Appellant v Respondent

Supreme Court of Victoria|2015-06-02|Before: Zammit J

ADMINISTRATIVE LAW - Appeal from decision of Victorian Civil and Administrative Tribunal ('VCAT') - Question of law - Section 148 Victorian Civil and Administrative Tribunal Act 1998 - Principle incorrectly applied - Decision to be set aside and remitted to VCAT for determination according to law

LEGAL PROFESSION ACT 2004 - Unsatisfactory professional conduct - Breach of r 21 - Principle in - Whether the principle is that there is no unsatisfactory professional conduct by a solicitor making accusations of a certain kind unless the accusations were false or without foundation to his or her knowledge - whether principle applicable in the circumstances - ; ; Solicitor's Statutory Committee (15 July 1987)

1 This is an appeal from a decision of the Victorian Civil and Administrative Tribunal ('VCAT'), in which the appellant ('Mr McDonald') was found guilty of two charges of unsatisfactory professional conduct under the Legal Profession Act 2004 ('the Act') for breach of Rule 21 (r 21) of the Professional Conduct and Practice Rules 2005.

2 The appeal is brought on a question of law pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('the VCAT Act'). The questions of law to be determined on appeal are listed in the notice of appeal as follows:

(a) whether the principle or authorative ruling to be derived from Lander v Law Society of ACT ('Lander')[1] is that there will be no unsatisfactory professional conduct on the part of a solicitor making accusations of the kind made in this case unless it is established that the accusations were false or without foundation to his or her knowledge; and

(b) whether the principle to be derived from Lander is applicable in the circumstances of this case.

3 In the reasons that follow, I have set out the principle to be derived from Lander and related decisions to the extent that it is possible to do so. I have determined that the applicability of Lander is a question to be determined by VCAT in the circumstances of this case. In his reasons,[2] I consider that the Senior Member incorrectly applied the test as set out in Lander. I would set aside the decision and remit the matter to VCAT to be determined according to law.

4 The Senior Member has set out in detail the circumstances in which the allegedly unsatisfactory professional conduct occurred.[3] In summary, Mr McDonald acted for an employee in a workplace relations matter, with Lander & Rogers having been retained by the employer. In the course of discussions and correspondence relating to the case, Mr McDonald made a number of allegations against a solicitor at Lander & Rogers, Mr Catanese. These allegations included:

(a) accusations that Mr Catanese was 'fundamentally dishonest' and was 'telling lies'; and

(b) statements that Mr Catanese had engaged in 'deliberate and calculated' dishonesty.

5 Given that these statements and allegations were contained in written correspondence between Mr McDonald and Lander & Rogers, there was no dispute at VCAT about the nature of the statements made. Rather, Mr McDonald relied primarily on the argument that the allegations were 'soundly based', and therefore that they could not constitute unsatisfactory professional conduct in accordance with Lander.

6 In respect of the first question of law that is to be determined in this appeal, the appellant relied heavily on the following statement made by the High Court in Clyne v NSW Bar Association:

The last thing we would wish to do would be to say anything which might be thought to curtail this freedom of speech, which public policy demands. Cases will constantly arise in which it is not merely the right but the duty of counsel to speak out fearlessly, to denounce some person or the conduct of some person, and to use such strong terms as seem to him in his discretion to be appropriate to the occasion.[4]

7 It was this principle that was expanded on and applied in Lander. In particular, the appellant drew on the following passages from Lander as supporting his contention that the true principle to be discerned from that case is that a breach of r 21 cannot found a charge of unsatisfactory professional conduct in circumstances where there is a reasonable basis for the comments:

It is a relevant matter that the impugned comments were not made in a public forum. They were made to the Department head concerning a matter that was properly the concern of the Department and, indeed, of its Minister. It was the solicitor's contention that the comments were based on reasonable grounds and were a fair comment that was, or ought to have been, a legitimate concern of the Department and its Minister.

...

The essence of the respondent's contention, which must be rejected, is that there is a general obligation on a solicitor to refrain from that which the recipient might find to be discourteous, offensive or provocative statements. That is too broad and a sweeping proposition.

If the criticisms the solicitor levelled at the Department were true or, at least, fair comment as understood in defamation law, it could not be misconduct or unsatisfactory conduct to draw them to the attention of the relevant officers of the Department and its Minister. That is not an issue which those considering the statements should have to concern themselves. The fact that it was perceived as discourteous and offensive, even provocative, to parties to whom it is directed, is beside the point. In contrast with Karageorge the terms of the solicitor's complaints were not, if the allegations were soundly based, gratuitously insulting or offensive.

