Legal Services Board v Forster (Ruling No 1)
[2016] VSC 356
•24 June 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2014 05029
| LEGAL SERVICES BOARD | Plaintiff |
| v | |
| DAVID BRIAN FORSTER | Defendant |
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JUDGE: | McDONALD J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 April 2016 |
DATE OF RULING: | 24 June 2016 |
CASE MAY BE CITED AS: | Legal Services Board v Forster (Ruling No 1) |
MEDIUM NEUTRAL CITATION: | [2016] VSC 356 |
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EVIDENCE – Admissibility of findings in earlier proceedings involving plaintiff and defendant – whether issue estoppel applied to earlier findings – Defendant estopped from denying ultimate findings and the essential foundation of ultimate findings – Evidence Act 2008 ss 91(1), 93(c).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Ruskin QC Mr S R Senathirajah | Solicitor for the Victorian Legal Services Board |
| For the Defendant | In Person |
HIS HONOUR:
Introduction and Background
Mr Forster was admitted as a solicitor and barrister of the Supreme Court of Victoria on 1 April 1974. He held an employee practising certificate from 1 April 1974 to 31 December 1980. From 1 January 1981 until 30 June 2011, Mr Forster practised as a sole practitioner under the entity name ‘Hollows Lawyers’. [1]
[1]Affidavit of Lesley Anne Davis sworn 18 September 2014, [6].
On 2 June 2009, following a report by trust account inspectors employed by the Law Institute of Victoria Ltd (‘the LIV’) of Hollows Lawyers in November and December 2008, the Legal Services Board (‘the Board’) applied to the Supreme Court for the appointment of receivers to Mr Forster’s law practice.[2] Receivers were appointed to Hollows Lawyers on 12 April 2010.[3]
[2]Forster v Legal Services Board [2013] VSCA 131, [11]–[15].
[3]Ibid [22].
On 14 September 2010, the Board refused to renew Mr Forster’s 2010-2011 practising certificate, and Mr Forster sought to have the Board’s decision reviewed by the Victorian Civil and Administrative Tribunal (‘the VCAT’).[4]
[4]Affidavit of Lesley Anne Davis sworn 18 September 2014, [7].
On 8 December 2011, President Ross J dismissed Mr Forster’s application for review of the decision by the Board, finding that he was not a fit and proper person to hold a practising certificate.[5] In dismissing Mr Forster’s application, Ross J held that Mr Forster had engaged in the four acts of misconduct set out at (c) to (f) in paragraph [11] below.[6]
[5]Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216, [299].
[6]See ibid [295].
Mr Forster then appealed the decision of the VCAT to the Court of Appeal. On 11 April 2013, the Court of Appeal dismissed Mr Forster’s appeal.[7] Subsequently, Mr Forster made an application for special leave to the High Court, which was refused on 12 February 2014.[8]
[7]Forster v Legal Services Board (2013) 40 VR 587, [6].
[8]David Brian Forster v Legal Services Board [2014] HCASL 20.
On 17 February 2011, Emerton J made the following order in the course of hearing an application for the appointment of a receiver to Mr Forster’s law practice:
The defendant [Mr Forster] is directed not to contact, communicate or otherwise approach any counsel retained by the plaintiff in this proceeding.[9]
[9]Legal Services Board v Forster (No 2) [2012] VSC 633, [15].
Mr Forster was present in court when the order was pronounced and a warning given that a breach of the order would constitute contempt of court.[10]
[10]Ibid [14].
On 13 October 2012, Mr Forster sent an email to counsel for the Board in breach of the order of Emerton J.[11] On 17 October 2012, Mr Forster was served with a summons for contempt of court and on 19 December 2012 he was found guilty of the charge of contempt for breach of the order of Emerton J and interfering with the course of justice.[12] Mr Forster was sentenced to a term of imprisonment for one month which was wholly suspended for a period of 12 months.[13]
[11]Ibid [2].
[12]Ibid [88].
[13]Legal Services Board v Forster (No 3) [2012] VSC 640, [31].
On 16 July 2014, the Board issued a Show Cause Notice (‘Notice’) to Mr Forster inviting a written response within 28 days after the date of service of the Notice regarding why the Board should not apply for an order that he be removed from the Roll of persons admitted to the legal profession.[14] The Notice was served on Mr Forster on 18 July 2014.[15]
[14]Affidavit of Lesley Anne Davis sworn 18 September 2014, [18].
[15]Ibid [20].
On 18 September 2014, the Board commenced the present proceedings seeking an order pursuant to s 2.4.42(5) of the Legal Profession Act2004 and/or the inherent jurisdiction of the Court that Mr Forster be removed from the Roll.[16]
[16]Originating Motion dated 18 September 2014, [1].
The Board relies on six acts of alleged misconduct by Mr Forster:[17]
[17]‘Plaintiff’s Outline of Submissions’ dated 16 October 2015, [13].
(a) conviction for criminal contempt for engaging in conduct on 13 October 2012 that had a tendency to interfere with the course of justice and in breach of an Order of the Court, which breach was not accidental or unintentional;[18]
[18]Ziems v Prothonotary of the Supreme Court (NSW) (1957) 97 CLR 279 at 290.
(b) engaging in conduct on and about 3 February 2011 that had a tendency to interfere with the course of justice;[19]
[19]Orders made on 17 February 2011 and extract of transcript of hearing before Emerton J on 17 February 2011 (exhibit “LAD5” to the Davis Affidavit); Legal Services Board v Forster (No 2) [2012] VSC 633 (exhibit “LAD6” to the Davis Affidavit).
(c) in about September 2009, deliberately attempting to get a client, Mr Rann, to confirm instructions that were not in fact given – in other words, to participate in a lie – in an effort to shore up the Defendant’s defence in court proceeding, and that in doing so behaved dishonestly and put his own interests ahead of those of his client;[20]
[20]Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216 (Ross J) at [89]-[144] (exhibit “LAD2” to the Davis Affidavit).
(d) in about November 2009, failing in his duty of honesty and candour to the Court in relation to a document (ie DBF94 [an annexure to the Defendant’s affidavit of 5 November 2009, filed in the court proceeding]) sought to be relied upon by the Defendant in the court proceeding and which demonstrated a lack of insight into the gravity of his misconduct;[21]
[21]Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216 (Ross J) at [148]-[184] (exhibit “LAD2” to the Davis Affidavit).
(e) breaching his duty of candour to the Court on 30 April 2010 in seeking a stay of the receivership of the Defendant’s former legal practice on the basis that, inter alia, the receivership was doing “mortal damage” to the practice in circumstances where the Defendant failed to disclose to the Court that the practice was, in any event, effectively closing down or at the very least being significantly wound back;[22] and
(f) displaying a casual approach to his duty of honesty and candour to a judicial tribunal (ie VCAT) in the review proceedings in about August and September 2011, and those actions – for example in falsely denying that he had received certain Board documents and in falsely stating that he had not received emails from the Board’s solicitors – spoke of a reckless disregard to the Defendant’s duty of honesty and candour.[23]
[22]Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216 (Ross J) at [194]-[210] (exhibit “LAD2” to the Davis Affidavit).
[23]Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216 (Ross J) at [211]-[234] (exhibit “LAD2” to the Davis Affidavit).
In respect of the grounds of alleged misconduct set out above, the Board seeks to admit into evidence and to rely upon findings made by:
(a) Emerton J in the order dated 17 February 2011 (and the reasons for it),[24] Legal Services Board v Forster (No 2)[25] and Legal Services Board v Forster (No 3)[26] in respect of grounds (a) and (b);
(b) Ross J in Forster v Legal Services Board (Legal Practice)[27] and the Court of Appeal in Forster v Legal Services Board[28] in respect of grounds (c) to (f).
[24]Transcript of Proceedings, Legal Services Board v Forster (Supreme Court of Victoria, S CI 2009 6947, Emerton J, 17 February 2011) T19 L29 – T21 L12.
[25][2012] VSC 633.
[26][2012] VSC 640.
[27][2011] VCAT 2216.
[28](2013) 40 VR 587.
Mr Forster has objected to the Board relying upon any of the findings in the judgments set out above.[29] He submits that the Board is precluded from doing so by s 91(1) of the Evidence Act2008.[30] Section 91(1) provides:
Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding.
[29]Letter of David Forster to Michael McGarvie of the Legal Services Board dated 7 March 2016.
[30]Transcript of Proceedings, Legal Service Board v David Forster (Supreme Court of Victoria, S CI 2014 0529, Justice McDonald, 9 December 2015) T5 LL18-22; Transcript of Proceedings, Legal Service Board v David Forster (Supreme Court of Victoria, S CI 2014 0529, Justice McDonald, 9 December 2015) T14 L28 – T15 L3; ‘Defendant’s Submission Re Estoppel’ dated 22 April 2016.
In reply, the Board contends that s 91(1) does not operate to prevent it from relying upon the findings in the judgments set out above to prove the existence of facts that were in issue in those proceedings.[31] It relies upon s 93(c) of the Evidence Act2008 which provides, relevantly, that s 91 does not affect the operation of the law relating to issue estoppel.[32] The Board contends that Mr Forster is estopped from denying each of the findings it wishes to rely upon. Mr Forster rejects this contention.[33]
[31]‘Plaintiff’s Outline of Submissions on Defendant’s Objection to Evidence’ dated 17 March 2016, [3].
[32]Ibid.
[33]‘Defendant’s Submission Re Estoppel’ dated 22 April 2016, [1].
The findings which the Board says are covered by the law relating to issue estoppel are voluminous. The relevant findings extracted from the transcript and judgments are annexed to this Ruling marked “Attachment A”. I have concluded that only those findings which have been underlined attract the operation of issue estoppel and are therefore within s 93(c) of the Evidence Act 2008. “Attachment B” to this Ruling is a consolidation of the particular findings of Emerton and Ross JJ and the Court of Appeal which are underlined in “Attachment A”.
Issue Estoppel
In Forster v Legal Services Board,[34] Kyrou AJA (as his Honour then was) cited with approval the statement of Lord Guest in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2)[35] that issue estoppel does not arise in respect of a judicial decision unless three criteria are satisfied:
[34](2013) 40 VR 587.
[35][1967] 1 AC 853, 935.
(a) that the same question has been decided;
(b) that the judicial decision which was said to create the estoppel was final; and
(c) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised.[36]
[36]Forster v Legal Services Board (2013) 40 VR 587, [100].
Mr Forster contends that issue estoppel does not arise because the proceedings before Emerton and Ross JJ and the Court of Appeal involved different questions from those which fall for determination in the current proceedings.[37] In Forster v Legal Services Board, Kyrou AJA stated in respect of the ‘same question’ component of issue estoppel:
Authorities such as Blair v Curran and Ramsay v Pigram make it clear that the expression ‘same question’ in the first component of the doctrine of issue estoppel does not refer to the ultimate question, as identity in the ultimate question would give rise to res judicata. Rather, the first component refers to an issue which established the legal foundation or justification for the judicial decision. Accordingly, the doctrine of issue estoppel can apply notwithstanding that the ultimate question for decision in a subsequent proceeding is different.[38]
[37]‘Defendant’s Submission Re Estoppel’ dated 22 April 2016, [5], [8], [19].
