Viscariello v Legal Practitioners Conduct Board

[2012] SASCFC 147

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Civil)

VISCARIELLO v LEGAL PRACTITIONERS CONDUCT BOARD

[2012] SASCFC 147

Judgment of The Full Court

(The Honourable Justice Gray, The Honourable Justice Sulan and The Honourable Justice Blue)

21 December 2012

PROFESSIONS AND TRADES - LAWYERS - COMPLAINTS AND DISCIPLINE - DISCIPLINARY PROCEEDINGS

PROFESSIONS AND TRADES - LAWYERS - COMPLAINTS AND DISCIPLINE - PROFESSIONAL MISCONDUCT - MISLEADING COURT AND PERVERTING THE COURSE OF JUSTICE

PROFESSIONS AND TRADES - LAWYERS - COMPLAINTS AND DISCIPLINE - PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT - IMPROPER DEALINGS

The appellant was charged in the Legal Practitioners Disciplinary Tribunal with two counts of unprofessional conduct.  First, that the appellant engaged in conduct in an attempt to defeat adverse costs orders against a company of which the appellant was at various times a director and shareholder and for which the appellant acted as solicitor. Second, that he falsely gave evidence before a Judge of the Supreme Court of South Australia.

The charges arose out of the purchase of land by the company and subsequent litigation arising from the proposed development of that land. The company purchased the land as trustee of a discretionary trust, of which the appellant and his partner were beneficiaries. The company then made an application to the relevant Council for development consent to construct a house on the land. Consent was refused and the company appealed to the Environment, Resources & Development Court, which allowed the appeal. The company resisted a subsequent appeal to the Supreme Court by two objectors. The Supreme Court appeal exposed the company to a potential liability to pay the costs of the other parties if the appeal proved successful. The appellant acted for the company in relation to the appeals.

In June 2004, the trust deed constituting the trust was amended by the appellant to remove a clause providing for the trustees to be indemnified out of the assets of the trust fund for liabilities incurred in the course of acting for the trust and to replace it with a clause providing that the trustees were not indemnified out of the assets of the trust fund for such liabilities.

Subsequently, the appeal was allowed and the parties corresponded regarding the costs of the appeals.

In 2006, the appellant caused the company to be replaced by another of which he was the sole director as trustee of the trust and transferred the land the the new trustee. 

The other parties to the appeal took action to recover their costs of the Environment, Resources & Development Court and the Supreme Court appeals. They applied in the District and Supreme Courts for charging orders over the land.

During the hearing of the application to the Supreme Court for charging orders, the appellant gave evidence that the company was acting in its own right, and not as trustee of the trust, in pursuing the development of the land and in particular in applying for development consent and in the subsequent appeals.

The Tribunal found the appellant guilty of unprofessional conduct in respect of the charges arising from this conduct. It found that the appellant had taken steps in relation to the trust in 2004 and again in 2006 as an intended and deliberate course of conduct with the objective of defeating adverse costs orders against the company. It found that the appellant lied to a Judge of this Court and lied to the Tribunal in sworn evidence on the topic whether the company was acting in its own right or as trustee of the trust in pursuing the development of the land.

The appellant appealed against the Tribunal’s decision. The respondent instituted disciplinary proceedings against him seeking an order that his name be struck off the roll of legal practitioners. The appeal and the disciplinary proceedings were heard together in so far as they raise for determination the question whether the appellant was guilty of unprofessional conduct.

Held:

Per The Court:

(1)     No error has been demonstrated in the Tribunal’s finding that the appellant made the amendment to the trust deed in 2004 for the purpose of attempting to defeat adverse costs orders against the company in the litigation.  The findings made by the Tribunal were open to it and are confirmed (at [121]-[123]).

(2)     No error has been demonstrated in the Tribunal's finding that the appellant changed the trustee in 2006 for the purpose of attempting to defeat adverse costs orders against the company in the litigation.  The findings made by the Tribunal were open to it and are confirmed (at [137]-[138]).

(3)     No error has been demonstrated in the Tribunal’s finding that the company acted in its capacity as trustee and not in its own right in making the application for development consent and the subsequent appeals. The findings made by the Tribunal were open to it and are confirmed (at [177]-[178]).

(4)     The finding that the appellant gave false evidence before a Judge of the Supreme Court of South Australia when he said that the company had been acting in its own right was open to it and is confirmed (at [178]).

(5)     The appeal is dismissed (at [179]).

(6)     In the disciplinary proceedings, having regard to the Tribunal’s findings and following a review of the underlying evidence, the appellant engaged in unprofessional conduct as charged in courts 1 and 2 (at [180]).

Corporations Act 2001 (Cth) s 588FE; Legal Practitioners Act 1981 (SA) s 5, s 82, s 86, s 89; Income Tax Assessment Act 1936 (Cth) Part IVA; Taxation Administration Act 1996 (SA) Part 6A; Trustee Act 1936 (SA) s 35; Trustee Act 1958 (SA) s 36, referred to.
Moyes v J & L Developmetns Pty Ltd [2007] SASC 261; RWG Management Ltd v Commisioner for Corporate Affairs (Victoria) [1985] VR 385, discussed.
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 557; Cannane v J Cannane Pty Ltd (in liquidation) [1998] HCA 26; (1998) 192 CLR 557; Hardie v Hanson [1960] HCA 8; (1960) 105 CLR 451; Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170; R v Collingridge (1976) 16 SASR 117; R v Percy Dalton (London) Ltd (1949) 33 Cr App R 102; Williams v Lloyd; Re Williams [1934] HCA 1; (1934) 50 CLR 341, considered.

VISCARIELLO v LEGAL PRACTITIONERS CONDUCT BOARD
[2012] SASCFC 147

Full Court:      Gray, Sulan and Blue JJ

THE COURT:

1. On 20 August 2008, John Viscariello was charged in the Legal Practitioners Disciplinary Tribunal with unprofessional conduct upon the complaint of the Legal Practitioners Conduct Board.[1]

   [1] Pursuant to section 82(2) of the Legal Practitioners Act 1981 (SA).

2. The Tribunal found Mr Viscariello guilty of unprofessional conduct.[2]  The Tribunal subsequently recommended that disciplinary proceedings be commenced in this Court.[3]

   [2]    Legal Practitioners Act 1981 (SA) section 82(6).

   [3]    Legal Practitioners Act 1981 (SA) section 82(6)(a)(v).

3. Mr Viscariello has appealed against the Tribunal’s findings of unprofessional conduct, recommendation that disciplinary proceedings be instituted and order that he pay the Board’s costs of the proceedings before the Tribunal.[4]

   [4]    Legal Practitioners Act 1981 (SA) section 86.

4. The Board has instituted disciplinary proceedings against Mr Viscariello seeking an order that his name be struck off the roll of legal practitioners.[5]

   [5]    Legal Practitioners Act 1981 (SA) section 89.

5. Mr Viscariello’s appeal and the Board’s disciplinary proceedings were heard together insofar as they raise for determination the question whether Mr Viscariello was guilty of unprofessional conduct.  The question what orders ought to be made following that determination was deferred.

6. The Board’s charge comprised two counts of unprofessional conduct.  First, that Mr Viscariello engaged in conduct in an attempt to defeat adverse costs orders against J & L Developments Pty Ltd (“J & L Developments”).  Second, that he falsely and dishonestly gave evidence before a Judge of this Court on 1 December 2006 in the matter of Moyes v J & L Developments Pty Ltd (No 2).[6]

   [6]    Moyes v J & L Developments Pty Ltd [2007] SASC 261.

7. The charges arose out of the purchase of land in Birch Road, Stirling, in 2003 by J & L Developments Pty Ltd, of which Mr Viscariello was at various times a director and shareholder, and subsequent litigation arising from the proposed development of that land.  Mr Viscariello acted as solicitor for the company in relation to relevant transactions and the litigation. It was not in dispute that Mr Viscariello’s conduct in relation to the underlying factual matters was in the course of, or connection with, his professional legal practice.[7]

   [7] Within the meaning of paragraph (b) of the definition of “unprofessional conduct” in section 5 of the Legal Practitioners Act 1981 (SA).

8. The Tribunal found Mr Viscariello guilty of unprofessional conduct in respect of both charges.  In reaching its conclusions, the Tribunal was satisfied to the requisite high degree that Mr Viscariello lied to a Judge of this Court and lied to the Tribunal in sworn evidence on the topic whether J & L Developments was acting in its own right or as trustee of the Stirling Property Trust for the purpose of the development at Stirling, including for the purpose of lodging a development application with the Council and pursuing and defending subsequent appeals.  The Tribunal was also satisfied to the requisite high degree that Mr Viscariello had earlier taken steps in relation to the Stirling Property Trust as an intended and deliberate course of conduct with the objective of defeating adverse costs orders against J & L Developments.  The Tribunal held that this conduct amounted to unprofessional conduct.

9. Following the conclusion of submissions on Mr Viscariello’s appeal, an application was made to amend the grounds of appeal and for the Court to receive further evidence and further submissions.  The Court granted leave to amend, received further evidence de bene esse and heard further submissions.  These matters are addressed in detail later in these reasons.

10. The Court has concluded that, although the further evidence is of little, if any relevance, it should be received when regard is had to the seriousness of the findings made by the Tribunal.

11. We have reached the conclusion that Mr Viscariello’s appeal should be dismissed.  We consider that the findings of the Tribunal should be confirmed.  Those findings were open to the Tribunal.  We would go further.  The evidence before the Tribunal overwhelmingly supported the conclusion that the charges had been made out and that, as a consequence, Mr Viscariello’s unprofessional conduct should now be addressed.  Our reasons follow.

    Background

12. Mr Viscariello was admitted as a legal practitioner of this Court on 16 December 2002.  He was first engaged as a consultant solicitor by Gretsas Chrzaszcz.  In 2003, he commenced as a consultant solicitor with McNamara Business and Property Law.  He was appointed a director of the company which conducted that legal practice in 2008. 

13. Between 1978 and 1993, Mr Viscariello had worked in the building construction and property development industry.  In May 1992, he and his father acquired a shelf company, of which they became the directors and shareholders. Mr Viscariello held 99 shares and his father held one share.  The company was renamed J & L Developments Pty Ltd.  J & L Developments undertook a land division development at Newton in 1992-1993. 

14. Nick Nicolaou acted at all material times as accountant for J & L Developments on the instructions of Mr Viscariello.

15. In March 2002, Mr Viscariello and his then partner Tanya Hamilton-Smith entered into a contract to purchase a property situated at 33 Birch Road, Stirling.[8]  In September 2002, Ms Hamilton-Smith replaced Mr Viscariello’s father as a director of J & L Developments. 

    [8]    Referred to in these reasons as the Stirling property.

16. In October 2002, a discretionary trust entitled the Stirling Property Trust (“the Stirling Trust”) was created by a Deed of Settlement dated 2 September 2002.  J & L Developments was trustee.  Mr Viscariello and Ms Hamilton-Smith were joint appointors with power to change the trustee.  They were also the corpus beneficiaries.

17. Mr Viscariello and Ms Hamilton-Smith nominated J & L Developments to become the purchaser of the Stirling property and settlement took place on 17 October 2002.  J & L Developments acquired the Stirling property as trustee of the Stirling Trust.  Mr Viscariello and Ms Hamilton-Smith wished to construct a two storey house on the Stirling property.

18. In September 2002, another discretionary trust entitled the Little Hampton Trust was created by a Deed of Settlement dated 15 April 2002.  Ms Hamilton-Smith was the initial trustee.  Mr Viscariello and Ms Hamilton-Smith were joint appointors with power to change the trustee.  They were also the corpus beneficiaries.  On 14 October 2002, J & L Developments replaced Ms Hamilton-Smith as trustee.

