Quan Pham v Legal Services Commissioner
[2017] VSCA 87
•20 April 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 115
| QUAN PHAM | Applicant |
| v | |
| LEGAL SERVICES COMMISSIONER | Respondent |
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| JUDGES: | OSBORN and BEACH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | On the papers |
| DATE OF JUDGMENT: | 20 April 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 87 |
| JUDGMENT APPEALED FROM: | [2016] VSC 450 (Keogh J) |
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DEFAMATION – Application for leave to appeal – Summary judgment – Whether applicant’s defamation proceeding had a real, as opposed to fanciful, chance of success – Imputations – Whether imputations relied upon by applicant were capable of being conveyed – Applicant’s proceeding did not have real chance of success – No error by primary judge – Proposed appeal does not have any real prospect of success – Application for leave to appeal refused – Defamation Act 2005 – Civil Procedure Act 2010, s 63.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | In person | |
| For the Respondent | Mr M Hoyne | Lander & Rogers |
OSBORN JA
BEACH JA:
On 22 December 2014, following a contested hearing at VCAT, the applicant, an Australian legal practitioner, was found guilty of one charge of professional misconduct.[1] On 27 February 2015, the respondent published an article on the Legal Services Commissioner’s website under the heading ‘False declaration plus creative accounting equals professional misconduct’ (‘the article’). The text of the article was as follows:
[1]Legal Services Commissioner v Pham [2014] VCAT 1591 (‘Tribunal Reasons’).
A new solicitor, who signed a statutory declaration containing statements which he knew to be false, has been found guilty of professional misconduct.
The Victorian Civil and Administrative Tribunal heard that Mr Quan Pham, of Noble Park, submitted a statutory declaration seeking to have the supervised legal practice condition removed from his practising certificate. Like all newly admitted lawyers, Mr Pham was required to demonstrate that he had been doing legal work under supervision for two years before he could have the condition removed.
Mr Pham commenced working for a small law practice in November 2011, before ceasing employment in July 2012. In August 2012 he applied to have the supervised legal practise condition removed. His statutory declaration stated that he had been employed as a solicitor for the whole of his time with the firm.
The Legal Services Commissioner told VCAT that Mr Pham did not receive his first practising certificate until February 2012, therefore he could not claim any work before he received his first practising certificate.
VCAT heard that Mr Pham claimed to have worked as a solicitor for 17.5 hours per day, seven days a week for the entirety of the seven and a half months he worked at the law firm, including the time before he held a practising certificate.
VCAT rejected Mr Pham’s calculations and determined that he had made statements in his statutory declaration which he knew to be false. Mr Pham was found him [sic] guilty professional misconduct [sic].
Senior Member Butcher of VCAT said:
‘The making of a declaration containing material which the deponent knew to be false is a clear breach of a practitioner’s duty of honesty and candour and diligence in relation to the contents of documents. A false declaration by a legal practitioner can only be seen as constituting professional misconduct.’
Mr Pham’s practising certificate was suspended until 30 June 2015, and for two years thereafter Mr Pham would only be entitled to practise as an employee. VCAT also specified that for the balance of Mr Pham’s supervised legal practice period, his work must be overseen by a principal of a practice he is employed by, who works on a full-time basis and is located at the same office. Mr Pham was further ordered to complete two additional CPD points in ethics and to pay the Commissioner’s costs.
Mr Pham has sought leave to appeal the decision.
For further information, download the VCAT decision.[2]
[2]The article, as its last sentence suggested, contained a link to the VCAT decision enabling a person who clicked on the last two words of the article (‘VCAT decision’) to read the full reasons of Senior Member Butcher.
On 9 November 2015, the applicant commenced a proceeding in the Trial Division of the Supreme Court, against the respondent, claiming damages for defamation. On 5 August 2016, following a contested summary judgment application brought by the respondent, a judge of the Trial Division gave summary judgment for the respondent.[3]
[3]Pham v Legal Services Commissioner [2016] VSC 450 (‘Reasons’).