[38]Forster v Legal Services Board (2013) 40 VR 587, [102] (citations omitted).
The ultimate question determined by Emerton J was whether Mr Forster was guilty of contempt of court. The ultimate question determined by Ross J was whether Mr Forster was a fit and proper person to hold a practising certificate. The ultimate question determined by the Court of Appeal was whether any of the grounds of appeal from the decision of Ross J should be upheld. In the present proceedings, the ultimate question is whether Mr Forster should be removed from the Roll of practitioners. I accept that the ultimate question to be determined in the present proceedings is different to those which were determined in the proceedings before Emerton and Ross JJ and the Court of Appeal. However, of itself, this does not preclude the application of issue estoppel in the present proceedings.
Before the Court of Appeal, Mr Forster contended that Ross J erred in concluding that he (Mr Forster) was estopped from contesting certain matters which had been found by Emerton J.[39] He contended that the issues in the receivership proceeding and the VCAT proceeding were not the same, the former being concerned with whether the requirements of s 5.5.1 of the Legal Profession Act2004 for the appointment of a receiver were satisfied; the latter with whether Mr Forster was a fit and proper person to hold a practising certificate. The Court of Appeal rejected this contention. Kyrou AJA stated:
Ross J was correct to conclude that, while the ultimate issue or cause of action in the receivership proceeding was not the same as the ultimate issue or cause of action in the VCAT proceeding, the factual question relating to the existence of trust account deficiencies and resultant breaches of the Act and the Regulations – which the appellant sought to agitate in the VCAT proceeding – had been determined in the receivership proceedings. His Honour also correctly concluded that Emerton J’s factual findings on this question necessarily established the legal foundation or justification for her Honour’s decision to make the receivership order. Had Ross J permitted the appellant to re-litigate this question, the result may have been two inconsistent decisions (one judicial and the other administrative) on the same factual matter. This is precisely the type of result that the doctrine of issue estoppel seeks to avoid.[40]
[39]Ibid [98].
[40]Ibid [109].
This reasoning applies with equal force in the present proceedings. The ultimate question in the respective proceedings before Emerton and Ross JJ and the Court of Appeal are different from the ultimate question for determination in the present proceedings. However, if Mr Forster were permitted to re-litigate findings that were legally indispensable to the ultimate findings of Emerton and Ross JJ and the Court of Appeal, the result could be inconsistent decisions in respect of the same matters. This is precisely the outcome which the doctrine of issue estoppel seeks to avoid.
Whilst I have concluded that the ‘same question’ component of issue estoppel is not an obstacle to the Board’s reliance upon the doctrine, the question remains as to the extent to which the findings of Emerton and Ross JJ and the Court of Appeal are subject to the doctrine of issue estoppel.
In Blair v Curran,[41] Dixon J stated:
But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation.[42]
[41](1939) 62 CLR 464.
[42]Ibid 532-533.
In Brewer v Brewer,[43] Fullagar J held:
Issue-estoppel applies only as to issues. There is no estoppel as to evidentiary facts found in the course of determining the affirmative or negative of an issue. There is nothing to prevent a party from tendering in a later proceeding in relation to a particular issue facts negatived in an earlier proceeding when they were tendered in relation to a different issue.[44]
[43](1953) 88 CLR 1.
[44]Ibid 15.
In Brewer v Brewer, Dixon CJ concurred with the reasons prepared by Fullagar J.[45]
[45]Ibid 6. Williams, Webb and Taylor JJ delivered a separate joint judgment.
The statement of Fullagar J in Brewer v Brewer has often been cited with approval.[46]
[46]See, eg, R v Storey (1978) 140 CLR 364, 419-420 (Aickin J); Mitsubishi Motors Australia Ltd v Harbord (1997) 69 SASR 75, 93 (Doyle CJ, with whom Matheson and Olsson JJ agreed); Clancy v Santoro (1999) 3 VR 783, 794, [50]-[51] (Ashley J); The University of Sydney v Cadence Australia Pty Ltd and Anor [2009] NSWSC 635, [35], [50] (Hammerschlag J); Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583, [87] (Sackar J); Wardle v Agricultural and Rural Finance Pty Ltd; Agricultural and Rural Finance Pty Ltd v Brakatselos [2012] NSWCA 107, [117] (Campbell JA, with whom Barrett JJA and Sackville AJA agreed).
In R v Storey,[47] Gibbs J stated:
The issue determined by the prior decision, and as to which an estoppel is raised, must have been essential to the conclusion, in the sense that to deny the correctness of the determination of that issue would necessarily be to deny the correctness of the decision itself: Queensland Trustees Ltd v Commissioner of Stamp Duties. The estoppel only extends to what is “legally indispensable to the conclusion”, that is to matters which are “in point of law the essential foundation or groundwork of the judgment, decree or order”, and not to findings which concern only evidentiary facts, however important to the decision: see Blair v Curran.[48]
[47](1978) 140 CLR 364.
[48]Ibid 378 (citations omitted).
In R v Storey, Aickin J stated:
As I have said above it must always be borne in mind that issue estoppel applies only to issues. There is no estoppel as to evidentiary facts found in the course of determining an issue. There is nothing to prevent a party, in a later proceeding in relation to a particular issue of fact negatived in the earlier proceeding, tendering evidence of those same facts directed to a different issue.[49]
[49]Ibid 424.
The principles set out above support a ruling which would not estop Mr Forster from challenging any findings by Emerton and Ross JJ and the Court of Appeal which concern evidentiary facts, as opposed to the ultimate facts, legally indispensable to their conclusions. As is apparent from “Attachment A” to this Ruling, the Board has sought to rely on numerous findings of Emerton and Ross JJ and the Court of Appeal. In doing so, the Board placed particular reliance upon a passage from the judgment of Dixon J in Blair v Curran wherein his Honour stated that a ‘judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue.’[50] The Board submits that all of the findings which it seeks to rely upon constituted necessary groundwork for the decisions of Emerton and Ross JJ and the Court of Appeal.
[50]Blair v Curran (1939) 62 CLR 464, 532, quoting R v Inhabitants of the Township of Hartington Middle Quarter (1855) 4 El & Bl 780, 794 (Coleridge J).
The Board also submits:
Further, where the issue the subject of the estoppel involves findings of fact, ‘[i]t includes any matter which it was necessary to decide, and which was actually decided, as the groundwork of the decision, though not then directly the point at issue’.[51]
[51]Plaintiff’s Outline of Submissions on Defendant’s Objection to Evidence dated 17 March 2016, [6] (emphasis in original), citing Blair v Curran (1939) 62 CLR 464, 532 (Dixon J) and Forster v Legal Services Board (2013) 40 VR 587, [106] (Kyrou AJA).
The paragraph in the judgment of Dixon J in Blair v Curran which includes the phrase ‘the groundwork of the decision’ is as follows:
Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J in R v Inhabitants of the Township of Hartington Middle Quarter, the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.[52]
[52]Blair v Curran (1939) 62 CLR 464, 532, quoting R v Inhabitants of the Township of Hartington Middle Quarter (1855) 4 El & Bl 780, 794 (Coleridge J).
Dixon J’s reference to ‘a matter which it was necessary to decide… as the groundwork of the decision’ must be read in the context of the clear statement of principle which precedes it. ‘Groundwork’ is properly construed as having the same meaning as ‘essential foundation’[53] and/or that which ‘is legally indispensable to the conclusion.’[54]
[53]R v Storey (1978) 140 CLR 364, 378.
[54]Blair v Curran (1939) 62 CLR 464, 532.
It is significant that Dixon J concurred with Fullagar J’s finding post Blair v Curran in Brewer v Brewer that there is ‘no estoppel as to evidentiary facts found in the course of determining the affirmative or negative of an issue.’[55] This finding is consistent with that of Dixon J in Blair v Curran that ‘[f]indings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion.’[56]
[55](1953) 88 CLR 1, 15.
[56](1939) 62 CLR 464, 532.
Only those findings which were an essential foundation to the ultimate findings of Emerton and Ross JJ and the Court of Appeal enliven the operation of s 93(c) of the Evidence Act 2008. Consistent with this approach, I have concluded that Mr Forster is not estopped in respect of many of the findings sought to be relied upon by the Board, particularly from the judgment of Ross J.
As to the findings of the Court of Appeal, it is necessary to read the findings identified by the Board in conjunction with the grounds of appeal to which they relate. It is the contents of the particular ground of appeal which sets the parameters for determining whether the Court of Appeal’s finding was or was not legally indispensable to its rejection of the particular appeal ground. It is for this reason that I have included in that part of “Attachment A”, which sets out the findings from the Court of Appeal judgment sought to be relied upon by the Board, the relevant appeal ground to which the findings relate.
The effect of this Ruling is that Mr Forster is estopped from challenging some, but not all, of the findings contained in the judgments of Emerton and Ross JJ and the Court of Appeal which the Board has identified. I shall provide the parties with an opportunity to make submissions on the question of costs of the proceedings which relate to this ruling.
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ATTACHMENT A
(a) Transcript on 17 February 2011
Transcript of Proceedings, Legal Services Board v Forster (Supreme Court of Victoria, S CI 2009 6947, Emerton J, 17 February 2011) T19 L29 – T21 L12 record:
HER HONOUR: Yes, I will make in view of the letter in particular and its contents, and what I understand to constitute an attempt at intimidation and an attempt to have Dr Hanscombe withdraw as counsel for the Board, I do propose to - - -
MR FORSTER: Your Honour, can I just say - - -
HER HONOUR: You have counsel here Mr Forster, Mr Forster, you have counsel here, counsel - - -
MR FORSTER: The difficulty that I have Your Honour is counsel has to see none of this material from today, for the precise reason that it is perceived by me that if the material was provided to my counsel (indistinct). The reason why Your Honour, I think it would be (indistinct) not to make any order in respect of this matter is that in my affidavit material I will wish to refer to the preceding comments that occurred in this court after Your Honour had left the Bench when Ms Hanscombe turned around to the other persons present in this court and said to those persons - - -
HER HONOUR: You have had an opportunity to respond to this affidavit, you have done so, you are here represented by counsel today - sit down Mr Forster, I'm making an order. Sit down.
MR FORSTER: I sit down, I renew my protest, I accept - - -
HER HONOUR: I will cite you for contempt in the face of the court unless you sit down now, I am making an order, I have heard submissions, you are represented by counsel and I propose to make an order, a direction that the defendant cease behaving - - -
MR FORSTER: (Indistinct) Services Commission has (indistinct) that has been furnished to them and my response was - - -
HER HONOUR: I'm leaving the bench.
MR FORSTER: Your Honour, I'll sit down, I apologise Your Honour.
HER HONOUR: You're a serial offender in this regard Mr Forster, you called Mr Batrouney a vulture at the proceeding hearing if not before the one before that in open court, you approached Mr Mann in court and made disparaging comments about the state of his marriage.
MR FORSTER: Well Your Honour - - -
HER HONOUR: Be quiet, I am making an order.
MR FORSTER: I'll be quiet Your Honour, but I would like the opportunity to reply in an affidavit, thank you.
