERE J: Now, that's where I thought what you're saying to me is that you are proposing to change things so that it goes back into the application for an inquiry only.
METAXAS, MR: Well, that's what it will be. I will file an amended statement of pleading within seven says to make that put that beyond doubt that it's just an application for an inquiry.
LE MIERE J: And Mr Thompson, you want to say something?
THOMPSON, MR: Well, I certainly do, your Honour. This is part of the difficulty about the security for costs application that we've experienced at every stage throughout, to pin down what is exactly the nature and scope of the dispute. Now, it's all very well for my friend to say you can now adjudicate this application on the basis of some hypothetical statement of claim which I will provide to you in the future; it's not satisfactory from our point of view because we have provided affidavit evidence and estimates of costs.
LE MIERE J: Mr Thompson, I - Mr Metaxas will have to have another go at this, but subject to Mr Metaxas persuading me otherwise, where I saw - where I see this going is that I would have to adjourn the application to enable Mr Metaxas to make the amendment that is outlined so that both the receivers and the court could then see precisely what the ambit of the application is.
It does seem to me that it does or is likely to make a significant difference to the proceeding if it is limited in the way in which Mr Metaxas has indicated and it would - Mr Metaxas - put it in terms of an undertaking but even leaving that to one side, Mr Metaxas informing the court that the plaintiffs intend to amend their case to limit it in the way which he has said, I think it would be quite wrong for the court to then persist in hearing and determining a security for costs application on the basis that it's a much bigger, wider hearing.
(Exhibit C pages 547548)

At this point Mr Metaxas had made it clear that the claim was essentially limited to a claim for an inquiry. It was clear that His Honour regarded it as appropriate to proceed to deal with the application for security for costs on the basis of the proposed limited scope of an inquiry.
Further, in Exhibit C at page 549, Mr Metaxas said:
METAXAS, MR: Well, the amendment that we would make is that the prayer for relief would be amended to plead only the plaintiff's claim, an order for an inquiry into the conduct of the receivers pursuant to section 423 of the Corporations Act as regards the conduct of the receivers pleaded above.
The following exchange later took place:
LE MIERE J: Well, it does seem to me if that's the change that is to be made, unless Mr Thomson persuades me otherwise, I would have thought that does or should change the receiver's approach to it. Mr Thomson might tell me in a minute, he might tell me "no" in which case we can just carry on but on the face of it, if that's the way things were to proceed then the burden of producing evidence and argument on the receivers at this first stage would be less than they have contemplated till now and the ambit of the hearing and argument would be less than they and I have contemplated until now. That would then cause them to need to reconsider their costs estimates, I would have thought.
METAXAS, MR: Well, with respect, in my submissions I said at paragraph 27 the costs in any event should be confined to stage one of the two stage process. The receiver's application seeks costs as if an order for inquiry had been made. It has not been made. If an order for inquiry is conceded then that should be stated, otherwise it just looks like the receivers are resorting to oppressive conduct.
LE MIERE J: The problem I had with that when I read it was that - and I think we're going back to where we went a while ago - I have understood the statement of claim not to be confined to an application for an inquiry and so things we were identifying earlier damages under the Trade Practices Act so I have understood, and I assume from what has been said from the receivers that they've understood, the hearing would not be simply what you're calling the stage one inquiry but rather would be a trial in the ordinary sort where one determines whether or not there have been breaches of fiduciary duties, whether or not there has been breaches of the Trade Practices Act and so on.
METAXAS, MR: Your Honour, with respect, if the receivers want to put something else up on quantum they can do that in the next two weeks or something. Really, there's no reason why I shouldn't proceed, I wouldn't have thought. Of course your Honour needs to hear from my learned friend but I would have thought I should complete my submissions. If the receivers want to put something else in on quantum they can do so but the proposition that we should all go away and come back just because there's going to be an amended draft bill prepared seems to me to be unnecessary.