The applicant now seeks leave to appeal and (if leave is granted) to appeal from the order of the primary judge dismissing his proceeding. The applicant’s proposed grounds of appeal are in the following terms:
Ground One – Finding Not Open
1.It was not open to his Honour to find that there is a distinction between ‘creative accounting’ and ‘creative financial accounting’.
2.It was not open to his Honour to find that the ‘creative accounting’ in the heading of the publication was referring to the ‘Mr Pham claimed to have worked as a solicitor for 17.5 hours per day, seven days a week for the entirety of the seven and a half months he worked at the law firm’ part of the publication.
3.It was not open to his Honour to find that the ‘creative accounting’ was not a separate topic or issue to the statutory declaration in the publication.
Ground Two – Unreasonableness
4.His Honour’s findings are unreasonable and no reasonable person could have arrived at it, nor can it be reasonably supported.
Background circumstances
The matter that led to the finding of professional misconduct against the applicant was a statutory declaration completed by him, on 7 August 2012, for the purpose of having a condition that he engage only in supervised legal practice removed. In his statutory declaration, the applicant deposed to working 17.5 hours per day seven days a week as a solicitor between 24 November 2011 and 10 July 2012. It was claimed by the applicant that working this many hours over the whole of that period was more than enough to satisfy a condition of his practising certificate that he engage in supervised legal practice for two years.
The applicant was charged with professional misconduct in relation to the provision of his statutory declaration. The Commissioner’s case at VCAT was that the applicant was guilty of professional misconduct because he acted in gross breach of his professional duty by executing and then submitting the statutory declaration to the Legal Services Board, in circumstances where he knew, or ought to have known, that the contents of the statutory declaration were false.
After a contested hearing, Senior Member Butcher found that the charge of professional misconduct was established. The senior member gave reasons for being satisfied that the applicant knew that he was not employed as a solicitor prior to 27 February 2012, and knew that he had not worked 17.5 hours per day for the period from 24 November 2011 to 10 July 2012.[4] In finding the applicant guilty of professional misconduct, the senior member then said:
I am satisfied to the requisite standard that the respondent made statements in his statutory declaration declared on 7 August 2012 which were false and that he knew that they were false. The making of a declaration containing material which the deponent knew to be false is a clear breach of a practitioner’s duty of honesty and candour and diligence in relation to the contents of documents. A false declaration by a legal practitioner can only be seen as constituting professional misconduct. Within the context of misconduct at common law, I am satisfied that the conduct is such as would be reasonably regarded as dishonourable or disgraceful by colleagues of good repute.[5]
[4]Tribunal Reasons [21]–[22].
[5]Ibid [29].
In accordance with the senior member’s findings, orders were made at VCAT suspending the applicant’s practising certificate and imposing conditions upon the applicant’s practising certificate upon his return to practice. The applicant appealed to the Trial Division of the Supreme Court. That appeal was dismissed on 27 November 2015.[6] An application for leave to appeal to the Court of Appeal was refused on 25 October 2016.[7] An application for special leave to appeal to the High Court was refused on 9 February 2017.[8]
[6]Pham v Legal Services Commissioner [2015] VSC 671.
[7]Pham v Legal Services Commissioner [2016] VSCA 256.
[8]Pham v Victorian Legal Services Commissioner [2017] HCASL 19.