HER HONOUR: I make a direction that the defendant not contact, communicate or otherwise approach any counsel retained by the Board in this proceeding.
(b) Legal Services Board v Forster (No 2) [2012] VSC 633
The judgment of Emerton J in Legal Services Board v Forster (No 2) [2012] VSC 633 records at [8], [11], [13]-[15], [21], [47]-[48], [54]-[56], [60], [63]-[65], [74], [76], [84]-[88]:
[8] For the reasons that follow, I have concluded that sending the offending email constituted a contempt of court because it was done in breach of an order of the court that was not accidental or unintentional and because it had a tendency to interfere with the course of justice. …
[11] On 3 February 2011, Mr Forster personally delivered to Dr Hanscombe’s chambers a letter stating (among other things) that he was having “emotionally very disturbing thoughts towards [himself] and [Dr Hanscombe]”. The letter went on to give examples of what Mr Forster alleged was Dr Hanscombe’s unfair behaviour. He described her behaviour as “vindictive” and alleged that Dr Hanscombe had no insight into the emotional and financial effects of her advocacy on the families involved. Among other things, Mr Forster called upon Dr Hanscombe to advise him whether she proposed to continue to act in the matters involving him. …
[13] The Board took the view that Mr Forster’s behaviour constituted a contempt of court. However, the Board did not move against Mr Forster for contempt at that time. Instead, it asked the court to make an order prohibiting Mr Forster from contacting the Board’s counsel.
[14] The court accepted the Board’s submissions, holding that Mr Forster’s letter to Dr Hanscombe constituted “an attempt at intimidation and an attempt to have Dr Hanscombe withdraw as counsel for the Board”. On 17 February 2011, the court ordered Mr Forster not to contact, communicate or otherwise approach any counsel retained by the Board in the proceeding (the “Order”). The Order was pronounced in court, with the warning that a breach of the Order would constitute contempt of court.7 Mr Forster was present in court when the Order was pronounced.
[15] The Order was engrossed and authenticated the following day in the following form:
The defendant [Mr Forster] is directed not to contact, communicate or otherwise approach any counsel retained by the plaintiff in this proceeding.
…
[21] However, at approximately 11.51 am on 13 October 2012, Mr Forster sent the offending email to Dr Hanscombe. The offending email is in the following terms:
Dear Dr Hanscombe,
We act for Mr Forster.
We propose to make an application to the Court of Appeal for you to disqualfiy (sic) yourself in acting in the proceeding Court of Appeal 2011 0213 on the basis that your involvement would be in conflict with your professional obligations to the barristers good conduct guide and to lodge a complaint with the Legal Services Commissioner.
We further request that you provide an itemized account for all your professional work in any matters involving myself, Receivership and appeals and request that you provide me with a copy of all invoices you have rendered.
Yours faithfully
David Forster
Whistleblowers Lawyers.
…
[47] In this case, the Order was made to secure the proper administration of justice. Although it was made at the behest of a party, and was directed to protecting that party’s counsel from entirely inappropriate communications from Mr Forster, it had the purpose of preventing interference in the court’s processes and promoting the administration of justice. There was a strong public interest reason for the making of the Order. In my view, therefore, the present application concerns not so much the enforcement of individual rights or benefits, but the preservation of the integrity of the judicial process and the due administration of justice.
Breach of the Order
[48] Mr Forster admits that he sent the offending email and that sending the offending email involved a breach of the Order. He has apologised for what he describes as his mistake. …
[54] There is no dispute that Mr Forster had knowledge of the terms of the Order and that, in sending the offending email, he breached the terms of the Order. I am satisfied beyond reasonable doubt that Mr Forster’s failure to comply with the Order was deliberate, in that he meant to send the offending email, and that this failure was not “merely casual, accidental or unintentional”.[57] As Dodds-Streeton J pointed out in Scott v Evia Pty Ltd,[58] it is not necessary for the purposes of civil contempt to establish that Mr Forster actually intended to disobey the Order. All that needs to be demonstrated is that he intentionally engaged in the conduct complained of, and that the conduct had the effect of contravening the Order.[59]
[57]Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 112–113.
[58][2007] VSC 15.
[59]Ibid [49]–[50].
[55] Mr Forster has acknowledged that he intended to send the offending email to Dr Hanscombe. His defence is that it was a mistake because he forgot about the Order.
[56] Mr Forster’s sending the offending email constituted a communication in breach of the unambiguous restraint imposed on him by the Order. I am satisfied to the requisite standard that it involved a civil contempt. …
[60] Nonetheless, I have some difficulty accepting that Mr Forster was so overwhelmed by the legal proceedings, and by the consequent stresses and strains on him and his family, that he simply forgot about the Order and made an innocent mistake in sending the offending email to Dr Hanscombe. The Order is an unusual one. It was made in very fraught circumstances and on the basis that there had been an interference with the course of justice. These features make the Order memorable. It was not a “run of the mill” order in any sense. …
[63] Furthermore, I do not accept that Mr Forster’s explanation for sending the offending email or that he had any good reason for doing so.
[64] Mr Forster gave evidence that he sent the offending email to Dr Hanscombe for a number of reasons, all of them benign. He said he wished to obtain copies of her invoices because he was very worried about the costs that he was being required to pay and he needed to preserve his rights in relation to those costs; he said he wished to advise Dr Hanscombe of his forthcoming application to the Court of Appeal to have her restrained from appearing as counsel for the Board; he said further that he wished Dr Hanscombe to think about her duties as counsel and a potential conflict in her continuing to act for the Board against him and to let her know that he proposed to lodge a complaint.
[65] Unfortunately, this explanation does not withstand scrutiny. …
[74] Although I have doubts about Mr Forster’s evidence that he temporarily forgot about the Order, I am not satisfied beyond reasonable doubt that Mr Forster deliberately defied the Order when he sent the offending email. Mr Forster presents as utterly disorganised and so confused as to be quite deluded about his circumstances and why he finds himself in so much trouble. Although the court had the benefit of more than one speech from Mr Forster about the ongoing importance of his work as a whistleblower bent on exposing the unfair litigation tactics deployed by the legal profession, and although he decried the “win at all costs” mentality that he attributed to other legal professionals, Mr Forster’s own approach to litigation appears to me to be confrontational, time consuming and costly, and he seems to be quite incapable of compromise. His behaviour is erratic and his presentation chaotic. This gives rise to the possibility that he did indeed forget about the Order. …
[76] The alleged contempt is proven by reason of Mr Forster sending the offending email. However, the charge that it was done contumaciously or in deliberate defiance of the Order is not made out on the criminal standard of proof.
[84] The effect of the offending email must be objectively assessed in the light of the events in the longstanding litigation between the Board and Mr Forster, especially the circumstances in which the Order was made. Dr Hanscombe had already been the recipient of the sinister letter that was hand delivered to her by Mr Forster in February 2011. An order had been made that was supposed to protect her from any further untoward communications from Mr Forster. The offending email showed that protection to be illusory. The effect of the offending email must also be assessed having regard to its content and the unlikelihood that it was what it purported to be, namely a “courtesy” letter. There was, objectively, no good reason for Mr Forster to send the offending email to Dr Hanscombe. Thus, although the content of the offending email is relatively neutral, at least on its face, and it does not contain abuse or overt threats, it has an intimidating effect because of its context and because it is not what it purports to be.
[85] Furthermore, there is no other reasonable explanation for the offending email than that it was sent to Dr Hanscombe with a view to antagonising and annoying her. The offending email was Mr Forster’s way of letting Dr Hanscombe know what he thought of her, and to signal to her that he would continue to “niggle” her. In seeking to antagonise and annoy in this way, the offending email had a tendency to make Dr Hanscombe’s discharge of her duties as counsel for the Board much more difficult, whether or not it was actually likely to cause Dr Hanscombe to withdraw as counsel for the Board.
[86] I am satisfied to the requisite standard that the offending email had a tendency to interfere with the course of justice.
Conclusion[87] The charge of contempt for breach of the Order is proven, although I am not satisfied that the breach was deliberately defiant or contumacious.
[88] Further, the charge of interfering with the course of justice is proven. I am satisfied to the requisite standard that the offending email had a tendency to interfere with the due administration of justice in that it was intimidating and would have the affect of making the discharge of Dr Hanscombe’s duties as counsel for the Board more onerous and difficult. Although this contempt is made less serious by reason of the absence of overt threats or abuse, it is nonetheless a contempt.
[89] I will hear from the parties on whether the court should proceed to record a conviction and on the question of penalty.
(c) Legal Services Board v Forster (No 3) [2012] VSC 640
The judgment of Emerton J in Legal Services Board v Forster (No 3) [2012] VSC 640 records at [12]-[15], [18], [26], [28]-[29], [31], [33]:
[12] This is not a case where your contempt can be classified as being merely technical. There are facts and circumstances that make the contempt a serious one, including the following:
(a) the Order was made in the first place because you engaged in intimidatory conduct;
(b) you are a very experienced litigation solicitor who owes duties to the court and who is aware of the importance of compliance with court orders;
(c) you were aware at all material times that if you breached the Order, you could be imprisoned; and
(d) there was no good reason for you to have contacted Dr Hanscombe.
[13] Furthermore, you said in the evidence that you gave to the court that while your primary focus in sending the offending email was your concern about costs, in relation to Dr Hanscombe, you were hoping that it would prompt her to start asking herself whether she should continue to be involved in the proceeding. You said that this would reduce an enormous amount of further work for you involving formal applications to the Court of Appeal and so on. You therefore sent the offending email, at least in part, to deter Dr Hanscombe from continuing to act for the Board.
[14] As to your apologies and public expressions of contrition, I consider these to be somewhat equivocal. Although I do not accept the Board’s submission that I should infer that the apologies to the Board were only given because proceedings against you had been initiated, in your evidence to the court you suggested at one point that you did not really think there had been a breach of the Order because the Order only applied in respect of this proceeding and not in respect of proceedings in the Court of Appeal. Although at other times you conceded that the Order had been breached and that you had made a serious mistake, I do not consider that you have insight into the seriousness of the nature of your offending.
[15] You are a member of the legal profession of long standing. You well knew the importance of complying with the Order and the seriousness of breaching it. You must also be taken to have appreciated the seriousness of seeking to interfere with the ability of the Board to retain counsel of its choosing. In my view, legal practitioners should be held to a higher standard when it comes to compliance with Court orders and the preservation of the due administration of justice than ordinary members of the public. Legal practitioners are bound to uphold the rule of law, which is an essential element in any civilised and properly functioning community. …
[18] Given the conduct that led to the making of the Order, your breach of the Order, and the fact that the protection sought to be provided by the Order was rendered illusory as a result of your conduct in sending the offending email, I cannot be satisfied that you would be deterred from repeating this misconduct simply by the imposition of a costs order and by the anxiety and inconvenience that this particular application has caused you. …
[26] Most importantly, however, I have formed the view that nothing less than the certainty that you will be imprisoned if you again contact the Board’s counsel will deter you from doing so. …
[28] However, none of this causes me to change my view about the appropriate penalty because I do not consider that simply making a costs order, or making a costs order and imposing a fine, would deter you from engaging in the same conduct again or that it appropriately express the denunciation that your conduct warrants.
