Victorian Legal Services Commissioner v McDonald
[2019] VSCA 18
•13 February 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0020
| VICTORIAN LEGAL SERVICES COMMISSIONER | Applicant |
| v | |
| ALAN JAMES McDONALD | Respondent |
---
| JUDGES: | TATE, KAYE and EMERTON JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 13 November 2018 |
| DATE OF JUDGMENT: | 13 February 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 18 |
| JUDGMENT APPEALED FROM: | [2017] VSC 89 (Bell J) |
---
PROFESSIONAL PRACTICE – Legal practitioners – Unsatisfactory professional conduct – Letters between solicitors alleging one solicitor was ‘fundamentally dishonest’ and telling lies – Professional Conduct and Practice Rules 2005 r 21 – Rule requiring practitioners, in all of their dealings with other practitioners, to take all reasonable care to maintain integrity and reputation of legal profession by ensuring courteous communications and avoiding offensive or provocative language or conduct – Interpretation of r 21 according to its plain meaning – Whether a practitioner’s comments are made in the legitimate pursuit of a client’s interests and on a reasonable basis are both relevant and inter-related considerations – Clyne v NSW Bar Association (1960) 104 CLR 186; Lander v Council of the Law Society of the ACT (2009) 168 ACTR 32, discussed; Legal Profession Act 2004 s 4.4.4(a), Charter of Human Rights and Responsibilities s 15(2).
ADMINISTRATIVE LAW – Appeal from decision of Victorian Civil and Administrative Tribunal – Question of law – Whether judge erred in finding that senior member made an error of law in considering questions of legitimate interest and reasonable basis separately – Whether judge’s finding on question of legitimate interest contrary to finding below and outside the scope of determination of a question of law – Osland v Secretary to the Department of Justice [No 2] (2010) 241 CLR 320 applied – Victorian Civil and Administrative Tribunal Act 1998 s 148.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr D Collins QC with Mr T Scotter | Mr L Priday Solicitor to the Victorian Legal Services Commissioner |
| For the Respondent | Mr J Burnside QC with Mr M Albert | McDonald Murholme Solicitors |
TATE JA
KAYE JA
EMERTON JA:
TABLE OF CONTENTS
| Introduction and summary ........................................................................................ | 1 |
| The letters sent by McDonald .................................................................................... | 4 |
| The two charges of unsatisfactory professional conduct ...................................... | 10 |
| The Lander test ............................................................................................................ | 12 |
| The first VCAT decision .............................................................................................. | 23 |
| The appeal to Zammit J .............................................................................................. | 27 |
| The second VCAT decision ......................................................................................... | 33 |
| The appeal to Bell J ..................................................................................................... | 40 |
| Grounds of appeal and notice of contention ........................................................... | 51 |
| Did the judge err in finding that VCAT erred by considering whether the accusations were made in the legitimate pursuit of the client’s interests separately from whether the comments had a reasonable basis? — Ground 1 .. | 53 |
| Alternatively, did the judge err in finding that VCAT erred in finding the comments were not made in the legitimate pursuit of the client’s interests separately from whether he had a reasonable basis? — Ground 2 ...................... | 59 |
| Did the judge err in setting aside VCAT’s finding of fact that the comments were not made in legitimate pursuit of the client’s interests? — Ground 3................... | 59 |
| Alternatively to grounds 1–3, did the judge err in finding that there was a reasonable basis for the comments? — Ground 4 ................................................... | 61 |
| Could Bell J’s judgment be affirmed on the basis that VCAT erred by failing to consider if the accusations were ‘not extraneous’? — Notice of Contention ...... | 62 |
| Conclusion .................................................................................................................... | 64 |
Introduction and summary
This proceeding raises the issue of the extent to which a legal practitioner may permissibly engage in communications which are discourteous and that involve offensive or provocative language when dealing with another legal practitioner. Mr Alan McDonald (‘McDonald’) wrote a letter in which he described an opposing legal practitioner as being ‘fundamentally dishonest’ and ‘telling lies’. He then repeated the statement that his opponent was ‘dishonest’ in a ‘deliberate and calculated’ manner in a second letter.
The hostility arose because of a conflict between the practitioners about whether one had told the other that there was no scope for negotiations or potential offers of settlement in the context of a redundancy-related employment dispute. The practitioners have conflicting understandings of a single telephone conversation which ultimately gave rise to heated correspondence between them.
Following a complaint to the Victorian Legal Services Commissioner (‘the VLSC’) about the two letters McDonald had sent, the VLSC brought two charges of unsatisfactory professional conduct against McDonald based upon a breach of r 21[1] of the Professional Conduct and Practice Rules 2005 made under the Legal Profession Act 2004 (‘the Act’).[2] The Victorian Civil and Administrative Tribunal (‘VCAT’) found McDonald guilty of both charges (‘the first VCAT decision’).[3]
[1]Rule 21 is set out at [31] below.
[2]The Act was repealed on 1 July 2015 and replaced by the Legal Profession Uniform Law (Victoria): Legal Profession Uniform Law Application Act 2014 s 4.
[3]Legal Services Commissioner v McDonald [2013] VCAT 1943.
Derham AsJ granted leave to McDonald to appeal from the first VCAT decision with respect to two questions of law relating to the correct test to be applied.[4] The appeal was heard by Zammit J who held that VCAT had not applied the correct test which she identified from Lander v Council of the Law Society of the Australian Capital Territory (‘Lander’).[5] She set aside the first VCAT decision and remitted the matter to VCAT (‘Zammit J reasons’).[6] Following a second hearing at VCAT, McDonald was again found guilty of the two charges (‘the second VCAT decision’).[7] McDonald applied again for leave to appeal to the Supreme Court. Bell J granted leave to appeal and allowed the appeal from the second VCAT decision[8] (‘Bell J reasons’) relying, in particular, on the right to freedom of expression under s 15(2) of the Charter of Human Rights and Responsibilities (‘the Charter’).[9] He dismissed the two charges of unsatisfactory professional conduct. The VLSC now seeks leave to appeal from, and if leave is granted to appeal against, Bell J’s decision.
[4]McDonald v Legal Services Commissioner [2014] VSC 34.
[5](2009) 168 ACTR 32.
[6]McDonald v Legal Services Commissioner [2015] VSC 237.
[7]Victorian Legal Services Commissioner v McDonald [2016] VCAT 21.
[8]McDonald v Legal Services Commissioner [No 2] [2017] VSC 89.
[9]Section 15(2) is set out at [110] below.
For the reasons set out below, we would grant leave to appeal and allow the appeal.[10]
[10]For convenience, in what follows, we refer simply to ‘the appeal’.
In summary, in our view, Bell J was correct in recognising that:
(1) Rule 21 is to be interpreted according to its plain meaning;
(2) The issues of whether a practitioner’s comments are made in the legitimate pursuit of a client’s interests and on a reasonable basis are both relevant considerations to the application of r 21; neither issue is determinative and neither issue is a substitute for the application of the ordinary language of the rule;
(3) Lander supports a contextual approach that recognises the inter-relationship between a number of factors (and not simply those identified in (2));
(4) The purpose of r 21 is the preservation of the integrity and reputation of the profession thereby supporting public confidence in the legal system;
(5) The duty a practitioner has to be robust in defending a client’s interests, and the freedom of expression protected by the Charter, support an interpretation of r 21 that imposes a limit on freedom of expression only to the extent necessary to achieve its purpose; thus the rule only prohibits discourteous, offensive or insulting language or conduct that represents a failure to take reasonable care of the reputation or integrity of the legal profession.
We consider, however, that Bell J erred in law in failing to recognise that, in the second VCAT decision, the senior member in substance applied the inter-related test, consistently with Lander, to arrive at the decision that the two charges were proved. In our view, that decision should be affirmed.
We also consider that Bell J, in making findings of fact that conflicted with those made by VCAT, went beyond the limited scope of the jurisdiction under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘the VCAT Act’).
The letters sent by McDonald
The two letters written by McDonald were sent by him during the course of negotiations in relation to a dispute between MS Australia and one of its former employees. McDonald, who is an Australian lawyer and is the only principal of a small law firm, McDonald Murholme, acted for the former MS Australia employee, who had been made redundant and was seeking a redundancy payment. Lander & Rogers acted for the employer. Mr David Catanese (‘Catanese’), an employee solicitor with Lander & Rogers, had the carriage of the matter on behalf of MS Australia under the supervision of a partner, Daniel Proietto (‘Proietto’).
On 19 August 2011 McDonald sent a letter to MS Australia on a ‘without prejudice save as to costs’ basis outlining his instructions about the circumstances of his client’s redundancy and his client’s response to the termination payment made by MS Australia that was alleged to be about $20,000 lower than that which had been initially estimated. The letter addressed a number of additional matters, including minimum entitlements under the Fair Work Act 2009 (Cth). It also alleged that the employer had breached that Act by failing to offer suitable alternative employment. There was a further allegation that the employer had engaged in misleading and deceptive conduct about whether his client’s duties had been dispersed amongst other employees. McDonald indicated that his client would execute a deed of release and not issue legal proceedings if he were to be paid an amount of $25,000 as a bona fide redundancy in addition to payments already made. This offer was expressed to be a Calderbank[11] offer and to be open until 5:00 pm on 23 August 2011.
[11]Calderbank v Calderbank [1975] 3 All ER 333.
On 24 August 2011 Lander & Rogers sent a letter to McDonald Murholme, also on a ‘without prejudice save as to costs’ basis, bearing the names of both Catanese and Proietto. That letter sought to address the ‘various grievances’ raised in McDonald’s letter relating to the notice of termination and amount of severance payment, redeployment and the Fair Work Act, the allegations of misleading and deceptive conduct, estimates of severance payments, and taxation of wages paid. The letter concluded:
Based on the matters discussed above, any proceedings commenced by your client against MSL in respect of the termination of his employment would be premature, without any prospects of success and, potentially, vexatious. This letter may be produced on any future question of costs.
On the same day, McDonald telephoned Lander & Rogers, and being unable to speak to Proietto, he spoke to Catanese (‘the 24 August telephone conversation’). The two practitioners had never spoken before. There is a dispute about what was said during the 24 August telephone conversation, and in particular whether or not future negotiations remained possible. In the first VCAT decision, it was noted that Catanese attached to his witness statement a contemporaneous file note. The file note was started during the conversation and completed after it. It set out Catanese’s version of what was said. The senior member described it as follows:
Mr Catanese’s version of the conversation was that Mr McDonald had commenced by saying that he was calling to confirm obligations under the Civil Procedure Act 2010, or words to that effect. He had said to Mr McDonald that he had not put a genuine position on behalf of his client; there was no particularisation of $25,000.00 damages sought. Mr Catanese said that he told Mr McDonald he was not saying there was nothing to discuss, and later that he stressed he was not saying there was no potential for resolution.[12]
[12]The first VCAT decision [13] (emphasis added).
The senior member also noted:
The note included the statements by Mr Catanese ‘no particularisation of $25K sought’ and ‘no quantification of damage suffered or payments sought’.[13]
[13]Ibid [40].