LE MIERE J: All right. Mr Thomson?
(Exhibit C pages 561562; Tribunal bold emphasis added)
It is plain from this exchange that it is for the Receivers to put up further evidence. Mr Metaxas clearly informed the Court that he should complete his submissions.
The following exchange also took place:
LE MIERE J: What I'm considering doing is this: is to direct first that you file a further amended statement of claim, which insofar as it seeks an inquiry in regard to the conduct of the receivers, specifies the conduct of the receivers which should be inquired into. (2) For you to continue your submissions today, to give both sides leave to file further submissions after receiving your amendment. And liberty to either party to apply to relist the matter for further argument if they wish to conduct further argument, having received your amendment.
METAXAS, MR: Well, I don't have a difficulty with that proposed your Honour's proposal, except that in order that we file a pleading I take it your Honour is saying pleading everything we intend to plead would require an enormous effort, because what we have to do otherwise we get met with complaints that we lack precision in our allegations, we have to plead every instance where we think we've been improperly charged.
LE MIERE J: Well, I've understood you to be saying to me that you say that to obtain an order for an inquiry you have to establish only sufficient reason for an inquiry to be made, which Mr Thomson then says should identify matters in relation to which the receivers have not faithfully performed their functions and so on within the terms of section 423. And specifying the matters in relation to which you want the conduct inquired. It seems to me then it's a matter for you what you plead, bearing in mind that you will have to make out a sufficient case for there to be an inquiry into the aspects of - the conduct of the receivers which you seek to be inquired into.
(Exhibit C page 566)
Later, the following exchange took place:
THOMPSON, MR: And then there will be some decision that your Honour makes which perhaps won't resolve the issues in a clear way between the parties, just because of the way that the matter has evolved before the court. That's the difficulty. So our submission is your Honour should follow what we would submit is an orthodox approach: give him leave to re-plead, allow a reasonable time, but on the assumption that, you know, there are people working on this so it may be a month. He's had 11 months or so or 10 months with the invoices. We will make a new application when we see the pleading, but we should have indemnity costs for this part.
METAXAS, MR: With respect, things that my learned friend said I was saying I didn't say.
LE MIERE. J: All right. I propose as follows - I don't want to spend the rest of the day arguing about what we should argue about. I propose as follows, that order that the plaintiffs file and serve a further amended statement of claim on or before a certain date, stating amongst other things the conduct of the receivers in regard to which an inquiry should be ordered.
Secondly, the parties have leave to file and serve any affidavits and submissions in relation to the further amended statement of claim on or before a certain date. Thirdly, each party have leave on or before a certain date to apply for a further oral hearing of the application for security for costs. Fourthly, if no party applies for a further oral hearing, the application for security for costs may be determined without any further oral hearing. So I propose then you should continue and complete your submissions.
METAXAS, MR: Please, your Honour.
LE MIERE J: Mr Thomson has made submissions, the matter has proceeded this far, in my view the most efficient or least inefficient way of now dealing with the matter is to complete the submissions, that the plaintiffs make the submissions on the basis that they wish. Insofar as they are predicated upon an amended pleading, that amended pleading will have to be filed within a certain time. Each party may then put on any further evidence and submissions in light of that.
I have in mind that the receivers may either stick with what they've got or, if they see fit, put on some further evidence whether in relation to the costs of the changed scope of inquiry if there is one, or otherwise, and each party may then put on any further written submissions in relation to that matter. If any party considers that further oral hearing is required - and that would include for the making of some further application or further directions, then they may request it within a certain, time and we will deal with it. So the first step in relation to these directions is how long you would need to put on that - or want to put on that further pleading, Mr Metaxas.
METAXAS, MR: Well, I think 20 June, your Honour, is a Friday and I'm going away for a week after 20 June. So if I could have until 20 June.