[29] I have formed the view that you have limited insight into the seriousness of your conduct in sending the offending email. I believe that you regard it as a fairly trivial mistake and as something that might happen, as you said, “in the heat of the kitchen” given the perils of email and the ease with which they may be unthinkingly sent. …
[31] I propose to order that you be convicted and committed to prison for one month. However, the order of imprisonment will be suspended for a period of 12 months from this date. No warrant for imprisonment will issue without the matter coming back before me. …
[33] The orders I will make are as follows:
1. David Brian Forster is adjudged:
(a) in contempt of the court in that contrary to the Order of the Honourable Justice Emerton made 17 February 2011, David Brian Forster did contact, communicate or otherwise approach counsel retained by the Plaintiff by sending an email at approximately 11.51 am on 13 October 2012 to Dr Kristine Hanscombe SC, senior counsel engaged by the Plaintiff; and
(b) in contempt of the court in that on 13 October 2012, David Brian Forster sent an email addressed to Dr Kristine Hanscombe SC, senior counsel engaged by the Plaintiff, which had a tendency to interfere with the due administration of justice because it was intimidating and would have the effect of making the discharge of Dr Hanscombe’s duties as counsel for the Plaintiff more onerous and difficult,
and is convicted and committed to prison for 1 month.
2. Upon giving the following undertaking to the court and signing the form of undertaking which is to be annexed to this Order:
I, DAVID BRIAN FORSTER of 1591 Mornington-Flinders Road, Flinders in the State of Victoria, UNDERTAKE to the Court that I will obey and comply in every respect with the Order of the Honourable Justice Emerton made 17 February 2011, during the period until 20 December 2015, or until the Order of the Honourable Justice Emerton made on 17 February 2011 ceases to operate, whichever occurs first, the order of imprisonment will be suspended for a period of 12 months from this date or until the Order of the Honourable Justice Emerton made on 17 February 2011 ceases to operate, whichever occurs first.
3. A warrant of committal to prison shall not issue until further order of the court.
4. The Defendant pay the Plaintiff’s costs of and incidental to the proceeding, including any reserved costs, on an indemnity basis.
(d) Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216
The judgment of Ross J in Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216 records at [89]-[144], [148]-[184], [194]-[234], [295]
(ii) Mr Rann
[89] Her Honour found that the manner in which the law practice rectified the errors in the matter of Rann was illustrative of the way in which the Applicant set about dealing with the inspectors’ findings and remedying the irregularities that had been identified.[60]
[60]Legal Services Board v Forster [2010] VSC 102 [206].
[90] Mr Rann’s matter was completed around May 2007. The law practice received settlement proceeds and party/party costs totalling $287,735.14 on behalf of Mr Rann, comprising settlement proceeds of $162,735.14 that were deposited into the law practice’s trust account on 21 May 2007, and party/party costs negotiated on behalf of Mr Rann in the amount of $125,000, that were deposited into the law practice’s general office account on that day.[61]
[61]Ibid [207].
[91] The Chun Report identified the payment of the party/party costs of $125,000 directly into the law practice’s office account as being a potential breach of s 3.3.13(1) of the Act (which requires trust money to be paid into the trust account in the absence of a written direction to the contrary).
[92] The law practice paid Mr Rann a settlement sum of $82,188.39.[62]
[62]Ibid [208].
[93] The law practice’s records show that its invoices issued from January 2003 onwards totalled $220,553.17. Payments totalling $217,406.17 were received by the law practice in respect of these invoices. An outstanding balance of $3,147.00 was written off.[63]
[63]Ibid [209].
[94] However, the Chun Report concluded that rather than there being an outstanding balance of $3,147.00, there appeared to be a potential deficiency in money entrusted to the law practice in the amount of $11,002.70, comprising overpayment of an invoice and deficiencies created by the double payment of disbursements and GST overcharging.[64]
[64]Ibid [210].
[95] On 18 December 2008, following the inspection, the law practice issued adjustment notes in favour of Mr Rann for the amounts of $1,650.00 and $2,856.00. The latter related to third party disbursements appropriated twice and the GST overcharge.[65]
[65]Ibid [211].
[96] On 20 April 2009, the law practice deposited two office cheques totalling $12,653.10 into Mr Rann’s trust account, purportedly in respect of the invoice overpayment and for third party disbursements and GST appropriated twice.[66]
[66]Ibid [212].
[97] Her Honour deals with the events which followed at paragraphs [213] – [221].[67] Mr Scott sent Mr Rann an email which, among other things, said:[68]
[67]Ibid.
[68]Ibid [215].
“Your file is finished and there is currently additional moneys owing by you of $7,485.50 and moneys owing to you of $13,600.10. The difference being $6,114.60, these funds will be forwarded to you, subject to the consent of the Law Institute.”
[98] Mr Rann was asked to sign the authority to the LIV authorising the sum of $6,114.60 to be forwarded to him and the balance of $7,485.50 to be paid to the law practice’s office account. In relation to the authority, the email read:[69]
[69]Ibid [216].
“We enclose authority for your signature and request you fax the same to our office as a matter of urgency. We have forwarded your account to your home address and hope you’re enjoying your holiday in Brisbane.”
[99] Mr Rann signed the authority, returned it to the law practice and subsequently received his payment.[70]
[70]Ibid [217].
[100] Mr Rann said that he did not understand the explanation in Mr Scott’s email as to why there were moneys owing to him and to the law practice, but he did understand that there was apparently a net amount of some $6,000 owing to him and some $7,000 owing to the law practice. At the time he signed the authority, he had not seen or been provided with any detail about the law practice’s account for the amount of $7,485.50. He had no written material other than the email from Mr Scott, and no information other than the information provided in the phone call from Mr Forster.[71]
[71]Ibid [218].
[101] Her Honour deals with the authority to pay and explanations given to Mr Rann at paragraphs [234]–[235] of her judgment and concludes as follow:
“[234] The evidence points to the defendant having been careless in seeking from Mr Rann an authority to pay ‘as a matter of urgency’ when he did not know whether Mr Rann had seen the invoice to which the payments related and should have known there was a strong chance that Mr Rann had not seen the invoice. His actions revealed a disregard for Mr Rann’s interests. The moneys in question had been sitting in the trust account since April, presumably without the knowledge of Mr Rann. Three months later, Mr Rann was suddenly requested to authorise the law practice to pay itself further moneys in respect of an invoice that he had not seen. The defendant was not acting in Mr Rann’s best interests in pursuing this course, notwithstanding that Mr Rann ultimately received an unexpected payment of $6,000. Signing the authority deprived him of a further $7,000 that was held on trust for him.
[235] Moreover, although much was made of the fact that the supervisor of trust moneys for the law practice, Mr Dunn, had approved the payments, Mr Dunn gave evidence that he would not have done so had he known that Mr Rann had not seen an account when he signed the authority to pay.”[72]
[72]Ibid.
[102] Some time later, on 24 September 2009, Mr Rann received an email from Mr Forster. The email read:[73]
[73]Ibid [220].
“Dear Vic,
Please forward me a fresh email along the lines of: At [sic]
At my settlement conference I can recall Mr Forster explained to me that there would be two cheques received for settlement and that the smaller of the 2 cheques would be costs and I directed him to put this cheque into his office account directly against my outstanding accounts.”
103.In the Supreme Court proceedings Mr Rann said he had no idea why Mr Forster wanted him to send such an email. He said that no such conversation took place at the settlement conference. As a result, he did not send the email that Mr Forster had requested.[74][74]Ibid [221].
[104] Her Honour made the following observations in respect of these events:
“[222] This sequence of events raises two particular issues: first, Mr Rann was asked to sign the authority to take funds out of his trust account to pay an invoice when he had not seen the invoice in question, and the defendant knew, or should have known, this to be the case; secondly, Mr Rann was asked to attest to a conversation that he says did not occur and apparently related to the deposit of settlement moneys directly into the law practice’s office account.
[223] In addition, the manner in which the 2009 invoice was raised gives rise to serious questions concerning the defendant’s billing practices. In the case of Rann, and other Melbourne Voyager matters where there was an agreement to charge according to scale, the law practice does not appear to have billed in accordance with its fee agreements.”[75]
[75]Ibid.
[105] The second issue, the authority to deposit settlement funds directly into the office account, is dealt with at paragraphs [246] – [249] of her Honour’s judgment. As I have mentioned the Chun Report identified the payment of the party/party costs of $125,000 directly into the law practice’s office account as being a potential breach of s 3.3.13(1) of the Act. It will be recalled that on 24 September 2009, Mr Forster asked Mr Rann to send him a ‘fresh email’ confirming a conversation that had allegedly occurred at the settlement conference regarding the payment to the law practice of moneys obtained for party/party costs from the Commonwealth. Mr Forster provided Mr Rann with a form of words. Mr Rann ignored the request.
[106] This email request is of particular importance in the context of these proceedings so I intend to spend some time dealing with the evidence relevant to this issue.
[107] In his affidavit of 14 October 2009 Mr Rann deals with Mr Forster’s email request, at [10] and [11]:
“10. Mr Forster’s email asked that I send an email to him stating that at my settlement conference I can recall Mr Forster explained to me that there would be two cheques received for settlement and that the smaller of the two cheques received for settlement would be for costs and I directed him to put this cheque into his office account directly against my outstanding accounts.
11. I do not know why Mr Forster wants me to send him such an email. In fact, no such conversation took place at the settlement conference. As a result, I did not respond to Mr Forster’s email.”[76]
[76]VCAT Ex LSB-26.
[108] Mr Rann was cross-examined about this issue in the proceedings before Justice Emerton:
“Mr Arthur: Do you recall your solicitor at the mediation in fact explaining in detail the costs and disbursements incurred in your matter to you?
Mr Rann: No, I don’t. The mediation conference was really quite short.
Mr Arthur: All right. Now if Mr Forster were to give evidence that he did explain the costs and disbursements to you would you dispute that?
Mr Rann: All I can say is I don’t recall that happening.
Mr Arthur: Thank you, Mr Rann.
Her Honour: Mr Rann, can I just clarify: are you saying you don’t recall there being any discussion about costs and disbursements or are you saying you don’t recall there being a detailed explanation about costs and disbursements?
Mr Rann: I don’t recall any – any discussion about any disbursements, your Honour.
Her Honour: Thank you. What about costs?
Mr Rann: I must explain that my state of mind at that time was one that I was pleased to be rid of the whole situation after seven or eight years. It has taken its toll physically and mentally on me and I just wanted to get out of the situation without costing me any money. I’ve already estimated that it cost approximately $40,000 out of my own pocket over the years to get to the final stage.
Mr Arthur: Because of the length of the case and your post traumatic stress disorder, and that the recalling the events which occurred, together with the very difficult nature of the litigation itself and the attitude of the defendant in that case, was very stressful, wasn’t it?
Mr Rann: It was.”[77]
[77]Transcript of Proceedings, Legal Service Board v David Forster (Supreme Court of Victoria, 6947/2009, Justice Emerton, 9 November 2009 – 21 May 2010) (‘Supreme Court Tn’) 125 lines 1-29.