As noted by the senior member, McDonald’s understanding of the 24 August telephone conversation, which is in conflict with that of Catanese’s, is reflected in the letter McDonald sent to Lander & Rogers on the same day:
We refer to our discussions with Mr Catanese as Mr Proietto was not available at the time the telephone call was made.
We point out that we have not received any open response to our correspondence. It was the purpose of Mr McDonald’s telephone call today to see whether or not there was any scope for negotiation of a settlement in accordance with the Civil Procedure Act 2010. Mr Catanese confirmed that there was no scope for discussion nor any proposal for a settlement.
In those circumstances it will be necessary for our client to issue legal proceedings. Although this was raised by Mr McDonald, Mr Catanese confirmed that there would be no offers of settlement.
We will take instructions from our client and expect to commence legal proceedings as soon as practicable.[14]
[14]Emphasis added.
McDonald gave evidence that he dictated this letter as soon as he finished the telephone conversation with Catanese.[15]
[15]The first VCAT decision [39]. The transcript of his evidence at VCAT shows McDonald said: ‘[I] finished the conversation and I immediately walked to the other side of my small office, in fact in the back corner, and dictated the letter which was the contents of the conversation, which is in evidence … I dictated immediately and I sent it soon after, as soon as the person I dictated it to could do that.’
On 25 August 2011 Lander & Rogers sent a letter to McDonald Murholme in the following terms:
We refer to the above matter, your telephone conversation with David Catanese on 24 August 2011 (telephone conversation) and your letter to us dated 24 August 2011 (your letter).
We are very concerned that your letter misrepresents the matters discussed during the telephone conversation.
In the telephone conversation, Mr Catanese stated, and reiterated, that we do not consider that there is no potential to resolve this matter prior to the commencement of proceedings.
You state in your letter that Mr Catanese ‘confirmed that there was no scope for discussion nor any proposal for a settlement’ and ‘confirmed that there would be no offers of settlement’. Mr Catanese did not confirm any of these things.
We suggest that you withdraw your letter as, if produced at a later date, it is likely to mislead a court or tribunal.
This letter may be produced on any future question of costs or any matter arising under the Civil Procedure Act 2010 (Vic) or any other similar legislation.[16]
[16]Emphasis added.
The three practitioners — McDonald, Catanese and Proietto — held a further telephone conversation on 26 August 2011 to discuss the claim. Catanese kept a file note of this telephone conversation, which he attached to his witness statement relied on for the first VCAT hearing. The senior member described the matters discussed in that telephone conversation in the following terms:
During the conversation, each of Mr McDonald and Mr Proietto put to the other their different versions of the telephone conversation on 24 August 2011. They then proceeded to discuss the claim. Each of Mr Proietto and Mr McDonald made some statements generally in support of their own clients’ positions. Mr Proietto said the $25,000 proposal was extreme, given that it amounted to a year’s pay being sought from a charitable organisation, that others had also been made redundant and that he did not know what the claim was. Mr McDonald said MS Australia had to realise it was not above the law, that there were two or three claims that could be brought and that he wanted to receive a counter offer. The call ended with Mr Proietto saying he will seek instructions on the offer made by Mr McDonald and revert.[17]
[17]The first VCAT decision [16].
Lander & Rogers then sent a letter dated 29 August 2011 to McDonald Murholme on a ‘without prejudice save as to costs’ basis conveying an offer of a gross amount of $500 in full and final settlement subject to execution of a deed of release. The offer was expressed to be open until 4:00 pm on 1 September 2011.
McDonald’s response was contained in a letter he wrote dated 30 August 2011 (‘McDonald’s 30 August letter’), and the accusations he made in the second paragraph of the letter are the basis for the first charge of unsatisfactory professional conduct (‘Charge 1’). The letter said:
We refer to the letters of 25 August 2011 and 29 August 2011.
It is unpleasant to describe Mr Catanese as fundamentally dishonest, and it is a slur on Mr Catanese’s career as a lawyer that he starts off at an early stage of his career telling lies. It is fundamental to the smooth operation of the legal system that people act with integrity and honesty and Mr Catanese should be counselled to do this.
Your letter of 29 August 2011 contains an offer of $500 gross which is not a genuine offer of settlement and does not meet the requirements of the Civil Procedure Act. If it were produced for the question of costs as you indicate, it would demonstrate that there is a lack of good faith being displayed in the correspondence.
Should you wish to engage in meaningful negotiations please let us have a more sensible offer within 24 hours.[18]
[18]Emphasis added.
On the same day Lander & Rogers replied. The response bears the names of Proietto and Mr Derek Humphrey-Smith (‘Humphrey-Smith’), the managing partner of the Work Relations and Safety Group of Lander & Rogers:
Your letter is highly unprofessional, defamatory and outrageous.
There is absolutely no basis for your allegation that Mr Catanese is ‘fundamentally dishonest’ or that he has told ‘lies’.
Unless you unconditionally withdraw your letter by 12.00 noon today, your letter will be referred to the Legal Services Commissioner without further notice.
We look forward to your immediate response.
McDonald and Humphrey-Smith spoke by telephone on 30 August 2011. Humphrey-Smith said the accusations made by McDonald in McDonald’s 30 August letter were ‘defamatory and entirely unacceptable’[19] and he urged McDonald to withdraw the letter, failing which the matter would be referred to the VLSC.
[19]The first VCAT decision [21].
Lander & Rogers sent a letter to McDonald Murholme dated 2 September 2011, again bearing the names of Proietto and Humphrey-Smith, noting that there had been no correspondence from McDonald since the telephone conversation on 30 August. The letter attached a draft complaint to the VLSC prepared by Catanese. The letter stated that Catanese proposed filing the complaint ‘if we do not receive from you correspondence unconditionally withdrawing your letter dated 30 August 2011 by 12.00 noon on Monday, 5 September 2011.’
McDonald’s response was to send a letter dated 2 September 2011 (‘McDonald’s 2 September letter’) to Lander & Rogers, directed to Humphrey-Smith, reiterating his accusations. The accusations in this letter, which repeat and expand upon the accusations made in the second paragraph of McDonald’s 30 August letter, form the basis of the second charge of unsatisfactory professional conduct (‘Charge 2’). McDonald’s 2 September letter stated:
I refer to your earlier letter today. As indicated in my telephone conversation with you on Tuesday I stand rigidly by all the statements that I actually made about Mr Catanese. I have not bothered to read the document entitled Draft Complaint or any of the attachments which I presume is a lot of self-serving nonsense following your unsuccessful and misguided attempt to extricate Mr Catanese from the problem he had created for himself. I welcome any independent inquiry into this matter and will not be bullied or blackmailed by you or anyone else and that has been my position throughout my career.
Indeed I will repeat the statement that Mr Catanese was dishonest. The dishonesty was deliberate and calculated:
1. He lied about the contents of the telephone conversation.
2. He tried to misrepresent the contents of the telephone conversation to his employer in his later correspondence with this firm because he knew full well that he had done the wrong thing by refusing to participate in genuine negotiations when it would have been appropriate to do so.
3. He attempted to malign me in his discussions with you and others and apparently continues to do so. Apparently this is an attempt to prevent action being taken by your firm against him which would otherwise be necessary. According to you the matter would need to be dealt with by the partners of the firm given the allegations which I made against him in my letter of 30 August 2011.
4. I have not demanded that your firm take disciplinary proceedings against Mr Catanese because that is a matter for you as his employer but I would be very disappointed if you attempted to support his dishonesty and implement [sic] yourself in his conduct.[20]
[20]Emphasis added. McDonald gave evidence that the word he intended to use was ‘implicate’: the first VCAT decision [23], n 2.
On 5 September 2011 Lander & Rogers sent a letter signed by Humphrey-Smith to the VLSC enclosing Catenese’s complaint against McDonald.
Ultimately, the claim by McDonald’s client against MS Australia was settled for $7,500.[21]
[21]The first VCAT decision [37].
The two charges of unsatisfactory professional conduct
The VLSC brought two charges of unsatisfactory professional conduct against McDonald in the following terms:
Charge 1
Unsatisfactory professional conduct within the meaning of s 4.4.4(a) of the Act, in that by sending the 30 August letter, you contravened Rule 21 of the Professional Conduct and Practice Rules 2005 by failing to take all reasonable care to maintain the integrity and reputation of the legal profession by failing to ensure that [your] communications with other practitioners were courteous and/or by avoiding offensive or provocative language or conduct.
Charge 2
Unsatisfactory professional conduct within the meaning of s 4.4.4(a) of the Act, in that by sending the 2 September letter, you contravened Rule 21 of the Professional Conduct and Practice Rules 2005 by failing to take all reasonable care to maintain the integrity and reputation of the legal profession by failing to ensure that [your] communications with other practitioners were courteous and/or by avoiding offensive or provocative language or conduct.[22]
[22]Ibid [6].
Section 4.4.4(a) of the Act provided:
4.4.4 Conduct capable of constituting unsatisfactory professional conduct or professional misconduct
Without limiting section 4.4.2 or 4.4.3, the following conduct is capable of constituting unsatisfactory professional conduct or professional misconduct—
(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules; …
Section 4.4.2 relevantly defined ‘unsatisfactory professional conduct’ as follows:
4.4.2 Unsatisfactory professional conduct
For the purposes of this Act —
unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
The legal profession rules applicable in this case were the Professional Conduct and Practice Rules 2005 published by the Law Institute of Victoria pursuant to s 72 of the Legal Practice Act 1996 (‘the 1996 Act’). Although the 1996 Act was repealed and replaced by the Act (that is, the Legal Profession Act 2004) these rules continued in operation pursuant to transitional provisions.[23] Section 72 of the 1996 Act provided:
[23]The relevant transitional provisions are in sch 2 cl 2.5(2) of the Act.
72. Practice rules of RPAs
(1) An RPA must have—
(a) rules for the engaging in of legal practice by its regulated practitioners; …
(2) The rules must include—
(a) rules for the professional conduct of regulated practitioners that are consistent with the general principles stated in section 64; …
The 1996 Act set out, in pt 3 div 1, the principles of legal practice, including the general principles of professional conduct, which relevantly provided:
64. General principles of professional conduct
The general principles of professional conduct, to be reflected in the practice rules, are that a legal practitioner or firm, in the course of engaging in legal practice, should—
…
(h) act with honesty, fairness and courtesy in all dealings with other practitioners and firms in a manner conducive to advancing the public interest; and
(i) conduct all dealings with other members of the community and the affairs of clients that affect the interests of others with honesty, fairness and courtesy and in a manner conducive to advancing the public interest.
Rule 21 of the Professional Conduct and Practice Rules appeared under the heading ‘Relations with other practitioners’ and provided:
21. Communications
A practitioner, in all of the practitioner’s dealings with other practitioners, must take all reasonable care to maintain the integrity and reputation of the legal profession by ensuring that the practitioner’s communications are courteous and that the practitioner avoids offensive or provocative language or conduct.[24]
[24]Law Institute of Victoria Ltd, Professional Conduct and Practice Rules 2005 (reprinted with amendments No 1/2005 commencing 30 September 2005) 32.