The proceeding at first instance
In his amended statement of claim, the applicant (plaintiff) pleaded that the article, in its natural and ordinary meaning, was defamatory of him and meant and was understood to mean that:
(a)the plaintiff also was engaged in activities of misrepresenting financial figures or data amounting to a finding of professional misconduct;
(b)the plaintiff also was engaged in activities of using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light amounting to a finding of professional misconduct;
(c)the plaintiff also was engaged in activities of exploitation of loopholes in financial regulations in order to gain advantage amounting to a finding of professional misconduct;
(d)the plaintiff also was engaged in dishonest activities of misrepresenting financial figures or data amounting to a finding of professional misconduct;
(e)the plaintiff also was engaged in dishonest activities of using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light amounting to a finding of professional misconduct;
(f)the plaintiff also was engaged in dishonest activities of exploitation of loopholes in financial regulations in order to gain advantage amounting to a finding of professional misconduct;
(g)the plaintiff also was engaged in unethical activities of misrepresenting financial figures or data amounting to a finding of professional misconduct;
(h)the plaintiff was also engaged in unethical activities of using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light amounting to a finding of professional misconduct; and/or
(i)the plaintiff was also engaged in unethical activities of exploitation of loopholes in financial regulations in order to gain advantage amounting to a finding of professional misconduct.[9]
[9]Paragraph 19A of the amended statement of claim.
Immediately, the following observations may be made about the imputations pleaded by the applicant:
(a) First, each imputation commences with the words ‘the plaintiff also was engaged’, and then ends with the words ‘amounting to a finding of professional misconduct’. The use of the word ‘also’ in the introductory words of each imputation conveys the suggestion that the article contained imputations as to other conduct about which complaint was not, and is not, made by the applicant.
(b) Secondly, while the first three imputations, (a), (b) and (c), are very similar, referring to ‘misrepresenting financial figures or data’, ‘using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light’ and ‘exploitation of loopholes in financial regulations in order to gain advantage’ respectively, variants of them were repeated as imputations (d), (e) and (f), before further variants are then pleaded in imputations (g), (h) and (i). The difference between (a)–(c) and (d)–(f) is the insertion of the word ‘dishonest’ in imputations (d)–(f); and in imputations (g)–(i), the word ‘dishonest’ is then replaced with the word ‘unethical’.
In his defence to the amended statement of claim, the respondent:
(c) denied that the article conveyed or was capable of conveying any of the meanings alleged by the applicant;
(d) asserted that the meanings pleaded by the applicant were ‘not different in substance from one another and should not be separately pleaded’;[10]
[10]Cf Franchise Central (Australia) Pty Ltd v Fairfax Media Publications Pty Ltd [2011] VSC 379 [23].
(e) pleaded that the article was true in the following alternative meanings:
‘(i)the plaintiff engaged in activities of misrepresenting figures or data resulting in a finding of professional misconduct;
(ii)the plaintiff dishonestly engaged in activities of misrepresenting figures or data resulting in a finding of professional misconduct;
(iii)the plaintiff unethically engaged in activities of misrepresenting figures or data resulting in a finding of professional misconduct;’
(f) pleaded the defence of a fair report of a proceeding of public concern;[11] and
(g) pleaded a contextual truth defence relying upon the alternative meanings already pleaded.[12]
[11]Defamation Act 2005, s 29.
[12]Defamation Act 2005, s 26.
In response to the respondent’s defence, the applicant filed and served a reply in which he adopted admissions made in the defence and contended that various non-admissions in the defence should be deemed as admissions, and then adopted these alleged admissions.
On 6 May 2016, the respondent issued a summons seeking summary judgment pursuant to s 62 of the Civil Procedure Act 2010 (‘CPA’). The summons also sought an order striking out the amended statement of claim, alternatively the imputations pleaded in the amended statement of claim. The summons was heard by the primary judge on 20 May 2016. As we have already noted, on 5 August 2016, the judge delivered judgment and made an order dismissing the proceeding.
The judge’s reasons
The argument before the judge centred on the meaning of the words ‘creative accounting’ in the article’s heading. From the pleadings and his submissions before the judge, it does not appear that the applicant took issue with anything in the article apart from the term ‘creative accounting’. The judge set out the parties’ submissions as follows:
For the defendant it was submitted that:
It is plain from a reading of the whole of the article that the ‘creative accounting’ referred to in the heading is a reference to the false assertion made by the Plaintiff in his statutory declaration that he had completed two years’ supervised legal practice by having worked 17.5 hours per day, 7 days per week, for seven and a half months. It is equally clear from a reading of the whole of the publication that no allegation is made that the plaintiff engaged in any form of financial wrongdoing.
