Roulstone v New South Wales Bar Association

[2015] NSWSC 1749

Supreme Court

New South Wales

Medium Neutral Citation:	Roulstone v New South Wales Bar Association [2015] NSWSC 1749
Hearing dates:	10-16 June 2015; 11 August 2015
Decision date:	25 November 2015
Jurisdiction:	Common Law
Before:	Hall J
Decision:	(1) Order the time for the appeal by the plaintiff pursuant to s 108 of the Legal Profession Act 2004 is extended to the date of the filing of the Summons filed in these proceedings, namely, 9 December 2014. (2)   Appeal allowed. (3)   A declaration that the deemed refusal of the plaintiff’s application to the Bar Association of New South Wales for a practising certificate made on 24 June 2014 for the period from 1 July 2014 to 30 June 2015 be set aside. (4) Order that the defendant, the New South Wales Bar Association, grant to the plaintiff a local practising certificate pursuant to s 48 of the Legal Profession Act 2004 for the year ending 30 June 2016.
Catchwords:	ADMINISTRATIVE LAW – Legal Profession Act 2004 (NSW) – Appeal under s 108 Legal Profession Act 2004 from deemed refusal by the defendant of the plaintiff’s application for a barrister’s practising certificate – Whether plaintiff meets requirements for grant of practising certificate – Whether plaintiff is of good fame and character – Serious allegations made by the Bar Association of breach of undertaking given to this Court by the plaintiff and breach of an order made by this Court against the plaintiff prohibiting him from communicating with former clients – Two instances of communication relied upon by the defendant as amounting to breach - Whether evidence establishes communications by plaintiff in breach of undertaking or order – Held that evidence not capable of establishing any breach by the plaintiff of either the undertaking or order – Deemed refusal of plaintiff’s application for practising certificate set aside – Order made that the defendant grant the plaintiff a barrister’s practising certificate for the year finishing 30 June 2016. ADMINISTRATIVE LAW – Legal Profession Act 2004 (NSW) – Appeal under s 108 Legal Profession Act 2004 from deemed refusal by the defendant of the plaintiff’s application for a barrister’s practising certificate – Whether plaintiff failed to discharge his duty of candour during the application process – Responses given to Notice seeking information issued under s 660 Legal Profession Act were incomplete but not wilfully misleading or false.
Legislation Cited:	Legal Profession Act 2004 Legal Profession Uniform Law Application Act 2014
Cases Cited:	A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1; 216 CLR 253 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Bannister v Walton (1993) 30 NSWLR 699 Barakat v Law Society of New South Wales [2014] NSWSC 773 Briginshaw v Briginshaw (1938) 60 CLR 336 Coe v New South Wales Bar Association [2000] NSWCA 13 Comeskey v The New South Wales Bar Association [2015] NSWSC 824 Council of the New South Wales Bar Association v Power [2008] NSWCA 135; 71 NSWLR 451 Forster v Legal Services Board [2013] VSCA 73 Garde-Wilson v Legal Services Board [2007] VSC 225 Helton v Allen (1940) 63 CLR 691 Incorporated Law Institute of New South Wales v Meagher [1909] HCA 87; (1909) 9 CLR 655 Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338 New South Wales Bar Association v Meakes [2006] NSWCA 340 New South Wales Bar Association v Murphy [2002] NSWCA 138; 55 NSWLR 23 New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 Prothonotary of the Supreme Court of New South Wales v Hendrick Jan Van Es [2014] NSWCA 169 Rafailidis v Camden Council [2015] NSWCA 185 Re Davis (1947) 75 CLR 409 Re Deo [2005] NTSC 58 Re OG, A Lawyer (2007) 18 VR 164 Rejfek v McElroy (1965) 112 CLR 517 Roulstone v New South Wales Bar Association [2015] NSWSC 5 Veghelyi v Council of the Law Society of New South Wales (1989) 17 NSWLR 669; Law Society of New South Wales v Glenorcy (2006) 67 NSWLR 169 at [14], Barakat v the Law Society of New South Wales [2014] NSWSC 773 Wentworth v New South Wales Bar Association [1992] HCA 24; (1992) 176 CLR 239 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279
Category:	Principal judgment
Parties:	Scott John Roulstone (Plaintiff) The New South Wales Bar Association (Defendant)
Representation:	Counsel: B Coles QC; T Vernier (Plaintiff) A M Stewart SC; Y Shariff   Solicitors: T A Williams Solicitors (Plaintiff) Hicksons (Defendant)
File Number(s):	2014/361966

Judgment

PART A - INTRODUCTION

1. The plaintiff, Scott John Roulstone, commenced these proceedings by way of Summons filed on 9 December 2014. The proceedings are in the nature of a statutory appeal under s 108 of the Legal Profession Act 2004 (“the LP Act”).

2. I note that the LP Act was repealed with effect from 1 July 2015 by s 167(a) of the Legal Profession Uniform Law Application Act 2014 (NSW). References to the legislation within this judgment are references to the provisions in the repealed legislation as at the time of the hearing.

3. An appeal under s 108 is not an appeal in the strict sense: it amounts to a hearing de novo: Veghelyi v Council of the Law Society of New South Wales (1989) 17 NSWLR 669; Law Society of New South Wales v Glenorcy (2006) 67 NSWLR 169 at [14]; Barakat v the Law Society of New South Wales [2014] NSWSC 773 at [1]; and Comeskey v The New South Wales Bar Association [2015] NSWSC 824 at [6]-[7].

4. The hearing of the proceedings commenced before this Court on 10 June 2015. The hearing subsequently continued on 11-12 June, 15‑16 June, and 11 August 2015.

5. Mr B Coles QC, with Mr T Vernier, appeared on behalf of the plaintiff.

6. Mr A Stewart SC with Mr Y Shariff of counsel appeared on behalf of the defendant Association.

7. The appeal is from a deemed refusal by the New South Wales Bar Association (“the Association”) to grant the plaintiff’s application for a barrister’s practising certificate for the period 1 July 2014 to 30 June 2015.

8. In proceedings of this nature the onus falls upon Mr Roulstone as the plaintiff to establish the matters specified in s 48(3) of the LP Act. These include that he is a “fit and proper person” to hold a practising certificate.

9. The evidence in the present proceedings reveals that the plaintiff has satisfied the academic requirements for admission. The central factual issues in these proceedings relate to an Undertaking and injunctive Order made by this Court in proceedings brought by a former client of the plaintiff, which Undertaking and Order bound the plaintiff. In circumstances discussed below, issues arise for determination as to whether the plaintiff, by his conduct, breached the provisions contained in the Undertaking and Order.

10. As noted in the Defendant’s Outline of Opening Submissions it is well settled that the Association is a proper contradictor in questions relating to the grant of a practising certificate and in disciplinary matters concerning barristers: Wentworth v New South Wales Bar Association [1992] HCA 24; (1992) 176 CLR 239.

11. The Association in its opening submissions stated that it intended to adduce evidence likely to be relevant to the Court’s determination on the question of whether Mr Roulstone is a fit and proper person and, to that end, the Association set out to test all the evidence, in particular, that of the plaintiff, consistent with its responsibility to promote and protect the public interest.

12. It was submitted for the Association that Mr Roulstone’s appeal must fail because he is not a fit and proper person to hold a barrister’s practising certificate for two reasons, namely:

“(a)   That Mr Roulstone may have breached undertakings given by him to the Court and/or an injunction restraining him from engaging in specified conduct;

(b)   Mr Roulstone has failed to provide a candid explanation of the circumstances surrounding the aforementioned breaches, in disregard of his duty of candour as a barrister.”

13. The facts and circumstances concerning these two matters are discussed below.

Overview

14. In his Summons, the plaintiff appeals from what is referred to as “the refusal of the Application” being his application to the Bar Association for the grant of a practising certificate as a barrister for the year 1 July 2014 to 30 June 2015.

15. The formal orders sought in the Summons are in the following terms:

“1   The time for the bringing of the appeal herein be extended to the date of the filing of this summons.

2   Appeal allowed.

3   The refusal of the Plaintiff’s Application for the grant of a practising certificate for the period from 1 July 2014 to 30 June 2015 be set aside.

4   An order granting the Plaintiff a practising certificate as a barrister for the balance of the year ending 30 June 2015.

5   Such further or other order as to the Court appears just and expedient.

6   Costs.”

16. In the Appeal Grounds to the Summons the plaintiff asserts:

1. That he is eligible to hold a practising certificate, and

2. That he is a fit and proper person to hold such a certificate.

17. A copy of the plaintiff’s Application for a practising certificate to the Association is attached to his affidavit sworn 5 December 2014. In the application Mr Roulstone disclosed matters including his tertiary qualifications, the details of the course of instruction he had undertaken in pursuit of becoming a barrister and his absence of any conviction for offences. Mr Roulstone also disclosed “Show Cause” information (in particular the plaintiff’s petition for bankruptcy on 9 August 2012 and its annulment on 12 November 2013).

18. In Part 4 of the Application under the heading “Fitness and Propriety” the plaintiff answered in the affirmative to the question “have you had, or is there currently, any complaint lodged against you as a legal practitioner, in any jurisdiction?”

19. The plaintiff provided a Statutory Declaration in relation to his Application. This, as discussed below, responded to a number of questions raised in a notice from the Association. In the Statutory Declaration Mr Roulstone disclosed a number of matters including the refusal by the Council of the Law Society of NSW on 18 July 2013 of his Application for a Practising Certificate as a Solicitor in relation to certain “impugned transactions” following his filing for bankruptcy on 9 August 2012.

20. Reference was made in the Statutory Declaration to the judgment of this Court (his Honour Beech-Jones J) delivered on 11 June 2014 in which Mr Roulstone successfully appealed against the Law Society’s refusal of his application to practice as a solicitor: Barakat v The Law Society of New South Wales [2014] NSWSC 773.

21. The Statutory Declaration disclosed that Mr Roulstone had presented a Debtors’ Petition and was declared bankrupt on 9 August 2012. As noted above, his bankruptcy was annulled on 12 November 2013. Reference was made in relation to Question 4.3 of the Application to “two outstanding complaints” lodged against Mr Roulstone then current, namely:

1. A complaint concerning the Law Society’s decision to suspend his practising certificate as at 22 November 2012,

2. A complaint by Mr Stephen Paul Firth, solicitor, trading as Firths the Compensation Lawyers. It was noted that all complaints against the plaintiff had been dismissed with the exception of an allegation concerning himself and his former partners to the effect that he had interfered with contractual relations between Mr Firth and his own clients (former clients of Keddies) over a period between approximately August 2011 and November 2011.

22. Mr Roulstone also stated in his statutory declaration that an associated claim of contempt had been re-listed before this Court on 29 May 2013 and that counsel representing Mr Firth had requested that the contempt matter be referred to the Prothonotary of the Court. Mr Roulstone stated that he had heard nothing further since that time about the matter and that if requested to do so he would answer the charge of contempt.

23. Attached to the plaintiff’s affidavit sworn 5 December 2014, were copies of correspondence with the Office of the Legal Services Commissioner (“OLSC”) dated 23 September 2014 and 4 December 2014.

24. The plaintiff also relied upon his second affidavit of 15 December 2014. At [4] of that affidavit he referred to certain actions taken by him in the expectation that the Association would issue him with a practising certificate.

25. In his opening submissions, Mr Coles referred to the statutory framework provided by the LP Act. He noted that the application was referred to the OLSC consequent upon a deemed refusal of Mr Roulstone’s application. As will be seen, under the Act an application is deemed to be refused if it is not determined within three months of being made or by the expiration of a specified period for the investigation of a “Show Cause” event: s 48(13). Mr Coles noted that it was somewhat surprising that the Association’s written submissions made a positive assertion that the plaintiff was not a fit and proper person to hold a practising certificate although the Bar Council had not itself made a decision to that effect, the application instead being deemed to have been refused: T 3, 10 June 2015. The assertion, Mr Coles noted, involved an allegation of the commission of serious criminal activity on the applicant’s part: T 4:10-15.