19. J & L Developments as trustee of the Little Hampton Trust acquired land at Littlehampton[9] from Ms Hamilton-Smith in 2002.  It then undertook a land division, dividing the land into 18 allotments.  J & L Developments as trustee of the Little Hampton Trust obtained an Australian Business Number and registered for GST.  Domenic Rinaldi was the accountant for the Little Hampton Trust from 2002 to April 2004.  Mr Rinaldi lodged quarterly Business Activity Statements on behalf of the Little Hampton Trust on instructions from Mr Viscariello.  The first Business Activity Statement (“BAS”) was lodged by the Little Hampton Trust in July 2003 for the April-June 2003 quarter. 

    [9]    Referred to in these reasons as the Littlehampton property.

20. Neither the Stirling Trust nor J & L Developments in its own right were registered for GST and they did not lodge any BAS returns. 

21. On 26 March 2003, on the instructions of Mr Viscariello, Master Plan SA Pty Ltd, town and country planners, lodged a development application with the Adelaide Hills Council for the construction of a two storey house on the Stirling property.  The development application form showed J & L Developments as both applicant and owner with nothing on the form to suggest that it was acting as trustee.  The form showed as builder “to be advised”.  A number of objections were lodged to the application, including by Mr Moyes and Mr Brooks. 

22. On 4 August 2003, the Council refused the development application.  McNamara Business & Property Law lodged an appeal on behalf of J & L Developments to the Environment, Resources and Development Court.  The respondents to the appeal were the Adelaide Hills Council, Mr Moyes and Mr Brooks.  Mr Viscariello had the conduct at McNamara Business & Property Law of the appeal on behalf of J & L Developments.

23. On 5 April 2004, the Environment, Resources and Development Court allowed the appeal and granted development approval.  The appellate jurisdiction of that Court in such matters is normally a no-costs jurisdiction.  It made no order as to the costs of the appeal save that it did order J & L Developments to pay the legal and expert witness costs of the respondent objectors and the Council due to late evidence being adduced by J & L Developments.  The costs were ultimately taxed and allowed at $3,982.66 and $5,408.68 respectively.

24. On 19 April 2004, Mr Moyes and Mr Brooks lodged an appeal to this Court against the orders of the Environment, Resources and Development Court.  The respondents were J & L Developments and the Adelaide Hills Council.  The Council supported the appellants.  Mr Viscariello had the conduct of the matter at McNamara Business & Property Law on behalf of J & L Developments.  The appeal to this Court exposed J & L Developments to a potential liability to pay the appeal costs of the appellants and the Council if the appeal proved successful.  It was common ground that Mr Viscariello, as a legal practitioner, was aware of this potential liability.

25. On 5 May 2004, the appeal was listed for hearing on 4 June 2004 before Debelle J.  Mr Viscariello appeared for J & L Developments at the hearing on 5 May 2004.

26. With effect on 1 June 2004, the trust deeds of each of the Stirling Trust and the Little Hampton Trust were amended by Mr Viscariello to delete the original clause 20(b) and substitute a new clause 20(b).  The original clause 20(b) in each Deed provided:

    The Trustees shall be indemnified out of the Assets of the Trust Fund for all liabilities incurred by them in the course of acting for the trust.

    and the substitute clause 20(b) in each Deed provided:

    The Trustees shall not be indemnified out of the Assets of the Trust Fund or at all for all or any liabilities incurred by them in the course of acting for the trust.

    (Emphasis added)

27. At the same time, the trust deeds were amended to substitute Mr Nicolaou for Ms Hamilton-Smith as one of the two joint appointors of each trust.  At the same time, Mr Nicolaou became a director and shareholder of J & L Developments in place of Ms Hamilton-Smith.  It was not in dispute that Mr Viscariello was acting in the course of, or in connection with, his professional legal practice in relation to the amendments to clause 20(b) in each deed.

28. On 4 June 2004, the appeal was heard by Debelle J.  Judgment was reserved.

29. On 17 June 2004, Mr Nicolaou, as accountant for J & L Developments, lodged with the State Taxation Office applications for opinion in relation to the amendments to the trust deeds and the transfer of shares in J & L Developments.  The financial statements for J & L Developments for the year ended 30 June 2001 were attached to the applications.  The financial statements showed no activity in the financial years ended June 2000 or June 2001, other than the payment of the annual return fee and the payment of dividends out of prior retained profits.  The applications for opinion stated:

    The company acts as trustee only and is not a trading company.  Attached financial statements for the year ended 30th June, 2001, from which time the financial position of the company has not changed.[10]

    [10]   The other application for opinion was to the same effect.  It stated “We have enclosed a copy of the 2001 financials.  Since this date the company has acted only as a trustee and has not traded in its own right”.

30. On 7 October 2004, Debelle J allowed the appeal, set aside the development approval and ordered that J & L Developments pay the costs of Mr Moyes and Mr Brooks and the Adelaide Hills Council.

31. An appeal lodged by Mr Viscariello on behalf of J & L Developments to the Full Court was discontinued on 1 June 2005.  Correspondence then ensued between Mr Viscariello, acting for J & L Developments, and the Council and Mr Moyes and Mr Brooks as to their costs.

32. On 30 May and 1 June 2006, Mr Moyes and Mr Brooks and the Council lodged bills of costs pursuant to the order made by the Environment, Resources and Development Court in the District Court for taxation.  On 24 July 2006, they were taxed and allowed, as noted earlier, at $3,982.70 and $5,408.68 respectively.  On 24 August 2006, the Council served J & L Developments with an allocatur for $5,408.68.  Mr Moyes and Mr Brooks, at about the same time, obtained an allocator for $3,982.76.

33. On 30 August 2006, a notice of change of shareholders and directors of J & L Developments was lodged with ASIC.  The notice recorded the replacement of Mr Viscariello and Mr Nicolaou as directors and shareholders of J & L Developments with Ms Hamilton-Smith and her mother, Ms Carol Smith.

1. On 31 August 2006, memoranda of transfer of the Stirling property and the Littlehampton property by J & L Developments to Palm Hills Pty Ltd[11] dated 15 April 2006 were stamped by Revenue SA.  Deeds amending the trust deeds of the Stirling Trust and Little Hampton Trust dated 15 April 2006 substituting Palm Hills as trustee for J & L Developments would appear to have been lodged with Revenue SA with the memoranda. 

   [11]   Referred to in these reasons as Palm Hills.

2. On 31 August 2006, Palm Hills lodged caveats with the Registrar-General over the Stirling property and Littlehampton property claiming an estate as legal owner as the new trustee of the respective trusts.  Mr Viscariello was the sole director and shareholder of Palm Hills.  It was not in dispute that Mr Viscariello was acting in the course of, or in connection with, his professional legal practice in relation to the change of trustee of the Stirling Trust and transfer of the Stirling property to Palm Hills.

3. On 1 and 4 September 2006, the Adelaide Hills Council and Mr Moyes and Mr Brooks applied to the District Court for charging orders over the Stirling property in respect of their costs in the Environment, Resources and Development Court.  The applications were made specially returnable for hearing on 5 September 2006.

4. On 5 September 2006, Mr Viscariello swore an affidavit in opposition to the charging order applications.  He deposed to and exhibited the deeds of amendment of the trust deed in June 2004 pursuant to which he said the trustee was not entitled to any indemnity out of the assets of the Stirling Trust.  He deposed to the change of trustee from J & L Developments to Palm Hills and lodgement of the memorandum of transfer from J & L Developments to Palm Hills of the Stirling property.  He contended that, as a consequence of those matters, there was no basis for the charging orders. 

5. On 5 September 2006, on the application of counsel for J & L Developments, the District Court adjourned the argument on the applications for charging orders to 20 September 2006 and ordered that J & L Developments file any further answering affidavits by 18 September.

6. On 8 September 2006, interim allocaturs were issued by this Court for costs of the appeal to this Court in favour of Mr Moyes and Mr Brooks and the Council against J & L Developments for $28,000 and $30,000 respectively.  On 14 and 15 September 2006, the Council and Mr Moyes and Mr Brooks applied to this Court for charging orders over the Stirling property in respect of those costs.  On 19 September 2006, those applications were listed for argument on 4 October 2006.

7. On 19 September 2006, Mr Viscariello swore a further affidavit in the District Court proceedings.  He exhibited copies of the certificates of title to the Stirling property showing that the transfer to Palm Hills had now been registered.

8. On 20 September 2006, the charging order applications came on for argument in the District Court.  Permission was sought to amend the applications.  This was opposed by Robert Sallis, counsel for J & L Developments, who sought an adjournment of the argument.  The matter was ultimately further adjourned for argument on 5 October 2006.  Orders were made that any further affidavits by J & L Developments be filed by 3 October 2006 and that, by that date, J & L Developments file an affidavit deposing to its assets and those of the Stirling Trust and deposing to on whose behalf the Environment, Resources and Development Court proceedings were initiated and the circumstances in which and the reasons for the lodging of the transfer of the Stirling property to Palm Hills.

9. On 28 September 2006, Mr Viscariello forwarded to Mr Sallis a draft affidavit of Ms Hamilton-Smith prepared in purported compliance with the orders made by the District Court on 20 September 2006.  The draft affidavit contained a statement:

   The appeal to the [Environment Court] … was filed by J&L Developments in its own right and not in its capacity as trustee for the beneficial owner of the land, namely the Stirling Property Trust.

10. On 3 October 2006, Ms Hamilton-Smith swore virtually identical affidavits in this Court and the District Court.  Each contained statements to the effect of the statement in the draft affidavit extracted in the previous paragraph.  On 3 October 2006, Mr Viscariello swore an affidavit in this Court largely identical to his affidavit sworn on 5 September 2006 in the District Court.

11. On 4 October 2006, the applications to this Court for charging orders were adjourned with a view to their being listed for argument before Debelle J.  On 5 October 2006, the applications for charging orders in the District Court were adjourned, pending the hearing and determination in this Court.

12. On 1 December 2006, the applications for charging orders came on for hearing before Debelle J.  Mr Sallis appeared for J & L Developments.  Ms Hamilton-Smith was not available for cross-examination on her affidavit.  Mr Viscariello was not available for cross-examination on his affidavit because he was instructing counsel in another matter in another court.  Debelle J waited for Mr Viscariello to complete his other matter so that he could attend for cross-examination.  When Mr Viscariello arrived, he was called by Mr Sallis to give oral evidence on behalf of J & L Developments and Palm Hills.

13. In evidence in chief, Mr Viscariello gave evidence that:

    J & L Developments Pty Ltd, in relation to the application for planning consent to the Adelaide Hills Council, in relation to the appeal to the Environment Court and in relation to its position as respondent in the appeal to this court was done in its capacity, in its own right, and not in its capacity as trustee of the Stirling Property Trust.

    Mr Viscariello claimed that, when the other parties had appealed to the Supreme Court in May 2004 against the orders made by the Environment, Resources and Development Court, he had been aware that there was a risk of an adverse costs order against J & L Developments.  When asked if he addressed his mind to whether that could affect the Stirling Trust, he initially said:

    Well, it didn’t really enter my mind because, as far as I was concerned, the first respondent was acting in its own right and I didn’t think for one minute that I was acting in a way that would put the assets at risk, the trust assets of the Stirling Property Trust at risk, because J & L was a legal entity of its own and acting in its own right.