[109] Her Honour’s conclusion in respect of this issue is set out at paragraphs [246], [248] and [249]:
“[246] This conduct by the defendant suggests that in September 2009, the defendant believed that the only authority that he had to pay the funds into his office account derived from things that were said at Mr Rann’s settlement conference. In the light of this, the defendant sent Mr Rann – out of the blue and entirely without explanation – a request to do something that Mr Rann did not understand, and which served the sole purposes of the defendant.
...
[248] It follows that the defendant’s request to Mr Rann to send him an email with the statement set out in the defendant’s email involved, in effect, the defendant asking Mr Rann to say something that was not true.
[249] In seeking to ‘shore up’ his entitlement to be paid directly the party/party costs obtained from the Commonwealth, the defendant seems to have paid scant regard to the interests of Mr Rann. This causes me concern about the way in which rectification of the irregularities was carried out by the law practice.”
[110] Mr Rann also gave evidence before the Tribunal. Mr Rann was asked about his discussions with the Applicant on the day of the mediation conference in April 2007. He was taken to the Applicant’s email of 24 September 2009 and then asked the following questions:
Mr Arthur: “Do you recall having a conversation with Mr Forster to that effect?
Mr Rann: No, I don't...
Mr Arthur: Now do you recall a conversation where Mr Forster explained to you that there would be two cheques received for settlement?...
Mr Rann: Emphatically, no.
Mr Arthur: You can't recall that?
Mr Rann: No.
Mr Arthur: So you therefore don't recall the rest of what is said by Mr Forster to have been explained to you, is that correct?
Mr Rann: That's correct.
Mr Arthur: You don't recall any discussion with Forster that there would be two cheques received from the Commonwealth of Australia?
Mr Rann: Definitely not.”[78]
[78]VCAT Tn 798 lines 28-29, 799 lines 3-5 and 9-16.
Mr Arthur: “Now, you said before that you couldn't recall a discussion with Mr Forster about two cheques. That's what you just said, wasn't it?
Mr Rann: That's correct, yes.
Mr Arthur: I put to you that Mr Forster's position and his evidence will be that he did have a discussion with you on 18 April at the mediation conference, which he can specifically recall, and that he explained to you that there would be two cheques received. Now, you've already said that you were aware that there'd be an amount paid for the claim, that'd be 165,000, and there would be an amount paid for costs, that'd be 125,000?
Mr Rann: Correct.
Mr Arthur: Now, what he will say is that he explained to you that there'd be these two cheques for settlement: one for the claim and the other for party/party costs. And he explained to you that the smaller of the two cheques, the party/party costs cheque, would be directly put into his office account - now listen to me very carefully - and that would pay part of your costs. Do you remember him explaining those matters to you to that effect on the mediation day?
Mr Rann: Yet again no. I understood there were two amounts of money were going to come in. In what fashion they came, what the logistics were, I had absolutely no idea and nor did I care.”[80]
Mr Arthur: “Now, Mr Forster wished you to confirm a conversation which had taken place at the mediation conference. Do you have any
comment?Mr Rann: Well, Mr Forster claims that a conversation took place. He wanted to meet and confirm that conversation which I do not recall and I believe did not happen.
Mr Arthur: So do I understand that your evidence then is you do not recall that conversation taking place with Mr Forster?
Mr Rann: Correct.”[79]
[79]VCAT Tn 804 lines 16-25.
Mr Arthur: “Now, I put to you, Mr Rann, that there was a conversation with Mr Forster at the mediation conference in the manner set out in that email?
Mr Rann: I dispute that and I deny it.
Mr Arthur: I'm putting to you that in fact you, at the mediation conference, authorised or directed Mr Forster that he could put the cheque, the smaller of the two cheques, the party/party cost cheque directly into his office account to pay or at least to partially meet the outstanding accounts which you had to his firm. Do you accept that that was...?
Mr Rann: As I said before many times, I don't recall that and quite frankly I don't see how relevant it would be to me to be asked about where he banks the cheque.
Mr Arthur: So you simply don't recall that conversation?
Mr Rann: Exactly.”[80]
[80]VCAT Tn 805 lines 10-2 and 25-31 and 806 lines 1-4.
Mr Arthur: Now, in your affidavit, Mr Rann, you said in paragraph 11 – would you look at paragraph 11 please?
Mr Rann: Yes.
Mr Arthur: You said, "In fact, no such conversation took place at the settlement conference"?
Mr Rann: Correct.
Mr Arthur: Now I put to you that that sentence is false because all you can really say and all that you've said to His Honour today is that the conversation you cannot recall. Do you agree with that? What your evidence is, Mr Rann, is you cannot recall any conversation to the effect that I put to you with Mr Forster about the two cheques?
Mr Rann: Not being able to recall means it didn't happen in my mind.
Mr Arthur: So are you saying that you positively can recall the conversation not having taken place? You can positively recall the conversation didn't take place or are you saying, "I can't recall whether it did take place" or to you is there no difference?
Mr Rann: I'm saying the conversation didn't take place.
Mr Arthur: It's changed now?
Mr Rann: No, that's exactly what I've said in my affidavit.
Mr Arthur: I put to you your position has changed now. Previously, before I took you to the affidavit, apart from one reference where you said you dispute the proposition that I put to you, every single answer you gave before that was, "I cannot recall these conversations." Is that correct?
Mr Rann: Probably yes but what's the difference in cannot recall and not happening. What I'm saying is I don't remember them happening therefore they didn't.”[81]
[81]VCAT Tn 806 lines 23-31 and 807 line 1, lines 5-6 and 14-29.
[111] After being warned by the Tribunal of the importance of the potential consequences of his email to Mr Rann,[82] the Applicant filed a witness statement dated 31 August 2011. In relation to his conversations with Mr Rann at his informal mediation “settlement conference”, the Applicant said:
[82]VCAT Tn 683 lines 8-16.
“The informal mediation on 18 April 2007 commenced at the office of Blake Dawson Waldron at 9.10 to 10.40. I remember Mr Rann wanted to receive payment immediately the case settled and wanted to receive $80,000 from the settlement. I explained to him that I had to pay others and myself first and he would have to wait and he approved the arrangement whereby the party party costs would go direct to me. We did not settle that day as I convinced him that I thought the Defendants would offer a bit more which would make meeting his demand for $80,000 achievable. At that conference an offer was made of $155,000 plus $125,000 for party party costs.
On 19th April 2007 at the settlement conference I did a detailed file note which notes $125,000 payable to Hollows being party party costs. The settlement monies was paid in two cheques. These payment arrangements were discussed with Mr Rann and my email sent to him reflected the arrangement. At the informal mediation took place between Mr Lysawick from Department of Defence and David Hanger the solicitor from Mallesons, myself and Sue Johnson and Mr and Mrs Rann at the office of Mallesons. On 19th April at a settlement conference with Mr Rann I again explained to Mr Rann that part payment of his outstanding account would be made directly from the monies received form (sic) the solicitors. He signed the instructions to settle. I further told him he would be charged for further work done in the matter.”[83]
[83]Applicant’s VCAT materials, Tab 1, Volume 3 (statement dated 31 August 2011).
[112] I note that in his statement of 31 August 2011 Mr Forster relies on a ‘detailed file note’ he made at the settlement conference which, he says, ‘notes $125,000 payable to Hollows being party party costs’.
[113] Initially, the Applicant said that the file note he was referring to was set out at Tab 31 in Volume 3 of the Applicant’s materials.[84] That file note does not say that $125,000 was payable to Hollows being party party costs, a point conceded by the Applicant in cross-examination.[85]
[84]VCAT Tn 920 line 31 and 921 lines 1-13.
[85]VCAT Tn 921 lines 2-4.
[114] Subsequently, the Applicant said that the ‘detailed file note’ to which he was referring was set out under Tab 39 in Volume 3 of his materials.[86]
[86]VCAT Tn 922 lines 5-29.
[115] A scanned copy of this file note is attached to the decision. Relevantly it says:
Amount payable to Hollows
Party party $125,000
Solicitor client $110,000
$235,000
[116] The file note does not mention any instruction from Mr Rann that the monies from the Commonwealth referable to party-party costs were to be paid into the practice’s office account.
[117] Mr Rann was recalled to give evidence to the Tribunal specifically in relation to the email he received from the Applicant and his conversation with the Applicant at the settlement conference. After asking Mr Rann questions about matters peripheral to the matters in issues at the Tribunal the Applicant’s counsel put to Mr Rann that:
“Mr Arthur: I put to you that Mr Forster's position and his evidence will be that he did have a discussion with you on 18 April at the mediation conference, which he can specifically recall, and that he explained to you that there would be two cheques received. Now, you've already said that you were aware that there'd be an amount paid for the claim, that'd be 165,000, and there would be an amount paid for costs, that'd be 125,000?
Mr Rann: Correct.
Mr Arthur: Now, what he will say is that he explained to you that there'd be these two cheques for settlement: one for the claim and the other for party/party costs. And he explained to you that the smaller of the two cheques, the party/party costs cheque, would be directly put into his office account - now listen to me very carefully - and that would pay part of your costs. Do you remember him explaining those matters to you to that effect on the mediation day?
Mr Rann: Yet again no. I understood there were two amounts of money were going to come in. In what fashion they came, what the logistics were, I had absolutely no idea and nor did I care”[87]
[87]VCAT Tn 802 line 25 – 803 lines 2-13.
[118] After the Tribunal pointed out to the Applicant’s counsel that he had not quite “nailed the point”,[88] the following was put to Mr Rann:
[88]VCAT Tn 804 lines 30-31.
“Mr Arthur: Yes, sir. Thank you, Your Honour. (To witness.) Now, I put to you, Mr Rann, that there was a conversation with Mr Forster at the mediation conference in the manner set out in that email?
Mr Rann: I dispute that and I deny it.
Mr Arthur: And that you directed and authorised Mr Forster to put the party/party cost cheque directly into his office account against your outstanding accounts --
Dr Hanscombe: Your Honour, that should be - - -
His Honour: Yes, you need to indicate when that direction was given. If it is that you're putting that direction was given during the course of the conversation between Mr Rann and Mr Forster at the mediation conference or on that day. (To witness.) Do you understand the question, Mr Rann?
Mr Arthur: So what I'm asking you, Mr Rann, I'm putting to you --- ?-
Mr Rann: I think I do.
Mr Arthur: I'm putting to you that in fact you, at the mediation conference, authorised or directed Mr Forster that he could put the cheque, the smaller of the two cheques, the party/party cost cheque directly into his office account to pay or at least to partially meet the outstanding accounts which you had to his firm. Do you accept that that was - - -?---
Mr Rann: As I said before many times, I don't recall that and quite frankly I don't see how relevant it would be to me to be asked about where he banks the cheque.
Mr Arthur: So you simply don't recall that conversation?
Mr Rann: Exactly.
Mr Arthur: Now you never responded to the email that Mr Forster sent you, did you?
Mr Rann: No.”[89]
[89]VCAT Tn 805 line 9 – 806 line 5.
[119] Taken as a whole, Mr Rann’s evidence was that no such conversation took place. Indeed, when the Applicant’s email was directly put to him in cross examination, Mr Rann said “I dispute that and I deny it”.