The construction of r 21 lies at the heart of this proceeding. It is immediately apparent that r 21 uses plain language that is general in its application; that is, it prescribes a rule to govern ‘all of the practitioner’s dealings with other practitioners’. Moreover, it does not itself distinguish between dealings between practitioners that are intended to advance their clients’ interests and those that are extraneous to that pursuit; nor does it refer to the issue of whether a practitioner has a reasonable basis for the conduct. Those factors, while relevant, are not a substitute for the ordinary language of r 21. This is an issue to which we return.
Immediately under the heading ‘Relations with other practitioners’ and before the relevant rules,[25] the following statement of general principle appeared:
[25]Rules 21 (Communications), 22 (Undertakings), 23 (Taking over a Matter from Another Practitioner), 24 (Transfer of a Practitioner’s Practice) and 25 (Communicating with Another Practitioner’s Client).
In the introduction to the Professional Conduct and Practice Rules it was noted that the rules were divided into eight categories and that:
Each of the last five categories is preceded by a statement of general principle, which is not intended to constitute by itself a rule, but is intended to describe the underlying principles and objectives of the rules which follow.[26]
[26]Law Institute of Victoria Ltd, Professional Conduct and Practice Rules 2005 (reprinted with amendments No 1/2005 commencing 30 September 2005) 1.
Rule 21 appeared in the sixth category in the list.
The Lander test
In defending his conduct, McDonald has consistently relied upon a decision of the Full Court of the ACT in Lander.[27]The Full Court reached its decision after examining three earlier authorities concerned with impugned conduct of legal practitioners: Kennedy v The Council of the Incorporated Law Institute of New South Wales (‘Kennedy’),[28] Clyne v New South Wales Bar Association (‘Clyne’),[29] and Law Society of New South Wales re Constantine Karageorge (‘Karageorge’).[30]
[27]Higgins CJ, Gray and Refshauge JJ.
[28](1940) 13 ALJ 563.
[29](1960) 104 CLR 186.
[30]Reports of Solicitors’ Statutory Committee (NSW) 15 July 1987.
Mr Kennedy (‘Kennedy’) was a solicitor representing the plaintiff in a claim for compensation against the Commissioner for Railways. The plaintiff’s father had died after falling from the open door of a train carriage. An issue at the trial was whether the deceased had been thrown through the open door by a jolt of the train, or had lost his grip or balance while leaning out to vomit. On the evening of the day on which his client’s case closed, Kennedy visited one of the defendant’s witnesses at her home and attempted to influence her to change her evidence to say the deceased had been jolted from the train. It was noted that he
stood with his foot in the doorway and though he was at first courteous and at no time adopted a bullying tone, he was importunate in pressing her with the view, which she disputed, that the deceased had been thrown out of the railway carriage door and had not fallen out, and in his request for a written statement.[31]
[31]Kennedy (1940) 13 ALJ 563, 563.
The Council of the Incorporated Law Institute of New South Wales determined that Kennedy’s name be removed from the roll of solicitors on the ground of misconduct. The High Court unanimously dismissed Kennedy’s appeal. Rich J said that the solicitor’s conduct was one of engaging ‘in a course of aggressive interference with the ordinary course of calling evidence’ and ‘clearly strove to influence a witness in what she would say and did so in an improper manner’.[32] Kennedy showed ‘a definite unfitness to be trusted to discharge the duties of a solicitor’ which amounted to professional misconduct and justified the solicitor’s removal from the roll of solicitors.[33] He said:
[A] charge of misconduct as relating to a solicitor need not fall within any legal definition of wrong doing. It need not amount to an offence under the law. It was enough that it amounted to grave impropriety affecting his professional character and was indicative of a failure either to understand or to practise the precepts of honesty or fair dealing in relation to the courts, his clients or the public. The particular transaction the subject of the charge must be judged as a whole and the conclusion whether it betokened unfitness to be held out by the court as a member of a profession in whom confidence could be placed, or on the other hand, although a lapse from propriety, was not inconsistent with general professional fitness and habitual adherence to moral standards, was to be reached by a general survey of the whole transaction.[34]
[32]Ibid 564.
[33]Ibid.
[34]Ibid 563–4.
Dixon J observed that Kennedy was so concerned with obtaining a version of events that favoured his client’s case, he ‘was careless whether it was true or false and whether [the witness] believed it or not.’[35] The conduct was a ‘bold attempt by irregular means to interfere with that part of the course of justice which affected the ascertainment of facts by the testimony of witnesses’.[36] This amounted to an attempt to pervert or obstruct the course of justice and was professional misconduct calling for the exercise of disciplinary powers. McTiernan J observed:
a solicitor for a party in an action was not at liberty to employ whatever tactics he thought might contribute to his client’s success. A solicitor, like anybody else, was liable to be prosecuted if with the object of winning the case he did anything which was a criminal offence. As a solicitor he had an additional and particular responsibility. His professional status, which he derived from being accredited by the court as a fit and proper person to practise, laid upon him the strict obligation not to interfere or attempt to interfere with the course of justice under any pretext. If he violated that duty he was guilty of professional misconduct.[37]
[35]Ibid 564.
[36]Ibid.
[37]Ibid.
He also observed that Kennedy’s ‘anxiety to win the action for his client was more powerful than his attachment to the standards which a solicitor should observe’.[38]
[38]Ibid.
Clyne is also a case of professional misconduct. At issue was the identification of the limits of permissible professional behaviour in the pursuit of a client’s interest, and the relevance of a legal practitioner’s immunity from defamation for comments made in court. The events in Clyne took place in 1959 at a time when, in certain circumstances, providing financial assistance to support litigation in exchange for a purported assignment of the cause of action, a form of ‘unlawful maintenance’, was historically a crime at common law and a civil wrong. Peter Clyne (‘Clyne’), a barrister, advised his client to institute a prosecution against a solicitor acting for a woman who was a party to certain civil proceedings involving that client, including divorce proceedings, as a means to intimidate that solicitor into ceasing to act for the woman. The client laid four informations against the solicitor for the common law misdemeanour of maintenance. In his opening address before the magistrate, Clyne made a savage public attack on the character of the solicitor in extravagant terms, alleging fraud, perjury and blackmail. He knew he had no evidence to substantiate the allegations. At the end of his opening, and before any evidence had been adduced, he invited the solicitor to defend himself and intimated that he would discontinue the proceeding if the solicitor were to cease to act for the woman. The Supreme Court of New South Wales ordered that Clyne be struck off the roll of barristers on the ground that he had been guilty of such grave misconduct as showed him not to be a fit and proper person to practise as a barrister.
The High Court[39] dismissed Clyne’s appeal after finding that his conduct was in breach of the rules of the profession, and that breach was accompanied by aggravating circumstances. The Court observed that the rules that governed the conduct of the profession may ‘be divided roughly into two classes’.[40] In the first class are those rules that are mainly conventional and ‘designed primarily to regulate the conduct of members of the profession in their relations with one another’.[41] These included what were at the time rules prohibiting advertising, rules about retainers, and the rule against senior counsel appearing without a junior. In the second class are the rules that are not merely conventional, but ‘fundamental’, and which ‘rest essentially on nothing more and nothing less than a generally accepted standard of common decency and common fairness.’[42] The second class include rules about not lying to a judge, or misrepresenting the law to an inferior court or a lay tribunal, or attacking the credit of a witness in cross-examination by asking if he or she is guilty of some evil conduct where counsel has no reliable information in support.
[39]Dixon CJ, McTiernan, Fullagar, Menzies and Windeyer JJ delivered a joint judgment.
[40]Clyne (1960) 104 CLR 186, 199.
[41]Ibid.
[42]Ibid 200.
The Court pointed to the absolute privilege enjoyed by members of counsel in relation to defamatory statements made in court, and observed that this privilege arises as a matter of public policy to guarantee counsel’s freedom of speech in a context where it is essential that freedom of speech exists. The privilege confers on counsel a right and, on occasion a duty, to speak out to denounce a person or that person’s conduct. However, with such a privilege comes a responsibility not to abuse it:
As the learned judges of the Supreme Court have said, a member of the Bar enjoys great privileges both de jure and de facto. In particular his privilege in relation to defamatory statements made by him in court is not qualified but absolute. It is perhaps worthwhile to quote yet again the oft-quoted words of Lopes LJ in Royal Aquarium and Summer and Winter Garden Society v Parkinson. His Lordship said:
This ‘absolute privilege’ has been conceded on the grounds of public policy to ensure freedom of speech where it is essential that freedom of speech should exist, and with the knowledge that Courts of justice are presided over by those who from their high character are not likely to abuse the privilege, and who have the power and ought to have the will to check any abuse of it by those who appear before them.
The last thing we would wish to do would be to say anything which might be thought to curtail this freedom of speech, which public policy demands. Cases will constantly arise in which it is not merely the right but the duty of counsel to speak out fearlessly, to denounce some person or the conduct of some person, and to use such strong terms as seem to him in his discretion to be appropriate to the occasion. From the point of view of the common law, it is right that the person attacked should have no remedy in the courts. But, from the point of view of a profession which seeks to maintain standards of decency and fairness, it is essential that the privilege, and the power of doing harm which it confers, should not be abused. Otherwise grave and irreparable damage might be unjustly occasioned. The privilege may be abused if damaging irrelevant matter is introduced into a proceeding. It is grossly abused if counsel, in opening a case, makes statements which may have ruinous consequences to the person attacked, and which he cannot substantiate or justify by evidence. It is obviously unfair and improper in the highest degree for counsel, hoping that, where proof is impossible, prejudice may suffice, to make such statements unless he definitely knows that he has, and definitely intends to adduce, evidence to support them. It cannot, of course, be enough that he thinks that he may be able to establish his statements out of the mouth of a witness for the other side.[43]
[43]Ibid 200–1 (emphasis added) (citations omitted).
The core of the Court’s denunciation of the conduct in Clyne was the abuse of the privilege of the immunity from defamation for statements made in court by a legal practitioner, the abuse consisting in the making of prejudicial statements which the practitioner knows he or she cannot justify by evidence.
The complaint in Karageorge[44] was an example of a solicitor using language that was gratuitously offensive and extraneous to the matters legitimately being pursued. The comments made by the solicitor were both racist and anti-Semitic and repugnant and offensive for those reasons. They were described in Lander as follows:
The solicitor’s comments in that case were undoubtedly gratuitously offensive. For example, he referred to another solicitor in conversation with him about a matter as, ‘you fucking Arab’. He demonstrated even-handed offensiveness referring to another solicitor in conversation with him as ‘a fucking Jew’. He similarly abused members of the public who had dealings with him.
Clearly, those comments and other like comments were extraneous to the matters legitimately being pursued and, as the Committee observed ‘the use of insulting language or behaving offensively towards members of the public is not conducive to the maintenance of the good name of the profession’.[45]
[44]The complaint was decided in July 1987 by the Solicitors’ Statutory Committee (NSW).