14. Mr Viscariello was then asked the purpose behind the amendment in June 2004 to exclude the trustee’s right of indemnity and he said:

    AI think a belt and braces approach, to remove any doubt whatsoever that, in relation to that matter, or in relation to any matters, that J & L Developments was somehow acting in its capacity as trustee for the trust in relation to these proceedings.  So, we wanted to make sure that it couldn’t be said that there was any doubt that J & L Developments was carrying out that in its own right, rather than in its capacity as trustee for the trust … to remove any doubt whatsoever that there could an inference or some suggestion that J & L Developments, in relation to those matters, was acting as trustee, in its capacity as trustee.

    QSo, you are saying that, at the beginning of this process – ie, when you made an application for planning approval to the council – this risk of exposure wasn’t in your mind … but, when the Supreme Court appeal loomed you addressed it.

    A     Yes, that’s correct.

    (Emphasis added)

15. In cross-examination, it was put to Mr Viscariello that when he became aware of the appeal by Mr Moyes and Mr Brooks, he was concerned as to the potential liability for costs.  He gave evidence as follows:

    I was concerned that if there was a potential liability that it could be said, as has been put to me now, that we were acting in our capacity as trustee for the trust and I felt an obligation to make sure that we changed that to ensure that there could be no doubt, there could be no confusion, there could be no submission put to me that we were acting as trustee, because the ultimate purpose of the trustee was to protect the trust assets for the benefit of the potential beneficiaries …

16. It was then put to Mr Viscariello that if J & L Developments’ exposure to the costs was its own, there would be no need to amend clause 20(b) of the trust deed.  He responded:

    That’s right, but, as I explained earlier, out of an abundance of caution and a belt and braces approach, as I thought I was obligated to do, was to remove any doubt whatsoever as to what was happening, so it couldn’t be said and no submission could be put, as you are putting to me now, that that’s what was happening.  If we had not amended the deed you would have then made a submission to me “well, why didn’t you do it?”  I just simply say that was just a very conservative – I felt I had an obligation as trustee to remove any possible doubt that that could be inferred in any way whatsoever.

17. When it was put to him that the amendment to the trust deed to remove the right of indemnity was done in anticipation of the appeal before Debelle J, Mr Viscariello responded:

    As I explained before, it was done to protect the trust assets and to make sure that there could be no inference drawn whatsoever that J & L Developments Pty Ltd, the first respondent, that it could be said in any way shape or form that it was acting in those proceedings, to which you referred, in its capacity as trustee.

    (Emphasis added)

18. Up to 1 December 2006, J & L Developments had not complied with the order made by the District Court on 20 September 2006 that it file an affidavit deposing to its assets and those of the Stirling Trust.  No financial statements had been prepared for J & L Developments in its own right since 2001 or at any time for the Stirling Trust. 

19. In December 2006, Mr Nicolaou, on Mr Viscariello’s instructions, prepared financial statements for J & L Developments for the years ended June 2004, 2005 and 2006 and for the Stirling Trust for the year ended June 2005 and for the four months ended 31 October 2006.  They were prepared in anticipation of J & L Developments being placed into administration.  The financial statements for the Stirling Trust showed that it earned a capital gain on the sale of the Stirling property in the four months ended October 2006 of over $250,000 and incurred no expenses other than rates and taxes and accountancy fees.  The financial statements for J & L Developments showed that it incurred legal and planning costs over the three years totalling approximately $78,000.  The financial statements of both the Stirling Trust and J & L Developments were prepared after Mr Viscariello gave evidence on 1 December 2006 that J & L Developments had acted in its own right as developer and in accordance with his evidence.

20. On 19 December 2006, J & L Developments was put into administration by its directors. 

21. On 11 July 2007, Debelle J delivered reasons for judgment.  He found that in applying for development approval, prosecuting the appeal in the Environment, Resources and Development Court and defending to the appeal in this Court, J & L Developments was acting as trustee of the Stirling Trust.  He held that the amendment to clause 20(b) of the trust deed to negate the right of indemnity against the assets of the trust was ineffective at law, and that the change of trustee and transfer of legal title to the Stirling property did not prevent the making of a charging order.

22. On 15 October and 14 November 2007, the Board wrote to Mr Viscariello concerning his conduct which later became the subject of the charges.  On 23 November 2007, he responded and provided an explanation for his conduct.

23. On 20 August 2008, the Board laid a charge against Mr Viscariello in the Tribunal containing two counts of unprofessional conduct.  On 3 April 2012, the Tribunal delivered a report with findings in which it found the two counts proved.  On 12 April 2012, the Tribunal recommended that disciplinary proceedings be commenced against Mr Viscariello in this Court and ordered that he pay the Board’s costs of the Tribunal proceedings save for the costs thrown away as a consequence of the adjournment of the enquiry on 15 November 2010.

24. On 24 April 2012, Mr Viscariello appealed against the finding of unprofessional conduct and the orders made by the Tribunal.  On 2 May 2012, the Board instituted proceedings in this Court seeking an order that Mr Viscariello’s name be struck off the roll of practitioners.

    The Charge

25. The first count charged was:

    The practitioner engaged in conduct in an attempt to defeat any adverse costs order against J & L Developments Pty Ltd (“J & L Developments”) which might be made as a result of litigation in the Supreme Court in which it was involved, by putting the only asset of J & L Developments, namely its right of indemnity out of the assets of the Stirling Property Trust (“S P Trust”) in particular the asset comprising the land at 33 Birch Road, Stirling in the State of South Australia (33 Birch Road) out of the apparent control of J & L Developments.

    Fourteen numbered sub-paragraphs appeared under the heading “Particulars”. Paragraph 1.10 of the Particulars alleged:

    1.10On or about 1 June 2004 the trust deed constituting the S P Trust was amended by the practitioner by deleting clause 20(b) which provided:

    “The Trustees shall be indemnified out of the Assets of the Trust Fund for all the liabilities incurred by them in the course of acting for the Trust”.

    and substituting the following:

    “The Trustees shall not be indemnified out of the Assets of the Trust Fund or at all for all or any liabilities incurred by them in the course of acting for the Trust”.

    Paragraphs 1.11 and 1.12 alleged:

    1.11   On or about 15 April 2006 J & L Developments executed a transfer of 33 Birch     Road to Palm Hills. 

    1.12   On or about 15 April 2006 J & L Developments retired as trustee of the S P Trust   and Palm Hills was appointed replacement trustee.

26. Mr Viscariello argued before the Tribunal and contended on appeal that on its proper construction, count 1 only charged conduct in 2004 in respect of the removal of the indemnity from the trust deed and not in 2006 in respect of the change of trustee and transfer of the legal title to the Stirling property.  We address that contention below.  For convenience, we use the term “the first limb” to denote count 1 insofar as it relates to conduct in 2004 and “the second limb” to denote count 1 insofar as the Board contends that it relates to conduct in 2006.

27. Count 2 charged that:

    In testifying before the Supreme Court of South Australia on 1 December 2006 in the matter of Moyes & Another v J & L Developments Pty Ltd & Another (No.2) [2007] SASC 261, the practitioner falsely and dishonestly in explanation of the steps referred to in paragraphs 1.10 to 1.15 above, gave evidence that J & L Developments had been acting in its own right and not as trustee of the S P Trust, in making the application for provisional development consent to the Adelaide Hills Council, and the steps consequent thereon, including the appeal to the Environment Court, and the opposition to the appeal in the Supreme Court.

    Particulars were given of specific questions and answers comprising that evidence.

    The respective cases

28. It was the Board’s case before the Tribunal that Mr Viscariello was the alter ego of J & L Developments, effectively owning and controlling that company.  The Board’s case was that Mr Viscariello took three successive steps for the purpose of defeating adverse costs orders against J & L Developments in the development approval litigation, namely:

    -in June 2004 by amending clause 20(b) of the trust deed of the Stirling Trust by removing the trustee’s right of indemnity and excluding any right of indemnity;

    -in mid-2006 by removing J & L Developments as trustee and substituting Palm Hills and by conveying the legal title to the Stirling property to Palm Hills; and

    -on 1 December 2006 by giving evidence on oath that J & L Developments had always acted in its own right, and not as trustee of the Stirling Trust, in applying for development approval and in pursuing and defending the subsequent appeals concerning development approval.

29. In relation to June 2004, it was the Board’s case that Mr Viscariello advised and caused J & L Developments to amend the trust deed of the Stirling Trust so as to remove the trustee’s right of indemnity in the knowledge that the appeal hearing listed for 4 June was looming and for the purpose of putting the trustee’s right of indemnity against the Stirling property out of the reach or apparent reach of the Council and the objectors.  It was the Board’s case that Mr Viscariello had admitted in his evidence before Debelle J on 1 June 2006 that it was the looming appeal and prospect of the Council and objectors seeking to have recourse to the Stirling property which prompted him to amend clause 20(b) of the Stirling Trust Deed.  The Board contended that, in his evidence before the Tribunal, Mr Viscariello equivocated and prevaricated as to the reason for the amendment, but ultimately was forced to concede that he did so partly to protect the assets of the Stirling Trust against adverse costs orders.

30. It was the Board’s case that by mid-2006, Mr Viscariello decided not to rely solely upon the amended provisions of clause 20(b) of the Stirling trust deed to prevent the Council and the objectors seeking to have recourse to the Stirling property to enforce the adverse costs orders which they had now obtained.  It was the Board’s case that Mr Viscariello decided to place a further obstacle in their path in mid-2006 by advising and causing the removal of J & L Developments as trustee of the Stirling Trust and its replacement with his company Palm Hills coupled with a transfer of the legal title to the Stirling property to Palm Hills.  It was the Board’s case that there was no other rational reason for those changes other than an attempt to avoid the looming enforcement of the adverse costs orders against the Stirling property.

31. It was the Board’s case that Mr Viscariello deployed those two successive steps as grounds to oppose charging orders over the Stirling property when he filed his affidavit in the District Court on 5 September 2006 and this was the intended implementation of the steps which he had earlier taken in mid-2004 and mid-2006.

32. It was the Board’s case that, following receipt of the Council’s outline of submissions on 18 September 2006, Mr Viscariello became concerned that the two steps which he had earlier taken and had now deployed in opposition to the charging orders might not be effective in law.  This prompted him to invent a third and fictitious step, namely that since March 2003, in applying for development approval and pursuing and defending the ensuing appeals, J & L Developments had not been acting as trustee of the Stirling Trust but rather in its own right.  The Board relied upon the contents of Mr Viscariello’s affidavits of 5 and 19 September 2006, statements by Mr Nicolaou in 2004 to the revenue authorities that J & L Developments did not undertake any activities in its own right, the failure of J & L Developments to register for GST or lodge BAS returns in its own right, the absence of any contemporaneous document demonstrating that J & L Developments was acting in its own right and finally, the absence of any terms of an agreement between J & L Developments in its own right and J & L Developments as trustee of the Stirling Trust for J & L Developments to be paid for development activities which it undertook.

33. Mr Viscariello’s case before the Tribunal was that the June 2004 amendments to clause 20(b) of the Stirling trust deed were not made for the purpose of defeating adverse costs orders but merely as part of generic forward-looking estate planning.  In the alternative, Mr Viscariello contended that if his purpose had been to defeat adverse costs orders, it was legally impossible of attainment and hence he could not be guilty of an attempt to defeat the costs orders as a matter of law.

1. In relation to the mid-2006 change of trustee and conveyance of the legal title to the Stirling property, Mr Viscariello’s case was that these steps were not taken for the purpose of defeating, or connected in any way with, adverse costs orders.  Rather, he changed the trustee because Mr Nicolaou wished to resign as a director of J & L Developments and he could not procure an alternative director to replace him.  He therefore had to replace the trustee itself with a single-director company, Palm Hills.  Again, he contended that, if his purpose was to defeat adverse costs orders, it was legally impossible of attainment and hence he could not be guilty of an attempt to defeat the costs orders as a matter of law.