26. In response, however, Mr Stewart SC on behalf of the Association observed:

“… the approach we take is not one to assert positively that there has been a contempt of Court. Our submissions carefully say that there may have been a contempt of Court, and the evidence will reveal that. Once we’ve heard Mr Roulstone’s evidence, then it may be there’s more clarity or less clarity as to where that lies, and we couple that with a reliance on what we say is a failure by the plaintiff to fully explain his position, factually that is, and what was his knowledge at the relevant times, to say that that is a demonstration of lack of fitness and propriety, and we do so as contradictor and in order to assist the Court as best we can in the protection of the public interest …” (T 4:36-48)

27. Mr Stewart also referred to the Association’s role in testing the evidence led by the plaintiff and calling contrary or relevant evidence. He referred to a level of uncertainty in this case as to where the evidence might lie at the conclusion of the case, particularly where certain witnesses have not provided statements and/or provided details as to certain factual matters: T 5:8-15.

Statutory Provisions

28. Mr Coles in his opening submissions referred to a number of provisions of the LP Act as in force at the time of the hearing. These included s 3 (Purposes of the Act) and s 9 (Suitability Matters).

29. The latter section provides:

“9 Suitability matters

(1)   Each of the following is a suitability matter in relation to a natural person:

(a)   whether the person is currently of good fame and character,

(b)   whether the person is or has been an insolvent under administration,

(c)   whether the person has been convicted of an offence in Australia or a foreign country, and if so:

(i)   the nature of the offence, and

(ii)   how long ago the offence was committed, and

(iii)   the person’s age when the offence was committed,

…

(f)   whether the person is currently subject to an unresolved complaint, investigation, charge or order under any of the following:

(i)   this Act or a previous law of this jurisdiction that corresponds to this Act, or

(ii)   a corresponding law or corresponding foreign law,

(g)   whether the person:

(i)   is the subject of current disciplinary action, however expressed, in another profession or occupation in Australia or a foreign country, or

(ii)   has been the subject of disciplinary action, however expressed, relating to another profession or occupation that involved a finding of guilt,

…

(2)   A matter is a suitability matter even if it happened before the commencement of this section.” (Emphasis added).

30. Section 42 - Suitability to hold local practising certificate - is in the following terms:

“42(1) This section has effect for the purposes of section 48 (Grant or renewal of local practising certificate) or any other provision of this Act where the question of whether or not a person is a fit and proper person to hold a local practising certificate is relevant.

(2)   A Council may, in considering whether or not the person is a fit and proper person to hold a local practising certificate, take into account any suitability matter relating to the person, and any of the following, whether happening before or after the commencement of this section:

(a)   whether the person obtained an Australian practising certificate because of incorrect or misleading information,

(b)   whether the person has contravened a condition of an Australian practising certificate held by the person,

(c)   whether the person has contravened this Act or a corresponding law or the regulations or legal profession rules under this Act or a corresponding law,

…

(f)   other matters the Council thinks appropriate.

(3)   A person may be considered a fit and proper person to hold a local practising certificate even though the person is within any of the categories of the matters referred to in subsection (2), if the Council considers that the circumstances warrant the determination.”

31. Section 43 – Duration of local practising certificate - provides:

“(1)   A local practising certificate granted under this Act is in force from the date specified in it until the end of the financial year in which it is granted, unless the certificate is sooner suspended or cancelled.

(2)   A local practising certificate renewed under this Act is in force until the end of the financial year following its previous period of currency, unless the certificate is sooner suspended or cancelled.

(3)   If an application for the renewal of a local practising certificate as a solicitor has been properly made as required by this Act but has not been determined by the Law Society Council by the following 1 July, the certificate:

(a)   continues in force on and from that 1 July until the Law Society Council renews or refuses to renew the certificate or the holder withdraws the application for renewal, unless the certificate is sooner cancelled or suspended, and

(b)   if renewed, is taken to have been renewed on and from that 1 July.”

32. Section 45 deals with matters concerning eligibility to make an application for the grant of a practising certificate. Section 46 prescribes the process for dealing with the grant of a local practising certificate. Under s 46(5) the Council of the Association may require an applicant to provide such further information as it considers relevant to its determination of the application for a practising certificate.

33. Section 48 applies to the decision of the relevant body to grant or renew a practising certificate. Section 48(3) provides:

“48(3)   The Council must not grant a local practising certificate unless it is satisfied that the applicant:

(a)   was eligible to apply for the grant when the application was made, and

(b)   is a fit and proper person to hold the certificate.

Note. Section 42 (Suitability to hold local practising certificate) deals with the question of whether or not a person is a fit and proper person to hold a practising certificate.”

34. Section 48(4) provides:

“The Council must not renew a local practising certificate if it is satisfied that the applicant:

(a)   was not eligible to apply for the renewal when the application was made, or

(b)   is not a fit and proper person to continue to hold the certificate.”

35. Section 48(13) provides for deemed refusals and is in the following terms:

“If an application made for the grant of a local practising certificate is not determined within:

(a)   3 months after the application is made, unless paragraph (b) applies, or

(b)   the required period referred to in section 68 (Investigation and consideration of show cause event), if that section applies in relation to the applicant,

the application is deemed to have been refused.”

36. Sections 66 and 68 are relevant to “show cause events”. Section 66 provides:

“66 Applicant for local practising certificate—show cause event

(1)   This section applies if:

(a)   a person (referred to in this Division as the applicant) is applying for the grant of a local practising certificate, and

(b)   a show cause event in relation to the person happened, whether before or after the commencement of this section and whether before or after the person was first admitted to the legal profession in this or another jurisdiction.

(2)   As part of the application, the applicant must provide to the appropriate Council a written statement:

(a)   about the show cause event, and

(b)   explaining why, despite the show cause event, the applicant considers himself or herself to be a fit and proper person to hold a local practising certificate.

(3)   A contravention of subsection (2) is professional misconduct.

(4)   However, the applicant need not provide a statement under subsection (2) if the applicant (as a previous applicant for a local practising certificate or as the holder of a local practising certificate previously in force) has previously provided to the appropriate Council:

(a)   a statement under this section, or

(b)   a notice and statement under section 67, explaining why, despite the show cause event, the applicant considers himself or herself to be a fit and proper person to hold a local practising certificate.

(5)   If the show cause event is a pre-admission event, the appropriate Council may decide to take no action under this Division in connection with the event, if satisfied that it is appropriate to do so given the passage of time and other circumstances the Council considers relevant (in which case the Council is not required to investigate and determine the matter under section 68).

(6)   A Council must, within 7 days after receiving a written statement from the applicant under this section about a show cause event, provide a copy of the statement to the Commissioner.

(7)   A Council may refuse to grant a local practising certificate if the applicant:

(a)   is required by this section to provide a written statement about a show cause event and has failed to provide the statement in accordance with this section, or

(b)   has provided a written statement in accordance with this section but, in the opinion of the Council, the applicant has failed to show in the statement that the applicant is a fit and proper person to hold a practising certificate, or

(c)   has failed without reasonable excuse to comply with a requirement under Chapter 6 (Provisions relating to investigations) made in connection with an investigation of the show cause event concerned or has committed an offence under that Chapter in connection with any such investigation.

(8)   If a Council refuses to grant a local practising certificate under subsection (7) to an applicant, the Council is not required to exercise its functions under section 68 in relation to the application.”

37. Section 68 allows for investigations in relation to “show cause events” and is in the following terms:

“68 Investigation and consideration of show cause event

(1)   On becoming aware of the happening of a show cause event in relation to an applicant or holder, the appropriate Council must investigate and determine within the required period whether the applicant or holder is a fit and proper person to hold a local practising certificate.

(2)   The appropriate Council must within 28 days of becoming aware of the happening of the show cause event give notice in writing to the applicant or holder:

(a)   if the Council has not received a statement under section 66 or 67 in relation to the show cause event, requiring the applicant or holder to provide the required statement, and

(b)   informing the applicant or holder that a determination in relation to the matter is required to be made under this Division, and

(c)   informing the applicant or holder of the required period under this section in relation to the determination of the matter and that the applicant or holder will be notified of any extension of that period, and

(d)   informing the applicant or holder of the effect of the automatic suspension provisions in section 70 in the event of the matter not being determined by the Council or the Commissioner within the required period.

(3)   The appropriate Council must determine the matter by:

(a)   deciding that the applicant or holder is a fit and proper person to hold a local practising certificate, or

(b)   deciding that the applicant or holder is not a fit and proper person to hold a local practising certificate, or

(c)   deciding that the applicant or holder is a fit and proper person to hold a local practising certificate but that it is appropriate to impose conditions on the applicant’s or holder’s local practising certificate for a specified period.

(4)   In investigating and determining a matter under this section the appropriate Council:

(a)   is not limited to investigating and making its determination on the basis of just the show cause event concerned, and

(b)   must have regard to the facts and circumstances that surround, arise in connection with, relate to or give rise to the show cause event concerned.

(5)   For the purposes of this section, the required period within which the matter must be determined is the period of 3 months (or 4 months if the Commissioner decides in a particular case to extend the period) commencing on:

(a)   the date on which the appropriate Council receives a written statement under section 66 or 67 in relation to the show cause event, or

(b)   if the appropriate Council has not received a written statement as referred to in paragraph (a) when it gives a notice under subsection (2) to the applicant or holder, the date specified in the notice as the date of issue of the notice.

(6)   If the Commissioner extends a period under subsection (5), the Commissioner must give notice in writing to the applicant or holder concerned of the extension of the period.

(7)   The appropriate Council is not required to deal with a matter under this section if the matter has previously been the subject of investigation and determination under this section.

(8)   The appropriate Council must give the applicant or holder an information notice about a decision under subsection (3) (b) or (c). The Commissioner must give that notice if the Commissioner makes the decision in the exercise of the functions of the Council under section 71 (Commissioner taking over determination of matter).”

38. As discussed below, Mr Roulstone was issued with notices seeking information in relation to his Application under s 660 of the Act which provides:

“660 Requirements in relation to complaint investigations

(1)   For the purpose of carrying out a complaint investigation in relation to an Australian lawyer, an investigator may, by notice served on the lawyer, require the lawyer to do any one or more of the following:

(a)   to produce, at a specified time and place, any specified document (or a copy of the document),

(b)   to provide written information on or before a specified date (verified by statutory declaration if the requirement so states),

(c)   to otherwise assist in, or co-operate with, the investigation of the complaint in a specified manner.

(2)   For the purpose of carrying out a complaint investigation in relation to an Australian lawyer, the investigator may, on production of evidence of his or her appointment, require any associate or former associate of a law practice of which the lawyer is or was an associate or any other person (including, for example, an ADI, auditor or liquidator but not including the lawyer) who has or has had control of documents relating to the affairs of the lawyer to give the investigator either or both of the following:

(a)   access to the documents relating to the affairs of the lawyer the investigator reasonably requires,

(b)   information relating to the affairs of the lawyer the investigator reasonably requires (verified by statutory declaration if the requirement so states).

(3)   A person who is subject to a requirement under subsection (1) or (2) must comply with the requirement.

Maximum penalty: 50 penalty units.

(4)   A requirement imposed on a person under this section is to be notified in writing to the person and is to specify a reasonable time for compliance.

(5)   A person who is subject to a requirement under subsection (1) or (2) is not entitled to charge the investigator for doing anything in compliance with the requirement.”

Bar Association’s Deemed Refusal of Mr Roulstone’s Application

39. The procedural history leading to the deemed refusal of Mr Roulstone’s application was set out in the Defendant’s Outline of Opening Submissions. Mr Roulstone’s application to the Association for a practising certificate to enable him to practise as a barrister was made on 24 June 2014. As mentioned above, the application disclosed Show Cause Events as required pursuant to s 66(2) of the LP Act.