The defendant accepted that the term ‘creative accounting’ used in the title of the publication was, if considered alone, ambiguous. However, reading the whole of the publication the reader would understand exactly what creative accounting means in this instance. It does not carry any meaning related to wrongful or inappropriate financial accounting. An imputation that the plaintiff was engaged in activities of misrepresenting financial figures or financial data, could not arise from the publication. Each of the pleaded imputations relied upon a natural meaning including wrongful or inappropriate financial accounting by the plaintiff. Because the publication was not capable of bearing that meaning, no such imputation could arise, and the statement of claim should be struck out.
In response the plaintiff submitted:
(a)the title of the publication should be given greater emphasis or significance than the balance of the publication. In the plaintiff’s written submissions, a particular passage of Kirby J’s judgment in Chakravarti v Advertiser Newspapers Ltd was relied upon, to some extent, in support of the argument that particular attention may be given to the title of the publication. I note that, in the relevant passage, Kirby J was dealing with the issue of fair report, rather than the topic of whether the imputations are capable of arising. Further, it was put to me in oral submissions by counsel for the defendant, and I accept, that the authoritative approach taken on this question is that of Aikin J in Mirror Newspapers Ltd v World Hosts;
(b)the title of the publication is capable of bearing the meaning contended for (for instance, the meaning pleaded in paragraph 19A(a) of the amended statement of claim);
(c)information in the balance of the publication related to the false statutory declaration and did not exclude or otherwise explain the reference to creative accounting in the title of the publication;
(d)the last sentence of the publication invites the reader to go to another source for ‘further information’. This last sentence ‘confirms’ the meaning of the words in the title of the publication for which he contended. I understand the plaintiff’s argument to be that a reader would conclude that information in relation to the plaintiff’s ‘activities of misrepresenting financial figures or (financial) data’ was to be found elsewhere.
In response counsel for the defendant argued that the title of the publication was adequately explained in the publication. It was fanciful to consider that the title meant that the plaintiff had engaged in financial wrongdoing, yet not a word about that was actually spoken in the body of the publication. It was impermissible to draw an inference upon an inference, which the imputations pleaded by the plaintiff required.[13]
[13]Reasons [8]–[11] (citations omitted).
The judge then analysed the parties’ arguments and concluded that there should be summary judgment for the respondent. The judge said:
In my view the plaintiff’s analysis requires that the phrase ‘creative accounting’ be taken out of context of both the title and the content of the publication. As it appears in the title of the publication ‘creative accounting’ is part of the equation leading to professional misconduct. Creative accounting is not a separate topic or issue. The content of the publication explains the history leading to the finding of professional misconduct by Senior Member Butcher and includes the following paragraphs:
VCAT heard that Mr Pham claimed to have worked as a solicitor for 17.5 hours per day, seven days a week for the entirety of the seven and a half months he worked at the law firm, including the time before he held a practising certificate.
VCAT rejected Mr Pham’s calculations and determined that he had made statements in his statutory declaration which he knew to be false. Mr Pham was found him guilty professional misconduct [sic].
It is clear from the title and content of the publication that the creative accounting referred to in the title, taken together with the false declaration, led to the finding of professional misconduct. The calculations referred to in the above paragraph, explained elsewhere in the publication, are the creative accounting aspect of the equation which leads to the finding of professional misconduct. Paragraph 19A of the plaintiff’s pleading requires that the reader search for a hidden meaning which the reader must infer is contained in the ‘further information’ referred to. In other words, the meaning contended for by the plaintiff is not a meaning contained within the words of the publication. It requires the reader to infer that ‘creative accounting’ means ‘creative financial accounting’, to treat these words as separate from the balance of the equation in the title of the publication, and to further infer that the explanation of that creative financial accounting is to be found elsewhere than in the publication. In other words, it requires ‘… a reader who engages in unreasonable and speculative “inference upon inference”.’