2. In relation to evidence given on 1 December 2006, Mr Viscariello’s case was that his evidence was true and that J & L Developments had always acted in its own right in relation to the development approval and not as trustee of the Stirling Trust.

   The Tribunal’s Findings

3. The Tribunal identified the standard of proof as the civil standard, having regard to the gravity of the facts to be proved.  The Tribunal said that it was mindful that the allegations were very serious and that it needed to be satisfied to a very high degree to find Mr Viscariello guilty of unprofessional conduct.[12]

   [12]   The Tribunal referred to Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149. See also Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-362 per Dixon J; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 at 170-171 per Mason CJ, Brennan, Deane and Gaudron JJ.

4. In relation to count 1, the Tribunal found that potential costs orders in the development approval litigation were a major motivating factor for the removal of the indemnity in June 2004 and the first step in Mr Viscariello’s attempt to remove the Stirling property and right of indemnity against it from the reach or apparent reach of the claims by the objectors and the Council for costs.

5. The Tribunal referred to the timing of the amendment, being after the appeal had been listed for hearing and three days before the hearing date of 4 June 2004.  It characterised Mr Viscariello’s evidence that the timing was coincidental as unbelievable.  The Tribunal referred to the fact that Mr Viscariello subsequently relied upon the removal of the indemnity in his affidavits of 5 September and 3 October 2006.

6. The Tribunal referred to and relied on Mr Viscariello’s evidence before Debelle J in December 2006 when he admitted that this was a motivating factor for the change to clause 20(b) of the trust deed.  The Tribunal referred to the reluctant admission by Mr Viscariello in cross-examination during his evidence before the Tribunal that the potential costs orders had been a motivating factor.

7. The Tribunal found that the change of trustee and legal owner in 2006 was another step in Mr Viscariello’s attempt to remove the Stirling property and the right of indemnity against it from the reach or apparent reach of the claims by the Council and the objectors for costs.

8. The Tribunal rejected Mr Viscariello’s evidence that he changed the trustee because Mr Nicolaou resigned as a director of J & L Developments, he could not find anyone else to take his place as a director, the constitution of J & L Developments required two directors and therefore he substituted Palm Hills, which had only a sole director, as trustee.  The Tribunal referred to the fact that, in cross-examination, Mr Viscariello admitted that he knew that he could have changed the constitution of J & L Developments to allow only one director, but said that he considered that it was easier to substitute Palm Hills as trustee of both trusts than to amend the constitution of J & L Developments.

9. The Tribunal referred to the fact that in his affidavit sworn on 5 September 2006, Mr Viscariello had relied upon the change of trustee as a ground for defeating the claims for charging orders.

10. In relation to count 2, the Tribunal found that it was satisfied to the requisite high degree that J & L Developments had not been acting in its own right in lodging the development application with the Council and in the subsequent appeals and that Mr Viscariello’s evidence before Debelle J on 1 December 2006 had been knowingly false.

11. The Tribunal referred to the fact that, in his affidavit sworn on 5 September 2006, Mr Viscariello had set out the grounds on which the Stirling property was not amenable to a charging order, namely the removal of the indemnity in 2004 and the change of trustee and legal ownership in 2006, and made no reference to J & L Developments having acted in its own right.  This was in circumstances in which Mr Viscariello’s evidence before Debelle J and the Tribunal was that he always regarded the fact that J & L Developments had acted in its own right as the primary defence to the charging order applications.

12. The Tribunal referred to what it characterised as evasion, prevarication and inconsistencies in Mr Viscariello’s evidence concerning his state of mind in June 2004 at the time the trust deed was amended to remove the right of indemnity.

13. The Tribunal rejected evidence by Mr Nicolaou that Mr Viscariello had informed him in 2003 that J & L Developments was acting in its own right as developer of the Stirling property.  The Tribunal relied upon the applications for opinion lodged by Mr Nicolaou with the Stamp Duties Office in June 2004 in which he stated that the company acted as a trustee only and had not traded in its own right, a statement by Mr Nicolaou’s office in September 2004 to the Australian Taxation Office that the company was only a trustee company, and the failure of Mr Nicolaou to prepare or lodge with the Australian Taxation Office any activity statements in respect of J & L Developments’ activities in its own right over the period from 2003 to 2006.

14. The Tribunal referred to the fact that there was no objective evidence prior to September 2006 that J & L Developments had acted in its own right.  There was no objective evidence of any agreement made in 2003 between J & L Developments and the Stirling Trust and there were no BAS returns or tax returns lodged by J & L Developments.

    Count 1

15. As earlier noted, the first limb of the Board’s case in relation to count 1 was that in June 2004, Mr Viscariello engaged in conduct in an attempt to defeat adverse costs orders whereby he advised and undertook the amendment of clause 20(b) of the trust deed.  The Tribunal found that this was conduct with the deliberate objective of defeating adverse costs orders.  Before the Tribunal, it was common ground that Mr Viscariello caused the trust deed of the Stirling Trust to be amended in June 2004 for the purpose of removing any right of indemnity of the trustee.  There was no real dispute that, in so acting, Mr Viscariello was acting for the purpose of putting J & L Developments’ right of indemnity against the Stirling property out of the control and apparent control of J & L Developments. 

16. The substance of the dispute before the Tribunal was whether, in so acting, Mr Viscariello’s purpose was, or included, attempting to defeat adverse costs orders made in the development approval litigation.  The Tribunal found that a prime motivation of Mr Viscariello was an attempt to defeat such adverse costs orders.

    Finding Not Reasonably Open on the Evidence

17. Mr Viscariello complained that the Tribunal’s finding that the amendment of clause 20(b) of the trust deed of the Stirling Trust in June 2004 was made by Mr Viscariello with the object of defeating adverse cost orders against J & L Developments was not reasonably open on the evidence.

18. We reject this contention.  In his evidence in chief and cross-examination before Debelle J, extracted above, Mr Viscariello expressly admitted that he amended the trust deed for the purpose of ensuring that the other parties to the development approval litigation did not prosecute, or successfully prosecute, a claim against the Stirling property in respect of their costs.  His evidence was that this was part of a belt and braces approach in that, in his own mind, the primary defence to such a claim would be that the company had acted in its own right and not as trustee of the Stirling Trust but it would rely upon this fallback position if necessary.  There was no suggestion in his evidence before Debelle J that the amendment was motivated or prompted by any other potential threat against the assets of the Stirling Trust, or that the amendment was not linked to the forthcoming hearing of the appeal.

19. In his letter to the Board dated 23 November 2007, Mr Viscariello reinforced that evidence.  His letter included the following statements:

    The amendment in June 2004 of the trust deed of the Stirling Property Trust occurred because I believed that J & L Developments made the development application in its own right and not in its capacity as the trustee of the Stirling Property Trust.  I believed that there was no basis for the assets of the trust to be at risk in relation to any liability that J & L Developments incurred independently of its role as trustee of the trust.  The amendment to the trust deed was made to make it clear that J & L Developments did not have any right to call upon assets of the trust to satisfy any liability it incurred independently of its role as trustee of the trust…

    The letter dated 27 August 2007 from the Honourable Justice Debelle states that he has a concern that “in executing a deed for the deliberate purpose of defeating an order for costs … might constitute unprofessional conduct”.  He is there referring to the amendment made to the trust deed on 1 June 2004 …

    At the hearing on Friday, 13 July 2007 I was represented by counsel, Mr Peter Heinrich … at page 7 line 28 and following His Honour stated that in his opinion a step was taken “… to seek to frustrate the ordinary consequences of the litigation, namely an order for costs…”

    Mr Heinrich responded and made submissions on my behalf … In summary, the submissions were to the following effect:

    1.The steps taken in relation to the amendment of the trust deed were arguably lawful…

    2.His Honour decided that the amendment to the trust deed did not remove the right to indemnity.  However, he accepted that the point was arguable…

    I believe that the Honourable Justice Debelle accepted the above submissions in the course of deciding to dismiss the application for indemnity costs.  I refer to paragraph 8 of the Second Reasons, where His Honour stated (a) that the amendment to the trust deed was a “… step believed [by J & L Developments] to be lawfully available to protect itself from the liability for costs…” …

    The conduct that is in issue is the role that I had in an arguably lawful step to minimise or reduce the potential financial exposure of J & L Developments and Stirling Property Trust in legal proceedings.  This involved a legal argument in connection with an amendment to a trust deed.

    (Emphasis added)

20. By contrast, in evidence before the Tribunal, Mr Viscariello did not unequivocally and consistently accept that his prime motivation in making the amendment was potential adverse costs orders in the development approval litigation.  In his evidence in chief before the Tribunal, he said that the amendment to the trust deed was prompted by his consideration in 2003 when J & L Developments decided that it would develop the Littlehampton property in its own right and he realised at that time that a claim might be made against it as developer with the claimant seeking to enforce the claim against land held by J & L Developments on trust.  He said that he explained his concern to Mr McNamara, who suggested that he amend the trust deed to remove the indemnity.  He said that it was this which led to the amendment of clause 20(b). 

21. In evidence in chief in the Tribunal, Mr Viscariello said that, at about the same time, he decided to remove Ms Hamilton-Smith as a director of J & L Developments because she was under siege in litigation and it was possible that she would go bankrupt.  He made no suggestion in his evidence in chief that Ms Hamilton-Smith’s position was connected in any way to the amendment to clause 20(b) of the trust deed.  Nor in his evidence in chief did he make any suggestion that the amendment to the trust deed was connected in any way to the development approval litigation.  On the contrary, he said that its genesis pre-dated that litigation and was connected with J & L Development’s activities in relation to the Littlehampton property instead. 

22. In cross-examination in the Tribunal, Mr Viscariello gave various different accounts of his purposes in making the amendment to clause 20(b) of the trust deed.  He initially said that it was part of general estate planning, prompted by his desire to protect the profit made out of the Littlehampton development: in a specific sense, the decision to amend the trust deed had nothing to do with the development approval litigation, but merely reflected a generic estate planning approach.[13]

    [13]   T489-490.

23. Mr Viscariello was then asked the following questions and gave the following answers:

    QDid the timing of any events in the ERD Court or the Supreme Court have any bearing at all upon your decision to alter the trust deed of the Stirling Property Trust.

    ANo, with that qualification that it was a factor.

    QWhat factor.

    AWell, it was a generic factor in that it was another example to me and reinforced the need to do that amendment, to alleviate any possibility of the conduct of a trustee inadvertently putting the trust assets at risk.

24. He was later asked the following question and gave the following answer:

    QDid it have anything to do with the imminence of the Supreme Court appeal.

    AIt was a factor, but it wasn’t a primary factor.

25. He was later asked the following questions and gave the following answers:

    QAs I understand your evidence, and correct me if I am wrong, the Supreme Court appeal and the imminence of the Supreme Court appeal, and the risk of an adverse costs order against the company, was only a factor in the generic way you described.

    AYes.

    QIt was not, therefore, a factor in a specific sense.

    AYes.

    QSo the amendment was not motivated in a specific sense by any perceived risk on costs in the Supreme Court appeal and the need to insulate the trust assets from that risk.

    AYes.

    QYou agree with me.

    AYes.

    The following questions were then put and the following answers given by Mr Viscariello:

    QSo is it a pure coincidence that the amendment is effected almost on the very eve of the hearing in the Supreme Court.