40. On 7 July 2014, the Association issued a Show Cause Notice under s 68(2) of the LPAct and a Notice issued under s 660 of the LP Act. Mr Roulstone responded to those Notices on 16 July 2014.

41. On 8 August 2014, the Association issued a further notice under s 660 requesting answers to specific questions. Mr Roulstone responded to the Notice on 19 August 2014 by providing the Bar Association with a Statutory Declaration.

42. By s 68(5) of the LP Act the Association was required to complete its investigations into the Show Cause event within three months (namely by 24 September 2014). However, the Association was granted an extension by the Acting Legal Services Commissioner to complete its investigation by 7 November 2014.

43. On 23 October 2014, the Bar Council resolved that it could not complete its investigation within the required time, with the result that the “determination of the matter” was taken over by the OLSC pursuant to s 70(1) of the LP Act. The passage of time also led to a deemed refusal of the application under s 48(13).

44. As noted above, on 9 December 2014, Mr Roulstone filed his appeal in this court under s 108 against the deemed refusal of his application for a barrister’s practising certificate.

45. On 23 January 2015, this Court (Davies J) granted Mr Roulstone interim relief whereby he was issued with a practising certificate as a barrister pending the final determination of the proceedings and upon him providing an undertaking to surrender the practising certificate upon request by the Court: Roulstone v New South Wales Bar Association [2015] NSWSC 5.

46. On a subsequent application, I made an order on 16 June 2015 whereby Mr Roulstone was entitled to a practising certificate for the year commencing 1 July 2015 until further order. The order was made upon the basis of a condition being imposed on the certificate that upon being directed to do so by the Court he would surrender the certificate. Mr Roulstone gave an undertaking that he will surrender his practising certificate if directed to do so by the Court.

PART B – The Present Proceedings

Evidence

47. The plaintiff read and relied upon the following affidavits:

1. Affidavit of Scott Roulstone sworn 5 December 2014.

2. Affidavit of Scott Roulstone sworn 15 December 2014.

3. Affidavit of Xi Li sworn/affirmed 5 December 2011.

4. Affidavit of Xi Li sworn/affirmed 11 April 2012.

48. In addition to the above affidavits the plaintiff relied upon the material in the Tender Bundle which became Exhibit A in the proceedings.

49. The defendant Association tendered the following:

1. A copy of the Short Minutes of Order made by this Court (Adams J) on 30 November 2011: Exhibit 1.

2. Defendant’s Tender Bundle: Exhibit 2.

3. Defendant’s Cross-Examination Bundle: Exhibit 3.

4. Vodafone records to number XXX: Exhibit 4.

5. Vodafone records from number XXX: Exhibit 5.

6. File Memorandum, 2 December 2011: Exhibit 6.

7. Statement of Mr Roulstone dated 20 December 2011: Exhibit 7.

50. Each of the above deponents was required to attend the hearing. Each was cross-examined on their respective affidavits.

51. The Bar Association provided a helpful Defendant’s Chronology relating to relevant events. It includes reference to evidentiary material, in particular, a Tender Bundle and affidavit evidence read in the proceedings. The chronology may be taken as an accurate summary. However, proof of the material events with which these proceedings are concerned is, of course, to be determined only on the evidence adduced in the proceedings.

Onus of Proof

52. In support of its submissions to the effect that Mr Roulstone has the onus of establishing that he is a “fit and proper person” to hold a practising certificate the Association relied upon two decisions of this Court: Barakat v The Law Society of New South Wales [2014] NSWSC 773 at [123]-[124]; and Roulstone v New South Wales Bar Association [2015] NSWSC 5 at [13]-[14]. The plaintiff did not dispute that he had the onus as claimed.

53. In the course of the hearing, the question was discussed as to whether the Bar Association carried an evidentiary onus of establishing two particular matters it relied upon in the proceedings. They were:

1. The Association’s contention that Mr Roulstone breached both the Undertaking given to this Court on 22 November 2011 in proceedings discussed below and an Order made by this Court (Adams J) on 24 November 2011;

2. The Association’s contention that Mr Roulstone failed to discharge his duty of candour, honesty and frankness in relation to the settlement of proceedings brought by Mr Xi Li against Keddies for alleged overcharging of fees.

54. This part and Parts C, D and E of this Judgment analyse certain factual matters that are central to the present proceedings. The details of these and other circumstances are dealt with in more detail in Parts F, G, H and I by reference to the evidence given by individual witnesses as to the key events.

Background and Work Injury Claim by Mr Xi Li

55. Mr Roulstone was admitted to practice as a solicitor in 1985. He became a partner of the law firm known as Keddies Lawyers in approximately 1992.

56. Prior to 31 December 2006, Keddies operated as a partnership. The partners consisted of Mr Keddie, Mr Barakat and Mr Roulstone. Following the partnership’s formation each of them operated their law practice through a company, Keddies The Insurance Law Specialist Pty Ltd.

57. On 11 January 2011, Slater & Gordon Ltd acquired the shares in the Keddies company and its name was changed to Slater & Gordon NSW Pty Ltd.

58. In the sale of Keddies to Slater & Gordon, Mr Keddie, Mr Barakat and Mr Roulstone indemnified Slater & Gordon from all liabilities arising from claims brought against Keddies by former or existing clients who had claimed to have been overcharged in respect of fees for services provided in relation to certain claims and proceedings for damages for personal injury.

59. On the evidence, Keddies primarily, although not exclusively, conducted personal injury work for plaintiffs. In that respect it had been successful, inter alia, in developing a substantial clientele involving Chinese clients.

60. The evidence as to the events concerning the alleged past conduct of Mr Roulstone was principally directed to questions raised by the Bar Association as to Mr Roulstone’s past conduct concerning the settlement of proceedings initiated by a former client of Keddies, Mr Xi Li.

61. On 7 June 2005, prior to Mr Husaini’s departure from Keddies, Mr Xi Li’s worker’s compensation/common law damages claim was settled for an amount of $325,000 (inclusive of costs). He was charged by Keddies a total of $124,025.39 for fees said to have been incurred by the firm and costs.

62. In the period in which Mr Husaini acted for Mr Xi Li, Keddies also employed or otherwise engaged the services of a Ms Helena Li who is said to have been a Mandarin interpreter. As discussed below, Ms Li’s services were not only those of an interpreter.

63. Ms Helena Li’s engagement by Keddies was terminated on 23 October 2006. Another interpreter who had been engaged by Keddies was also terminated at about that time.

64. In these proceedings, Mr Roulstone maintained that he did not remain in contact with Ms Helena Li following the termination of her contract on 23 October 2006. The evidence, however, is that Mr Barakat had remained in contact with her. The relevance of the roles played by Mr Husaini and Ms Helena Li to the present proceedings is addressed in the discussion below.

The Overcharging Cases

65. According to the evidence, within a period of weeks after Ms Helena Li’s engagement was terminated, many former clients of Keddies commenced proceedings against the firm for having allegedly overcharged them fees. The evidence was that there were approximately 130 to 140 of such claims.

66. These claims by former Keddies clients placed financial stress on the former partners of Keddies including Mr Roulstone. There was evidence that the total estimated liabilities of the firm were approximately $12m.

67. Mr Keddie was declared bankrupt in June 2012. Mr Barakat and Mr Roulstone were declared bankrupt in August 2012.

68. Prior to each of these partners declaring bankruptcy, Keddies (or the former partners of Keddies) had paid approximately two million dollars to former clients in respect of an estimated fifty to fifty five cases.

69. In relation to what were referred to as “the overcharging cases”, the Keddies partners were represented by Mr Robert Tassell of Verekers Lawyers. Either Mr Barakat or Mr Roulstone gave instructions to Mr Tassell, Mr Keddie having ceased to practice in June 2011.

70. The evidence, however, indicated that Mr Roulstone was also regularly involved in directly communicating with Margiotta Solicitors (“Margiotta’s”) who acted for a number of the former clients of Keddies in relation to the “overcharging cases”. The evidence was that this included regular communications with Mr Naushad Husaini who had commenced working for Margiotta Solicitors.

71. There was said to be no formal arrangement between the former partners of Keddies as to the basis or mechanism by which the various “overcharging cases” were to be settled. The evidence indicated that in each case there would be discussions between the three partners by phone. On the evidence, three to four cases ran to final judgment but approximately fifty cases were settled.

72. The evidence indicates that some former clients of Keddies subsequently engaged and were represented by Firths the Compensation Lawyers (“Firths”), in respect of the “overcharging cases”. At some later unspecified time, approximately five to ten of Firths’ clients switched their legal representation from Firths to Margiotta Solicitors. In those cases, Margiotta Solicitors would render a Memorandum for their fees to Keddies for payment in respect of services to former clients of Keddies. In the present proceedings the evidence was that in at least three cases, Margiotta Solicitors billed Keddies a fee of $5,000 plus GST. There were other cases where a somewhat lesser amount was charged.

73. The usual course followed in the settlement of such claims, Mr Roulstone accepted, was that written settlement terms were produced in one form or another. In some cases deeds of release were drawn up to record the settlement, or in some cases settlement was effected by means of an acceptance of an Offer of Compromise that had been filed.

74. According to Mr Tassell, of the 120 cases in which his firm acted he estimated that he had handled for either the partners of Keddies or the firm’s corporate entity, about 15 to 20 cases which were settled by acceptances of Offers of Compromise. In relation to other matters there were either Consent Judgments after acceptance of an Offer of Compromise or in one case a settlement by way of a Deed.

75. However, in relation to Mr Xi Li’s case, the facts of which will be discussed below, the procedures followed in giving effect to settlements as referred to in the preceding paragraph were not engaged. In particular, there were no written Terms of Settlement and no acceptance of an Offer of Compromise. Whilst Mr Roulstone’s evidence indicated that there may have been other cases that were settled where no written Terms of Settlement came into existence, such cases involved different circumstances to the settlement of Mr Xi Li’s proceedings, as explained in evidence.

65. Mr Roulstone was criticised in the Association’s final submissions (at [3.18]) in relation to what was contended to be an attempt by him to later suggest that there had been other cases where payment had been made to former clients without the settlement being documented. Mr Roulstone ultimately accepted that there had in fact been no comparable cases.

66. There was evidence however that there were three or four cases that were settled involving former clients of Keddies who resided in China. In those cases it took time for the relevant Deeds of Release to be signed. As such, the former Keddies partners paid settlement monies on the basis that they would be held in escrow by the former client’s new solicitors. The monies were released after the Deeds had been signed.

67. In summary, on Mr Roulstone’s evidence, it is clear that there had been no other cases (than that of Mr Xi Li) where clients were paid a settlement sum prior to a written record of the settlement being made. There had always been a form of writing recording the settlement.

68. Mr Tassell’s evidence was to the same effect. There had, in his experience, been no other case, other than Mr Xi Li’s case where payment was made prior to, or in the absence of any recorded settlement.

Background to Mr Xi Li’s Case

80. Proceedings in respect of alleged overcharging of fees were commenced on Mr Xi Li’s behalf in the District Court in 2010. The proceedings involved a claim by Mr Xi Li against the Keddies partners (proceedings 2010/344874). Mr Xi Li alleged that he had been overcharged legal fees by Keddies in the work injury proceedings in which they had earlier acted on his behalf. In the District Court proceedings, Mr Stephen Firth of Firths acted for Mr Xi Li and was the solicitor on the record.

81. The critical events surrounding the settlement of Mr Xi Li’s proceedings for overcharged legal fees occurred in October and November 2011. Attendances by Mr Xi Li upon Mr Husaini and communications made on his behalf, including, in particular, communications made by Mr Roulstone and Ms Helena Li, are central to the issues in the present proceedings.