LE MIERE J: Yes. Now, I've put it in terms of the parties have leave to file and serve any affidavits and submissions in relation to that further amended statement of claim on or before - I had in mind putting a period after that but, of course, in your case you can probably do it by 20 June anyway, wouldn't you? Because there's nothing further you would be receiving. I don't have in mind that yours are responsive to anything the receivers put on - - -
METAXAS, MR: Sorry - - -
LE MIERE J: - - - rather you can put, if you see fit - - -
METAXAS, MR: Sorry. Is it your Honour's intention that these are affidavits in respect of the application for security for costs?
LE MIERE J: Yes.
METAXAS, MR: Sorry.
LE MIERE J: This is all in relation to security for costs.
METAXAS, MR: I thought you meant in support of the application for an inquiry.
LE MIERE J: No. No.
METAXAS, MR: No, just for security of costs. Yes.
LE MIERE J: And the reason I raise that is because it might be - it might not be, but it might be that receivers might say, "Well, that change the scope of the inquiry, our costs would be different, here's an estimate of what those costs might be."
METAXAS, MR: Yes. Yes. In that case - - -
LE MIERE J: They may not, they may choose to put on submissions which say, 'Well, this doesn't change anything' or may choose to put on submissions which say something else.
(Exhibit C pages 569571; Tribunal bold emphasis added)
It is clear from the exchange between His Honour and Mr Metaxas that the reference to the affidavits being related to 'security for costs' is in contradistinction to the application for an inquiry. It is not a statement by His Honour that there is an open invitation to file further submissions relating to the security for costs. The affidavit and submissions relate to the impact the further amended statement of claim may have on the application for security for costs.
Mr Metaxas' reliance upon this exchange as basis for a contention that the security for costs was part heard is misplaced. (See Respondent's Outline of Submissions paras 4 to 4 (second)).
The exchange continued:
METAXAS, MR: Yes. In that event, 20 June for me.
LE MIERE J: 20 June. And another two weeks after that, Mr Thomson, for you to - - -
THOMSON, MR: I'm entirely unavailable in July.
METAXAS, MR: Sorry, are you - sorry, is your Honour asking my learned friend what date he wants to file the affidavits and submissions in reply?
LE MIERE J: Yes, so some time after 20 June.
METAXAS, MR: Yes.
LE MIERE J: Do you have any time after 20 June, Mr Thomson, that would enable you to do it?
THOMSON, MR: Well, I have a three day trial in the following week and then I'm on leave for three weeks and then I'm back and doing a two week trial. So perhaps if we were to say 4 July, really, to deal with it. Mr Feutril may well be involved.
LE MIERE J: All right. And then I have in mind, say, another seven days after that in which either side might ask for an oral hearing.
THOMSON, MR: Yes.
METAXAS, MR: 11 July?
LE MIERE J: 11 July.
METAXAS, MR: Please, your Honour.
LE MIERE J: All right. So you can complete your submissions now, Mr Metaxas.
(Exhibit C page 571; Tribunal bold emphasis added)
Having been invited by His Honour to complete his submissions, Mr Metaxas then addressed His Honour in Exhibit C at pages 571600. He concluded with the words 'so please the court, they're my submissions'. This exchange makes it clear that, except for any matters arising from the amendments to the statement of claim and any impact that might have on the security for costs application, the matter was complete. Save for matters arising from the amendment it would be a waste of judicial resources to have matters not related to the foreshadowed amendment part heard. It would have made far more sense to adjourn the entire hearing.
Mr Thompson then addressed His Honour. At page 613, His Honour stated 'All right. Well, I will reserve my decision, thank you, on the basis of the directions I made this morning'.
It is difficult to understand how Mr Metaxas could come away from the hearing with any misconception as to what the orders were and the basis upon which his Honour had made the orders.
The Associate's Record of the orders made by His Honour on 23 May 2014 (noted as 21 May 2014 in the Associate's Record) was:
The plaintiffs file and serve a further amended statement of claim on or before 20 June 2014 stating, amongst other things, the conduct of the Receivers in regard to which an inquiry should be ordered.