    AYes.

    QPure coincidence.

    AYes.

26. The Tribunal had ample evidence to support the finding that Mr Viscariello’s prime motivation in making the amendment to clause 20(b) of the trust deed was to rely upon the amended clause to defeat adverse costs orders in the development approval litigation.  Mr Viscariello had consistently and unequivocally admitted that this had been his motivation in his evidence on 1 December 2006 and in his response to the Board on 23 November 2007 both extracted above.  His attempt to retract that evidence and to maintain his later account in the face of cross-examination putting to him the transcript of evidence from 1 December 2006 was completely unconvincing.

    Concern over liabilities of Ms Hamilton-Smith

27. Mr Viscariello complained that the Tribunal erred in making findings that were not sustainable concerning Mr Viscariello’s evidence about his concern as to the liabilities of Ms Hamilton-Smith.  After the conclusion of the hearing of the appeal, on 22 August 2012, Mr Viscariello applied for permission to amend his grounds of appeal to introduce this complaint and to adduce further evidence.  The Board did not oppose the amendment to the grounds of appeal.  We granted permission to Mr Viscariello to amend his grounds of appeal. 

28. The Board opposed the reception of the further evidence on the grounds that much of it was not new and it was not in any event material or decisive, but accepted that the further evidence ought to be received if this Court took the view that it was material and significant.

29. This complaint is directed to the Tribunal’s finding concerning Mr Viscariello’s evidence that he was concerned that Ms Hamilton-Smith’s liabilities could be a source of attack on the trust assets.

30. Mr Viscariello sought to adduce evidence on appeal which he contended is relevant to the Tribunal’s finding in this respect.  The essence of the further evidence is the transcript of evidence given on 22 August 2012 during the trial of an action in this Court in which Mr Viscariello is suing Peter Macks.  That action relates to Mr Macks’ alleged maladministration of the winding up of two companies, Bernstein and Newmore, of which Mr Viscariello was a director and major shareholder. 

31. In August 2002, under the control of Mr Macks as liquidator, Bernstein commenced legal proceedings against Ms Hamilton-Smith for a debt of approximately $27,000.  This led to legal proceedings in various courts in which Ms Hamilton-Smith was a party.  Mr Macks gave evidence at the trial concerning his reasons for pursuing Ms Hamilton-Smith and the prospects of recovery if successful.  During cross-examination on 22 August 2012 by Mr Viscariello’s counsel, Mr Macks was asked whether he had considered the prospect of bankrupting Ms Hamilton-Smith, if successful in the litigation, and her trustee in bankruptcy exercising her powers as appointor to distribute trust property in favour of the bankruptcy administration.

32. On appeal, Mr Viscariello contended that Mr Macks’ evidence demonstrated that Mr Viscariello’s own evidence before the Tribunal that he had been motivated to remove Ms Hamilton-Smith as appointor of the Stirling Trust and Little Hampton Trust by a concern over her bankruptcy trustee seeking to exercise the power of appointment had reflected a valid concern.

33. We reject this contention.  Mr Viscariello’s contention conflates two quite different changes to the trust deed of the Stirling Trust which were made in June 2004.  The first change was to substitute Mr Nicolaou for Ms Hamilton-Smith as one of the two joint appointors, which coincided with Mr Nicolaou replacing Ms Hamilton-Smith as a director and shareholder of J & L Developments.  The second change was the amendment to clause 20(b) to remove the right of indemnity.  It was never the Board’s case that the first set of changes was an attempt in any way to defeat adverse costs orders in the development approval litigation.  Logically, there could be no such link and there is no suggestion in the Tribunal’s reasons that it considered that there was any such link.  Mr Viscariello’s motivation in removing Ms Hamilton-Smith as an appointor of the trust and as a director and shareholder of J & L Developments was not in issue in the proceedings before the Tribunal.

34. During cross-examination in the Tribunal, Mr Viscariello gave evidence that he removed Ms Hamilton-Smith as appointor of the trust because she was involved in a lot of litigation, it was highly probable that she would be bankrupted and, in that event, it could be argued that she controlled the trust and therefore the bankruptcy trustee could try to attack the trust assets.  As observed above, Mr Viscariello vacillated in the evidence which he gave before the Tribunal on his motivation for removing the right of indemnity.  His evidence was vague, confused and inconsistent.  His evidence in cross-examination of his concern about Ms Hamilton-Smith’s prospective bankruptcy might be read as explaining why he changed the trust deed in June 2004 in both respects being removal of the indemnity as well as removal of Ms Hamilton-Smith as appointor.  At times in his submissions on appeal, Mr Viscariello put that very construction upon his evidence.  However, logically Ms Hamilton-Smith’s bankruptcy could not have been connected with the amendment to clause 20(b) and Mr Viscariello on appeal did not articulate how it could have been.  More importantly, in his evidence before Debelle J on 1 December 2006 and in his response to the Board on 23 November 2007, Mr Visicariello had unequivocally accepted that adverse costs orders were a motivation for the amendment to clause 20(b) and did not raise Ms Hamilton-Smith’s prospective bankruptcy as being relevant or at all.

1. The paragraph in the Tribunal’s reasons the subject of the attack by Mr Viscariello appears under the heading “The amendment to clause 20(b) of the SP Trust Deed on 1 June 2004” and reads as follows:

   The practitioner has reluctantly admitted (T509) that the costs were a factor in changing the deed.  There was no other immediate reason to change this trust deed in this regard other than the costs.  There was no other danger to the trust assets.  We reject the evidence from the practitioner that he was concerned that Ms Hamilton-Smith’s liabilities could be a source of attack on the trust assets because she was an appointor (T510-512).

   (Emphasis added)

2. Mr Viscariello contended that, by the comment in the last sentence, the Tribunal was rejecting his evidence that he changed the appointor, as opposed to removing the indemnity, because of his concerns over Ms Hamilton-Smith’s liabilities.  We reject this contention.  The context of the paragraph is the amendment to clause 20(b).  This is reinforced by the words emphasised in the passage above “in this regard”.  The change of appointor was irrelevant to the Board’s case involving the amendment to clause 20(b).  Understood in context, the Tribunal was rejecting the suggestion, repeated at times in submissions on appeal before us, that Ms Hamilton-Smith’s liabilities were a motivation for changing clause 20(b).

3. In any event, Mr Macks’ evidence given in August 2012 does not support the contention that Mr Viscariello, in June 2004, feared that Ms Hamilton-Smith’s prospective bankruptcy trustee would exercise her power of appointment to change the trustee of the Stirling Trust and then make distributions of trust assets to Ms Hamilton-Smith’s bankruptcy estate.  On appeal, Mr Viscariello explicitly accepts that, as matter of trust law, a bankruptcy trustee could not exercise the power of appointment and could not do so to benefit the bankruptcy administration.  Mr Viscariello in his evidence before the Tribunal, was referring to potential and unlawful conduct on the part of the bankruptcy trustee.  By contrast, Mr Macks did not give any evidence that it was his intention or purpose that a bankruptcy trustee appointed to Ms Hamilton-Smith’s estate would act in that improper way.  His evidence addressed only potential legitimate and lawful conduct on the part of a prospective bankruptcy trustee. 

4. When considered as a whole, it is clear on Mr Macks’ evidence that he had not had any experience in which a bankruptcy trustee had acted illegitimately in the manner addressed in Mr Viscariello’s evidence before the Tribunal and did not contemplate that this would occur.  Mr Macks had not in fact had any experience in which a bankruptcy trustee had exercised a power of appointment at all.  Accordingly, Mr Macks’ evidence does not support the fear identified by Mr Viscariello.

5. Finally, there was abundant material before the Tribunal to demonstrate that adverse costs orders were, at the very least, a major factor in Mr Viscariello’s amendment of clause 20(b) of the trust deed.  We have already referred to that evidence.  That material is overwhelming, even if one ignores the last sentence of the impugned paragraph of the Tribunal’s reasons.

   The Business of Defeating Adverse Costs Orders

6. At the conclusion of its reasons and after making its findings, the Tribunal addressed a number of submissions made on behalf of Mr Viscariello which it had not yet addressed.  One of Mr Viscariello’s submissions was that he was not about the business of defeating adverse costs orders.  In response, the Tribunal made the following observation:[14]

   If he was not about that business in June 2004 and in April 2006, he certainly was in that business in September 2006 and October 2006 when affidavits were filed citing the events of June 2004 and April 2006 in an attempt to defeat adverse costs orders.

   [14]   Reasons for decision [110(f)].

7. Mr Viscariello’s complaint is that the Tribunal erred in making this observation in circumstances in which Mr Viscariello was not charged with unprofessional conduct with respect to an attempt to defeat adverse costs orders in September and October 2006.

8. Mr Viscariello’s complaint misconceives the nature of the Tribunal’s observation.  The observation was only made in response to a specific submission made by Mr Viscariello.  The Tribunal had earlier quoted and accurately summarised count 1 as relating to Mr Viscariello’s conduct in mid-2004 and mid-2006 and had already made separate findings concerning his motivation in engaging in that conduct.  The Tribunal was merely reiterating its earlier observations that Mr Viscariello, in September and October 2006, deployed the steps earlier taken the subject of count 1 for the very purpose of attempting to defeat adverse costs orders. 

9. Mr Viscariello further submitted that the Tribunal’s conclusion that Mr Viscariello amended clause 20(b) of the trust deed of the Stirling Trust to defeat adverse costs orders was inconsistent with its finding in the impugned paragraph above.[15]  We reject this contention for the same reason.  The Tribunal did not find that Mr Viscariello did not in June 2004 have a purpose of defeating adverse costs orders in amending the trust deed.  The Tribunal had earlier and unequivocally made an express finding that this was his prime motivation.  The Tribunal was responding to a specific submission made on behalf of Mr Viscariello. 

   [15]   Reasons for decision [110(f)].

   Impossibility

10. Mr Viscariello complained that there could not be any attempt to defeat adverse costs orders unless it were established that the goal of the attempt was capable of being accomplished as a matter of law.  In Moyes v J & L Developments Pty Ltd (No 2),[16] Debelle J held that, while the amendment to clause 20(b) removed the express right of indemnity previously conferred by the former clause 20(b), it was not effective to remove the statutory right of indemnity conferred by section 35(2) of the Trustee Act 1936 (SA).[17]  Based on that decision, Mr Viscariello contended that, as the statutory right of indemnity was incapable of being removed as a matter of law, his alleged goal was incapable of being accomplished in law and hence he could not be guilty of an attempt to defeat adverse costs orders by that means.  Mr Viscariello relied upon authorities in relation to criminal offences in which it has been held that in certain circumstances a defendant cannot be guilty of attempting to commit a substantive offence if the substantive offence would not have been committed if the events had occurred as intended by the defendant.[18]

    [16]   Moyes v J & L Developments Pty Ltd [2007] SASC 261.

    [17] Ibid at [38]-[40].

    [18]   R v Percy Dalton (London) Ltd (1949) 33 Cr App R 102; R v Collingridge (1976) 16 SASR 117 at 119-125 per Bray CJ (Bright J agreeing).

11. We reject this contention.  Disciplinary proceedings are not criminal in nature.  The criteria for assessment of the conduct of a legal practitioner in disciplinary proceedings are quite different to determining in criminal proceedings whether a defendant is guilty of a criminal offence.  In disciplinary proceedings, the Court acts in, and has regard to, the public interest in law being practised only by practitioners who are fit to do so.  The question whether a practitioner has failed to meet the standard of conduct observed by competent legal practitioners of good repute looks to both the conduct and the conscience of the legal practitioner in question.  If a legal practitioner advises that steps be taken or participates in the taking of steps which have an unlawful purpose, it is no answer to contend that, as a matter of law, the purpose was not in fact capable of being achieved by those steps.  For example, if a practitioner advised a client to take steps for the purpose of avoiding liability for income tax or stamp duty, it would be no answer to say that Part IVA of the Income Tax Assessment Act 1936 (Cth) or Part 6A of the Taxation Administration Act 1996 (SA) rendered those steps ineffective.