[45]Lander (2009) 168 ACTR 32, 51 [34]–[35] (emphasis added).
The Solicitors’ Statutory Committee said in Karageorge:
It may be that the conduct complained of would merely amount to reprehensible rudeness or churlish discourtesy if it were conduct on the part of someone other than a solicitor. There may be some acts which, although they would not be disgraceful in any other person, yet if they are done by a solicitor in relation to his profession may be fairly considered disgraceful and dishonourable conduct: see Lord Esher MR in Allinson v General Council of Medical Education & Registration. Clearly, such acts may include acts perpetrated towards members of the public. It has long been the view of the profession that only the very highest conduct is consistent with membership of the profession … Clearly, the use of insulting language or behaving offensively towards members of the public is not conducive to the maintenance of the good name of the profession.[46]
[46]Ibid 47–8 [23], referring to [20] of the tribunal’s extract from the report of the Solicitors’ Statutory Committee (citation omitted).
In Lander the Full Court was not concerned with communications between legal practitioners but between a solicitor, Mr Lander (‘Lander’), and a third party, the Department of Education and Training (‘the department’). Lander was acting for a teacher seeking medical retirement on the basis of total incapacity to work. In the course of correspondence with the department, Lander wrote a letter in which he made general allegations of malpractice and maladministration against the department, including accusing the department and its staff of failing to communicate, being dishonest, rude, unhelpful, obsessive and compulsive, and bearing grudges against people who engaged lawyers. A complaint was lodged on behalf of the department with the Law Society of the ACT. In subsequent correspondence with the Law Society, Lander contended that in making the allegations he did, he had at all times acted in accordance with his instructions. He said he drew on 30 years of experience with the department ‘as a parent, citizen and lawyer’[47] who had acted for many clients in respect of matters involving the department. He asserted he was entitled as a solicitor to draw on his skill, knowledge and experience when acting for his clients, and relied upon the right to freedom of expression contained in s 16 of the Human Rights Act 2004 (ACT) (‘the HR Act’) which he claimed ‘overrides any Rule which may be in conflict with a statutorily prescribed freedom of expression’.[48] He then repeated the allegation that the department had engaged in systematic maladministration, cover-ups of wrong doings, and abuses of power.
[47]Lander (2009) 168 ACTR 32, 36 [7].
[48]Ibid 37 [7].
The Law Society applied to the Legal Practitioners Disciplinary Tribunal (‘the tribunal’) on the basis that Lander had engaged in unsatisfactory professional conduct. It relied on r 24 of the Legal Profession (Solicitors) Rules 2006 (ACT), which is cognate with r 21[49] of the Professional Conduct and Practice Rules 2005, the rule identified in the two charges against McDonald. Rule 24 (which later became rule 25)[50] provided:
A practitioner, in all of the practitioner’s dealings with other practitioners, must take all reasonable care to maintain the integrity and reputation of the legal profession by ensuring that the practitioner’s communications are courteous and that the practitioner avoids offensive or provocative language or conduct.[51]
[49]See [31] above.
[50]It appears that following the repeal and re-enactment of the ACT rules, r 24 became r 25: Lander (2009) 168 ACTR 32, 50 [27]–[28].
[51]Lander (2009) 168 ACTR 32, 45 [23] (quoting from [13] in the tribunal’s reasons).
The tribunal accepted the submission of the Law Society that r 24 imposed an obligation of courtesy on a practitioner with respect to members of the community; it imposed
a fundamental ethical obligation … to maintain due courtesy and civility when dealing with, inter alia, the other party and broader members of the public, particularly in the course of conducting one’s practice.[52]
[52]Ibid 45 [23] (quoting from [14] in the tribunal’s reasons).
The tribunal went on to say:
We think there is much force in that submission and it should be adopted. In applying the general principle ... to r 24, practitioners should, in the course of their practice, conduct their dealings with other members of the community according to the same principles of honesty and fairness which are required in relations with the courts and other lawyers namely, to take all reasonable care to maintain the integrity of the legal profession by ensuring that the practitioner’s communications are courteous and that the practitioner avoids offensive or provocative language or conduct.[53]
[53]Ibid 45–6 [23] (quoting from [15] in the tribunal’s reasons).
The tribunal examined the principles contained in Kennedy, Clyne and Karageorge and concluded ‘we are firmly of the view that the respondent has been guilty of unsatisfactory professional conduct’.[54] It determined that the matters Lander raised did not exculpate him from that conclusion. It found that the ‘whole tone of [Lander’s] letter is objectively discourteous.’[55] It also held that Lander could not rely on the HR Act to excuse his conduct noting that the right to freedom of expression, protected in s 16, is not absolute but is subject to reasonable limits that can be justified in a free and democratic society and is to be weighed against other individual’s rights.[56]
[54]Ibid 48 [23] (quoting from [24] in the tribunal’s reasons).
[55]Ibid 48 [23] (quoting from [25] in the tribunal’s reasons).
[56]Ibid 49 [23] (quoting from [28]–[29] in the tribunal’s reasons).
The Full Court upheld Lander’s appeal. The Court endorsed the principles set out in Kennedy, Clyne and Karageorge.[57]It unequivocally supported the view expressed by the Solicitors’ Statutory Committee that gratuitously offensive comments such as those in Karageorge were ‘extraneous to the matters legitimately being pursued’[58] and damaged the good name of the profession. However, the Court emphasised that this does not diminish the right and the duty of a solicitor to represent his or her client’s interests forthrightly, even where the recipient of forthright statements may find them offensive or rude:
Clearly, those comments [in Karageorge] and other like comments were extraneous to the matters legitimately being pursued and, as the Committee observed, ‘the use of insulting language or behaving offensively towards members of the public is not conducive to the maintenance of the good name of the profession’.
That view must be supported emphatically. However, it seems to us that that principle in no way diminishes the right, indeed the duty, of a solicitor to represent his or her client’s interests forthrightly and without fear or favour. If the conduct of public officials adversely impacting on a client is considered on reasonable grounds to be ‘rude, unhelpful’ or any similar characterisation, it is no breach of the obligation of courtesy to point that out to those in authority, even though those criticised may consider the criticism unwarranted and offensive. Such communication may well be regarded as discourteous and provocative but, nevertheless, a subject that needs to be raised in the interests of the client as well as generally.[59]
[57]Ibid 49 [24].
[58]See [45] above.
[59]Lander (2009) 168 ACTR 32, 51 [35]–[36] (emphasis added).
In respect of the right to freedom of expression under the HR Act, the Court also accepted as correct that ‘it is not inconsistent with [that] right ... to place limits on professional behaviour, provided, such limits are compatible with a solicitor’s duty to his or her client, to the courts and the public and can be justified in a free and democratic society’.[60]
[60]Ibid 51 [38].
The Court agreed with the submission made on behalf of Lander that there is a difference in the rules between obligations owed towards fellow practitioners and obligations towards third parties.[61] While there is a uniform obligation to deal with all persons with honesty and fairness, the obligation of ‘courtesy’ under the rules, and the avoidance of offensive or provocative language or conduct, is expressed only in relation to other practitioners. The Court observed it may be necessary for a solicitor, based on apparently reasonable information, to set out accusations in correspondence that may be taken by the recipient to be offensive or provocative:
It may be necessary to write a letter of demand accusing the recipient of fraud or other misconduct. The recipient, particularly if the accusation is untrue, will be offended, even outraged. He or she may well regard it as provocative. Yet, if the solicitor had received apparently reasonable information supporting such an accusation, he or she is bound to put it to the recipient. Nor is the mere fact that the accusation is made robustly a valid cause for complaint.[62]
[61]This distinction, as submitted by the VLSC on the appeal, may account for the statement the Court later made that r 25 was ‘on its face, inapplicable’: Lander (2009) 168 ACTR 32, 53 [59]. See [58] below.
[62]Lander (2009) 168 ACTR 32, 52 [47] (emphasis added).
While it might be observed that confrontation is a less effective means of being an advocate for one’s client than persuasion, it is important to bear in mind that ‘it is not unsatisfactory professional conduct to choose a less effective option in representing a client to one which others might choose.’[63]
[63]Ibid 53 [54].
The Court rejected the proposition that ‘there is a general obligation on a solicitor to refrain from that which the recipient might find to be discourteous, offensive or provocative statements’.[64] It acknowledged that a legal practitioner has a privilege to make otherwise defamatory statements, and indeed, on occasion, has a duty to make them. It confirmed, however, that for a practitioner to do so knowing that there is no reasonable basis for making such a statement, particularly when it is done gratuitously or for a collateral purpose, would be to abuse that privilege and constitute misconduct:
[I]t is misconduct to abuse [a practitioner’s] privilege by making unfounded accusations knowing that there was no reasonable basis for them, worse if done gratuitously or even more pertinently, if it were shown to be for a collateral purpose.[65]
[64]Ibid 53 [52].
[65]Ibid 51 [32].
The Court held that the real issue, in the circumstances, was whether Lander had a sound basis for making the allegations he did; that is, whether, to his knowledge, the allegations and criticisms were false or without foundation. It held that the tribunal had erred by failing to address the real issue.[66] It acknowledged that it had not been alleged that Lander made the statements he did knowing them to be untrue or knowing there was no reasonable basis for them or that he had a collateral purpose for making them.[67] The Court concluded that, providing the allegations had a sound basis, they could not constitute unsatisfactory professional conduct because, in the circumstances and with respect to the language used, they were not gratuitously insulting or offensive:
If the criticisms the solicitor levelled at the department were true or, at least, fair comment as understood in defamation law, it could not be misconduct or unsatisfactory conduct to draw them to the attention of the relevant officers of the department and its minister. That is not an issue which those considering the statements should have to concern themselves. The fact that it was perceived as discourteous and offensive, even provocative, to parties to whom it is directed, is beside the point. In contrast with Karageorge … the terms of the solicitor’s complaint were not, if the allegations were soundly based, gratuitously insulting or offensive.[68]
[66]Ibid 53 [60].
[67]Ibid 52 [48].
[68]Ibid 53 [53].
The Court went on to say:
Of course, the fact that r 25 requires that practitioners ensure courtesy and the avoidance of offensive or provocative language does not of itself make an apparent non-compliance unsatisfactory professional conduct. To make it so, however, it is not sufficient that the client did not specifically instruct the solicitor to make those comments. The question is whether the solicitor had a reasonable basis for them. He said there was. That was not a contention that was examined.
If the HR Act, s 16(2) has a role to play, it super imposes itself on the Statement of Principles to be found in the Rules and it is to allow lawful criticism by a solicitor of the performance of public officials.
In our view, the real issue was not that the solicitor made the comments complained of in the course of correspondence concerning his client’s claim, but whether the accusations and criticisms he made were false or without foundation, to his knowledge. If that were to be made out, then the finding of unsatisfactory professional conduct should be upheld. However, it seems to me that particular issue was not addressed by the tribunal.
In other words, the true complaint should have been in terms of the kind of misconduct alleged in Clyne’s case, not in terms of a breach of r 25 which was, on its face, inapplicable.