In my view the plaintiff has no real prospect of establishing that the publication is capable of conveying, to the ordinary reasonable reader, any of the imputations pleaded in paragraph 19A of the amended statement of claim, or any meaning that the plaintiff engaged in wrongful or inappropriate financial accounting.
…
I am satisfied that the plaintiff’s claim has no real prospect of success. I am not satisfied that the trial should nonetheless proceed for any reason referred to in s 64 of the CPA. Accordingly, I will give summary judgment in favour of the defendant.[14]
[14]Ibid [12]–[13], [21] (citation omitted).
Applicant’s contentions
The applicant’s written case commences with references to dictionary definitions of the words ‘plus’, ‘accounting’, ‘creative accounting’, ‘equals’, ‘professional misconduct’ and ‘financial’. ‘Creative accounting’ by reference to dictionary definitions, is said to mean:
(i)the practice of using loopholes in financial regulations to present figures in a misleadingly favourable light;
(ii)ways of explaining how money has been spent, that hide what has really happened to it.
The applicant submits that the judge erred when he determined that when the article was read as a whole the words ‘creative accounting’ could not mean wrongful or inappropriate financial accounting. It was submitted that this conclusion was not open and was based on three errors that were made by the judge. Those errors were identified by the applicant in the following terms:
(h) there is a distinction between ‘creative accounting’ and ‘creative financial accounting’ (described by the applicant as ‘the distinction error’);
(i) the ‘creative accounting’ in the heading was referring to the applicant claiming to having worked as a solicitor for 17.5 hours per day, seven days a week for the entirety of the seven and a half months that he worked at the relevant law firm (described by the applicant as ‘the referring error’); and
(j) ‘creative accounting’ was not a separate topic or issue to the statutory declaration (referred to by the applicant as ‘the no separation error’).
The applicant submitted there is no distinction between ‘creative accounting’ and ‘creative financial accounting’. It was submitted that because ‘creative accounting’ is financial, it would be unnecessary to say ‘creative financial accounting’. It was then said that the judge was wrong insofar as he concluded that for the applicant’s imputations to be capable of arising, the word ‘financial’ would have needed to be in the heading or the article.
As to the referring error, it was said by the applicant that the notion that the ‘creative accounting’ in the heading was a reference to the applicant claiming to having worked 17.5 hours per day, seven days a week for seven and a half months was ‘absurd’. Such a notion was said to be absurd because, for example, a dietician who calculated calorie numbers, times and dates in preparing a food and exercise plan for a client would be capable of being described as having performed an act of creative accounting.
As to the separation error, it was submitted that the judge erred in finding that ‘creative accounting’ was not a separate topic or issue from the statutory declaration. The applicant submitted that there was a clear separation between the false declaration referred to in the article and creative accounting, and that this separation was exemplified by the word ‘plus’ in the heading appearing before the words ‘false declaration’ and ‘creative accounting’. It was submitted that the plain meaning of the heading and the article was that the applicant’s false declaration plus (or together with) some creative accounting equalled (or amounted to) the professional misconduct of which the applicant had been found guilty.
Having identified these three errors (the distinction error, the referring error and the no separation error), the applicant then submitted that the judge ought to have concluded that the ordinary reasonable reader of the article would, after reading the article:
(i)identify (by its natural and ordinary meaning) the heading as to mean the meanings the applicant complains of (or at least one of them) because the heading is in a larger font, the words are clear and precise as to what it means and therefore would place more importance or significance on the heading;
(ii)conclude the information that followed the heading were some information (or details) relating to the false statutory declaration but in no way would he or she conclude such information conflicts with the information in the heading and therefore would continue to place more importance or significance on the heading; and
(iii)by result of the last sentence conclude that ‘further information’ will be provided in full of the above (ie the information in the heading and information that followed it) in the VCAT decision via the hyperlink. Accordingly, by result, of the last sentence confirms [sic] further to the reasonable reader the importance or significance on the heading.