12. In this respect, as at June 2004, it was by no means clearly established law that a trustee’s right of indemnity could not be removed by an express provision in a trust deed.  As Debelle J acknowledged, in RWG Management Ltd v Commissioner for Corporate Affairs (Victoria)[19] Brooking J had held that both an express right of indemnity and the statutory right of indemnity under section 36(2) of the Trustee Act 1958 (Vic) were capable of being excluded by an express provision in a trust deed. Debelle J did not cite any previous decisions on section 35(2) of the Trustee Act 1936 (SA). If the Tribunal was correct in finding that Mr Viscariello was motivated by a desire to defeat adverse costs orders, it cannot be said that he had no basis for believing in June 2004 that the removal of the indemnity would achieve that purpose.

    [19] [1985] VR 385.

    Conduct Amounting to Unprofessional Conduct

13. Mr Viscariello complained that, in any event, on the Tribunal’s findings of fact, Mr Viscariello’s conduct in June 2004 did not amount to unprofessional conduct within the meaning of section 5 of the Act. On the hearing of the appeal, this contention was advanced only in respect of the 2004, and not the 2006, conduct.

14. Mr Viscariello accepted that a legal practitioner should not tender advice to a client that the practitioner knows is being requested to advance an unlawful purpose, nor advice as to the ways in which an unlawful purpose may be achieved or concealed.[20]

    [20]   Dal Pont, Lawyers Professional Responsibility  (Lawbook Co, 4th ed, 2010) [19.50].

15. The Board contended that the removal of J & L Developments’ right of indemnity against the trust assets, assuming it had been effective, would have been a voidable transaction pursuant to section 588FE of the Corporations Act 2001 (Cth). The Board contended that the transaction would have been voidable:

    -under subsection (5) because the company became a party to it for the purpose of defeating, delaying or interfering with the rights of any creditors on a winding up; and/or

    -under subsection (3) because it was an “uncommercial transaction”, being a transaction into which a reasonable person in the company’s circumstances would not have entered,

    and in either case, the company would have become insolvent as a result of the transaction because it had incurred liabilities but would no longer have had any assets available to meet those liabilities.

16. On the assumption that a major purpose of the removal of the indemnity was to defeat adverse costs orders in the development approval litigation and the further assumption that it had been effective, Mr Viscariello contended that his conduct did not, in the circumstances, amount to unprofessional conduct. Mr Viscariello’s principal contention was that such conduct was not illegal, criminal or fraudulent and, in particular, that it is not an element of section 588FE(3) or (5) of the Corporations Act 2001 (Cth) that there be any intent to defraud on the part of the company.

17. We reject Mr Viscariello’s contention. The requisite element of section 588FE(5) that there be an “intention to defraud creditors” requires an actual intention to cheat creditors of the company, whether present or future, by putting property of the company beyond reach of the creditors.[21]

    [21]   See Williams v Lloyd; Re Williams [1934] HCA 1; (1934) 50 CLR 341 at 372 per Dixon J; Hardie v Hanson [1960] HCA 8; (1960) 105 CLR 451 at 456 per Dixon CJ and Cannane v J Cannane Pty Ltd(in liquidation) [1998] HCA 26; (1998) 192 CLR 557 at [10] per Brennan CJ and McHugh CJ, [31] per Gaudron J, and [54] per Gummow J, in respect of the predecessors to section 588FE(5).

18. The Tribunal found that Mr Viscarello’s intent was to put the asset of J & L Developments being its right of indemnity against the Stirling property, beyond the reach of creditors.  On the Tribunal’s findings, J & L Developments disposed of property, the right to indemnity supported by a lien over the trust assets, for the purpose of defeating claims by creditors.  This involved an actual intent to defraud creditors.

19. Mr Viscariello made a further contention that, making the same assumptions, the removal of the indemnity did not comprise a voidable transaction pursuant to either section 588FE(3) or (5). Mr Viscariello’s contention was that as at 1 June 2004, the Council and Mr Moyes and Mr Brooks were only prospective future creditors. Mr Viscariello contended that it was not unprofessional conduct to advise a client on how to minimise a risk of future liability. Mr Viscariello contended that his conduct in June 2004 was properly characterised as involving the minimisation of a risk of future liability, rather than an unlawful purpose.

20. Dal Pont addresses the relevant distinction by giving an example relating to taxation advice:

    The principles discussed above prohibit lawyers from advising clients to engage in tax evasion, being criminal falsification or non-disclosure as a means of reducing tax.  Nor should lawyers advise clients to engage in tax avoidance, which is rendered unlawful by virtue of its artificial and contrived character, having no rationale apart from the obtaining of a tax benefit.  Conversely, a lawyer may, and must where the scope of the retainer encompasses this, advise a client as to the legal means of minimising taxation liability, termed tax planning.[22]

    [22]   Dal Pont, Lawyers Professional Responsibility  (Lawbook Co, 4th ed, 2010 [19.55].

21. We reject Mr Viscariello’s further contention. As at 1 June 2004, costs orders had already been made in favour of both the Council and the objectors by the Environment, Resources and Development Court on 5 April 2004. While those costs had not yet been taxed and hence quantified, the liability cannot be characterised as a mere possible theoretical future liability. Further, costs had already been incurred by the Council and Mr Moyes and Mr Brooks in the appeal to this Court which had been lodged on 19 April 2004. There had been a hearing on 5 May 2004, at which Mr Viscariello attended, and the preparation of Mr Moyes and Mr Brooks and the Council for the hearing of the appeal must have been substantially complete by 1 June 2004 three days before the hearing date. If the appeal were to prove successful, it was inevitable that an adverse costs order would be made against J & L Developments which would include the costs which had already been incurred by the objectors and the Council up to 1 June 2004. It is well established that, for the purposes of section 588FE(5), a transaction will be voidable as being for the purpose of defeating, delaying or interfering with the rights of creditors if those creditors are future or contingent creditors.[23]

    [23]   See Williams v Lloyd; Re Williams [1934] HCA 1; (1934) 50 CLR 341 at 372 per Dixon J; Hardie v Hanson [1960] HCA 8; (1960) 105 CLR 451 at 456 per Dixon CJ and Cannane v J Cannane Pty Ltd(in liquidation) [1998] HCA 26; (1998) 192 CLR 557 at [10] per Brennan CJ and McHugh CJ, [31] per Gaudron J, and [54] per Gummow J, as to predecessors to section 588FE(5).

    Conclusion – 2004 events

22. No error has been demonstrated in the Tribunal’s finding that Mr Viscariello made the June 2004 amendment to clause 20(b) of the Stirling trust deed for the purpose of attempting to defeat adverse costs orders against J & L Developments in the development approval litigation.  No material error has been demonstrated in the reasoning of the Tribunal.  The findings made by the Tribunal were open to it. 

23. We would go further.  On the evidence before the Tribunal, the conclusion was overwhelming that this was Mr Viscariello’s purpose.  Mr Viscariello unequivocally admitted in his evidence before Debelle J on 1 December 2006 and his letter to the Board dated 23 November 2007 that the change to clause 20(b) of the trust deed was motivated by the forthcoming hearing of the appeal before Debelle J.  His evidence in this respect before the Tribunal was both internally inconsistent and contrary to those earlier accounts in December 2006 and November 2007.

    2006 Events

24. The Board’s case in relation to the second limb of count 1 was that in 2006 Mr Viscariello engaged in conduct in an attempt to defeat adverse costs orders whereby he advised and undertook the removal of J & L Developments as trustee of the Stirling Trust and replaced it with Palm Hills and transfer of the legal title to the Stirling property from J & L Developments to Palm Hills.  The Tribunal found that this was deliberate conduct with the objective of defeating adverse cost orders against J & L Developments. 

    2006 Conduct Not Open on the Charge

25. Mr Viscariello complained that the Tribunal erred in declining to strike out paragraphs 1.11 to 1.14 of the particulars to count 1 as being inconsistent with the count itself.  Mr Viscariello contended that the Tribunal ought not to have entertained the 2006 allegations of the Board at all.  Count 1 was in the following terms:

    The practitioner engaged in conduct in an attempt to defeat any adverse costs order against J & L Developments Pty Ltd (“J & L Developments”) which might be made as a result of litigation in the Supreme Court in which it was involved, by putting the only asset of J & L Developments, namely its right of indemnity out of the assets of the Stirling Property Trust (“S P Trust”) in particular the asset comprising the land at 33 Birch Road, Stirling in the State of South Australia (33 Birch Road) out of the apparent control of J & L Developments.

26. Mr Viscariello contended that the wording of count 1 was apposite to the conduct alleged in paragraph 1.10 of the Particulars that the trust deed was amended in 2004 to remove the right of indemnity, but not to the conduct alleged in paragraphs 1.11 to 1.12 relating to the change of trustee and transfer of the legal ownership of the Stirling property in 2006.  Mr Viscariello further contended that the transfer of the legal title to the land cannot be characterised as “putting the right of indemnity out of the assets of the Stirling Trust out of the apparent control of J & L Developments”.

27. We reject these contentions.  The count and the particulars to it are to be read together.  So read, they clearly convey that Mr Viscariello engaged in conduct on two different occasions.  The first, in 2004, was his attempt to put the legal right of indemnity out of the apparent control of J & L Developments by expressly excluding the right of indemnity by the new clause 20(b) of the Trust deed.  The second, in 2006, was his attempt to put the sole asset of the Stirling Trust (the Stirling property) out of the apparent control of J & L Developments which was intended to put the right of indemnity out of that asset out of the apparent control of J & L Developments.  While the wording of the count was not elegant, the intention and effect were clear. 

28. At the commencement of the hearing before the Tribunal, Mr Viscariello made to the Tribunal the same submission which he advanced on appeal.  The Board outlined its case.  The Tribunal rejected the submission essentially for the earlier referred to reasons.  In closing address, Mr Viscariello made a submission to the Tribunal that it should disregard the 2006 events referred to by the Board because it was “a bit of a jumble”.  The Tribunal accepted that a technical criticism of the wording of the charge made by Mr Viscariello could be made, but held that no prejudice or detriment had resulted to Mr Viscariello in that the case had been conducted on the substantive issues. 

29. On appeal, Mr Viscariello did not identify any manner in which he would have conducted his case differently if the wording of count 1 had been amended as he contended was necessary for the Board to advance the 2006 events. 

30. We have reviewed the transcript of the evidence and hearing before the Tribunal and exhibits tendered and admitted.  It is clear that Mr Viscariello conducted his defence to the charge on the basis that he was required to address all matters the subject of count 1.  We agree with the Tribunal’s conclusion that there was no detriment to Mr Viscariello due to any technical deficiency.  We go further and conclude that count 1 was not deficient in the first place.

    Finding of Purpose Not Reasonably Open

1. Mr Viscariello complained that the Tribunal’s finding that the change of trustee and legal ownership of the Stirling property in 2006 involved a deliberate course of conduct with the object of defeating adverse costs orders against J & L Developments was not reasonably open on the evidence.