The hearing did not address the correct issue. The finding of unsatisfactory professional conduct was, therefore, based on an erroneous assumption and must be set aside as must be the consequential orders on penalty.[69]
[69]Ibid 53 [56]–[60] (emphasis added).
The principles espoused in Lander, and their correct characterisation, is an issue that has been much deliberated upon in the course of this litigation.
The first VCAT decision
The first hearing of the two charges against McDonald took place at VCAT on 16 October 2013 and 6 November 2013. Witness statements were filed by a representative of the VLSC, by Catanese, and by McDonald. Oral evidence was given by all three witnesses.
The senior member noted that the VLSC and McDonald differed about the scope and nature of the inquiry to be undertaken.
McDonald put in issue the content of the 24 August telephone conversation. He submitted that he was justified in sending the two letters and accusing Catanese of lying because Catanese was lying. He asserted that he could not be in breach of r 21, ‘because otherwise, no lawyer would ever be allowed to accuse another of being dishonest, even where that is the case, or is believed by the lawyer to be the case’.[70] McDonald also submitted that Lander & Rogers had challenged his integrity and sought to bully and intimidate him, and that in all the circumstances ‘his responses were justified, indeed measured, and not offensive or provocative, under Rule 21.’[71] He contended that his responses were soundly based and, relying on the remarks of the Full Court in Lander,[72] it could not be unsatisfactory professional conduct to make the statements he did, even if they were perceived to be discourteous and offensive, or even provocative.
[70]The first VCAT decision [31].
[71]Ibid [32].
[72]See [57] above.
The VLSC submitted that it was not necessary to determine whose version of the 24 August telephone conversation was correct. It was submitted that even if McDonald’s version was accepted, neither McDonald’s 30 August letter nor McDonald’s 2 September letter should have been sent because the contents of those letters had breached r 21 by the use of imprudent language which undermined the reputation of the legal profession and which had the potential to threaten McDonald’s client’s best interests.
The senior member was not able to reach a conclusion about what precisely was said during the 24 August telephone conversation.
He accepted that Catanese’s file note was ‘the better evidence’[73] given that, although McDonald said in evidence that he dictated his letter of 24 August 2011 immediately after the conversation, he did not produce any direct file note of the conversation. The senior member variously described McDonald’s belief about what was said during the 24 August telephone conversation as ‘fervently held’,[74] ‘a firm belief’,[75] and an ‘earnest belief’.[76] He considered McDonald’s demeanour to indicate ‘an absolutely fixed view, not admitting any possibility of there being a misunderstanding’.[77] On the other hand, he described the evidence of Catanese as ‘measured and thoughtful’,[78] and was unable to conclude he lied about the conversation. In respect of McDonald’s submission that during Catanese’s evidence he had fabricated the contents of the telephone conversation he observed that ‘[t]here is no proof of that contention and I reject it’.[79] He also said that he could not be sufficiently satisfied on the applicable Briginshaw standard that Catanese’s version of the 24 August telephone conversation was the correct one. He remarked that it was possible that each practitioner may have taken different meanings from the conversation:
In the course of a conversation where the two opposing solicitors were having their first discussion about a new claim, where they had never spoken to each other before, and each was focussing on their own clients’ position, it is quite conceivable that they could take different meanings out of the conversation. There is not necessarily a big difference between words which might convey, on the one hand, ‘no offers will be made’, and, on the other, ‘without proper particulars, no offers will be made’.[80]
[73]The first VCAT decision [39].
[74]Ibid [43].
[75]Ibid [48].
[76]Ibid [55].
[77]Ibid [43].
[78]Ibid [44].
[79]Ibid.
[80]Ibid [47].
Turning to whether there had been a breach of r 21, the senior member held that notwithstanding McDonald’s ‘earnest belief in his own version of the phone conversation, his reaction was so extravagant as to breach Rule 21.’[81] He found that, first, there was no purpose to be served by McDonald making ‘the emphatic assertion’ that Catanese was lying where there was no proof this was so and McDonald knew there was no proof.[82] Secondly, McDonald soon became aware ‘that it was possible to seek to negotiate with Lander & Rogers on behalf of his client. So no interest of his client’s would be served by continuing to argue what had now become a moot point.’[83] He concluded, thirdly, that McDonald should have considered the possibility that he was mistaken in his belief that Catanese had lied and that there was a misunderstanding of what had been said, especially as McDonald had not taken notes of the actual words used.[84]
[81]Ibid [55].
[82]Ibid [51].
[83]Ibid [52] (emphasis in original).
[84]Ibid [53].
The senior member rejected McDonald’s contention that Lander & Rogers had attacked him in an ‘uniquely aggressive’ manner that was ‘unjustified or outrageous’.[85] He held that:
In any event, even if he was provoked, Mr McDonald’s letter of 30 August 2011 constituted an unnecessarily offensive and personal attack on Mr Catanese. Even on the basis that Mr McDonald firmly believed Mr Catanese had made the statement attributed to him by Mr McDonald, to write a letter stating that a solicitor he had never dealt with before was ‘fundamentally dishonest’ and had started off ‘at an early stage of his career telling lies’ arising out of a conversation the content of which was he had known for five days was contested, and which objectively, he knew could not be proved, was discourteous, offensive and provocative. The letter of 30 August 2011 purports to make a damning judgment about the character of a solicitor, with whom Mr McDonald has had only minimal contact.[86]
[85]Ibid [56], [57].
[86]Ibid [63] (emphasis altered).
The senior member observed that the circumstances differed from those in Lander as there was no apparent interest of McDonald’s client which was being served by the accusations. He found the two charges proved and at [70]–[71] of the first VCAT decision said:
The present circumstances are different to those in the case of Lander, relied upon by Mr McDonald. Here, no apparent interest of Mr McDonald’s client was being served by the making of the assertions about Mr Catanese. These were letters to another practitioner relating to that practitioner’s conduct, not the client’s. This distinction was recognised by the Court in Lander.
It is not sufficient in this case for Mr McDonald to say that his assertions are to be regarded as ‘soundly based’ because they were not proved to be wrong. Here, they were inherently incapable of conclusive proof — it was his word against Mr Catanese’s. To persist with such allegations in the circumstances of this case — where the question was whether Mr Catanese had lied to him in a telephone conversation, where the outcome of the alleged lie would have no bearing on the matter between their respective clients — was provocative, because nothing could come of this except trouble. And it was offensive, because of the seriousness of the allegation that the solicitor was ‘fundamentally dishonest’. Then, four days later, even after he had time to reflect, Mr McDonald repeated his provocative and offensive assertions, and broadened them. This conduct has the potential to undermine the integrity and reputation of the profession. It undermines cooperation between practitioners which is important to promote the efficient operation of the justice system, and the conduct of legal business.[87]
[87]The first VCAT decision [70]–[71] (emphasis added) (citation omitted).
The appeal to Zammit J
McDonald appealed to the Supreme Court from VCAT pursuant to s 148(1)(b) of the VCAT Act.[88] Under s 148, leave to appeal is required and the appeal is confined to a determination of the questions of law identified in the grant of leave.[89] Leave to appeal was granted by Derham AsJ on the following questions of law:
(6) Whether the principle or authoritative ruling to be derived from Lander is that there will be no unsatisfactory professional conduct on the part of a solicitor making accusations of the kind made by [McDonald] unless it is established that the accusations were false or without foundation to his knowledge;
(7) Whether the principle or authoritative ruling to be derived from Lander is applicable in this case?[90]
[88]Section 148 provides: ‘(1) A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding — (a) if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or … (b) in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division’.
[89]Osland v Secretary to the Department of Justice [No 2] (2010) 241 CLR 320, 332 [19].
[90]Orders were made in these terms by Derham AsJ 14 February 2014 [1].
Zammit J answered the first question in the negative. That is, she did not accept that the principle espoused in Lander was correctly formulated in the first question.[91] Her Honour formulated the principle differently and determined that the senior member had incorrectly applied the test she identified in Lander. She also held that the question of the application of the Lander test to the circumstances of this case was a question that ought be further determined by VCAT and she ordered a remitter.
[91]Zammit J reasons [25]–[34].
Zammit J noted that McDonald relied on the reference in Clyne to the freedom of speech conferred on legal representatives to speak out fearlessly to denounce some person or conduct.[92] Her Honour also noted that McDonald relied on the remarks of the Full Court in Lander rejecting the contention that there is a general obligation on a solicitor to refrain from making statements that a recipient might find discourteous, offensive or provocative.[93] McDonald submitted that the true principle to be derived from Lander was as reflected in the first question before Zammit J, namely, ‘that a breach of r 21 cannot found a charge of unsatisfactory professional conduct in circumstances where there is a reasonable basis for the comments’.[94] He contended that his circumstances could be equated with those in Lander because:
[92]See [43] above.
[93]See [56] above.
[94]Zammit J reasons [7].
(1) his comments were not made in a public forum;
(2) nor were his comments gratuitously insulting or offensive as in Karageorge;
(3) he firmly believed he had a reasonable basis for making the comments; and
(4) the comments were made in the course of correspondence regarding his client’s case.[95]
[95]Ibid [8].
McDonald further submitted that VCAT fell into error in failing to determine whether the accusations he made were ‘false or without foundation to his knowledge’ and instead finding him guilty on the basis of a breach of r 21.
The VLSC submitted that the principle to be derived from Lander was that a solicitor will not be guilty of unsatisfactory professional conduct (or professional misconduct) where:
(8) the solicitor has a reasonable basis for the allegations;
(9) the allegations are made in the legitimate pursuit of a client’s legal rights; and
(10) the comments made are not gratuitously offensive.[96]
[96]Ibid [11].
The VLSC relied on the emphatic support of the Full Court in Lander condemning the conduct in Karageorge,[97] arguing that Lander recognised that comments that are extraneous to the matters being legitimately pursued, about conduct that adversely impacts on the client, would not qualify for the protection afforded by the principle in Clyne. To qualify for protection, it was submitted, there must be reasonable grounds for the allegations and the communication needs to be raised in the interests of the client.[98]
[97]Lander (2009) 168 ACTR 32, 51 [35]–[36]. See [52] above.
[98]Zammit J reasons [13].
The VLSC also drew on the distinction accepted by the Full Court in Lander between communications amongst practitioners, and communications with third parties.[99] It was submitted that the senior member correctly distinguished Lander on the basis that the impugned letters here were to and about another practitioner, rather than to a third party whose conduct was impacting on the client’s legitimate interests (such as the department in Lander).
[99]See [54] above.
In her analysis, Zammit J was of the view that the Court in Lander applied what she described as a ‘dichotomous’ test which distinguished between comments made by a practitioner that are extraneous to the legitimate pursuit of a client’s matter, to be assessed against r 25 (the equivalent of r 21), and comments made to further a client’s interest, to be assessed against a standard of whether the comments have a reasonable basis. What exactly was meant by ‘dichotomous’ is an issue before this Court on the appeal from Bell J.[100] This issue is discussed below.[101] Suffice it to say here that we reject the submission that it was intended by Zammit J to mean anything other than a two-limbed test.[102] In a critical paragraph of her judgment, Zammit J at [26] said:
[T}he Court applied a dichotomous test, whereby any comment extraneous to the legitimate pursuit of a matter would be assessed against r 25, and any comment made in the client’s interests would be assessed on whether there was a ‘reasonable basis’ for the allegation.