PART C – PRELIMINARY SETTLEMENT DISCUSSIONS:

OCTOBER 2011

82. On 12 October 2011, Mr Xi Li and his wife attended on Mr Husaini, then of Margiotta Solicitors in Leichhardt. At that time Mr Husaini was acting on behalf of Mrs Li in relation to a claim that she was making concerning superannuation entitlements. Ms Helena Li was also present at the meeting. She, at that stage, was providing interpreting services for Margiotta Solicitors. The evidence was that towards the end of the meeting Mr Xi Li asked what had happened with his case against the Keddies partners. Mr Xi Li advised Mr Husaini and Ms Helena Li that he was interested in settling the proceedings.

83. Mr Xi Li was present in Mr Husaini’s office when Mr Husaini made a telephone call in relation to a possible settlement of his claim. He was unsure as to whom Mr Husaini spoke to on that occasion. A handwritten file note was created by Mr Husaini, a copy of which was included in Exhibit 2 at Tab 6. It related to a phone call made by Mr Husaini to Mr Roulstone in which Mr Roulstone is said to have made an offer to settle Mr Xi Li’s claim in the amount of $5,000 plus costs payable to Firths.

84. Mr Xi Li said that after the phone call he rejected Mr Husaini’s advice to settle the proceedings with the Keddies partners for the amount of $5,000. Mr Xi Li’s evidence was that Mr Husaini then made another phone call. Following the call it was indicated to Mr Xi Li that the Keddies partners had now offered to settle his case for an amount of $10,000. Mr Xi Li indicated that he would require at least $75,000 to $80,000 to settle his proceedings.

85. The file note created by Mr Husaini recorded that, following a call with Mr Roulstone, Mr Xi Li had indicated that he would accept $70,000 plus costs (Exhibit 2 at Tab 6). An offer was conveyed by Mr Husaini to Mr Roulstone in that amount. Mr Roulstone made a counter-offer of $10,000 which was rejected by Mr Xi Li.

86. In the Association’s Closing Submissions (at [3.27]) it is noted that the two affidavits filed by Mr Roulstone in the present proceedings did not address the conversations that occurred on 12 October 2011 with Mr Husaini. However, it was conceded that they had been mentioned in correspondence that he had sent to the Association. In that correspondence Mr Roulstone had made two points about the conversation:

“●   On 12 October 2011 I received a telephone call from Mr Naushad Husaini, a solicitor employed by Margiottas. This approach was unsolicited. Mr Husaini informed me that he had been consulted by Mr Xi Li (who was with him at the time) and that Mr Li wished to attempt to settle his existing claim against the Keddies Partnership.

●   Mr Husaini requested for me to provide some basic accounting documentation from the former file maintained in respect of Mr Li’s matter. I did so on the same date by way of facsimile.”

87. On 12 October 2011 Mr Roulstone sent a facsimile to Mr Husaini which contained accounting information. The last page of it included a file note of a conversation between Mr Roulstone and Mr Husaini at 2:00pm on 12 October 2011. It recorded that Mr Xi Li had claimed that he had deposited $10,000 into Keddies’ trust account. Mr Roulstone said he would look into it.

88. Mr Roulstone’s evidence was that he did not have any discussions with Mr Husaini, or anyone else on behalf of Mr Xi Li, about a possible settlement of Mr Xi Li’s case in the period 12 October 2011 and 30 November 2011. Mr Roulstone accepted that in that period he would have spoken with Mr Barakat to convey information about the offer having been made by Mr Xi Li.

PART D – UNDERTAKING AND ORDER

89. Some time in November 2011, proceedings were brought in the Supreme Court by two former clients of Keddies against the Keddies partners (proceeding number 2011/370116). The former clients were Mr and Mrs Goritsas. Mr Stephen Firth joined the proceedings as a plaintiff. He made an application seeking to injunct Mr Roulstone, Mr Barakat and Mr Keddie from communicating with certain of Firths’ clients including Mr Xi Li.

90. On 22 November 2011, Mr Roulstone and his two former partners provided an Undertaking to the Court in the following terms (included in Exhibit 2 at Tab 48, p 111):

“… the Defendants be restrained from, either by themselves or by their servants or agents, at any time contacting, approaching or in any way communicating or attempting to communicate with any of their former clients or any of the former clients of Keddies the Insurance Law Specialists Pty Ltd or any other person or persons acting on behalf of such former clients (other than any solicitor on behalf of such former clients on the record) who have provided instructions to Firths the Compensation Lawyers to act on their behalf.”

91. On 24 November 2011, this Court (Adams J) ordered injunctive relief against Mr Roulstone and his two former partners (Exhibit 2 at Tab 48, p 112). The order was in the following terms:

“That the Defendants be restrained from, either by themselves or by their servants or agents, at any time contacting, approaching or in any way communicating or attempting to communicate with any of their former clients or any of the former clients of Keddies the Insurance Law Specialists Pty Ltd in respect of whom the third plaintiff [Firth] has served an authority to transfer the file or any other person or persons acting on behalf of such former clients (other than any solicitor acting on behalf of such former clients on the record) who have provided instructions to Firths The Compensation Lawyers to act on their behalf in respect of the subject matter of those instructions.”

92. In evidence, Mr Roulstone agreed that he knew and understood the terms of the injunction and in fact he had been present when the terms of it had been negotiated. In addition, he admitted that as at 30 November 2011 he understood that he was prevented by the injunction from communicating with Mr Xi Li either directly or by an agent or through an agent of Mr Xi Li.

Part E – settlement negotiations: NOVEMBER 2011

93. A series of critical events occurred on 29 and 30 November 2011 leading to the settlement of Mr Xi Li’s proceedings in respect of his claim for overcharged fees. It is apparent that Ms Helena Li played an active role in instigating settlement of his proceedings over those two days. Whilst the evidence does not reveal why or how she became involved in prompting settlement discussions in November 2011, it is apparent from the evidence that she did so, as a type of facilitator, rather than merely acting in her role as an interpreter. There is no dispute as to the following facts:

1. That on 29 November 2011, Mr Xi Li returned to Sydney having spent some time in China. When he checked his answering machine there was a message from Ms Helena Li.

2. That on the evening of 29 November 2011, he spoke to Helena Li who asked him whether he wanted to settle his claim against Keddies, or not.

3. That on the evening of 29 November 2011, Mr Xi Li told Helena Li that he would accept $80,000. She told him that it would be “very difficult” to achieve a settlement in that amount.

94. The evidence establishes that on 30 November 2011, the following events took place:

1. Mr Xi Li received a call from Helena Li who told him that the Keddies partners had agreed to pay an amount of $75,000. Mr Xi Li told her that he wanted $80,000 by way of settlement. Helena Li told him she would need to make another call. She later called back and told him that he should go to Margiotta Solicitors.

2. Mr Xi Li’s evidence was that he then received a phone call from Mr Husaini of Margiotta Solicitors asking him to come to the firm’s office in Leichhardt. He did so and there he met with Mr Husaini and Helena Li. Mr Xi Li told Mr Husaini that he wanted $90,000 to settle the proceedings. Mr Husaini told him that he would need to make a phone call which he did.

3. Mr Husaini told Mr Xi Li that the Keddies partners would settle for $80,000 clear of costs, that is they would pay all costs including Firths’ costs. Mr Xi Li agreed to accept that offer. He said that he had signed certain documents at Mr Husaini’s request. According to Mr Xi Li, Mr Husaini said to him “You will need to come back here to sign a settlement and then 7 days after Keddies will send you a cheque”: Affidavit of Mr Xi Li sworn 11 April 2012 at [21].

95. Mr Husaini produced a record which he said was a file note created by him as to the events of 30 November 2011. It records him having contact with Mr Xi Li on 30 November 2011 at 11:00am and that he told him that the proceedings were listed for hearing the following day. It recorded that Mr Xi Li said that he was being offered $80,000 to settle the claim, that he wanted Mr Husaini’s advice and that he wanted Mr Husaini to achieve a $90,000 settlement. The file note, included in Exhibit 2 at Tab 7, in particular, records the following:

1. At 11:55am Mr Xi Li attended at Margiotta’s offices. He gave instructions for a settlement in the amount of $90,000.

2. Around the same time Mr Husaini made contact with Mr Tassell of Verekers, who was acting for the Keddies partners. He advised Mr Tassell of Mr Xi Li’s offer to which Mr Tassell said he would obtain instructions.

3. At 12:15pm, Mr Tassell rang Mr Husaini. Mr Tassell told him that he could not deal with Mr Husaini in light of the orders of the Court which prevented him from doing anything other than communicating with the solicitor on the record.

4. At approximately 12:15pm Mr Husaini spoke to Mr Xi Li and told him that if he had Mr Xi Li’s authority to put an offer of $90,000 and that was rejected by Keddies partners, then he, Mr Husaini, would not be in a position to conduct the hearing the next day. In that event, Mr Xi Li would be liable for costs thrown away, estimated at $20,000.

5. At 12:50pm, instructions were given by Mr Xi Li for Mr Husaini to act on his behalf and to settle the claim in the amount of $80,000. Mr Husaini then prepared a letter to Verekers stating that he had instructions to act for Mr Xi Li.

6. At approximately 12:32pm Margiotta Solicitors forwarded by facsimile a letter to Verekers regarding Mr Husaini’s authority to act (Exhibit 2, Tab 9).

7. At 1:35pm Margiotta Solicitors sent by facsimile to Firths, an Authority to Transfer, and a Notice of Change of Solicitor (Exhibit 2, Tab 10).

8. At 1:37pm, Margiotta Solicitors served on Verekers by facsimile transmission, a Notice of Change of Solicitor (Exhibit 2, Tab 11).

9. At approximately 3:00pm, Mr Husaini put to Mr Tassell of Verekers, an offer in the sum of $80,000 to settle Mr Xi Li’s proceedings.

10. At approximately 3:10pm, the offer put on behalf of Mr Xi Li was accepted by Mr Tassell on behalf of Mr Roulstone and his former partners. Mr Tassell undertook to mention the proceedings the next day and advise the Court that the matter had been settled and that Terms of Settlement would be filed.

96. Mr Roulstone’s evidence as to the offer made to Mr Xi Li of $80 000 and how that eventuated will be dealt with below.

PART f – MR ROULSTONE’S EVIDENCE

97. Mr Roulstone in his affidavit sworn 5 December 2014 stated that he submitted his Application for a Local Practising Certificate to the Council of the Bar Association of New South Wales on 24 June 2014. As previously mentioned, he annexed a copy of the Application together with correspondence between him and the Bar Association (Annexure C) and correspondence from the OLSC dated 4 December 2014 (Annexure D) and a response to the Commissioner’s letter (Annexure E).

98. As mentioned previously, in paragraph 7 of that affidavit Mr Roulstone referred to the decision in Barakat v The Law Society of New South Wales, supra, in which, he stated, a finding was made that he was a fit and proper person to hold an unrestricted practising certificate to practice as a solicitor and barrister.

99. In his second affidavit sworn on 15 December 2014 Mr Roulstone set out details of various actions he had taken and commitments that he had made and events that had occurred in the expectation of the Association issuing him with a practising certificate: Affidavit of Scott John Roulstone sworn 15 December 2014 at [4].

100. Mr Roulstone was cross-examined on 10 and 11 June 2015 and was further cross-examined on 15 June 2015.

101. In the course of the cross-examination, Mr Roulstone gave evidence concerning the practice that was formerly conducted by Messrs Keddie, Barakat and himself. He stated that Keddies developed a substantial following amongst Chinese clients and that the firm employed Ms Helena Li who acted as an interpreter. She was employed from about 1999 and later worked for the firm on a contract basis until the relationship ended on 23 October 2006. Mr Roulstone said that Ms Li’s employment was terminated along with an employed solicitor and a Chinese “liaison officer” employed by the former Keddies partners: T 36.