The parties have leave to file and serve any affidavits and submissions in relation to the further amended statement of claim on or before 4 July 2014.
Each party have leave on or before 11 July 2014 to apply for a further oral hearing of the application for security for costs.
If no party applies for a further oral hearing the application for security for costs will be determined without any further oral hearing.
(Exhibit C page 775)
The Associate's Record accurately reflects the orders made as set out in the transcript. The only error in the Associates Record is that the orders were made on 23 May 2014 not 21 May. Nothing turns on this as the precise date on which the orders were made is irrelevant. The transcript shows that they were made on 23 May 2014. Mr Metaxas received a copy of the Associate's Record on 20 June 2014 from the Receivers' solicitors (Exhibit C page 779). Mr Metaxas made no objections to the Associate's Record of the orders pronounced by His Honour upon receiving a copy of that Record by email on 20 June 2016. If Mr Metaxas believed those orders to be incorrect, it was open to him to have the orders corrected by communicating with the Associate. The fact that Mr Metaxas did not seek to correct the Associate's Record indicates that he was not under any misconception as to what the orders were.
Mr Metaxas' submission that the Associate's Record did not accurately reflect His Honour's orders are not supported by an examination of the relevant transcript and of the Associate's Record. (Respondent's Submissions para 16).
The contention that 'in reality and substance [the Westpoint Companies] were not able to consider the judgment prior to the formal making of orders' (Respondent's Submissions para 8) is simply wrong.
Initially, His Honour's Associate gave notice that His Honour intended to hand down his decision on 26 June 2014 but at the request of Mr Metaxas this was changed to 2 July 2014 (Exhibit A pages 767777).
On 20 June His Honour's Associate sent an email to the parties:
Dear Parties
I refer to the below emails of Mr Metaxas.
I confirm that the reserved decisions in relation to the above matter will now be handed down by the Court on Wednesday, 2 July 2014 at 9.15am.
Any minutes of proposed orders should therefore be prepared for presentation to the Court on the above date.
Advanced copies of the decisions will be available for collection from the Supreme Court reception at level 15, 111 St Georges Terrace on Tuesday, 1 July 2014 at 2.00pm.
Kind regards
(Exhibit C page 776)
Mr Metaxas' submissions that the Westpoint Companies were denied the opportunity to file further evidence, is incorrect. (Respondent's Submissions paragraph 1415). The Westpoint Companies lost the opportunity because of their failure to comply with the order for the filing of an amended statement of claim.
The date of the email was the date by which the Westpoint Companies were to file a further statement of claim.
The Tribunal notes that the fact that His Honour may have nominated a date for the drafting of the decision does not mean that His Honour has decided the matter. The Tribunal does not accept Mr Metaxas' submission that it is a 'fair assumption' that because His Honour nominated a date, being 2 July 2014, to hand down the decision in respect of security of costs, that the decision had therefore already been drafted as at 20 June 2014, that is, when the Associate informed the parties of the listing. His Honour still had 11 days to draft the decision.
Despite being given notice that the decision was being handed down on 2 July 2014, Mr Metaxas did not indicate that he intended to take any further steps pursuant to the orders of 23 May 2014, save for filing a further statement of claim on 26 June 2014. Importantly, he did not indicate that he intended to take any steps to apply for a further oral hearing of the application for security for costs nor that he wished to make any submissions. There was nothing to stop Mr Metaxas from requesting His Honour to defer making final orders at a point so that he could seek leave to file further affidavits and submissions or to seek to make a further oral application.
On 26 June 2014 the Appellants filed and served a further reamended statement of claim.
On 1 July 2014 at 2.00 pm, advanced copies of the decision (see [2017] WASC 217 Exhibit C page 193) were available for collection from the Supreme Court reception at level 15, 111 St Georges Terrace.