[100]See [136] below.
[101]See [136]–[138], [143] below.
[102]See [138] below.
She acknowledged the recognition by the High Court in Clyne of the need to protect freedom of speech, providing the communication has a sound basis, regardless of its efficacy:
[T]he fact that a solicitor has not adopted the optimal course for resolving a dispute does not mean that he or she is not legitimately pursuing the client’s interests. Rather, the right or freedom of speech referred to by the High Court in Clyne’s case is applied to any comments made with a reasonable basis in the legitimate pursuit of a client’s matter, regardless of their effectiveness in that regard.[103]
[103]Ibid [27].
She referred to the offensive comments made in Karageorge, extraneous to the legitimate pursuit of the client’s interests, and noted that comments made in other circumstances will not be so clear cut; it will be a matter for the courts to determine if comments made are sufficiently extraneous to fall outside the protection afforded by the privilege enjoyed by practitioners:
[I]t will fall to the courts to determine in the circumstances of each case whether the relevant comments are sufficiently extraneous to fall outside the scope of the privilege. However, that is not to say that some allegations may not contain a mixture of extraneous and non-extraneous comments. For example, if a solicitor were to write a letter of demand alleging a breach of contract and finished by calling the other party a ‘dirty rotten crook’, there is no doubt that such a statement would be extraneous in the Karageorge sense. This would be so even if there was a reasonable basis for the allegation of breach of contract.[104]
[104]Ibid [28].
Zammit J rejected the submission made by the VLSC that for comments to fall within the scope of Lander it was necessary for the allegations made by the practitioner to relate to conduct that negatively impacts on the practitioner’s client. She also treated the test to be applied as an objective one; that is, the issue is whether the subjective knowledge of the practitioner provides an objectively reasonable basis for the accusations the practitioner makes.[105]
[105]Ibid [32]: ‘[I]t was Mr Lander’s subjective knowledge that was to be used in determining whether there was an objectively reasonable basis for his accusations and criticisms of the Department’.
Zammit J considered whether Lander should be distinguished on the basis that McDonald’s communications were with another practitioner, and not with a third party. She concluded that it should not be distinguished. In her view, there is not a clear demarcation between communications engaged in by practitioners inter se, and between practitioners and third parties.[106]
[106]Zammit J reasons [44], [47].
In paragraphs [33] and [34], Zammit J proposed that the appropriate test involved a first step of asking a question followed by another step that depends upon whether the response to the first question is ‘no’ or ‘yes’:
In my view, the principles set out in Lander apply to any and all comments that are made by a legal practitioner. The purpose of the decision is to set out the circumstances in which breach of r 21 (or its equivalent) will be sufficient to demonstrate unsatisfactory professional conduct or professional misconduct, and the circumstances in which r 21 cannot be applied. The decision is founded on a lawyer’s right and duty to be forthright in denouncing the conduct of others without fear or favour. The Court then goes on to outline the circumstances in which the right does not apply; that is, in circumstances where the comments are extraneous to the legitimate pursuit of a client’s matter.
As such, the question whether to apply the ‘reasonable basis’ test in Lander is one that must be determined at first instance on the basis of the factual circumstances in the proceeding. As set out in Lander, the first question that must be addressed is whether the comments were made in the legitimate pursuit of the client’s matter. If not, then r 21 is applied to determine whether the practitioner is guilty of the charges. If so, then the ‘reasonable basis’ test must be applied to determine whether the practitioner is guilty of the charges. In either case, the principles laid out in Lander must be applied in reaching a decision.[107]
[107]Emphasis added.
The critical paragraphs, [26] and [34] of Zammit J’s reasons, reveal that the test she prescribed, in determining if a practitioner is guilty of unsatisfactory professional conduct, has two limbs:
(11) the first question to ask is whether the comments made by the practitioner were made in the legitimate pursuit of his or her client’s matter;
(12) (a) if the answer to the first question is ‘no’, the practitioner’s conduct is to be assessed against the standards of r 21;
(b) if the answer to the first question is ‘yes’, the practitioner’s conduct is to be assessed by asking if he or she had a reasonable basis for the comments (determined by inquiring whether the practitioner’s subjective knowledge provided an objectively reasonable basis for the comments made).
The question of whether an allegation made by a practitioner was made in the legitimate pursuit of the client’s matter controls which form of alternative assessment (r 21 or the ‘reasonable basis’ test) is to be carried out. As Zammit J said:
The only relevant question when determining which test to apply in relation to an allegation by a solicitor is whether it was made in the client’s interests.[108]
[108]Zammit J reasons [44] (emphasis added).
Turning to the case in hand, Zammit J found that in the first VCAT decision the senior member erred by focussing on whether McDonald’s conduct was in breach of r 21, and did not consider the preliminary question of whether the accusations McDonald made were extraneous to the legitimate pursuit of his client’s matter:
the Senior Member repeatedly utilises the words of r 21, emphasising that the primary issue that has been considered and determined by him is whether the conduct is in breach of that rule. In spite of the fact that, according to Lander, such consideration must be preceded by a finding that the accusations were extraneous to the legitimate pursuit of the client’s matter, this was the first and only issue to which the Senior Member truly turned his mind.[109]
[109]Ibid [36].
Her Honour rejected the submission made by the VLSC that the senior member did in fact find that McDonald’s conduct was extraneous to the legitimate pursuit of his client’s matter.[110] In her view, the senior member failed to consider the possibility that McDonald’s conduct was ‘merely ineffective advocacy, as required by Lander’,[111] and instead appeared to assess his conduct against ‘an optimal or preferred course of action, more effectively furthering the client’s interests’.[112] The senior member’s description of McDonald’s remarks as ‘intemperate’, an ‘over-reaction’, ‘extravagant’ and ‘written in anger’, did not ‘constitute a finding that the comments were extraneous in the Karageorge sense’.[113] She found that the senior member failed to make a finding of fact that McDonald’s accusations were ‘extraneous to the legitimate pursuit of his client’s matter’,[114] with the result that there was an error of law in failing properly to apply the test in Lander.
[110]See [68] above.
[111]Zammit J reasons [37].
[112]Ibid [38].
[113]Ibid [39].
[114]Ibid [40].
Zammit J also held that here the senior member did not make any finding that there was no reasonable basis for McDonald’s statements. She noted that the onus lay on the VLSC.[115]
[115]She expressed the test in the following terms: ‘The question to be asked is whether, taking into account that firm belief and all the information available to Mr McDonald, there was an objectively reasonable basis for the making of the accusations’: Zammit J reasons [51].
Zammit J set aside the VCAT decision and remitted the matter to VCAT to be determined according to law. There was no application made for leave to appeal from the decision of Zammit J.
The second VCAT decision
The remitter was heard by the same senior member who had made the first VCAT decision. He noted that the task was as agreed by the parties having regard to the reasons published by Zammit J. He identified the task as applying a two-limbed test: first, to determine whether McDonald’s accusations were made in the legitimate pursuit of his client’s matter, and secondly, if they were not so made, then the statements stood to be assessed against r 21; if they were so made, the ‘reasonable basis’ test applied. At [20]–[21] of the reasons he said:
The parties agreed that the task for the Tribunal following the remittal is as follows. First, to determine whether the letters were written by Mr McDonald in the legitimate pursuit of his client’s matter. If not, then Rule 21 is to be applied to determine whether Mr McDonald is guilty of the charges. Notwithstanding that there is some overlap between the matters to be considered in relation to these two questions, it is important to deal with them as two separate steps.
If the letters were written in the legitimate pursuit of the client’s matter, the Tribunal then needs to consider whether there was a ‘reasonable basis’ for the allegations made by Mr McDonald in the two letters.[116]
[116]The second VCAT decision [20]–[21] (footnote omitted) (emphasis added). The first line of [20] of the senior member’s reasons, noting that the parties agreed on the test to be applied on the remitter, is omitted in the judgment of Bell J: Bell J reasons [63]. See [124] below. It was also omitted in McDonald’s submissions to this Court on the appeal. The first ground of appeal raises the question of the significance of the parties’ having agreed upon the test to be applied: see [132] below.
The senior member’s remark about the agreement of the parties as to the test to be applied is made out by the written submissions of both parties at VCAT on the remitter. In written submissions, the VLSC sought to reflect the two stages of the test set out at [26] and [34] of Zammit J’s reasons described above.[117] Referring to the reasons of Zammit J as ‘the Appeal’, they said:
[117]See [76], [81] and [82] above.
The test that the Appeal has posed that must be considered by the Tribunal is taken from the Court’s consideration of the test in Lander ... and set out at Appeal [26].
This can be reformatted as:
... a dichotomous test, whereby:
(a) any comment extraneous to the legitimate pursuit of a matter would be assessed against [Rule 21] (category 1); and
(b) any comment made in the client’s interests would be assessed on whether there was a ‘reasonable basis’ for the allegation (category 2),
(the Test).[118]
[118]Citation omitted.
McDonald, in his written submissions, contended for VCAT to apply the two-limbed test prescribed by Zammit J at [26] and [34] of her reasons, in a similar fashion to the VLSC:
In paragraphs 26–34 of her judgment, Zammit J made clear that the Tribunal was required, on remittal, to make findings of fact in respect of the following:
a) whether the contents of either letter from Mr McDonald contained a comment ‘extraneous to the legitimate pursuit of a client’s matter’, ‘regardless of the [comments’] effectiveness’ and bearing in mind the ‘lawyer’s right and duty to be forthright in denouncing the conduct of others without fear or favour’;
b) if not, ‘whether there was [objectively] a ‘reasonable basis’ for the comment.
Each of these two limbs was addressed separately in McDonald’s extensive written submissions before VCAT.[119]
[119]The first limb, whether the comments were ‘extraneous to the legitimate pursuit of a client’s matter’, was addressed at [25]–[39], and the second limb, whether there was a ‘reasonable basis’ for McDonald’s comments, was addressed at [40]–[49].
(b)The Tribunal did not determine which version of the telephone conversation between Mr Catanese and Mr McDonald was correct, and rejected the allegation that Mr Catanese had lied and rejected Mr McDonald’s submission that Mr Catanese fabricated the contents of the telephone conversation of which there was no proof;
(c)That it was conceivable that Mr McDonald and Mr Catanese could take different meanings out of the conversation;
(d)That Mr McDonald should have considered the possibility that he was mistaken in his belief that Mr Catanese had lied, and should have considered the possibility that there was a misunderstanding or that he had misinterpreted what Mr Catanese had said, especially as he did not take notes of the actual words spoken;
(e)That the Tribunal accepted that Mr McDonald had an earnest belief that Mr Catanese had made the statements attributed to him by Mr McDonald, but did not find that this constituted a reasonable basis for the allegations which were made;
(f)Mr McDonald’s belief in his recollection of a single conversation with Mr Catanese, in the circumstances referred to above, did not provide a reasonable basis to accuse Mr Catanese of being ‘fundamentally dishonest’ and to have been guilty of ‘deliberate and calculated’ dishonesty.