102. Mr Roulstone gave evidence that within weeks of their termination, a number of former clients of Keddies commenced suing Mr Keddie, Mr Barakat and himself for alleged overcharging of fees, as previously mentioned. A number of proceedings were commenced. He said this included approximately 120 sets of proceedings instituted by Firths the Compensation Lawyers: T 37.

103. Mr Roulstone stated that, at that stage, Ms Helena Li a particular employed solicitor and the liaison officer who were terminated in October 2006 formed an association with Margiotta Solicitors. He stated that some seventy five authorities for the transfer of files were received from Margiotta Solicitors: T 37.

104. Prior to the intervention of the bankruptcy of the Keddies partners, Mr Roulstone said that approximately two million dollars was paid by them in respect of fifty to fifty-five cases: T 38.

105. Mr Roulstone stated that either he or Mr Barakat gave instructions to Mr Tassell to act on their behalf: T 42.

106. Mr Roulstone agreed that he, on behalf of his former partners, was regularly involved in communicating with Margiotta Solicitors in relation to the overcharging matters and that such communications included the question of settlement of the claims: T 42-43. He confirmed that the communications were on a regular basis with Mr Husaini of Margiotta Solicitors.

107. He also confirmed that Mr Husaini had previously worked at Keddies as an employed solicitor prior to the sale of that firm to Slater & Gordon.

108. Mr Roulstone stated of the many plaintiff clients whose files were transferred to Firths (all involving the overcharging claims) some switched solicitors to Margiotta Solicitors. As noted above, Mr Roulstone estimated that there were about five to ten such matters. Margiotta’s then proceeded to negotiate settlements against the former partners: T 44.

109. He agreed that the usual course was that where a case was settled settlement terms were reduced to writing and in some a Deed of Release was used: T 44.

110. In some cases an Offer of Compromise had been accepted. When asked whether, apart from Mr Xi Li, payment had been made and cases settled in circumstances where there had been no written terms of settlement, Mr Roulstone said there may have been but that he was unable to recall the names. He said these were settled in May and June of 2011 by himself and Margiotta Solicitors: T 44-45.

111. He said in such cases Deeds of Settlement, according to his recollection, were eventually executed and returned. He thought that these cases involved plaintiffs who had been residing in China: T 45.

112. Mr Roulstone gave evidence subsequently in relation to his evidence referred to in [110] above. He said that settlement monies had been paid in some cases before Terms of Settlement were finalised and then held in escrow. The monies were released only after deeds were signed: T 45-46. He said “There was always some form of writing between myself and Margiotta’s in relation to settlement. The deeds might not have been put in place”: T 46.

113. Mr Roulstone was asked about the proceedings that had been instituted by Mr and Mrs Goritsas. He said those proceedings had been commenced by Firths. Mr and Mrs Goritsas, former clients of Keddies, were suing for fees they said they had been overcharged. Mr Firth, he said, became a third plaintiff to the proceedings in which he sought an injunction against the former Keddies partners: T 46.

114. Mr Roulstone was taken to the Undertaking given by himself and his former partners to the Supreme Court on 22 November 2011 and to the Injunction subsequently ordered by Adams J two days later. He said that he understood the terms of both the Undertaking and the Injunction: T 47. It was put to him:

“Q.   Specifically on 30 November 2011 you knew that by the undertaking and the injunction you were prevented from communicating with Mr Xi Li either directly or by your agent or through his agent. Is that right?

A.   Yes.

Q.   Because Mr Xi Li was one of those former clients who was then represented by Firths.

A.   That’s correct.

Q.   Was there a strategy by you or your former partners to, with the assistance of others if necessary, to try and get clients of Mr Firth’s to leave him and go to other solicitors?

A.   No.

Q.   Now, on 12 October 2011, so prior to the undertaking and the injunction, Mr Husaini called you on the telephone to discuss the possible settlement of Mr Xi Li’s matters. Is that right?

A.   Yes.” (T 48:1-19)

115. As previously mentioned (paragraphs [82]-[88]), on 12 October 2011, prior to the Undertaking being given to the Court and the injunction granted, Mr Husaini called Mr Roulstone on the telephone to discuss possible settlement of Mr Xi Li’s matters. He said that arising from that telephone call he faxed some information with regard to Mr Xi Li to Mr Husaini: T 48. Mr Roulstone said there were two or three telephone conversations on that day and that he had faxed the material at around mid-afternoon, being an amended reconciliation statement dated June 2005 and a trust account print out (comprising three pages): T 48.

115. A copy of the facsimile sent to Mr Husaini was included in the plaintiff’s tender bundle (Exhibit A at Tab 16, p 78).

116. Mr Roulstone later in his evidence emphasised that there had been three calls on 12 October 2011. The first was at 11:00am when Mr Husaini said “I am instructed by Mr Xi Li. He is with me now. He would like to settle his case against Keddies, and he has offered to settle for $80,000”. Mr Roulstone said that he responded that he was not familiar with the case but would need to look up accounting documentation from the former file and get back to him.

117. After that conversation he said he contacted an assistant at the Redfern office about the documents.

118. Mr Roulstone said he called back about thirty minutes or so later and said “Naushad, I’ve looked at the bill and reconciliation statement. The profit costs were $70,000. Your offer is too much”. Mr Roulstone said he thought he used the word “ridiculous” and then said “I will counter offer for $10,000”. Mr Husaini, according to Mr Roulstone, then said “Scott, leave it with me. Send through the documents. I will get further instructions and come back to you”: T 50.

119. As previously mentioned, a copy of the file note prepared by Mr Husaini was included in Exhibit 2 at Tab 6, page 13: see paragraph [85] above.

120. That note confirms the offer of $10,000 plus costs. Mr Roulstone stated that he thought the offer was inclusive of costs: T 50.

121. Mr Roulstone said that Mr Husaini did not come back to him about settlement of Mr Xi Li’s case until 30 November 2011. He said that he had no discussions with Mr Husaini or anyone else, about the settlement of Mr Xi Li’s case between 12 October 2011 and 30 November 2011: T 51.

122. He had a recollection that he had spoken to either one of his partners, or both of them, at some point between those dates and pointed out that Margiotta Solicitors were now on the record for Mr Xi Li: T 51.

123. He also said that at some point before 30 November 2011 he had spoken to Mr Barakat and told him of the offer (of $10,000) he had previously put to settle Mr Xi Li’s case: T 51.

Communications on 30 November 2011

125. Mr Roulstone was taken to the file note made by Mr Husaini relating to entries made on 30 November 2011, included amongst which was a note of a telephone conversation between Mr Husaini and Mr Xi Li in which, in relation to Mr Xi Li, it was recorded:

“He is being offered $80,000K to settle it.

Wants my advice & wants me to get him $90,000K.”

126. Mr Roulstone stated that his understanding was that the offer of $80,000 was from Mr Xi Li to Keddies. When asked whether he knew how it was Mr Xi Li was possessed of what he understood to be an offer of $80,000, Mr Roulstone responded “No, I don’t know”: T 53:40-45.

127. Mr Roulstone’s evidence was that he could only recall having spoken to Mr Husaini once on the morning of 30 November 2011, that call being at about 10:00am: T 53.

128. He was asked whether he had a file note of the conversation, he said he did. That, in due course, became Exhibit 6 in these proceedings.

129. Exhibit 6 confirmed that Mr Roulstone had not made any offer to Mr Xi Li of $80,000 prior to the call to Mr Husaini on 30 November 2011: T 54.

130. Mr Roulstone was adamant that he had not made any offer of settlement to Mr Xi Li or to anyone else on behalf of Mr Xi Li other than the offer of $10,000 that was made on 12 October 2011: T 56.

131. He said that he did not know of anyone else who had made any offer on behalf of the Keddies partners: T 56.

132. Mr Roulstone said that after he had given instructions to Mr Tassell on the settlement on 30 November 2011, his first knowledge of any settlement was when Mr Tassell rang him back that day at about 3:30 or 3:45pm: T 57.

133. Mr Roulstone stated that he did not have knowledge of the fact that further injunctions were being sought by Firths against Margiotta Solicitors in the afternoon of 30 November 2011, but only found that out late in the evening on that day: T 58. A copy of the injunctive Order made by this Court (Adams J) on 30 November 2011 became Exhibit 1 in these proceedings.

134. He was shown a copy of an email sent by Mr Tassell addressed to Mr Branson QC and Ms Castle of counsel who were appearing for Mr Roulstone and his former partners in the Supreme Court Proceedings. It was sent on 30 November 2011 at 6:09pm. In it, Mr Tassell, inter alia, stated that he had been advised by Margiotta’s that the injunction application against them was to be heard at 8:00am the following day and that short service orders had been made on that day. A copy of the email was included in Exhibit 2 at Tab 14.

135. The email was copied to Mr Roulstone and Mr Barakat. Mr Roulstone stated that he received the email when he was at a school function and that he may have read it, but could not recall reading about the injunction: T 58.

136. An email was sent by Mr Roulstone to Mr Tassell on that date at 6:31pm in response to Mr Tassell’s email: Exhibit 2, Tab 15. It was put to Mr Roulstone that in light of the fact that the proceedings had been settled on the afternoon of 30 November 2011, and that proceedings for injunctive orders had been instituted, a circumstance of urgency had arisen:

“Q.   I suggest that out of that there arose in your mind an urgency to execute the settlement with Xi Li, so that it couldn’t be undone by any injunction orders.

A.   I think the, I think the urgency arose earlier than that. I think it was --- I think the urgency arose earlier that day. I think it was just after it settled, about 4:00pm.

Q.   Why do you say urgency at 4:00pm?

A.   I had discussed the settlement with my partner, with my former partner Mr Barakat, after I heard that it had settled. He said that he was preparing a deed to send to Mr Tassell. And he rang me back, probably about 4:30 saying the client wanted his cheque, as in Mr Xi Li ‘Could you leave the cheque at the reception and it will be picked up’.” (T 60)

137. Mr Roulstone said that he thought he had said, in his conversation with Mr Barakat that afternoon, that he could not draw the cheque because his cheque book was at his home and the best he could do would be to draw it the next morning: T 61. He said that they agreed on that course.

138. It was put to Mr Roulstone that Mr Barakat had requested him to draw the cheque and make it available for collection. Mr Roulstone agreed: T 61-2.

139. Mr Roulstone was taken to a copy of the cheque that was drawn for the settlement monies at Exhibit 2, Tab 17, page 32. He agreed that at the time he signed the cheque no Deed of Release had been executed: T 63. Nor had a Deed been received at the time he drew the cheque and made it available for collection: T 63. Mr Roulstone said he placed it in an envelope and gave it to the receptionist at Margiotta Solicitors. When asked whether he wrote anything on the envelope he said that he did, but he could not remember whether it was “Xi Li” or “Xi Li care of Margiotta”. He said it was either one or both: T 63. Mr Roulstone was asked in cross-examination:

“Q.   When you drew the cheque, when you wrote on the envelope and when you left it to be collected by Mr Xi Li, did you have regard to the terms of the undertaking and the injunction?

A.   Yes.

Q.   So at that time you did have regard to their terms?

A.   Yes.

Q.   What did you conclude with regard to whether you would be in breach of those terms?

A.   I wasn’t aware that there had been any injunction against Margiotta. I noted the exception that was agreed upon in relation to the injunction, if another firm came on record, and those matters had been considered by me and in consultation with Mr Barakat and Mr Tassell during the course of the, of the afternoon of 30 November.” (T 64)

140. A little later he was asked:

“Q.   --What did you conclude with regard to whether your actions in drawing the cheque and making it available in the way in which you did were in breach of the undertaking or the injunction?

A.   I couldn’t see any difficulty in what I had done. I wanted to ensure payment as soon as possible and solicitors other than Mr Firth had come onto the record, on my understanding, at about lunchtime on 30 November.” (T 65)

141. A little later it was put to him:

“Q.   You relied in some way, did you, on what Mr Tassell said to you?