An email was sent to Mr Metaxas by the solicitors for the Receivers on 2 July 2014 at 8.45 am attaching a minute of proposed orders.
The Receivers' minute of proposed orders was:
THE COURT ORDERS THAT:
Interlocutory process for security for costs filed 20 December 2010
1.By 16 July 2014, the plaintiffs provide security for the second, third and fifth defendants' (the Receivers) costs of the action up to the close of pleadings in the sum of $150,000 by payment of that amount into court, the provision of an unconditional bank guarantee from an Australian trading bank in favour of the Receivers or by some other means agreed by the Receivers.
2.If the plaintiffs fail to provide security pursuant to Order 1, the proceedings be stayed until the plaintiffs provide the security or further order of the Court.
3.Subject to the plaintiffs' compliance with Order J, the Receivers file their defence by 17 November 2014.
4.The Receivers have liberty to apply for further security for costs after the pleadings are closed.
Costs of disallowance application heard on 28 August 2013
5.The plaintiffs and Mr Norman Phillip Carey do jointly and severally pay the Receivers' costs of their application to disallow the amendments to the re-amended statement of claim and any reserved costs to be taxed.
6.Pursuant to section 280(2) of the Legal Profession Act 2008 (WA) the costs the subject of Order 5 be taxed in accordance with item 10 of the Supreme Court Scale of Costs 2012 set out in Table B of the Legal Practitioner (Supreme Court) (Contentious Business) Determination 2012 (Determination) with the following limits substituted for the limits fixed in the scale:
a.the limit of the time allowed for the performance of the work be removed;
b.the maximum hourly and daily rates allowed in respect of each fee earner set out in Table A of the Determination shall be increased by 50%; and
c.the costs (inclusive of GST and counsel fees but exclusive of other disbursements) shall not exceed $50,000.
Other orders
7.Orders 2 to 4 (inclusive) made on 23 May 2014 be vacated.
8.The plaintiffs and Mr Norman Phillip Carey do jointly and severally pay the Receivers' costs of the application for security for costs and the costs of the application for Receivers' costs of the disallowance application, fixed in the sum $20,000 to be paid within 14 days of this order.
(Exhibit C pages 783784)
COR 223 of 2009 was called on before Le Miere J on 2 July 2014. Mr Metaxas appeared for the Westpoint Companies. Given that Mr Metaxas appeared it is difficult to say that he had no notice of the decision. It is even more difficult for Mr Metaxas to argue this when he requested that the date for handing down of the decision be changed from 26 June 2014 to 2 July 2014. On the application for security for costs His Honour determined that the Westpoint Companies should give security for the Receivers' costs up to the close of pleadings in the sum of $150,000. The Receivers were able to apply for further security for costs after the pleadings had closed and proceedings were stayed until security was provided by payment into Court, by provision of a bank guarantee or some other means agreed by the Receivers. His Honour then published his reasons.

The Court of Appeal's finding in Huntingdale Village at [39]:
As advocacy is a human process, it is inevitable that inadvertent mistakes will be made by counsel from time to time. However, counsel's duty to not mislead the court carries a positive and correlative responsibility to take all necessary steps to ensure that there is a proper factual basis for submissions put to the court. The terms of proposed ground 2 and the oral submissions put in support of that ground represent a significant departure from that duty.
and the Court of Appeal's reasons encapsulates Mr Metaxas' failure to take all necessary steps to ensure that there was a proper factual basis for submissions put to the court.
Mr Metaxas' failure to do so represents a significant departure from his positive duty to take all necessary steps.

Did Mr Metaxas' breach of duty amount to professional misconduct?

Mr Metaxas submitted that:
17None of the issues can amount to professional misconduct even if found to be correct.
18[Mr Metaxas] was perfectly entitled to make argument on these issues and whilst the Court of Appeal was not persuaded by them, there was real factual basis for advancing such arguments.