[120] I reject any suggestion that Mr Rann simply did not recall a conversation which had in fact occurred with the Applicant at the settlement conference in which he “directed and authorised” the Applicant to deposit the party/party costs cheque into his office account. The answers given by Mr Rann that he did not recall matters were in the context that, until the very end of his examination (when the Tribunal asked the Applicant’s counsel to put the points directly to Mr Rann), the questions had all been prefaced “do you recall...”[90]; to which Mr Rann answered “I do not recall...”.
[90]For example, VCAT Tn 797 line 26 – 799 line 25.
[121] In any event, the Applicant has never given evidence that at the settlement conference Mr Rann “directed or authorised” the Applicant to deposit any cheque in his office account. The closest the Applicant’s evidence gets to this point is in his statement of 31 August 2011 (see paragraph [111] infra) where he says ‘I explained to him that I had to pay others and myself first and he would have to wait and he approved the arrangement whereby the party party costs would go direct to me’.
[122] In his oral evidence the highest it was put by the Applicant was that ‘he specifically discussed it’ with Mr Rann and he accepted that Mr Rann’s evidence was directly to the contrary[91] and later in his evidence the following exchange takes place:
[91]VCAT Tn 1148 lines 3-8.
“Dr Hanscombe: The deposit of the party/party costs into the office account is the matter concerning which you say Mr Rann gave you a verbal direction at the settlement conference, correct?
Mr Forster: Yes. It’s – to be more accurate, it’s not actually the settlement – by settlement conference I mean the informal. mediation conference
Dr Hanscombe: Ok, the informal mediation. You say Mr Rann gave you a direction at that information mediation that you could deposit the party/party costs directly to the office account?
Mr Forster: That’s correct. What ...
Dr Hanscombe: And you know Mr Rann denies that?
Mr Forster: Yes, it – that’s not correct. Mr Rann – what occurred was Mr Rann was wanting to get his hands on the money. He was wanting the money for himself and basically I said to him, ‘No, if we settle, you don’t get it’, words to that effect. And then he agreed and he said, ‘Yes, Ok I understand’ Because we were waiting all the time to get paid, so that’s the context of that discussion with Mr Rann.
Dr Hanscombe: Well, whatever the context was, Mr Rann’s evidence is in direct conflict with your evidence?
Mr Forster: Absolutely.
Dr Hanscombe: About that authority being given at the informal mediation. You’re aware of that?
Mr Forster: Yes, yes.”[92]
[92]VCAT Tn 1267 lines 27-31 and 1268 lines 1-17.
[123] In his evidence in chief the Applicant stated:[93]
[93]VCAT Tn 913 line 4 – 917 line 29.
“Mr Forster: In respect of lack of candour, Your Honour - can I go to that issue? If I go - if I turn to your summary, sir, the lack of candour issues. I'm just trying to pick up the page where it mainly concentrates on that. Oh, certainly - perhaps the most - thing I should - - -
His Honour: It's p.99 and following?
Mr Forster: We'll start with Mr Rann? Sorry? P.99 and following?---P.99. I've got to come back to Mr Rann as well, sir.
His Honour: Well, you can deal with - while he's in your mind, deal with him now?--
Mr Forster: Right. In respect of Mr Rann there was - there was a conference that was held by my solicitor, Sue Johnson, which is on the - on the – on the 17th of - - - ...
...His Honour: I want to know what you explained to him at the settlement conference?
Mr Forster: OK, we'll I'll just - can I quickly just flick through, because there's a lot of documents.
His Honour: But all these documents are in evidence, and really - what's your recollection of what you explained to him at the settlement conference?
Mr Rann: Yeah. Well, my recollection is, sir, that we - we were doing - we were at the settlement conference, we're going through the process of explaining offers and backwards and forwards with the discussions with the other side, and what is claimed as work. And how - how - what would happen when the case would finish. And what I said - and what happened is that we had got a - the other side, or Blake Dawson Waldron indicated that they would pay $125,000 for party/party costs. That, you know - sorry, that we would - we talked about it, and I said, Well, look, we'll - because we wanted to have a fixed figure on party/party costs to avoid having to go through a party - a costing process. So we had a figure of $125,000 on a party/party cost, and then we had a figure - which I would have to refer to my notes as to an amount. And what - and then what happened with Vic is that - - -
His Honour: Just without referring to your notes - you said you had a very clear recollection of what happened at the settlement conference?
Mr Forster: We were looking - I was looking outside the - talking to him - he's facing the window, a beautiful view of Sydney Harbor, and what he - - -
His Honour: Sounds like the Blakes offices?
Mr Forster: Yeah, it was very nice. And what he was saying - look, he was - he was saying to us, I want to get this amount of money and I want to get my money straightaway.
His Honour: Yes?
Mr Forster: And what I said to him, No, Vic, you can't expect that, or words to that effect. I said to him: You will get - you'll have to wait because the case has been. going on a long time, there'll be two cheques; you'll get a cheque for - there'll be a cheque - a cheque that would be $125,000 which would be the party/party costs amount, and that would go straight - straight to me to pay the barristers, the disbursements and everything, and then - and then the remainder - the remainder would go to him, being the amount that he wanted. But I also said to him at the time - because I reduced my fees down to make sure that he'd get the $80,000 that he wanted - I said to him: Look, Vic, I think we'll just - we'll settle it. The final settlement – they won't do it today, but the final settlement will be settled. And it got settled the following day. So I was very clear in terms of - in terms of making sure Mr Rann understood. And the particular reason, I suppose, that Mr Rann - why it sticks in my memory, is that Mr Rann was one of very few clients that was so financially astute. Most of them would - most of them were at the stage that they would just - they'd walk out of the room without anything. But Vic's an astute businessman, and he wanted to know exactly, you know, what the lie of the land is. And so therefore I had to say to him, Vic, or words to the effect - Well, Vic, you're not going to get your - you're not going to get the payment straightaway and you have to wait. And then I told him what you'd get, and I said, Look, why don't we come back – or come back tomorrow, or whatever, and expect a further payment. And that's exactly what happened. Then we signed him up. And in terms of the process, Mr Rann was unlike most of the clients in the sense that he was very - he had a lot of commercial acumen. I mean he was running quite a complex business, a mobile stone business, and I think he was mainly doing the paperwork and the office administration work. So he - so he understood it, and had a pretty clear understanding. And he never said to me - he never said to me things like, Mr Forster, you know, you ripped - words like I've ripped you off, or anything like that. So at the end of the day he was – he was relieved to have it finished, understandably. Gone on for - it had gone on for a long time, and the reason I sent the email is that I wanted him to confirm exactly what occurred, and that's exactly what did occur in our discussion. I am not sure if there's something there that's worrying Your Honour, or if I need to clarify something in terms of that?
His Honour: My difficulty is I can't - you know what the issue is, you know what is said against you, and this is your opportunity to give your recollection of what you told him at the settlement conference and what his instructions were?
Mr Forster: Yes, well his instructions were that he agreed - he didn't want to at the start, but he agreed that, you know, fair enough, you get your - you've got to get the party-party costs in for you, and you get that. And that's - and that's precisely what happened and it's reflected further in the correspondence to the client to the extent that I go through the remainder of the documents...”
[124] During cross examination the Applicant gave the following evidence:[94]
[94]VCAT Tn 1269 line 14 – 1271 line 5.
His Honour: I'm not clear as to what your evidence is about what Mr Rann told you and what directions he gave you at the mediation conference. You know the one I'm referring to?
Mr Forster: Yes, sir. Yes, sir.
His Honour: Now, you've heard Mr Rann's evidence about his recollection of what took place at that?
Mr Forster: Yes.
His Honour: What instructions do you say he gave you?
Mr Forster: On that day?
His Honour: Yes, about - - -?
Mr Forster: On that day?
About this issue?
Mr Forster: Well, it was - - -
His Honour: That is, about the costs and the like and the payment from the Commonwealth?
Mr Forster: To the best of my recollection, Your Honour, is that - all I can - he raised with me – he raised with me as to what would happen if he accepted the offer that was made on that day, and then he asked - he said to me, Well, will I get my money straight away?, or words to that effect. At that time that's when I said to Vic, No, Vic. If you settle it - If we settle it today, you've got to wait. There'll be two cheques. There'll be a cheque for party/party costs. Those monies will go straight to us and then you'll get your money at the end. And in the end what occurred is that - my recollection is that I said to Vic, you know, You'll get your $80,000 that you want to get from the settlement and that $80,000 is - just leave it with me. Leave it with us 'cause I'm pretty confident that they will come up with this - with these actual figures that they did come up with on the following day. I can't be any more accurate than that. And it's - but the reason why I remember it particularly, Your Honour, is that for some reason I just remember that there was - it was looking at the - we were looking out the window and there was a fantastic view of the harbour at the time and that sort of stuck in my mind and he was different in the sense that he was the person that was pretty particular about financial matters, more so than probably 90 per cent of them.
His Honour: And is the conversation you've just described the basis for your statement that you had instructions that $125,000 should be paid into the office account?
Mr Forster: Yes, sir, and that was - occurred at that time.
His Honour: You say, yes, it occurred at that time?
Mr Forster: Well, that's when I was - - -
His Honour: But my - - -?
Mr Forster: Having - that time - - -
His Honour: But my question was - - -?
Mr Forster: And I was looking out the - sorry, sir.
His Honour: My question was, the conversation you just described to me, is that the basis for your submission in your statement that you had instructions to deposit the $125,000 into the office account?
Mr Forster: Yes.
Dr Hanscombe: And that's the whole of the conversation on that topic?
Mr Forster: I mean, we would've - no, look, I'd be reconstructing if I tried to say. Just let me think. No, I think that's all I can - - -
Dr Hanscombe: That's all?
Mr Forster: Yes.”
[125] Despite their length, the Applicant’s witness statement, his answers in chief and in cross examination do not sufficiently corroborate the email he sent to Mr Rann.
[126] Ms Susan Johnson, a solicitor in the NSW office of Hollows Lawyers, was also present at the ‘informal settlement conference’ on 18 April 2007. An affidavit from Ms Johnson is in evidence in these proceedings.[95] At paragraph 10 of her affidavit Ms Johnson says:
[95]Applicant’s VCAT materials, Tab 41 Volume 3.
“I made a further file note dated 18 April 2007 taken during the informal settlement conference when David Forster myself and Mr and Mrs Rann were present with solicitors from the Blake Dawson Waldron and Michael Lyswvich from the Department of Defence. Now produced and shown to me and marked SJ 4 is a copy of 3 pages of my handwritten notes of the informal settlement conference together with a further page which I believe was taken during a break in the settlement conference.”
[127] Ms Johnson’s handwritten notes make no mention of any oral direction by Mr Rann that the sum in respect of party party costs was to be paid into the Hollows office account.
[128] A further matter is relevant to this issue. On 3 February 2009 Mr Chun and Ms Kozovska wrote to the Applicant setting out the result of their investigation of the trust records of the Hollows law practice.[96] That correspondence states, among other things:
[96]VCAT Ex LSB-52.
“Client: V R Rann
Reference: 132186-1
Matter: Personal injury claim37.The matter appears to have been completed around May 2007.