A.   Yes.

Q.   What did he say to you?

A.   What he said – provided Margiotta had come onto the record the case can be settled, and he told me that earlier that day, on the 30th, about lunchtime, that he wouldn’t deal with Mr Husaini until he had actually come onto the record as in acting on behalf of Mr Xi Li in those proceedings.” (T 65)

142. Mr Roulstone said that the settlement discussion was later in the afternoon at about 3:00 or 3:30pm but there had been the earlier discussions between Verekers and Margiotta Solicitors about settlement: T 65.

143. It was put to Mr Roulstone:

“Q.   Your understanding then on 1 December 2011 is that you would not be in breach of the undertaking or the injunction because Margiotta’s had come onto the record for Mr Xi Li?

A.   That’s correct.

Q.   With the consequence that Mr Firth was no longer on the record for Mr Xi Li?

A.   That’s correct.

Q.   Is that your understanding now?

A.   Yes.

Q.   But you would otherwise accept that the drawing, signing and making available for collection of a cheque by Mr Li in an envelope addressed to him would constitute communicating with him?

A.   Absent the injunction?

Q.   Sorry…

…

Q.   What you did in signing the cheque, drawing it, signing it, putting it in an envelope addressed to Mr Xi Li --

A.   Yes. Yes.

Q.   -- and making it available on the expectation he would collect it --

A.   Yes.

Q.   -- was a communication with him.

A.   I guess by signing the cheque, if – if that’s communication, I suppose so.

Q.   Let’s go further. The writing on an envelope, “Xi Li” or “Xi Li care of Margiotta’s” and leaving it for him to collect with the expectation that he’s going to collect it, that’s a communication.

A.   I agree that’s a communication.

Q.   If it’s collected by, as it turns out, someone else on his behalf then it’s a communication with him through someone else.

A.   I suppose so, yes.” (T 66-7)

144. It was then put to Mr Roulstone that there was no reasonable basis upon which he thought that it was open to him to communicate directly with Mr Xi Li, or in any way with Mr Xi Li, other than via solicitors representing him. Mr Roulstone responded:

“A.   The way I saw it was that I’m putting effect to the settlement in paying a settlement that had been reached without any breach of the injunction.

Q.   You said you saw it like that, but I’m suggesting that you couldn’t honestly have seen it like that when you have regard to the terms of the undertaking.

A.   The way I understood the – the undertaking to be negotiated was that if another firm came onto the record and acted on behalf of a former Keddies client after that had occurred, a settlement would be effected and the settlement could be completed, that’s the way I understood it.” (T 67)

145. As to the reason for paying the settlement monies by cheque on an urgent basis Mr Roulstone again referred to the fact that Mr Barakat said he had spoken to Helena Li who said that she was not able to get hold of Mr Husaini and that Mr Xi Li wanted his cheque and would pick it up: T 74. He said he could not recall specifically why Mr Xi Li wanted his cheque the next day. Mr Roulstone said that he and Mr Barakat agreed to draw the cheque – that the matter was on for hearing and he thought something was said along the lines of “We didn’t want the matter going off the rails with allegations that it hadn’t been settled”: T 74.

146. It was put to Mr Roulstone:

“Q.   … the real reason was to pre-empt the effect of any injunction that might be ordered the next morning against Margiotta’s, wasn’t it?

A.   I had no idea at that stage that there was any injunction being brought against Margiotta.

Q.   It was of course completely against the usual course to pay the client, as opposed to paying to escrow, before a settlement had been documented.

A.   Not necessarily. I think there had been a couple of other instances.” (T 75)

147. It was pointed out that in earlier evidence he had said that in other cases money had generally been paid into escrow.

148. Mr Roulstone agreed that he had not discussed with Mr Tassell the question of payment being made: T 76.

149. A somewhat contrary version of events as related by Mr Xi Li in his affidavit sworn 11 April 2012 at [21] was put to Mr Roulstone. In that paragraph, Mr Li stated:

“Mr Husaini also asked me to sign a single page document which I did. I signed that document at around 12:30 or 1:00pm.

Mr Husaini then said: ‘You will need to come back here to sign a settlement and then 7 days after Keddies will send you a cheque.

I said: ‘What do I do about Firths?’

He said ‘Don’t worry about them. Don’t answer their call’.”

150. When Mr Roulstone was asked whether he had any response to that version, he responded in the negative: T 77.

part G – MR HUSAINI’S evidence

151. Mr Husaini was called by the Bar Association to give oral evidence, there being no affidavit evidence filed on his behalf. The solicitors for the Association had made attempts to arrange a conference to discuss with him the events with which the present proceedings are concerned. Whilst Mr Husaini had declined to make himself available for a conference prior to the hearing, he did in fact have a discussion with the Bar Association’s legal representatives for approximately 45 minutes on the day he gave evidence (11 June 2015).

152. Mr Husaini said that from mid-January 2011 to the end of March 2006 he worked with Keddies as an employed solicitor. He said he left of his own accord to start working for Margiotta Solicitors in Leichhardt. Whilst at Keddies he acted for Mr Xi Li in relation to a workplace injuries claim. He said that when he was working there Ms Helena Li worked there as an interpreter. Additionally, a Mr Siu Sheng Lee worked at Keddies as a Client Liaison Officer. Mr Husaini said that any Chinese client who responded to an advertisement in a Chinese newspaper would contact either Mr Lee or Helena Li.

153. After he left Keddies, Mr Husaini worked for a brief period with Wyatt Attorneys in Ashfield between October 2007 and December 2007 and whilst there he said that Mr Lee brought Mr Xi Li’s wife to see him. He said that in early 2011 or thereabouts she had a dispute with Wyatt Attorneys in relation to fees.

154. He said that at some point the relationship between Mr Lee and Helena Li and Margiotta Solicitors “soured” and they left the firm.

155. As to the arrangement or understanding between Margiotta and Keddies with regard to former Keddies clients, Mr Husaini stated there were four or five clients who Mr Lee introduced to the firm because he claimed they were not happy with Firths and wanted to settle their matters. An arrangement was made between Margiotta’s and Keddies whereby Keddies would pay Margiotta’s costs in the amount of any settlement received by the client, clear of any solicitor/client costs component.

Communications between Mr Husaini and Mr Roulstone

156. Mr Husaini gave evidence as to conversations that he said he had with Mr Roulstone concerning Mr Xi Li’s claim on or about 11 and 12 October 2011 and then 30 November 2011.

(a) Conversations on 11-12 October 2011

157. Mr Husaini gave evidence of a conference with Mr Xi Li’s wife in relation to a superannuation payment and said that at that time Mr Xi Li was present. On that occasion, Mr Xi Li raised with Mr Husaini the issue of contacting Keddies to see if he could resolve his claim. Mr Husaini said he then rang Mr Roulstone: T 120. In that respect he was taken to a copy of his file note dated 11 October 2011 in Exhibit 2 at Tab 6, p 13A. That note recorded in part:

“Xi Li Conf with Client

11/10/11

12.25

XXXX XXXX

Helena ***

PA - SJR

Discussion about matter

His offer $5,000 they pay Firths costs on an indemnity basis

Discussed matter with client

He says he was charged $130,000 for Keddies costs & disb

He will accept $70K plus costs

*** damages etc

Rang SJR put the offer $70k plus costs”

158. The file note then sets out figures concerning Mr Xi Li’s claim and the costs charged by Keddies and others, including Helena Li (in the amount of $7,000). The file note concludes:

“offer $10k plus costs

Discussed offer with client

He says he had paid $10k to Keddies

Which was not refunded. This amount only represents what he paid to Keddies.”

(b) Discussions on 30 November 2011

159. When Mr Husaini was asked whether Mr Xi Li made contact with him subsequent to the conference held on 11 or 12 October 2011 about possible settlement of the matter, Mr Husaini said “not until 30 November”: T 124. He said that between 12 October and 30 November 2011 he did not have any contact with Mr Xi Li. He also said that he did not have any contact with anyone else with regard to the possible settlement of Mr Xi Li’s matter: T 124.

160. The examination of Mr Husaini in evidence then moved to 29 and 30 November 2011. He was taken to telephone records which reflected a call made from Helena Li to Mr Husaini’s phone at 6:38pm on 29 November 2011. He could not recall what the call was about but he said that she used to ring him from time to time. However he said there was definitely no discussion about Mr Xi Li: T 124.

161. Mr Husaini said that on 29 November 2011 he did not have any communication with Mr Siu Sheng Lee about Mr Xi Li’s claim against Keddies, nor did he have any communication with Mr Roulstone, Mr Barakat or Mr Keddie on that date: T 125.

162. Mr Husaini said that before Mr Xi Li called him on the morning of 30 November 2011, he did not have any knowledge concerning any offer conveyed to Mr Xi Li on behalf of Keddies to settle the claim: T 125.

163. Mr Husaini said that at 11:00am on 30 November 2011 he returned Mr Xi Li’s call. Mr Xi Li told him that his matter against Keddies was listed for hearing the next day and that he was being offered $80,000 to settle his claim. He said that Mr Xi Li wanted his advice and wanted him to get $90,000 to which Mr Husaini said “it would be better if you come to my office and then I could take formal instructions from you. I will call Helena to be here as well.”

164. Mr Husaini said that at 11:55am on 30 November 2011, Mr Xi Li arrived at his office and he again said that he wanted him to try to get $90,000. Mr Husaini then rang Mr Tassell, solicitor, who acted for the former Keddies partners, and advised him that Mr Xi Li was in his office for advice about the matter listed for the next day. Mr Tassell apparently indicated that he had no formal instructions as at that time. Mr Xi Li wanted Mr Husaini to put an offer of $90,000 plus costs to settle the claim. Mr Husaini asked Mr Tassell if he could get instructions on such an offer and he would keep Mr Xi Li at his office: T 125-6.

165. At 12:15pm Mr Husaini spoke to Mr Tassell who apparently told Mr Husaini that he was unable to deal with him because of the court orders that were in place and that neither he nor his clients should deal with anyone unless they came onto the record: T 126.

166. Mr Husaini said that he explained to Mr Xi Li that if he obtained instructions to put an offer of $90,000 and Keddies rejected the offer, then there would be difficulty in him being able to represent him the next day as he did not have the file.

167. Mr Husaini said he explained to Mr Xi Li that if the proceedings were adjourned he could be made liable for costs of up to $20,000 to Keddies. He said that at 12:50pm his client formally instructed him to settle the claim for $80,000. Mr Husaini then prepared a letter to Verekers Solicitors advising that Mr Husaini now acted for Mr Xi Li. He rang Mr Tassell and asked for the District Court file number: T 126.

168. Mr Husaini was taken to his file note in Exhibit 2, at Tab 7, p 15A. The file note indicates that at 3:00pm on 30 November 2011 he again spoke to Mr Tassell. The note records that he had faxed a Notice of Change of Solicitor to Mr Tassell and that Mr Tassell had said that he could now speak to Mr Husaini. The file note records an offer being put to settle the claim in the amount of $80,000 plus the costs of Firths on a solicitor/client basis.

351. Whilst it is, of course, possible that Mr Roulstone saw another possible benefit in having early payment of the settlement monies made, that possibility has not on the evidence been established as a likely one. The evidence certainly does not establish a cogent basis for a conclusion that the urgent payment was undertaken deliberately by Mr Roulstone in order to frustrate any injunctive relief the Court may order.

Was the Cheque a Communication in Breach of the Undertaking or Order?

353. As earlier discussed, on 1 December 2011 Mr Roulstone placed a cheque, in settlement of Mr Xi Li’s claim, in an envelope addressed to Mr Xi Li.

354. Accepting that the cheque, together with the addressed envelope, could be considered to be a form of communication, the question again is whether it was a communication within the terms of the Undertaking and Order.

355. The ordinary dictionary meaning of “communication” includes an act of imparting or transmitting something intangible, in particular, “information”. In certain contexts it may also include transmission of something that is abstract: Oxford English Dictionary.