In short, it was submitted that the reference to ‘creative accounting’ could only be a reference to creative financial accounting of the kind commonly understood and referred to in dictionaries; the text of the article under the heading did not refer at all to creative accounting; the further information available via the hyperlink must contain that information (ie the information about the creative financial accounting); and many readers of the article, while reading the whole of the article, would not have clicked on the hyperlink. Readers of the article who did not click on the hyperlink would thus understand the article to convey the imputations relied upon by the applicant.
Analysis
There is no substance in the applicant’s submissions. The ordinary reasonable reader[15] would understand the heading to be an editor’s or author’s pithy encapsulation of the text of the article below it. The applicant’s relevant misconduct, as reported in the article, involved a two-step process: first, a tallying up of hundreds of hours worked by reference to a counting of hours, claimed to have been worked, that produced a total of 17.5 hours per day seven days a week for more than seven months; and secondly, knowingly completing and submitting a false statutory declaration in which the applicant equated his false hourly claim with two years of ordinary supervised legal practice.
[15]The attributes of the ordinary reasonable reader have been described many times before and do not need to be repeated here. For a summary of those attributes and the relevant principles, see Farquhar v Bottom [1980] 2 NSWLR 380, 385-6 [21]-[25]. See also, Soultanov v The Age Co Ltd (2009) 23 VR 182, 186-7 [11]; Hardie vThe Herald and Weekly Times Pty Ltd [2016] VSCA 103 [46].
There was nothing inapposite in the respondent’s description of the applicant’s claims as ‘creative accounting’. The use of that expression in the headline (either alone or in combination with the last sentence of the article) was not capable of conveying to the ordinary reasonable reader some additional finance related misconduct. Moreover, it is fanciful to think that the ordinary reasonable reader might have read the headline and the body of the article and concluded that there was some other creative financial accounting which constituted professional misconduct, and in respect of which a finding had been made against the applicant. It was of course necessary to read the article (as distinct from the headline) in order to identify the applicant as the subject of the relevant findings.
The article was plainly defamatory of the applicant: it reported serious findings of dishonesty/misconduct that had been made against him. The applicant’s complaint, however, is that the article was defamatory by conveying imputations that he had been involved in some form of financial impropriety or impropriety that involved financial figures or data. The judge was, with respect, correct when he concluded that any such meanings were not capable of arising from the publication of the article.
While it was submitted by the applicant that it would be open to the jury to find the article defamatory in a permissible variant of his imputations (that is, one that was not substantially different and no more serious or injurious),[16] at no stage did the applicant seek to proffer some permissible variant. Moreover, it is plain from the applicant’s submissions that any permissible variant he might contend for would contain (either expressly, or by necessary implication) a reference to misconduct in respect of financial figures or data.
[16]See David Syme & Co Ltd v Hore-Lacy (2000) 1 VR 667; Setka v Abbott (2014) 44 VR 352.
The judge dismissed the applicant’s proceeding pursuant to s 63 of the CPA. The principles informing the operation of that section were helpfully summarised by Warren CJ and Nettle JA in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[17] as follows:
(a)the test for summary judgment under s 63 of the Civil Procedure Act2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[18]
[17](2013) 42 VR 27 (‘Lysaght’).
[18]Ibid 40 [35].
For the reasons given above, the judge was correct when he held that the applicant did not have a real, as opposed to a fanciful, chance of success in the proceeding. The imputations pleaded by the applicant were not capable of being conveyed to the ordinary reasonable reader of the article. Such permissible variants of those meanings as the applicant may have wished to rely upon all contain an element that is not capable of being conveyed. While it was not necessary for the judge to go as far as saying that the applicant’s case was hopeless or bound to fail, it is difficult to imagine a more unrealistic case than that which was advanced by the applicant.
Conclusion
The applicant’s proposed appeal does not have any real prospect of success. Accordingly, the application for leave to appeal must be refused.[19]
[19]Kennedy v Shire of Campaspe [2015] VSCA 47.
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