McDonald has filed a notice of contention in which he seeks to affirm the decision of Bell J on the following question of law:
Did the Tribunal err in its application of principles from relevant authorities set out in McDonald v Legal Services Commissioner [2015] VSC 237, in that it considered and determined whether the comments were in the legitimate pursuit of the Appellant’s client’s interests at large and not by reference to the limitation established by the authorities that advocacy is in the legitimate pursuit of a client’s interests if it is not extraneous to those interests?
The Notice of Contention reflects ground 2 before Bell J which he found unnecessary to decide.
Did the judge err in finding that VCAT erred by considering whether the accusations were made in the legitimate pursuit of the client’s interests separately from whether the comments had a reasonable basis? — Ground 1
In support of ground 1, the VLSC submits that the senior member was obliged to decide the matter in accordance with the principles identified by Zammit J; that is, the two-limbed test as described above.[190] Moreover, as set out above, both the VLSC and McDonald agreed that the test for VCAT to apply on the remitter was the two-limbed test described by Zammit J.[191] On this test a negative answer to the question of whether comments from a practitioner were made in the legitimate pursuit of the client’s matter mandates that the conduct by the practitioner be assessed by reference to r 21 so that it is unnecessary to consider whether the practitioner had a reasonable basis for the comments made. As discussed, the ‘reasonable basis’ question was proposed by Zammit J as a separate question enlivened only if it had been already established positively that the comments were made in furtherance of the client’s interests. The ‘legitimate interests’ question is thus separate from the ‘reasonable basis’ question on the test propounded by Zammit J. The VLSC submits that, applied to the circumstances of the case, as the senior member found that the accusations made by McDonald were not made in the legitimate pursuit of his client’s interest, there was no need for the senior member to consider the ‘reasonable basis’ issue. He could hardly be criticised for doing exactly what he was directed to do by Zammit J.
[190]See [81]–[82] above.
[191]See [88]–[91] above.
In response, McDonald submits that the senior member failed to recognise that the ‘legitimate interests’ question and the ‘reasonable basis’ question are inter-related and that Zammit J, Bell J, and the Full Court in Lander all understood this. In particular, McDonald submits that the test propounded by Zammit J does not identify two separate steps. Zammit J’s use of the word ‘dichotomous’ appeared in the context of a description of the analysis undertaken in Lander. The word ‘dichotomous’ does not appear in Lander. McDonald submits that Zammit J’s use of the word does not signify that she was seeking to modify the test from Lander; she was simply trying to re-state it. He submits that Zammit J’s use of the word ‘dichotomous’ is consistent with one of its meanings, namely, a reference to ‘something with seemingly contradictory qualities’ but which are not necessarily mutually exclusive. He relies on ‘dichotomous’ having many meanings as recognised by the Merriam-Webster online dictionary:
The two most commonly used senses of dichotomy are easily (and often) confused. The older one refers to the division of something into two groups that often are mutually exclusive or contradictory (as in ‘the dichotomy between good and evil’). Like trichotomy (meaning ‘division into three parts’), this sense denotes separation into different elements, but it adds the connotation of oppositeness. The newer sense of dichotomy denotes a thing that appears to have contradictory qualities, such as a lemonade stand found in a war zone.[192]
[192]Merriam-Webster Online Dictionary (online at 2 March 2018) ‘Dichotomy and False Dichotomy’, <
McDonald urges that Zammit J’s use of the word ‘dichotomous’ should be understood in its second newer sense and that this is also how Bell J understood it. He submits that this is shown, in particular, by Bell J’s understanding of Zammit J’s reasons as being consistent with the recognition in Lander of the context-dependent and undifferentiated analysis of multiple elements.[193]
[193]See [119] above.
In our view, the test propounded by Zammit J in [26] and [34] of her reasons is to be understood in the older sense of a division between two steps rather than in the newer sense of anomalous or incongruous. We consider that Zammit J analysed Lander as countenancing, as a primary step, the asking of the controlling question whether the comments were made in the legitimate pursuit of the client’s interests. The response dictates which form of alternative assessment is to be carried out, r 21 or the ‘reasonable basis’ test. The test thus involves two separate steps, the second step of which involves the application of alternative criteria, as we have sought to explain above.[194]
[194]See [82]–[83] above.
We consider that the senior member was correct in appreciating that the Zammit J test involved two separate steps. We also consider that the methodology the senior member adopted, of first considering whether the accusations made by McDonald were in legitimate pursuit of his client’s matter, accurately reflected the first limb of the Zammit J test. [195] For Zammit J this was the controlling question, as we have described it. Having determined that issue adversely to McDonald, the senior member did precisely what the two-limbed test invited, namely, an assessment of whether r 21 had been breached.
[195]The second VCAT decision [32]–[65]. See [94]–[102] above.
In our view, the VLSC is correct to submit that there can be no criticism of the senior member for having expressed the ‘legitimate interests’ question as separate from the ‘reasonable basis’ question in his articulation of the test, as was agreed between the parties.[196]
[196]The second VCAT decision [20]. See [88] above.
However, that is not the end of the matter.
As discussed above,[197] we consider that r 21 operates according to its plain meaning and is not to be analysed by means of the two-limbed test propounded by Zammit J. In accordance with that plain meaning, r 21 involves what Bell J described,[198] we consider correctly, as an ‘inter-related approach’ with the ‘legitimate interests’ question and the ‘reasonable basis’ question both being relevant considerations but neither being determinative. Neither question, individually or collectively, functions as a substitute for the language of the rule.
[197]See [121] above.
[198]See [120] above.
We consider that Bell J also understood the test propounded by Zammit J to involve two separate steps to be undertaken in a particular order and, based on that understanding, he considered that the test did not accurately reflect the approach in Lander.[199] However, importantly, Bell J also said that he understood Zammit J not to have wholly rejected the inter-related approach adopted in Lander and not to have ruled out the possibility of common or overlapping considerations.[200] In our view, the possibility of inter-relationship may be because the ‘dichotomous’ test propounded by Zammit J does not consist of mutually exclusive or contradictory elements. To this limited extent, McDonald’s submission as to the connotations conveyed by the word ‘dichotomous’ may be correct. We do not consider that the two-limbed test propounded by Zammit J was intended to suggest that the ’legitimate interests’ question and the ‘reasonable basis’ question were mutually exclusive opposites similar to the example in the Merriam-Webster dictionary of good and evil.
[199]See [118]–[119] above.
[200]See [120] above.
However, where we consider that Bell J erred in law is in not recognising that the senior member also appreciated that both the ‘legitimate interests’ question and the ‘reasonable basis’ question ought be explored in the context of r 21. In essence, the senior member applied the inter-related approach (notwithstanding the terms in which he and the parties articulated the applicable test).
First, the senior member found (as a finding of fact) that the accusations made in McDonald’s 30 August letter and McDonald’s 2 September letter were not made in the legitimate pursuit of his client’s matter. Although Bell J arrived at a different view, there was no challenge to that finding in the questions identified before Bell J.[201]
[201]Nor, given that the appeal was confined, under s 148(1)(b) of the VCAT Act, to questions of law, could there have been such a challenge (unless it took the form of a ‘no evidence’ ground). The proceeding before Bell J was not in the nature of a re-hearing. In any event, the senior member had an appropriate basis for that finding; in particular McDonald’s evidence that the accusation of dishonesty ‘was an issue between him [Catanese] and myself, it was not an issue between my client and the other party’: see [95] above. We consider the implications of this when considering ground 3. See [155]–[161] below.
In then proceeding to consider whether r 21 had been breached, the senior member took into account a range of matters relevant to whether there was any objectively reasonable basis for McDonald’s conduct:
(13) McDonald knew he had no conclusive proof of the accusation that Catanese was lying;[202]
[202]The second VCAT decision [68], [69] adopting the first VCAT decision [51] and [71] respectively, see [66] and [68] above respectively.
(14) McDonald should have considered the possibility that he was mistaken in his belief that Catanese was lying and that there was a misunderstanding as to what each of he and Catanese had said; [203]
[203]The second VCAT decision [68] adopting the first VCAT decision [53], see [66] above.
(15) The accusations were unnecessary for the task at hand and served no purpose;[204]
(16) The accusations were unnecessarily offensive and personal;[205]
(17) The accusations could not be justified even as a response to what he believed was an attack on his reputation.[206]
[204]The second VCAT decision [68] adopting the first VCAT decision [51], [52], see [66] above.
[205]The second VCAT decision [68] adopting the first VCAT decision [56], [57] and [63], see [67] above.
[206]The second VCAT decision [52], see [96] above. See also the second VCAT decision [68] adopting the first VCAT decision [54]–[55].
The senior member expressed himself in a manner that is tantamount to a finding that McDonald did not have a reasonable basis for making the accusations:
While Mr McDonald gave evidence that ‘a failure to ... respond in defence of reputation would be harmful to my client and myself’, no basis for this conclusion was demonstrated.[207]
[207]The second VCAT decision [52] (emphasis altered), see [96] above.
He referred to McDonald’s 30 August letter and said, in contrast to the circumstances in Lander:
[N]o convincing basis has been articulated as to how the making of the allegations by Mr McDonald could have been thought to serve his client’s interests.[208]
[208]The second VCAT decision [58] (emphasis added), see [99] above.
He adopted ‘the same analysis’, that is, no convincing basis, ‘with greater force’, in respect of McDonald’s 2 September letter because that letter conveyed an implication of dishonesty against Lander & Rogers and the accusation of blackmail.[209]
[209]The second VCAT decision [59]–[60], see [100] above.
The senior member’s conclusion of a breach of r 21 conforms with its language. Reflecting the language of r 21, he found that it was ‘discourteous, offensive and provocative’[210] of McDonald to accuse a solicitor, with whom he had never previously dealt, of being ‘fundamentally dishonest’ and that he had ‘started off at an early stage of his career telling lies’ where the accusation was based upon a conversation the content of which was contested and which McDonald knew was contested.
[210]The second VCAT decision [68], adopting [63] of the first VCAT decision, see [67] above.See also the second VCAT decision [69], adopting [71] of the first VCAT decision, see [68] above.
Furthermore, the senior member did engage with the purpose of the rule as directed at the integrity of the profession and the maintenance of public confidence in the legal system. He said:
[McDonald’s] conduct has the potential to undermine the integrity and reputation of the profession. It undermines co-operation between practitioners which is important to promote the efficient operation of the justice system, and the conduct of legal business.[211]
[211]The second VCAT decision [69], adopting [71] of the first VCAT decision (emphasis added).
Accordingly, we consider that the senior member, in the second VCAT decision, found that McDonald’s accusations were not made in the legitimate interests of his client and that McDonald did not have a reasonable basis for making them. The senior member regarded both issues as relevant considerations in concluding that r 21 had been breached. He treated the issues as inter-related. In doing so, he applied r 21 in accordance with the interpretation which we have embraced as correct. The senior member committed no error of law.