19What constitutes professional misconduct was described in LPCC v Caine as follows:
The common law concept of unprofessional conduct (sometimes expressed as professional misconduct, sometimes signifying more serious misconduct) is a conduct that would be reasonably regarded as disgraceful of dishonourable by practitioners of good repute and competence. See Kyle v LPCC [1999] WASCA 115.
20Further, the standard of proof required is that of that espoused in Briginshaw v Briginshaw. The alleged conduct of [Mr Metaxas] falls well short of the standard required to make a finding of professional misconduct against him.
(Respondent's Outline of Submissions)
As noted below in [32] and [33] of Park:
32In Jemielita v The Medical Board of Western Australia (unreported, WASC, Library No 920584, 13 November 1992), Justice Owen stated:
[T]he concept of gross carelessness involves unacceptable conduct without any intentional wrong doing on the part of the practitioner. It also suggests that the practitioner is unable to give the care required or is indifferent to the need for such care notwithstanding that he may have the intellectual and technical ability to supply the care that is required.
…
[T]he concept of 'carelessness' may not be endemic to the practitioner's affairs generally. It may be limited to individual, perhaps sporadic,incidents[.]
33In A Practitioner v The Medical Board of Western Australia [2005] WASC 198 at [88], Justice Kenneth Martin, then siting as a Commissioner, stated:
[I] reiterate that where appropriate, a finding of improper conduct of a serious enough kind, or indeed even gross carelessness of a serious enough kind, may well justify the most severe disciplinary sanction[.]
A breach of a practitioner's duty to take all necessary steps to ensure that there is a proper factual basis, may, if sufficiently egregious, constitute professional misconduct.
As the Tribunal stated in Rayney at [17]-[19]:
Fitness to practise law requires that the practitioner must command the personal confidence of clients, fellow practitioners and judges see: In re Davis (1947) 75 CLR 409 (In re Davis) at 420; Legal Profession Complaints Committee v Bachmann [2011] WASC 309 at [46]; Dixon v Legal Practice Board of Western Australia [2012] WASC 79 (Dixon) at [19].
Unprofessional conduct includes conduct that would be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence, which includes, but is not confined to, conduct which occurs in the course of legal practice (Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at [61]).
The assessment of fitness and propriety in legal practitioners involves a range of broad public interest considerations. The relevant interests are the interests of the public, the interests of the Court and the maintenance of the high reputation and standards in the legal profession (Dixon at [27]).
Courts and tribunals are heavily reliant upon information provided by practitioners in proceedings. They must be able to be confident that the information provided in submissions is scrupulously accurate.
Mr Metaxas' substantial departure from that standard amounts to professional misconduct. Despite Mr Schlicht's best efforts in a difficult case, contrary to Mr Metaxas' submissions there was no real factual basis for advancing the arguments.

Conclusion and orders

The Tribunal finds:
1.That the practitioner, Mr Arthur Metaxas between about 23 July 2014 and about 17 March 2015 engaged in professional misconduct within the meaning of s 403 and s 438 of the Legal Profession Act 2008 (WA) in that his conduct of an application for leave to appeal and of an appeal to the Court of Appeal substantially or consistently fell short of the standard of competence that a member of the public is entitled to expect of a reasonably competent legal practitioner because Mr Arthur Metaxas failed to take all necessary steps to ensure that there was a proper factual basis for:
(a)a proposed ground of appeal;
(b)oral submissions made to the Court of Appeal in support of the application for leave to appeal and the appeal.

2.The Legal Profession Complaints Committee to file and serve its written submissions on penalty and costs by 10 May 2018.
3.Mr Arthur Metaxas to file and serve his written submissions on penalty and costs by 24 May 2018.
4.Subject to any further order of the Tribunal, the question of penalty and costs is to be dealt with entirely on the documents.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
JUSTICE J CURTHOYS, PRESIDENT
26 APRIL 2018