356. In this case the tender or an act of providing a cheque, that is, a written order to a bank, would not in itself constitute a communication in the ordinary sense of that word to the recipient (as distinct from a bank). The act of addressing an envelope containing the cheque conveys the identity of the person intended to receive it. The reference in the Order to “communication”, having regard to the evident purpose of the prohibition (to prevent clients of Mr Firth from being lured away), and to the context in which that word appears as earlier discussed, does not, in my assessment, as a matter of construction, extend to the act of enclosing a cheque in an addressed envelope.

357. Even if contrary to that conclusion it could be said that the act of leaving the addressed envelope out for collection was a communication by Mr Roulstone contrary to the Order, I accept that at the time of doing so Mr Roulstone did not have an understanding or belief that it could constitute a breach of the Order. Again, the evidence of his statements to Mr Husaini on the morning of 30 November 2011, recorded in Exhibit 6, provides some support for that conclusion. Any such “communication” would at most have been an inadvertent one.

Lack of Candour

358. The Association’s submission in relation to what it asserted was a lack of candour by Mr Roulstone was that the overwhelming weight of evidence established that Mr Roulstone had misled the Association and that he has otherwise failed to discharge his duty of candour and frankness: Defendant’s Closing Submissions at [5.1]. The Association relied upon answers provided by Mr Roulstone in relation to a s 660 Notice issued to him on 8 August 2014.

(a) Answers Provided by Mr Roulstone to the Second s 660 Notice

359. The Association submitted that answers provided by Mr Roulstone in response to the second s 660 notice issued to him on 8 August 2014 were false or at least misleading. In para [5.3] of their Closing Submissions the Association set out questions 11 and 12 in the Notice and the answers given by Mr Roulstone in a Statutory Declaration dated 19 August 2014 which I reproduce below:

“Q11.   Did you draw a cheque on or about 1 December 2011 in the sum of $80,000 in favour of Mr Li?

A11.   Yes.

Q12.   If the answer to A11 is in the affirmative, please answer the following questions:

(a)   who asked you to draw the cheque?

A   No one. I drew the cheque of my own volition and as a matter of course to complete the settlement.

(b)   for what purpose did you draw the cheque?

A   To complete the settlement.

(c)   To whom did you give the cheque?

A   To Eileen Drurie, the receptionist at my Redfern Office, a former employee of Keddies.”

360. It was submitted that each of the responses was false or misleading in that it did not convey the true position or the entire truth for the reasons set out in [5.4(a)-(e)] of the Defendant’s Closing Submissions.

361. It was submitted for Mr Roulstone that he had disclosed material facts in answer to the questions raised: Plaintiff’s Written Submissions at [167].

362. In relation to the question, “(a) who asked you to draw the cheque?”, the Association’s submission was that the answer given by Mr Roulstone was patently false:

“… because on Mr Roulstone’s own evidence Mr Barakat had asked him to draw the cheque: T 61:50-62:4 …” (Defendant’s Closing Submissions at [5.4(a)])

363. In response it was submitted for Mr Roulstone that his evidence on the point at T 91:23-41 was given in the context in which it had been put to him that he drew the cheque because Mr Barakat phoned him and told him that Helena Li had called and said to Mr Barakat that the client wanted his cheque urgently. It was additionally put that he was asked whether he would draw the cheque and make it available:

“Q.   … and you had a discussion and you agreed to do so, that’s what you’ve told us.

A.   Yes. Yeah.”

364. In the submissions for Mr Roulstone, the underlined words “you agreed to do so” was submitted to be a basis upon which Mr Roulstone’s response was given. That was said to be consistent with Mr Roulstone’s answer that no one had asked him to draw the cheque, rather it arose following discussion and an agreement between Mr Roulstone and Mr Barakat.

365. In the submissions for the plaintiff it was observed that though a regulator under the LP Act in the position of the Association is entitled to issue a second s 660 Notice in the form of interrogatories, it may only be issued in two circumstances as specified in the plaintiff’s submissions at [141]. It was contended that in this case the Association had no legal power to issue the second s 660 Notice.

366. Be that as it may, I proceed upon the basis that the questions were put and answered. I accept the point made by Mr Coles in his submissions that the questions put in the second s 660 Notice were in the nature of interrogatories. Interrogatories are required to be drawn with some specificity in order to elicit a direct answer to a particular point or fact. The same, in my opinion, can be said of questions in a s 660 Notice. Question 12(a) was framed in terms of the proposition or premise that Mr Roulstone had been asked to draw the cheque.

367. It was acknowledged in the plaintiff’s submissions that Mr Roulstone in cross-examination accepted that the right answer would have been “Mr Li through Helena Li through Mr Barakat had asked for payment of the settlement monies” but that his initial answer as given was what he had in mind at the time that he completed the answers: Plaintiff’s Written Submissions at [173].

368. It was contended by Mr Coles that this was not an example where Mr Roulstone intended to give a false answer or to mislead the Association. It might simply be a misunderstanding of the question which he corrected under cross-examination: Plaintiff’s Written Submissions at [174].

369. Furthermore it was submitted that there were no circumstances that compelled Mr Roulstone to draw the cheque. As such the drawing of the cheque was, as the answer recorded, in fact done by Mr Roulstone of his own volition, that is, by his own decision or at his option: Plaintiff’s Written Submissions at [176].

370. It was also submitted by the Association that the answer that the cheque was drawn “… as a matter of course to complete the settlement” was false: Defendant’s Closing Submissions at [5.4(c)]. The Association relied upon evidence in which Mr Roulstone was unable to identify other cases in which payment had been made before any deeds were executed and that it was not simply “a matter of course” to make a payment prior to settlement being recorded in writing.

371. In response to question 12(a), it was contended for Mr Roulstone that the cheque paid was in fact “as part of the course of settlement”: Plaintiff’s Written Submissions at [177]. It was submitted that this was an absolutely true statement. At that time, on Mr Tassell’s evidence, Mr Xi Li’s proceedings represented the second or almost the second overcharging claim to have been settled and it was submitted that a different course or practice of effecting settlement could have been developed after Mr Xi Li’s proceedings were settled. It was submitted that in these circumstances it could not be said that the payment was not as a matter of course to complete the settlement. It was acknowledged that Mr Roulstone agreed that a “full answer” would be ‘to complete the settlement as soon as possible.” T 93:25-27. However, it was submitted that this did not mean that Mr Roulstone’s answer was incorrect or misleading: Plaintiff’s Written Submissions at [178].

372. In relation to question 12(c) “To whom did you give the cheque?”, the Association’s submission was that this was incomplete and misleading because Mr Roulstone did not simply give the cheque to the receptionist Ms Drurie but placed it in an envelope and marked it for the attention of Mr Xi Li with the expectation that he was coming to collect it. It was submitted that the response was not the entire truth and was liable to mislead the Association as it directed attention away from the communication with Mr Xi Li: Defendant’s Closing Submissions at [5.4(e)].

373. In response it was submitted on behalf of Mr Roulstone:

“182   This answer is completely accurate. The question was not: ‘What did you do with the cheque?’. The Association’s criticism is unfounded.”

Conclusions on Answers to Question 12(a), (b) and (c)

374. In assessing and determining whether the answers provided to the above questions were either false or misleading, and thus in breach of the plaintiff’s duty of candour and frankness, observations should be made, firstly, as to the process involved with the second s 660 Notice and, secondly, the manner in which the questions were framed in terms of determining their focus.

375. As to the first, as earlier observed, the questions were, as I have accepted, in the nature of interrogatories and it was incumbent upon the drafter of the questions to identify with some precision, without being unduly pedantic, the topic or subject matter in question. Questions 11 and 12(a)-(c) were all concerned with the mode or means of effecting payment of the settlement sum of $80,000, that is to say, through the use of a cheque.

376. Hence, question 11 raised the question as to whether Mr Roulstone drew “a cheque” to which he replied in the affirmative.

377. Questions 12(a) and (b) were concerned, respectively, with the identity of persons who had asked Mr Roulstone to draw “the cheque” and the recipient of “the cheque”. Question 12(b) was directed to the purpose of drawing “the cheque”.

378. As to Question 12(a), I accept Mr Barakat’s evidence that the person who had requested urgent payment was, as stated by Mr Barakat, Ms Helena Li. On his evidence Mr Barakat understood that she had been requested by Mr Xi Li to arrange for payment. Accordingly, the answer given failed to record that the request for payment had come about in that way. However, whilst the decision to make payment of the settlement sum of $80,000 was, on the evidence, made upon the basis of an agreement between Mr Roulstone and Mr Barakat, the decision to draw the cheque itself could be said to have been a voluntary act by Mr Roulstone though giving effect to the agreement to do so.

379. The evidence given by Mr Roulstone on question 12(a) is to be found at T 60:40-45; T 61:25-30 to T 62:1-10 and at T 91:15-30.

380. At the end of the day, whilst on one view there can be said to be some truth to the answer that the physical act of drawing the cheque was a voluntary act of Mr Roulstone, the answer given was inadequate to convey the circumstances that lay behind the drawing of the cheque. To that extent the answer was deficient. It is, however, another question as to whether it could be said that the answer given was deliberately false, or deliberately misleading. I have concluded that the evidence is not sufficient, or sufficiently cogent, for such a finding to be made.

381. It is necessary to put question 12(a) in the context of the issues in the proceedings in order to determine the significance or materiality of the answer given to that question. The issue of urgency of payment arose for consideration in the proceedings, firstly, because of its possible significance in supporting the proposition that Mr Roulstone acted urgently in a way to pre-empt any injunctive relief that may have been made by the Court on 1 December 2011 on Mr Firth’s application. Secondly, the relevance otherwise of the issue of urgency was said, in effect, by Mr Roulstone, to relate to the urgency that arose, not in his mind or the minds of any of the former partners of Keddies, but in the mind of Mr Xi Li who rang Helena Li requesting urgent payment.

382. The evidence, as discussed at [350]-[352], in my opinion supports the proposition that it was the latter circumstance, that is, Mr Xi Li’s request that engendered the urgency for payment, and not the former. In those circumstances, the possible significance as to the purpose behind the request made for the cheque is reduced.

383. The statement made by Mr Roulstone in his answer to question 12(a) – that he drew the cheque “as a matter of course to complete the settlement” – is to be evaluated as to the meaning to be given to the phrase “a matter of course”. That expression is defined in the Oxford English Dictionary as meaning “the natural or expected thing”. Accordingly, in one sense the drawing of a cheque to pay the settlement monies was a matter of course in that sense in giving effect to the settlement. On the other hand, payment within a day of the settlement being reached may be said not to fall within the natural or expected process in effecting the settlement. A more fulsome answer would have made reference to the reason for the urgency and the circumstances in which the request for payment came about. However, I do not consider that the failure to advert to and elaborate upon the same could be said to give rise to a deliberate or false or misleading statement by Mr Roulstone in the circumstances to which I have referred above.

384. In relation to the answer to question 12(b), the answer “To complete the settlement” undoubtedly correctly identifies the purpose for which the cheque itself was drawn. I do not consider that the answer to the question, standing alone, could be said to have been a false or misleading statement or willfully so.

385. As to question 12(c) I do not, with respect, consider that there is any substance at all to the submission made on behalf of the Association. I accept, as Mr Coles submitted, that the answer is completely accurate in that it was provided to Ms Drurie, the receptionist at the Redfern office. As Mr Coles observed, the question was not “What did you do with the cheque?”. The point made on behalf of the Association, that Mr Roulstone placed the cheque in an envelope marked for the attention of Mr Xi Li with the expectation that he would collect it, is not in any way, in my opinion to detract from or undermine the truthfulness of the answer given. I consider that the answer can be regarded as a complete answer, given that the Association did not seek by the question to ascertain the purpose or ultimate destination or payee on the cheque.