2. We reject this contention.  By 2006, costs orders had been made by this Court in the development approval litigation against J & L Developments in favour of the Council and the objectors.  They could be expected to be of the order of $50,000.  Having regard to the timing of the change of trustee and the fact that in September 2006 Mr Viscariello deployed the change as a ground upon which to resist the charging orders against the Stirling property, it was open to the Tribunal to draw the inference that the change of trustee was motivated by the inevitable forthcoming steps by the Council and objectors to enforce the costs orders against the Stirling property.

3. Mr Viscariello gave evidence that he changed the trustee because Mr Nicolaou had resigned, the constitution of J & L Developments required two directors, he could not procure a second director and it was easier to change the trustee of two trusts than to change the constitution of J & L Developments.

4. It was open to the Tribunal to reject Mr Viscariello’s evidence.  On the face of Mr Viscariello’s own affidavit sworn on 5 September 2006, Ms Hamilton-Smith was appointed as a director of J & L Developments simultaneously with Mr Nicolaou resigning.  Ms Carol Smith was appointed a director at the same time as Mr Viscariello himself resigned as a director of J & L Developments.  On the face of his own affidavit, J & L Developments at all times remained a two director company.  Contrary to the evidence he gave before the Tribunal, he was able to, and did in fact, appoint Ms Hamilton-Smith to replace Mr Nicolaou as a director of J & L Developments.

5. Moreover, Mr Viscariello’s evidence that it was easier to change the trustee of both the Stirling Trust and Little Hampton Trust (with consequential conveyances of the real estate of each trust) than to amend the constitution of J & L Developments to permit it to have single director is simply not credible.

   Business of Defeating Adverse Costs Orders and Impossibility

6. Mr Viscariello complained, in relation to the second limb of the Board’s case under count 1, raising the same contentions as in relation to the first limb.  We reject these repeated contentions for similar reasons.

   Conclusion – 2006 events

7. No error has been demonstrated on the part of the Tribunal in finding that Mr Viscariello changed the trustee for the purpose of attempting to defeat adverse costs orders against J & L Developments in the development approval litigation.  No error has been demonstrated in the reasoning of the Tribunal.  The findings made by the Tribunal were open.

8. On the evidence before the Tribunal, the conclusion was overwhelming that this was Mr Viscariello’s purpose.  By this time, J & L Developments was the subject of actual costs orders which were likely to be quantified in the order of $50,000.  There was no other rational reason for Mr Viscariello to change the trustee and convey the legal title to the Stirling property to Palm Hills.  The explanation advanced by Mr Viscariello in his evidence before the Tribunal was not believable.  His evidence that he could not replace the second director, Mr Nicolaou, was false because he in fact did so by replacing him with Ms Hamilton-Smith.  In any event, it would manifestly have been much easier to change the constitution of J & L Developments to permit it to have a single director than to change the trustee of two trusts and to convey the legal title to two properties.

   Count 2

9. Several grounds of appeal relate to the Tribunal’s finding that J & L Developments did not make the development application and subsequent appeal to the Environment, Resources and Development Court in its own right and that Mr Viscariello’s evidence to that effect before Debelle J on 1 December 2006 was knowingly false. 

   No claim before 20 September 2006

10. Mr Viscariello complained that the Tribunal erred in rejecting Mr Viscariello’s evidence that J & L Developments was acting in its own right to the extent that it relied on the fact that Mr Viscariello made no such claim before 20 September 2006. 

11. The Tribunal referred to Mr Viscariello’s affidavit sworn on 5 September 2006 for the purpose of the hearing that day in the District Court of the applications by the Council and objectors for charging orders over the Stirling property.  The Tribunal noted that, in this affidavit, Mr Viscariello set out the grounds upon which he contended that the charging order was not available.  He referred to and relied upon clause 20(b) of the trust deed which excluded the right of indemnity of the trustee against the trust assets.  He referred to and relied on the change of trustee and change in the legal ownership of the Stirling property in 2006.  The Tribunal observed that he made no mention of what he later said was the primary ground for resisting charging orders, namely that J & L Developments had acted in its own right and not as trustee of the Stirling Trust.  The Tribunal also observed that, in his supplementary affidavit sworn on 19 September 2006, which was filed for the purpose of the argument listed for hearing on 20 September 2006, Mr Viscariello again made no mention of J & L Developments acting in its own right.

12. Mr Viscariello contended that the Tribunal wrongly rejected his explanation for the omission, given in evidence before the Tribunal that Mr Sallis advised him that the fact ought to be addressed in an affidavit from Ms Hamilton-Smith as a director of J & L Developments and not in Mr Viscariello’s affidavit.  The Tribunal rejected that evidence as inherently unlikely and contrary to the facts that the only affidavits sworn for the purpose of the arguments listed for hearing on 5 and 20 September 2006 successively were Mr Viscariello’s own affidavits sworn on 5 and 19 September 2006.[24]  The Tribunal observed that Mr Viscariello did not adduce any corroborative evidence concerning the alleged advice.[25]  No evidence was led from Mr Sallis.

    [24]   Reasons for decision [46], [51], [67].

    [25]   Reasons for decision [51], [67].

13. Mr Viscariello contended, as part of a broader submission involving reversal of the onus of proof, that the Tribunal reversed the onus of proof in its reasoning at this point by referring to the lack of any corroborative evidence.  We reject this contention.  The Tribunal was entitled to take into account as part of the circumstances bearing on the matter the fact that there was no independent objective or supportive evidence that any such advice was given.

14. In any event, it is apparent from the Tribunal’s reasons that it did not rely upon the lack of corroborative evidence to make the finding: rather it relied upon the objective facts, namely the content of Mr Viscariello’s affidavits, the fact that he had personal knowledge of the matter and Ms Hamilton-Smith did not, and the fact that the applications for charging orders were listed for argument on 5 and again on 20 September 2006 at which time Mr Viscariello’s two affidavits were the only evidence which J & L Developments sought to adduce in opposing the charging orders.  We agree with the Tribunal that those three matters are compelling. 

15. The existence of the asserted advice from counsel was inconsistent with Mr Viscariello’s own conduct on 5 September 2006 in setting out the factual basis for the two grounds advanced in that affidavit in opposition to the applications for charging orders: the removal of the indemnity in 2004 and the change of trustee in 2006.  Mr Viscariello, and not Ms Hamilton-Smith, was a director of J & L Developments at the time of lodgement of the development application in March 2003 and of the appeal to the Environment, Resources and Development Court in August 2003: only he could give admissible evidence concerning the company’s conduct and intention in that regard.  As it transpired, the argument listed for 5 September 2006 was adjourned to 20 September 2006, and the argument listed for 20 September 2006 was adjourned to 5 October 2006.  However, at the time Mr Viscariello swore his two affidavits, his expectation and intention must have been that the applications would be heard and determined on 5 and 20 September 2006 respectively.  Finally, Mr Viscariello in his evidence said that he could not say that counsel’s advice was provided before he swore his affidavit of 5 September 2006.  We reject Mr Viscariello’s first contention.

16. Mr Viscariello further contended that the Tribunal’s observation that, at the time of swearing his affidavits on 5 and 19 September 2006, “[t]he practitioner presumably had not thought of the argument”[26] was inconsistent with a later finding by the Tribunal that Mr Viscariello and Mr Nicolaou had discussed in 2002 the theoretical alternatives of J & L Developments undertaking the development as trustee for the Stirling Trust or, alternatively, as developer in its own right.

    [26] Reasons for decision [51].

17. It is to be observed that the Tribunal did not make a finding that such a conversation between Mr Viscariello and Mr Nicolaou took place.  The Tribunal made a generally adverse finding as to the credibility of Mr Viscariello and Mr Nicolaou.  The Tribunal observed that it would have been logical for such a conversation to take place but expressly made no finding that it did take place.[27]  We reject Mr Viscariello’s contention. 

    [27] Reasons for decision [70].

18. More importantly, the Tribunal expressly found that, even if the theoretical alternatives of J & L Developments acting as developer in its capacity as trustee or in its own right had been discussed in 2002, the position was not advanced beyond a discussion about possibilities and Mr Viscariello did not at any time decide that J & L Developments would in fact undertake the development in its own right.[28]  The Tribunal’s observation was that presumably Mr Viscariello had not thought of the argument at the time of swearing his affidavits on 5 and 19 September.  This observation does not entail that Mr Viscariello had not thought of the concept of J & L Developments acting in its own right, but rather that he had not thought of contending that it in fact had acted in its own right and that this was the primary defence to the charging order applications.

    [28]   Reasons for decision [70]-[72].

19. Mr Viscarello contended that the Tribunal erred in finding that the defence articulated by Mr Viscariello after 20 September 2006 that J & L Developments had been acting in its own right had formed in his mind after 18 September 2006 when he read the outline of argument of the Council.[29]  Mr Viscariello contended that this finding was erroneous because there was nothing in that outline which could have prompted his formulation of that proposition. 

    [29] Reasons for decision [91].

20. We reject this contention.  The outline of argument answers to the clause 20(b) argument, namely that the indemnity under section 35 of the Trustee Act 1936 (SA) could not be excluded, and the change of trustee argument, namely that the old trustee was entitled to be indemnified out of the assets of the trust. Paragraph 19.2 of the outline of argument filed by the Council and dated 18 September 2006 went on to state:

    Such liabilities [in respect of which the trustee is entitled to be indemnified out of trust assets] include liabilities for costs in relation to any litigation brought or defended by a trustee in respect of its duties as trustee [citations omitted].  It is submitted that if the Stirling Property Trust was the beneficial owner of the land in respect of which the Appellant initiated the ERD Court Proceedings then the Appellant must have brought those proceedings in its capacity as trustee and must therefore be entitled to indemnity in relation to its liability for the costs order made against it in those proceedings.

    (Emphasis added)

21. The Council explicitly raised the issue whether J & L Developments brought the appeal in its capacity as trustee as opposed to in its own right (setting up a straw man to knock it down).  This was perfectly capable of suggesting to a practitioner in the position of Mr Viscariello a contrary factual contention that J & L Developments had been acting in its own right and not in its capacity as trustee.

22. Mr Viscariello complained that the Tribunal wrongly rejected the force of the evidence comprised by Ms Hamilton-Smith’s affidavit sworn on 3 October 2006 that J & L Developments lodged the development application in its own right and not as trustee of the Stirling Trust. 

23. Mr Viscariello suggested that the Tribunal rejected that evidence because it found that Ms Hamilton-Smith was interstate or overseas from 5 September to 30 October 2006 and that this was erroneous because the evidence was clear that she had returned by 3 October 2006, the date on which she swore her affidavit. 

24. It is apparent from the reasons of the Tribunal that the number “30” is a typographical error and was intended by the Tribunal to read “3”.  The Tribunal had earlier in its reasons referred to Ms Hamilton-Smith’s swearing the affidavit on 3 October 2006 and the affidavit itself was before the Tribunal and was manifestly sworn before Mr McNamara in Adelaide.  The Tribunal did not say that it rejected the statement in Ms Hamilton-Smith’s affidavit because she was interstate or overseas on the date on which it was sworn.  That would have been an irrational basis on which to reject such evidence and there is no reason to attribute such reasoning to the Tribunal.

25. More importantly, it was obvious that Ms Hamilton-Smith could not have had personal knowledge of the capacity in which J & L Developments had been acting when it lodged the development application and appeal to the Environment, Resources and Development Court in 2003 because she was not a director of J & L Developments at the time.  Her knowledge of those matters could only have been sourced from Mr Viscariello himself.  Any reliance by Mr Viscariello upon Ms Hamilton-Smith’s affidavit before the Tribunal could only have been of a bootstraps nature.  We reject Mr Viscariello’s contention.