38.The law practice received settlement proceeds and party/party costs totalling $287,735.14 on behalf of the client as follows:
[171] The third impugned finding concerns the appellant’s Email to Mr Rann (ground 11). At para 139 of his decision, Ross J found that the evidence did not provide a reasonable basis for the appellant’s request in the Email for Mr Rann to send an email confirming that he had given instructions to the Practice to pay the Commonwealth’s cheque for $125,000 for party and party costs directly into the Practice’s office account. …
[173] The evidence upon which Ross J relied in reaching the third impugned finding was discussed at [40]–[50] above. Rather than there being no evidence to support this finding, there was strong evidence to justify it. The fact that the appellant’s assessment of that evidence differs from that of Ross J cannot assist the appellant in the appeal. …
[159] Grounds…8… and 12 are as follows:
…8. The learned judge erred in law in failing to apply the principle in Briginshaw v Briginshaw in considering whether the Appellant lacked insight “into the gravity of his conduct” (Reasons para 184)…
12. The learned judge erred in law in failing to apply the principle in Briginshaw v Briginshaw in considering whether the Appellant “had deliberately attempted to get … Mr Rann to confirm instructions that were not given —in other words to participate in a lie — in an effort to shore up his defence in the Receivership proceeding”. (Reasons para 144).[176] Under cover of grounds 8 and 12, the appellant submitted that Ross J erred in law by failing to apply the principles in Briginshaw[167] in relation to two findings. The first finding, at para 184 of Ross J’s decision, was that the appellant lacked insight into the gravity of his conduct in relation to his swearing an affidavit which misdescribed the Item 10 document as an “executive council” document and his failure to correct the position once he became aware of the misdescription. The second finding, at para 144 of Ross J’s decision, was that the appellant “had deliberately attempted to get … Mr Rann to confirm instructions that were not given — in other words to participate in a lie — in an effort to shore up his defence in the receivership proceeding.” …
[167](1938) 60 CLR 336.
[179] A reading of Ross J’s decision as a whole indicates that his Honour properly applied the principles in Briginshaw and that he carefully analysed and weighed up the evidence before reaching conclusions that were adverse to the appellant. This is borne out by his Honour’s refusal to make adverse findings on some of the matters upon which the Board relied.[168] There was a surfeit of evidence that enabled his Honour to reach the conclusions at paras 144 and 184 of his decision, in accordance with the principles in Briginshaw. Accordingly, grounds 8 and 12 are not made out. …
[168]See above at [35]–[36].
[180] Grounds 6 and 9 are as follows:
6. The learned judge was in error in failing to hold that the [Appellant] was entitled to sell his non-regulated property without notifying the Court and or the Legal Services Board.
9. The learned judge erred in failing to hold that the provenance of exhibit “DBF94” to the affidavit of the Appellant sworn 5 November 2009 was not a live issue at the time the Honourable Justice Emerton considered her decision on the application for appointment of receivers to the practice of Hollows Lawyers by reason of the uncontradicted evidence of Noel Henman and Brett Young adduced by the appellant.[181] Under cover of the above grounds, the appellant submitted that Ross J erred in law in failing to make two findings. The first finding was that the appellant was entitled to sell the Frankston premises without notifying the court and the Board. The second finding was that the provenance of the Item 10 document was not a live issue in the Receivership proceeding after the uncontradicted evidence of Mr Henman and Mr Brett Young. …
[183] In relation to the sale of the Frankston premises, there is nothing in Ross J’s decision that suggests that his Honour concluded either that the appellant was not entitled to effect the sale or that he had an unqualified obligation to inform the court or the Board of the sale. Rather, his Honour focused on the appellant instructing his counsel to make submissions to Emerton J in support of a stay of the Receivership order on the basis of its impact on the Practice, without disclosing to her Honour that he had sold the Frankston premises and had taken other steps to effectively close the Practice. The sale of the Frankston premises and the other steps were correctly found by Ross J to be relevant to Emerton J’s assessment of the appellant’s submissions and the orders that her Honour was being asked to make. By withholding that information from her Honour, the appellant created a misleading impression and breached his duty of candour.[169]
[169]See the principles discussed above at [161].
[184] It follows that ground 6 is not made out.
[185] In relation to the Item 10 document, there is nothing in Ross J’s decision to suggest that his Honour regarded the provenance of that document as a live issue in the Receivership proceeding after Mr Henman and Mr Brett Young had concluded their evidence. The questions of whether the provenance of the Item 10 document was a live issue and whether it had any bearing on Emerton J’s decision to appoint the Receivers did not influence Ross J’s conclusion that the appellant was not a fit and proper person to hold a practising certificate. Rather, the matters that informed this conclusion were the four matters set out at [170] above.
[186] The appellant contended that, since the true nature of the Item 10 document became apparent in the course of the evidence given by the LIV employees, it was not necessary for him to advise the court of his misrepresentation of that document, or to amend his affidavit. According to the appellant, following the evidence of the LIV employees, it was obvious to the court that the Item 10 document was not a minute of the LIV executive council and that the matter was a “dead issue”.
[187] The appellant’s submissions disclose a fundamental misconception about the duty of honesty and candour. As discussed at [161]–[163] above, having misled the court about the nature of the Item 10 document, the appellant had a personal duty to disclose the true position to the court, including that it was he who wrote the words “Executive Council” on the document. The fact that the court became aware of some aspects of the true position through other sources does not mean that the appellant did not breach the duty of honesty and candour. Likewise the existence of such a breach does not depend on whether the information that was not disclosed by the appellant continued to be a live issue until the conclusion of the Receivership proceeding. The time of the court was wasted in pursuing evidence that was based on a false foundation created by the appellant on an issue that he stated was important to his case. Also, at no stage did the appellant disclose to Emerton J a fact that was exclusively within his own knowledge, namely, that he had written the words “Executive Council”.
[188] It follows that ground 9 must be rejected.
ATTACHMENT B
(a) Transcript on 17 February 2011
HER HONOUR: … I will make in view of the letter in particular and its contents, and what I understand to constitute an attempt at intimidation and an attempt to have Dr Hanscombe withdraw as counsel for the Board…
HER HONOUR: I make a direction that the defendant not contact, communicate or otherwise approach any counsel retained by the Board in this proceeding.
(b) Legal Services Board v Forster (No 2) [2012] VSC 633
[8] … sending the offending email constituted a contempt of court because it was done in breach of an order of the court that was not accidental or unintentional and because it had a tendency to interfere with the course of justice. …
[14] … On 17 February 2011, the court ordered Mr Forster not to contact, communicate or otherwise approach any counsel retained by the Board in the proceeding (the “Order”)...
[21] … at approximately 11.51 am on 13 October 2012, Mr Forster sent the offending email to Dr Hanscombe. The offending email is in the following terms:
Dear Dr Hanscombe,
We act for Mr Forster.
We propose to make an application to the Court of Appeal for you to disqualfiy (sic) yourself in acting in the proceeding Court of Appeal 2011 0213 on the basis that your involvement would be in conflict with your professional obligations to the barristers good conduct guide and to lodge a complaint with the Legal Services Commissioner.
We further request that you provide an itemized account for all your professional work in any matters involving myself, Receivership and appeals and request that you provide me with a copy of all invoices you have rendered.
Yours faithfully
David Forster
Whistleblowers Lawyers.
…
[47] … the Order was made to secure the proper administration of justice... it had the purpose of preventing interference in the court’s processes and promoting the administration of justice…
[54] … in sending the offending email, he breached the terms of the Order… Mr Forster’s failure to comply with the Order was deliberate, in that he meant to send the offending email, and that this failure was not “merely casual, accidental or unintentional”
[56] Mr Forster’s sending the offending email constituted a communication in breach of the unambiguous restraint imposed on him by the Order… it involved a civil contempt.
[60] … I have some difficulty accepting that Mr Forster was so overwhelmed by the legal proceedings, and by the consequent stresses and strains on him and his family, that he simply forgot about the Order and made an innocent mistake in sending the offending email to Dr Hanscombe…
[63] … I do not accept that Mr Forster’s explanation for sending the offending email or that he had any good reason for doing so.
[64] … He said he wished to obtain copies of her invoices because he was very worried about the costs that he was being required to pay and he needed to preserve his rights in relation to those costs; he said he wished to advise Dr Hanscombe of his forthcoming application to the Court of Appeal to have her restrained from appearing as counsel for the Board; he said further that he wished Dr Hanscombe to think about her duties as counsel and a potential conflict in her continuing to act for the Board against him and to let her know that he proposed to lodge a complaint.
[65] … this explanation does not withstand scrutiny.
[74] … I am not satisfied beyond reasonable doubt that Mr Forster deliberately defied the Order when he sent the offending email…
[76] The alleged contempt is proven by reason of Mr Forster sending the offending email. However, the charge that it was done contumaciously or in deliberate defiance of the Order is not made out on the criminal standard of proof.
[84] … There was, objectively, no good reason for Mr Forster to send the offending email to Dr Hanscombe… it has an intimidating effect because of its context and because it is not what it purports to be.
[85] …it was sent to Dr Hanscombe with a view to antagonising and annoying her. The offending email was Mr Forster’s way of letting Dr Hanscombe know what he thought of her, and to signal to her that he would continue to “niggle” her. In seeking to antagonise and annoy in this way, the offending email had a tendency to make Dr Hanscombe’s discharge of her duties as counsel for the Board much more difficult, whether or not it was actually likely to cause Dr Hanscombe to withdraw as counsel for the Board.
[86] I am satisfied to the requisite standard that the offending email had a tendency to interfere with the course of justice.
[87] The charge of contempt for breach of the Order is proven, although I am not satisfied that the breach was deliberately defiant or contumacious.
[88] … the charge of interfering with the course of justice is proven. I am satisfied to the requisite standard that the offending email had a tendency to interfere with the due administration of justice in that it was intimidating and would have the affect of making the discharge of Dr Hanscombe’s duties as counsel for the Board more onerous and difficult...
(c) Legal Services Board v Forster (No 3) [2012] VSC 640
[12] This is not a case where your contempt can be classified as being merely technical. There are facts and circumstances that make the contempt a serious one, including the following:
(a) the Order was made in the first place because you engaged in intimidatory conduct;
(b) you are a very experienced litigation solicitor who owes duties to the court and who is aware of the importance of compliance with court orders;
(c) you were aware at all material times that if you breached the Order, you could be imprisoned; and
(d) there was no good reason for you to have contacted Dr Hanscombe.
[13] … You therefore sent the offending email, at least in part, to deter Dr Hanscombe from continuing to act for the Board.
[14] As to your apologies and public expressions of contrition, I consider these to be somewhat equivocal… I do not consider that you have insight into the seriousness of the nature of your offending.