In our view, ground 1 of the grounds of appeal is made out because Bell J erred by finding that the senior member had an ‘exclusive focus’ on the ‘legitimate interests’ question and failed to consider the ‘reasonable basis’ question, leading his analysis to be directed to the question of courtesy rather than whether, as a matter of professional judgment, McDonald failed to take reasonable care to maintain the integrity and reputation of the legal profession. For the reasons outlined, the ‘legitimate interest’ question was not the exclusive focus of the second VCAT decision[212] and the senior member did not ignore the issue of whether there was a ‘reasonable basis’ for McDonald’s accusations. The second VCAT decision reveals that the senior member was properly alive to the contextual and undifferentiated nature of the inquiry into whether the two charges of unsatisfactory professional conduct were made out.
Alternatively, did the judge err in finding that VCAT erred in finding the comments were not made in the legitimate pursuit of the client’s interests separately from whether he had a reasonable basis? — Ground 2
[212]Bell J reasons [71]. See [127] above.
As ground 2 is an alternative ground to ground 1, and ground 1 has been made out, it is unnecessary for ground 2 to be determined.
Did the judge err in setting aside VCAT’s finding of fact that the comments were not made in legitimate pursuit of the client’s interests? — Ground 3
The VLSC submits that, as we have emphasised above, the jurisdiction under s 148 of the VCAT Act is confined to questions of law. The appeal to Bell J was not a re-hearing on the merits and it did not invite a re-examination of the factual finding that McDonald’s accusations were not made in the legitimate pursuit of his client’s interests.
McDonald submits that Bell J made no finding of fact on the appeal before him. He accepts that the scope of the appeal did not permit him to do so. Rather, McDonald contends, the complaint of the VLSC is that the only orders Bell J could make were to remit or dismiss the appeal. Such an understanding of s 148 is wrong, McDonald submits, because under s148(7)(b) the Court is empowered to ‘order on appeal ... an order that the Tribunal could have made in the proceeding’. In Oslandv Secretary to the Department of Justice [No 2] (‘Osland’)[213] the High Court explained that this power allows the Court to
make substitutive orders where only one conclusion is open on the correct application of the law to the facts found by the Tribunal. Such a case arises when no other conclusion could reasonably be entertained. In that event, the Court can make the order that the Tribunal should have made.[214]
[213](2010) 241 CLR 320.
[214]Ibid 332–3 [20] (citation omitted).
McDonald submits that was all that Bell J purported to do in dismissing the charges.
We accept that there is some scope, even within the confines of an appeal under s 148, for additional facts to be found if this is necessary for the disposition of the matter. After the passage quoted above from Osland, the High Court went on to say:
The language of s 148(7) is also wide enough to allow the Court of Appeal to make substitutive orders in other circumstances. But its powers must, as with the equivalent powers of the Federal Court in relation to the AAT, be exercised having regard to the limited nature of the appeal. Absent such restraint, a question of law would open the door to an appeal by way of rehearing. Where there is a factual matter that has to be determined as a consequence of the appeal, it may be that it is able conveniently to be determined by the Court of Appeal upon uncontested evidence or primary facts already found by the Tribunal. When the outstanding issue involves the formation of an opinion which is, as in this case, based upon considerations of public interest, then it should in the ordinary case be remitted to the body established for the purpose of making that essentially factual, evaluative and ministerial judgment.[215]
[215]Ibid 323 [20] (emphasis added).
Bell J was clearly aware of the constraints of s 148. He stated that he based his conclusion that VCAT was bound to conclude that McDonald did not fail to take reasonable care of the integrity and reputation of the legal profession on what he described as ‘the facts found [by VCAT] and inferences necessarily arising’.[216] This might appear to fall within the scope of the powers Osland confirmed that a court has under s 148. However, we consider that Bell J ultimately went further than what is permitted by s 148 when he found as a fact that McDonald was ‘at all times … acting within the scope of reasonable professional judgment in his client’s interest’.[217] In effect this involved setting aside the contrary finding by VCAT that McDonald’s accusations were not made in the legitimate pursuit of his client’s matter.
[216]Bell J reasons [79].
[217]Ibid.
We consider that the finding arrived at by Bell J was outside the scope of s 148 because the finding by the senior member that McDonald had not made the accusations he did in the legitimate pursuit of his client’s interests was a critical inference in the analysis undertaken in the second VCAT decision and it had not been appealed on the merits (nor could it be). We do not consider that it was the type of incidental fact-finding that a court exercising the jurisdiction under s 148 might need to determine in order to achieve a convenient disposition of a matter and avoid a remitter. Whether McDonald’s accusations were made in the legitimate pursuit of his client’s matter was not the exclusive or determinative factor for the senior member in assessing whether there was a breach of r 21 but it was nevertheless a major factor in the second VCAT decision. It could not be overturned without a re-hearing on the merits and, as the High Court emphasised in Osland, an appeal under s 148 is not an appeal by way of re-hearing.
In our view, ground 3 is made out.
Alternatively to grounds 1–3, did the judge err in finding that there was a reasonable basis for the comments? — Ground 4
As ground 4 is an alternative ground to grounds 1–3, and grounds 1 and 3 are made out, it is unnecessary for ground 4 to be determined.
Suffice it to say that we also consider that Bell J went further than what is permitted by s 148 when he concluded that the senior member ought to have treated McDonald’s belief that Catanese had lied to him as not only honestly held but also as a reasonably held belief. The honesty of the belief is firstly characterised by Bell J as ‘necessarily suppl[ying] an arguably reasonable basis for [McDonald’s] actions’[218] and later VCAT is criticised for ‘its failure to take into account [McDonald’s] reasonable belief that Mr Catanese had lied to him’.[219] As described above, we consider that the senior member concluded that McDonald had no reasonable basis to accuse Catanese of being ‘fundamentally dishonest’ in the context of a conversation the content of which he knew was contested and which, in the circumstances of the case, he ought to have considered might have given rise to a misunderstanding. A challenge to that finding did not form part of the appeal before Bell J.
[218]Ibid [72] (emphasis added).
[219]Ibid [78] (emphasis added).
We turn then to the issue raised by the Notice of Contention.
Could Bell J’s judgment be affirmed on the basis that VCAT erred by failing to consider if the accusations were ‘not extraneous’? — Notice of Contention
McDonald submits that it was not sufficient for VCAT to have applied a ‘legitimate interests’ test without also applying its counterpart, namely, whether the accusations were ‘not extraneous’ to the client’s interests. According to McDonald, a comment is ‘extraneous’, as Zammit J understood it, if it is entirely unrelated to the substance of the matter and may involve a gratuitous slur, for example, the slurs identified in Karageorge or where one practitioner calls another practitioner a ‘dirty rotten crook’.[220] McDonald claims that VCAT ought to have considered the question: ‘Were the accusations made by McDonald in pursuit of his client’s matter in the sense that they were not extraneous to it?’. The failure to ask and answer this question is submitted to demonstrate error.
[220]Zammit J reasons [28]. See [78] above.
In response the VLSC submits that the authorities do not support the view that any form of connection to the client’s matter is sufficient to render a comment ‘not extraneous’. Rather, it is a question of whether a practitioner’s comments are or are not extraneous to the legitimate pursuit of the client’s matter. VCAT asked and answered this question.
We agree.
We accept that a primary example of ‘extraneous’ comments are those to be found in Karageorge. However, we do not accept that extraneous comments are limited only to those involving gratuitous slurs. We consider that for a comment to be ‘not extraneous’ to a client’s interests there must be some real connection to the client’s matter or interests. In our view, the connection is revealed by the nature of the privilege discussed above, namely, that it is a privilege practitioners enjoy to speak out fearlessly for their clients. As the senior member said:
The starting point for consideration of Mr McDonald’s comments is the privilege enjoyed by solicitors to speak out fearlessly, where necessary in the interests of their clients.[221]
[221]The second VCAT decision [32] (emphasis added).
We accept that the discussion of the issue in Karageorge, Clyne, and Lander, shows that the issue of whether comments are ‘extraneous’ or ‘sufficiently extraneous’ to fall outside the privilege is really a question of whether the comments are made in the pursuit of the client’s interests or were not made for that purpose. As Zammit J said, in her discussion of Lander and Karageorge:
It is apparent from the judgment in Lander that the Court was concerned not to unduly constrain a solicitor’s right to free speech ... [t]he privilege was held not to apply in relation to comments that were ‘extraneous to the matters legitimately being pursued’, as was the case in Karageorge.[222]
[222]Zammit J reasons [25] (emphasis added). See also [45] above.
In our view the senior member in the second VCAT decision considered whether the accusations McDonald made were not extraneous to his client’s interests in that they were made in an attempt to further those interests. For example, it is clear from his reference to Zammit J’s reasons that he correctly saw the issue of whether comments were ‘extraneous’ as tied to the question of whether they were made in the legitimate pursuit of the client’s interest. He said:
The Court held that the Tribunal wrongly applied the test outlined in Rule 21 without first considering the applicability of that test, derived from Lander. It should have determined whether Mr McDonald’s comments were made in the legitimate pursuit of his client’s matter or whether they were extraneous to his client’s interests, so as to determine the applicability of the ‘reasonable basis’ test outlined in Lander.[223]
[223]The second VCAT decision [14] (emphasis added). See also [10] and [12].
He expressly took into account McDonald’s submissions on the issue,[224] the decisions in Clyne and Karageorge on the issue,[225] and the discussion by Zammit J.[226] Furthermore, he made a finding that the accusations McDonald made were not merely an example of ineffective advocacy in an attempt to further the client’s matter; rather, they were ‘sufficiently extraneous’ to the legitimate pursuit of the client’s matter to fall outside the privilege because at ‘the time they were written, they served no purpose other than disparaging Mr Catanese’. [227] In other words, the accusations were not made with the requisite connection to the pursuit of the client’s interests to render them ‘not extraneous’ to the matters legitimately being pursued.
[224]Ibid [24].
[225]Ibid [31].
[226]Ibid [33], n 29.
[227]The second VCAT decision [57] (emphasis added). See [98] above.
We would dismiss the Notice of Contention.
Conclusion
Leave to appeal should be granted and the appeal should be allowed.
The charges remain proven.
- - -
18 Overarching obligation—requirement of proper basis
A person to whom the overarching obligations apply must not make any claim or make a response to any claim in a civil proceeding that — (a) is frivolous; or (b) is vexatious; or (c) is an abuse of process; or (d) does not, on the factual and legal material available to the person at the time of making the claim or responding to the claim, as the case requires, have a proper basis.
22 Overarching obligation to use reasonable endeavours to resolve dispute
A person to whom the overarching obligations apply must use reasonable endeavours to resolve a dispute by agreement between the persons in dispute, including, if appropriate, by appropriate dispute resolution, unless — (a) it is not in the interests of justice to do so; or (b) the dispute is of such a nature that only judicial determination is appropriate.
Example
A proceeding where a civil penalty is sought may be of such a nature that only judicial determination is appropriate.
11
4
0