    Reversal of the Onus of Proof

26. Mr Viscariello complained in response to this Court that the Tribunal erred in treating its disbelief of evidence called on behalf of Mr Viscariello as equivalent to proof of the charges, thus reversing the applicable onus of proof.[30]

    [30]   Ground 5A.

27. The first passage in which Mr Viscariello contended that the Tribunal reversed the onus of proof was an observation by the Tribunal that no corroborative evidence was tendered concerning the alleged advice by Mr Sallis that Ms Hamilton-Smith should instead deal with the factual basis of J & L Developments acting in its own right.[31]  We have already addressed and rejected this contention.

    [31] Reasons for decision [51].

28. The second passage in which Mr Viscariello contended that the Tribunal reversed the onus of proof was when the Tribunal addressed the evidence of Mr Viscariello and Mr Nicolaou that in 2002 they had discussed the alternatives of J & L Developments proceeding with the development of the Stirling property either in its own right or as trustee of the Stirling Trust.  The Tribunal observed that no satisfactory explanation or evidence was provided to support two separate entities with different Australian Business Numbers and separate GST registrations which would have been expected if a lawyer and accountant had agreed to have two entities, a trust holding the asset and another entity, a company, to incur the development liabilities.[32] 

    [32] Reasons for decision [70].

29. We reject these contentions.  On the evidence before the Tribunal, the only entity which was registered for GST and which lodged BAS returns over the period from March 2003, when the development application was lodged, to September 2006, when the charging order applications were made, was J & L Developments in its capacity as trustee of the Little Hampton Trust.  No BAS returns were lodged over that period for J & L Developments acting in its own right.  If J & L Developments had been incurring expenses as a developer of the Stirling property in its own right, the Tribunal was correct in its observation that Mr Viscariello as a lawyer and Mr Nicolaou as an accountant would have been expected to ensure that J & L Developments in its own right was registered for GST and lodged BAS returns to recoup GST paid on such expenses.  The Tribunal was entitled to take into account the fact that this did not occur as part of the overall objective evidence as to the capacity in which J & L Developments was acting.  This does not involve any reversal of the onus of proof. 

30. The third passage in which Mr Viscariello contended that the Tribunal reversed the onus of proof relates to an observation by the Tribunal in the course of its analysis of Mr Nicolaou’s evidence that, while he did not claim input tax credits for J & L Developments in its own right in respect of expenditure in its capacity as a developer in 2004, 2005 or 2006, he intended to make a re-allocation and claim those expenses down the track.[33]  The Tribunal referred to an argument put to the Board that the use of different pens and pencils in Mr Nicolaou’s working papers demonstrated that the notes must have been made at different dates.  The Tribunal stated that it was unable to reach any conclusion by reference to the different pens and pencils.[34]  Mr Viscariello contended that the Tribunal reversed the onus of proof because it nevertheless rejected Mr Nicolaou’s evidence.

    [33]   Reasons for decision [84(c)].

    [34] Reasons for decision [84].

31. We reject this contention.  The Tribunal treated the apparent use of different pens and pencils as neutral and did not rely upon this evidence in reaching its overall conclusion.  This does not involve any reversal of the onus of proof.  The Tribunal relied upon other matters in reaching its conclusion that Mr Nicolaou did not make his allocations until December 2006.  We address those other matters below.

    Specific finding not sustainable

32. Mr Viscariello complained that the Tribunal erred in making findings that were not sustainable on the Tribunal’s reasons or on the evidence.  Mr Viscariello identified five findings in this regard.[35]

    [35]   Ground 5B.

33. The first finding attacked is the statement in the Tribunal’s reasons that Ms Hamilton-Smith was interstate or overseas until 30 October.  We have already addressed this complaint.  We reject this complaint for the reasons given above.

34. The second finding attacked is the rejection by the Tribunal of Mr Nicolaou’s evidence that there was a “resolution” before the application for development approval, in March 2003, that J & L Developments would act in its own capacity in lodging that application.  Mr Viscariello contended that the Tribunal mischaracterised Mr Nicolaou’s evidence as being that there had been a formal resolution of the board of directors of the company as opposed to a decision by Mr Viscariello as the guiding mind of the company. 

35. We reject this contention.  There was no suggestion in the evidence of Mr Nicolaou or Mr Viscariello, or the submissions made to the Tribunal on behalf of Mr Viscariello, that a formal resolution of the board of directors of the company was ever made.  More importantly, it is apparent from the context of the Tribunal’s reasons[36] that the Tribunal consistently used the word “resolution” to denote a decision in contradistinction to discussion or consideration of a mere possibility.  It did not use the word to denote a formal resolution by the board of directors.

    [36]   Reasons for decision [68]-[72].

36. The third finding attacked is an observation by the Tribunal in the course of its assessment of Mr Nicolaou’s evidence in which he admitted that he told a “white lie” to the Stamp Duties Office to cut corners, namely his statement that J & L Developments did not trade in its own right but only acted as trustee.  The Tribunal observed: “The consequence of the half truth was to avoid paying the applicable stamp duty on the transfer”.[37]  Mr Viscariello contended that this was contrary to Mr Nicolaou’s evidence that his belief at the time was that, if he had disclosed the truth to the Stamp Duties Office, there would still have only been nominal stamp duty of $10 payable on the transfer. 

    [37] Reasons for decision [75].

1. We reject this contention.  The Tribunal did not make any finding about the quantum of the applicable stamp duty, merely that the consequence was that Mr Nicolaou avoided paying whatever was the applicable stamp duty on the transfer on the true facts.  The Tribunal did not find that the applicable stamp duty would have been any more, but rather that Mr Nicolaou misled the Stamp Duties Office into assessing stamp duty on a false basis.[38]  This was relevant to his credit.

   [38]   The Tribunal referred at [110(g)] to Mr Nicolaou’s evidence that there was no actual loss of revenue to the State.

2. Mr Viscariello’s fourth contention was that the Tribunal erred in finding that the documentary evidence was to the contrary of the evidence of Mr Viscariello and Mr Nicolaou that J & L Developments was acting in its own right, and not as trustee of the Stirling Trust.  This contention, however, was not developed on the hearing of the appeal. 

3. We reject this contention.  The Tribunal identified in its reasons for decision various documentary evidence suggesting that J & L Developments did not act other than as trustee, including lodging the application for development approval in March 2003 (in which the same entity, J & L Developments, was named as both the owner and the applicant)[39], the lodging of documents for stamping in 2004 on the explicit basis that J & L Developments acted solely as a trustee, the fact that J & L Developments did not register for GST or lodge any BAS returns or income tax returns and Mr Viscariello’s affidavits sworn on 5 and 19 September 2006 in which he identified the grounds upon which the charging orders were opposed and did not include this ground.

   [39] Reasons for decision [78].

4. Mr Viscariello’s fifth contention was that the Tribunal erred in rejecting Mr Nicolaou’s evidence that he made allocations in his working papers in 2004 between expenses incurred by J & L Developments in its capacity as trustee of the Little Hampton Trust and expenses incurred by it in its own right as developer of the Stirling property.[40] 

   [40] Reasons for decision [84].

5. We reject this contention.  The Tribunal correctly observed that Mr Nicolaou prepared and submitted BAS returns only on behalf of J & L Developments in its capacity as trustee of the Little Hampton Trust.  He did not prepare or submit any BAS returns for J & L Developments in its own right as developer of the Stirling property or otherwise.  On his own evidence, he wrongly claimed on behalf of the Little Hampton Trust input tax credits to which that entity was not entitled.  On his own evidence, he had no reason to make allocations as between the two entities in 2004.  He only had reason to do so in December 2006 when he was instructed by Mr Viscariello to prepare financial statements for J & L Developments in its own right.  It was open to the Tribunal to reject Mr Nicolaou’s evidence in this respect.  The Tribunal heard and saw Mr Nicolaou give evidence.  The Tribunal formed a generally adverse view of Mr Nicolaou’s credibility, based in part on his own admission that he told lies to the Stamp Duties Office and in part on the fact that, on his own admission, he claimed GST credits to which the Little Hampton Trust was not entitled.  The Tribunal made no error in its assessment of his evidence.

   Evidence Given Falsely and Dishonestly

6. Mr Viscariello complained that the Tribunal erred in concluding that the evidence given by Mr Viscariello on 1 December 2006 was given falsely and dishonestly.[41]  This complaint has been addressed above.  We repeat our rejection above.

   [41]   Ground 2.

7. It follows that, if the Tribunal did not err in reaching its conclusion that J & L Developments under the control of Mr Viscariello had not been acting in its own right in lodging the development application and in the subsequent appeals, the evidence which he gave to that effect on 1 December 2006 was knowingly false.  As his evidence concerned his own state of mind as controller of J & L Developments, there is no room for any contention that his evidence was honest but mistaken. 

8. The fundamental premise of Mr Viscariello’s evidence was that, in or before March 2003, he was concerned to ensure that the Stirling property be insulated from any claims if liabilities incurred by J & L Developments in the development of the house on the Stirling property, including any liabilities incurred by reason of the application for development approval and any subsequent litigation.  His evidence was that he decided that J & L Developments would undertake the entirety of the development in its own right to insulate the Stirling property from any such liabilities.  He decided that it would be agreed between J & L Developments in its own right and J & L Developments as trustee of the Stirling Trust that J & L Developments would develop the property on the basis that it would earn a profit margin in so doing.  If Mr Viscariello had so decided, it would have been vital for him to document the decision and arrangements so that, in any future dispute, the position would not depend upon his mere assertion as to his intentions.  To achieve the very purpose which he said he had, he would have prepared a document or documents and executed them on behalf of J & L Developments in its own right and J & L Developments as trustee of the Stirling Trust.  He would have ensured that the existence and execution of the documents was verified by a third party such as submitting the documents to the Stamp Duties Office for stamping.  He would also have decided what consideration was payable by the Stirling Trust to J & L Developments for undertaking the development and on what terms.

9. Mr Viscariello took none of these steps.  His evidence was that he never determined the consideration that Stirling Trust would pay to J & L Developments.  There never was any agreement between J & L Developments and the Stirling Trust for the payment of such consideration.  It did not convene a meeting of directors of J & L Developments or prepare minutes of a meeting recording the decision or any agreement.  His own conduct belies the evidence which he gave before Debelle J and the Tribunal.

10. Mr Viscariello’s subsequent conduct in mid-2004 in changing clause 20(b) of the Stirling trust deed, in mid-2006 in changing the trustee of the Stirling Trust and in September 2006 in deposing to the grounds of opposition to the charging order without mentioning J & L Developments having acted in its own right also belies his evidence.

11. No error has been demonstrated in the Tribunal’s finding that J & L Developments acted in its capacity as trustee of the Stirling Trust and not in its own right in lodging the application for development approval and in relation to the subsequent appeals.  No material error has been demonstrated in the reasoning of the Tribunal.  The findings made by the Tribunal were open to it. 

12. We would go further.  The evidence before the Tribunal was overwhelming.  The conclusion that J & L Developments had not been acting in its own right, that Mr Viscariello belatedly advanced this contention in an attempt to defeat the charging orders being sought and that he gave false evidence before Debelle J when he said that J & L Developments had been acting in its own right was open and should in our view be confirmed.

    Conclusion

13. We dismiss Mr Viscariello’s appeal. 

14. In the disciplinary proceedings, we find, having regard to the Tribunal’s findings and following our review of the underlying evidence, that Mr Viscariello engaged in unprofessional conduct as charged in counts 1 and 2.

15. We will hear the parties as to the appropriate orders to be made in the disciplinary proceedings.