(b) Questions 12(f)(ii), 12(f)(iii) and 12(f)(iv)

386. In the Defendant’s Closing Submissions at [5.6] it was contended that certain responses given by Mr Roulstone in his statutory declaration in respect of questions 12(f)(ii)-(iv) were false or misleading for reasons set out in that paragraph. Question 12(f)(ii) was in these terms:

“12(f)   at the time you drew the cheque were you aware:

…

(ii)   Of any attendance by Mr Li at the offices of Margiotta and any discussions he had with Mr Husaini on or about 30 November 2011;

A   No.”

387. It is to be noted that question 12(f)(ii) was directed to whether Mr Roulstone was aware (a) at the time he drew the cheque of Mr Xi Li’s “attendance” at Margiotta’s offices and as well (b) “[of] … any discussions he had with Mr Husaini on or about 30 November 2011”.

388. In the submissions for the plaintiff it was noted (respectfully) that question 12(f)(ii) was poorly worded.

389. The Association noted at [5.6(a)] of its Closing Submissions that Mr Roulstone had given evidence to the Court that Mr Husaini told him that Mr Xi Li was with him in his office and wanted to settle the case against Keddies. The submission then refers to other evidence given by Mr Roulstone which it was submitted advanced matters to justify his response.

390. In the submissions for Mr Roulstone it was argued that the answer “No” was said to be correct. In this respect it was observed that in cross-examination Mr Roulstone at T 94:15-20, gave evidence (a) that he did not see Mr Xi Li with Mr Husaini; (b) that he did not see Mr Xi Li attend the offices of Margiotta; (c) that he accepted Mr Husaini and Mr Xi Li were together to provide instructions; and (d) that he did not know what discussions took place between Mr Husaini and Mr Xi Li.

391. I have earlier adverted to the need for questions in the nature of interrogatories to be drafted with some precision. That, as I have indicated, was necessary with the s 660 Notices. Question 12(f)(ii) sought an answer as to Mr Roulstone’s knowledge or awareness, not only of any attendance by Mr Xi Li at the offices of Margiotta, but whether he was aware in addition, of “any discussions” that Mr Xi Li had had with Mr Husaini on the date in question. Mr Roulstone, of course, was not party to, or in attendance at, any discussions that took place on that occasion between Mr Xi Li and Mr Husaini. There was no evidence that Mr Roulstone had been told as to what precisely had been discussed between Mr Husaini and his client. In those circumstances I do not consider it can be said that the answer given to question 12(f)(ii) could be said to be false or misleading. The fact, unchallenged, is that he could not and was not aware of the “discussions” between Mr Xi Li and his solicitor on or about 30 November 2011.

392. Question 12(f)(iii) asked the question of whether, at the time Mr Roulstone drew the cheque, he was aware:

“(iii)   of any authority obtained by Mr Husaini on or about 30 November 2011 from Mr Li terminating Mr Li’s retainer of Firths and appointing Margiotta as Mr Li’s solicitor …. “

393. Mr Roulstone’s answer to that question was “No”.

394. The Association submitted that this answer was false and misleading because on his own evidence Mr Roulstone was aware from his discussions with Mr Tassell that Mr Husaini had filed a Notice of Change of Solicitor. Mr Roulstone had referred in evidence to a telephone conversation he had with Mr Tassell during the day of 30 November 2011, where it was said that Margiotta’s had come onto the record and a Notice of Change of Solicitor had been filed.

395. It was observed that Mr Roulstone’s justification for his response to the question was that he was told about the Notice of Change of Solicitor but had not seen the authority, nor any documentation from Mr Tassell. However, it was noted that he reticently accepted that he was aware that there was “obviously an authority”: T 95:36-38.

396. In relation to this question, the submission for Mr Roulstone was, again, that the question was “… a poorly worded question”: Plaintiff’s Written Submissions at [189]. Further, the submission for Mr Roulstone was:

“191   Although Mr Roulstone was aware that Mr Husaini had filed a Notice of Change of Solicitor, there is no possible way that Mr Roulstone could know of any authority terminating the retainer of Firths. The answer is correct.

191   The question did not ask Mr Roulstone whether he was aware of the Notice of Change of Solicitor.”

397. The answer to question 12(f)(iii), may be considered against the background of information earlier provided by Mr Roulstone to the Bar Association in his letter of 18 July 2014: Exhibit 2 at Tab 47, p 106-7. At page 107, Mr Roulstone disclosed, inter alia, that he knew from his telephone discussion with Mr Tassell that Margiotta’s had come onto the record and that a Notice of Change of Solicitor had been filed. His evidence on the matter was at T 55:12-13. That information was capable of conveying tacitly or impliedly that Mr Roulstone could have inferred Firth’s retainer had been terminated. His answer to question 12(f)(iii) accordingly should be considered in light of the earlier information provided as to his knowledge of the Notice of Change of Solicitor having been filed. However, as the submissions for Mr Roulstone observed, that was not the specific question asked.

397. Whilst an answer to the question could have included reference to the fact that termination of Mr Xi Li’s retainer of Firths was a matter that could have been implied from the filing of the Notice of Change of Solicitor, the need to do so should be evaluated in light of Mr Roulstone’s disclosure to the Association of the fact that he was aware of that having been done. The question, however, being framed in terms of Mr Roulstone’s knowledge or awareness that a solicitor had obtained an authority from his client, was not a matter upon which a third person such as Mr Roulstone would have actual knowledge, as distinct from implied knowledge, unless told or otherwise expressly informed that that had taken place.

398. In the circumstances, I do not consider that the question as framed, and the answer given, provides a basis for a finding that the answer was false or deliberately misleading.

399. Question 12(f)(iv) sought an answer to the question as to whether at the time the cheque was drawn Mr Roulstone knew:

“(iv)   of any communication by Mr Husaini to Mr Li on or about 30 November 2011 that you and your former partners would pay Mr Li $80,000 to resolve the proceedings that Mr Li had brought against you and your partners.”

401. Mr Roulstone’s answer to that question was “No.”

402. The Association submitted that the answer was false and misleading because on his own evidence Mr Roulstone was aware from his discussions with Mr Tassell that an offer of $80,000 had been made and accepted and the matter had been settled. The submission was that this would obviously mean that Mr Roulstone was aware that Mr Husaini had communicated to Mr Xi Li that an amount of $80,000 would be paid to settle the proceedings. It was submitted that Mr Roulstone’s justifications for his responses were not credible and that he maintained he was not aware of the matters because he was relying upon what Mr Tassell had told him.

403. In response it was submitted on behalf of Mr Roulstone that the obvious answer to the question was “No” and that Mr Roulstone had accordingly answered it in that way: Plaintiff’s Written Submissions at [194].

404. It was further submitted that Mr Roulstone could not have been aware of any communication between the solicitor, Mr Husaini and his client Mr Xi Li. Further, it was observed that someone other than Mr Husaini could have informed Mr Xi Li.

405. It was submitted that the answer given by Mr Roulstone was correct and was not misleading. It was again submitted that the Association’s question was “poor”: Plaintiff’s Written Submissions at [196].

406. Again, this question was framed in terms of a communication directly between a solicitor, Mr Husaini, and his client Mr Xi Li, on or about 30 November 2011. A question framed in that way seeks, in effect, to ascertain whether a third person, Mr Roulstone, was privy to or was told of a particular “communication” having taken place between the solicitor and client.

407. The matter put forward by the Association, namely that Mr Roulstone had information that was passed on through Mr Tassell that an offer of $80,000 had been made and accepted and that the matter had settled, could base or support an inference that some form of communication or assent had been given by Mr Xi Li to Mr Husaini. However, that was not the way the question was expressed. The question rather sought to elicit direct or actual knowledge in Mr Roulstone as to any communication of the fact. I consider that the submission put on behalf of Mr Roulstone is a sound one. There is no basis for a finding that the answer provided to question 12(f)(iv) was either false or deliberately misleading.

408. In relation to the Association’s submissions as to allegedly false or misleading statements made in answer to the second s 660 Notice, it is necessary to bring into account the obligation Mr Roulstone had to disclose matters within his knowledge relevant to any answer to questions raised in the Notice. It was acknowledged in the written submissions for the plaintiff that the obligation on Mr Roulstone was to disclose anything which he honestly believed and that should not be left out and it was contended that he had done that. It was accepted that the duty of candour did not permit of deliberate or reckless misrepresentation pretending to be a disclosure: Re OG, A Lawyer (2007) 18 VR 164 at [123]. In the assessment of the submissions made as to alleged false and misleading answers and as to Mr Roulstone’s truthfulness it is, in my opinion, relevant to bring into account the evidence to which I have earlier referred at [347]–[348] namely, the evidence that establishes that Mr Roulstone acted properly on 30 November 2011 to ensure that he did not engage in discussions as to the settlement of Mr Xi Li’s claim by reason of the prohibition under the Order and the emphatic direction he gave in that respect to Mr Husaini that he would need to deal with Mr Tassell and not him.

409. I also accept, as was submitted on behalf of the plaintiff, that it is necessary to firstly identify the alleged non-disclosure by Mr Roulstone and then to determine whether it was a matter that was material to the Association and to the Court in the present proceedings: Plaintiff’s Written Submissions at [203].

410. I accept the submission that each case depends on its own circumstances but that a high degree of culpability arises for intentional misconduct: Plaintiff’s Submissions at [204].

411. Upon a close consideration of the evidence and the submissions made I am not satisfied that it has been established to the requisite standard that Mr Roulstone’s answers in his statutory declaration responding to the Second 660 Notice, were deliberately false or deliberately misleading for the reasons set out above.

Conclusions

1. The evidence does not establish that Mr Roulstone gave deliberately false or misleading evidence to the Association or to the Court.

2. In particular, the information provided by Mr Roulstone to the Association, including by way of answers to the second s 660 Notice issued to him, has not been established as having been false or intentionally misleading in any material respect.

3. There is no evidence contradicting Mr Roulstone’s evidence to the effect that he did not have any communications with Mr Husaini or Mr Xi Li or anyone else on his behalf between 12 October 2011 and the morning of 30 November 2011 when Mr Husaini phoned Mr Roulstone.

4. There is no evidence capable of establishing, or from which an inference can be drawn adverse to Mr Roulstone, that when Mr Xi Li attended on Mr Husaini on the morning of 30 November 2011, Mr Roulstone or either of his former partners, had indicated they were prepared to pay or offered to pay him $80,000 plus costs to settle his claim.

5. The communications between Mr Roulstone and Mr Husaini in the telephone conversation initiated by Mr Husaini on the morning of 30 November 2011 did not constitute a breach of the Order made by this Court on 24 November 2011.

6. The cheque and addressed envelope enclosing the cheque for $80,000 in favour of Mr Xi Li did not constitute a communication in breach of the Undertaking or Order.

412. On the basis of the findings and conclusions set out above I am satisfied that the plaintiff has discharged the onus of proof with respect to the statutory requirements for the grant of a practising certificate under s 48(3) of the LP Act, namely:

1. That he was and is eligible to apply for the grant when the application was made, and

2. That he was and is a fit and proper person to hold a practising certificate.

Proposed Orders

413. I propose to make the following Orders:

1. Order the time for the appeal by the plaintiff pursuant to s 108 of the Legal Profession Act 2004 is extended to the date of the filing of the Summons filed in these proceedings, namely, 9 December 2014.

2. Appeal allowed.

3. A declaration that the deemed refusal of the plaintiff’s application to the Bar Association of New South Wales for a practising certificate made on 24 June 2014 for the period from 1 July 2014 to 30 June 2015 be set aside.

4. Order that the defendant, the New South Wales Bar Association, grant to the plaintiff a local practising certificate pursuant to s 48 of the Legal Profession Act 2004 for the year ending 30 June 2016.

414. I will hear the parties on the form of orders proposed and on the question of costs of the proceedings.

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Decision last updated: 25 November 2015