[15]... You well knew the importance of complying with the Order and the seriousness of breaching it. You must also be taken to have appreciated the seriousness of seeking to interfere with the ability of the Board to retain counsel of its choosing…
[18] … I cannot be satisfied that you would be deterred from repeating this misconduct simply by the imposition of a costs order and by the anxiety and inconvenience that this particular application has caused you. …
[26] … nothing less than the certainty that you will be imprisoned if you again contact the Board’s counsel will deter you from doing so. …
[33] The orders I will make are as follows:
1. David Brian Forster is adjudged:
(a) in contempt of the court in that contrary to the Order of the Honourable Justice Emerton made 17 February 2011, David Brian Forster did contact, communicate or otherwise approach counsel retained by the Plaintiff by sending an email at approximately 11.51 am on 13 October 2012 to Dr Kristine Hanscombe SC, senior counsel engaged by the Plaintiff; and
(b) in contempt of the court in that on 13 October 2012, David Brian Forster sent an email addressed to Dr Kristine Hanscombe SC, senior counsel engaged by the Plaintiff, which had a tendency to interfere with the due administration of justice because it was intimidating and would have the effect of making the discharge of Dr Hanscombe’s duties as counsel for the Plaintiff more onerous and difficult,
and is convicted and committed to prison for 1 month.
2. Upon giving the following undertaking to the court and signing the form of undertaking which is to be annexed to this Order:
I, DAVID BRIAN FORSTER of 1591 Mornington-Flinders Road, Flinders in the State of Victoria, UNDERTAKE to the Court that I will obey and comply in every respect with the Order of the Honourable Justice Emerton made 17 February 2011, during the period until 20 December 2015, or until the Order of the Honourable Justice Emerton made on 17 February 2011 ceases to operate, whichever occurs first,
the order of imprisonment will be suspended for a period of 12 months from this date or until the Order of the Honourable Justice Emerton made on 17 February 2011 ceases to operate, whichever occurs first.
3. A warrant of committal to prison shall not issue until further order of the court.
4. The Defendant pay the Plaintiff’s costs of and incidental to the proceeding, including any reserved costs, on an indemnity basis.
(d) Forster v Legal Services Board (Legal Practice) [2011] VCAT 2216
[144] … by the email of 24 September 2009 the Applicant had deliberately attempted to get a client, Mr Rann, to confirm instructions that were not given – in other words to participate in a lie – in an effort to shore up his defence in the receivership proceeding. In doing so the Applicant behaved dishonestly and put his interests ahead of those of his client. …
[182] By his conduct in the Supreme Court proceedings the Applicant has failed in his duty of honesty and candour to the Court. By affidavit the Applicant proferred document DBF94 to the Court as a minute of the LIV’s Executive Council. That document had a handwritten notation on the top left hand corner: ‘Executive Council’. The Applicant remained mute while his counsel suggested to Mr Henman that the words ‘Executive Council’ had been written by them, when in fact the notation had been written by Mr Forster. Even when the Board squarely put the issue in its final address to her Honour on 18 December 2009 – that either Mr Forster or somebody at Hollows Lawyers had written the words ‘Executive Council’ on the document – the Applicant still remained mute and did not inform the Court that he had made the notation.
[184] The Applicant’s evidence demonstrates a lack of insight into the gravity of his conduct. Such a lack of insight also bears on the question of whether or not he is a fit and proper person to hold a practising certificate. …
[202] On 30 April 2010, without disclosing to the Court that he had sold the law practice’s office in Frankston and without disclosing to the Court that in the future he was proposing to practise from his home in Flinders for the next six months, the Applicant applied to Justice Emerton for a stay of the receivership on the express basis that the receivership was causing “mortal damage to the practice.[170] That application was refused by her Honour.
[170]Supreme Court Tn 1815 lines 15-6, 1825 lines 10-3; Ruling 2, Ruling 1, 5.
[204] At about the same time as he was making the stay application to her Honour, the Applicant was closing down (or at the very least, significantly winding-back) his practice. That information was relevant to her Honour’s determination of the Applicant’s stay application and the Applicant’s claim of mortal damage to his practice.
[210] … it was disingenuous to be seeking a stay of the receivership on the basis that, inter alia, the receivership was doing mortal damage to the practice in circumstances where (undisclosed to the Court) the practice was effectively closing down or at the very least being significantly wound back. The Applicant’s conduct in this regard amount to a breach of his duty of candour to the Court.
[222] The essence of the Board’s point is as follows. The documents tabbed 51 to 60 were sent to the Applicant on 9 March 2011. The Applicant has previously denied receiving any documents attached to the letter of 9 March 2011. Yet the Applicant now has in his possession a folder containing the documents tabbed 51 to 60. The Board submits that the Tribunal should infer from the evidence that the Applicant received the letter of 9 March 2011, and the attached documents tabbed 51 to 60, on 15 March 2011 and that his statement to the Tribunal that he had not received these documents was incorrect.
[225] I agree with the Board’s submission and find that the Applicant received the letter from the Board dated 9 March 2011 and the attached documents, on 15 March 2011…
[226] … I do find that the Applicant’s conduct in respect of this issue is indicative of a somewhat casual approach to his duty of honesty and candour to the Tribunal. Mr Forster’s actions speak of a reckless disregard of his duty to the Tribunal.
[232] The Board contends that the Applicant misled the Tribunal when he asserted that he did not receive Mr Muir’s emails of 1 July 2011.
[233] I am not persuaded that the Applicant deliberately sought to mislead the Tribunal in relation to his receipt of Mr Muir’s emails of 1 July 2011. But it provides a further example of a general pattern of behaviour by the Applicant – he asserts first and, when challenged, checks later.
[234] …such conduct speaks of a reckless disregard of his duty of honesty and candour to the Tribunal. …
[295] In the context of this case the Applicant’s actions and motives tell against his character and his fitness to practise. In particular I rely on the following findings:
◦➢ The Applicant deliberately attempted to get a client, Mr Rann, to confirm instructions that were not given – in other words to participate in a lie – in an effort to shore up his defence in the receivership proceeding. In doing so the Applicant behaved dishonestly and put his interests ahead of his client.
◦➢ The Applicant failed in his duty of honesty and candour to the Court in relation to document DBF94 and has demonstrated a lack of insight into the gravity of his offending.
◦➢ The Applicant breached his duty of candour to the Court in seeking a stay of the receivership on the basis that, inter alia, the receivership was doing ‘mortal damage’ to the practice in circumstances where he failed to disclose to the Court that the practice was effectively closing down or at the very least being significantly wound back.
◦➢ The Applicant has displayed a somewhat casual approach to his duty of honesty and candour to the Tribunal in these proceedings. The Applicant’s actions – for example in denying that he had received certain Board documents and in stating that he had not received Mr Muir’s email of 1 July 2011 – speak of a reckless disregard to his duty of honesty and candour.
(e) Forster v Legal Services Board [2013] VSCA 73; (2013) 40 VR 587
[159] Grounds 7… [and] 10… are as follows:
7. The learned judge’s finding (at Reasons para 182) that “by his conduct in the Supreme Court proceedings the [Appellant] has failed in his duty of honesty and candour to the Court” was not open to him on the evidence…
10. The learned judge erred in holding that as the Appellant he did not have a proper basis for annotating exhibit “DBF 94” as he did and he was acting dishonestly and with a want of candour…[170] In circumstances where the LIV never informed the appellant that the Item 10 document had any connection with the LIV executive council and no such connection was evident on the face of the document, the appellant breached the duty of honesty and candour in four respects after he wrote the words “Executive Council” on a copy of the document which did not appear on the original. First, by ascribing to the Item 10 document the unqualified description “the Law Institute of Victoria Executive Council Minute Item 10” in his affidavit of 5 November 2009 when the LIV had never described it as such. Secondly, in not disclosing that he had written the words “Executive Council” on the document. Thirdly, by standing by while Mr Arthur — presumably on the appellant’s instructions — asked questions that were premised on the document being a document of the LIV executive council and on the words “Executive Council” having been written by a person other than the appellant. Fourthly, in not informing Emerton J of the correct position at any time prior to the making of the Receivership order.
[171] The third impugned finding concerns the appellant’s Email to Mr Rann (ground 11). At para 139 of his decision, Ross J found that the evidence did not provide a reasonable basis for the appellant’s request in the Email for Mr Rann to send an email confirming that he had given instructions to the Practice to pay the Commonwealth’s cheque for $125,000 for party and party costs directly into the Practice’s office account. …
[173] ... Rather than there being no evidence to support this finding, there was strong evidence to justify it…
[159] Grounds…8… and 12 are as follows:
…8. The learned judge erred in law in failing to apply the principle in Briginshaw v Briginshaw in considering whether the Appellant lacked insight “into the gravity of his conduct” (Reasons para 184)…
12. The learned judge erred in law in failing to apply the principle in Briginshaw v Briginshaw in considering whether the Appellant “had deliberately attempted to get … Mr Rann to confirm instructions that were not given —in other words to participate in a lie — in an effort to shore up his defence in the Receivership proceeding”. (Reasons para 144).
[176] Under cover of grounds 8 and 12, the appellant submitted that Ross J erred in law by failing to apply the principles in Briginshaw[171] in relation to two findings. The first finding, at para 184 of Ross J’s decision, was that the appellant lacked insight into the gravity of his conduct in relation to his swearing an affidavit which misdescribed the Item 10 document as an “executive council” document and his failure to correct the position once he became aware of the misdescription. The second finding, at para 144 of Ross J’s decision, was that the appellant “had deliberately attempted to get … Mr Rann to confirm instructions that were not given — in other words to participate in a lie — in an effort to shore up his defence in the receivership proceeding.” …
[171](1938) 60 CLR 336.
[179] A reading of Ross J’s decision as a whole indicates that his Honour properly applied the principles in Briginshaw and that he carefully analysed and weighed up the evidence before reaching conclusions that were adverse to the appellant... There was a surfeit of evidence that enabled his Honour to reach the conclusions at paras 144 and 184 of his decision, in accordance with the principles in Briginshaw…
[180] Grounds 6 and 9 are as follows:
6. The learned judge was in error in failing to hold that the [Appellant] was entitled to sell his non-regulated property without notifying the Court and or the Legal Services Board.
9. The learned judge erred in failing to hold that the provenance of exhibit “DBF94” to the affidavit of the Appellant sworn 5 November 2009 was not a live issue at the time the Honourable Justice Emerton considered her decision on the application for appointment of receivers to the practice of Hollows Lawyers by reason of the uncontradicted evidence of Noel Henman and Brett Young adduced by the appellant.[183] ... The sale of the Frankston premises and the other steps were correctly found by Ross J to be relevant to Emerton J’s assessment of the appellant’s submissions and the orders that her Honour was being asked to make. By withholding that information from her Honour, the appellant created a misleading impression and breached his duty of candour.[172]
[172]See the principles discussed above at [161].
[187] … having misled the court about the nature of the Item 10 document, the appellant had a personal duty to disclose the true position to the court, including that it was he who wrote the words “Executive Council” on the document. The fact that the court became aware of some aspects of the true position through other sources does not mean that the appellant did not breach the duty of honesty and candour. Likewise the existence of such a breach does not depend on whether the information that was not disclosed by the appellant continued to be a live issue until the conclusion of the Receivership proceeding. The time of the court was wasted in pursuing evidence that was based on a false foundation created by the appellant on an issue that he stated was important to his case. Also, at no stage did the appellant disclose to Emerton J a fact that was exclusively within his own knowledge, namely, that he had written the words “Executive Council”.
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