...

In our view, the real issue was not that the solicitor made the comments complained of in the course of correspondence concerning his client's claim, but whether the accusations and criticisms made were false or without foundation, to his knowledge. If that were to be made out, then the finding of unsatisfactory professional conduct should be upheld. ...[5]

8 In relation to the second question to be determined in this appeal - that is, whether the principle of Lander is applicable in this case - the appellant drew parallels between the circumstances in Lander and the facts in this case in that:

(a) the comments were not made in a public forum;

(b) the comments were not 'gratuitously insulting or offensive' in the Karageorge[6] sense;

(c) Mr McDonald firmly believed that he had a reasonable basis for making the comments; and

(d) the comments were made in the course of correspondence regarding his client's case.

9 In applying the ruling in Lander to the present proceedings, the appellant emphasises the following statement by the Full Court in that case:

In other words, the true complaint should have been in terms of the kind of misconduct alleged in Clyne's case, not in terms of a breach of [the ACT equivalent of r 21] which was, on its face, inapplicable.

10 Thus, the appellant submits that the Senior Member fell into error in failing to determine whether the allegations made by Mr McDonald were 'false or without foundation, to his knowledge', and instead finding Mr McDonald guilty on the basis of a breach of r 21 of the Rules.

11 The respondent submitted that the principle to be derived from Lander is that a solicitor will not be guilty of unsatisfactory professional conduct or professional misconduct in circumstances where:

(a) the solicitor has a reasonable basis for the allegations;

(b) the allegations are made in the legitimate pursuit of a client's legal rights; and

(c) the comments made are not gratuitously offensive.

12 In particular, the respondent relies on the following paragraphs from the Full Court's judgment in Lander, in which the Court discussed the comments that were the subject of disciplinary proceedings in Karageorge:

Clearly, those comments and other like comments were extraneous to the matters legitimately being pursued and, as the Committee observed 'the use of insulting language or behaving offensively towards members of the public is not conducive to the maintenance of the good name of the profession'.

That view must be supported emphatically. However, it seems to us that that principle in no way diminishes the right, indeed the duty, of a solicitor to represent his or her client's interests forthrightly and without fear or favour. If the conduct of public officials adversely impacting on a client is considered on reasonable grounds to be 'rude, unhelpful' or any similar characterisation, it is no breach of the obligation of courtesy to point that out to those in authority, even though those criticised, may consider the criticism unwarranted and offensive. Such communication may well be regarded as discourteous and provocative but, nevertheless, a subject that needs to be raised in the interests of the client as well as generally.[7]

13 On the basis of these remarks, the respondent submits that the following are also to be considered principles of law in accordance with Lander:

(a) that comments that were extraneous to the matters being legitimately pursued would not qualify for the protection afforded by the principle in Clyne;

(b) the conduct complained of needs to adversely impact on the client;

(c) there must be reasonable grounds for the allegations; and

(d) the communication needs to be raised in the interests of the client.

14 In relation to the issue of whether the principles from Lander should be applied in this case, the respondent submits that the Senior Member correctly distinguished Lander on the basis that the communications were to and about another practitioner, rather than to a third party whose conduct was impacting on the client's legitimate interests.

15 In this respect, the respondent relies on a number of passages from the Reasons of the Senior Member, which are submitted to contain findings of fact relating to whether Mr McDonald had a reasonable basis for his allegations and whether the comments were made in the legitimate pursuit of his client's interests. I will return to these matters below, in my analysis of the Senior Member's reasons.

16 In relation to charges of unsatisfactory professional conduct, the following provisions of the Legal Profession Act 2004 (Vic) ('the LPA') are relevant:

4.4.2 Unsatisfactory professional conduct

For the purposes of this Act -

unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

...

4.4.4 Conduct capable of constituting unsatisfactory professional conduct or professional misconduct

Without limiting section 4.4.2 or 4.4.3, the following conduct is capable of constituting unsatisfactory professional conduct or professional misconduct -

(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules;

...

17 Mr McDonald was charged with unsatisfactory professional conduct on the basis that he had breached r 21 of the Rules, which constitute 'legal profession rules' within the meaning of s 4.4.4(a) of the LPA.[8] Rule 21 states as follows:

Communications

A practitioner, in all of the practitioner's dealings with other practitioners, must take all reasonable care to maintain the integrity and reputation of the legal profession by ensuring that the practitioner's communications are courteous and that the practitioner avoids offensive or provocative language or conduct.

18 The Senior Member carefully set out the background circumstances in this case, as well as the facts and circumstances of Lander's case. In particular, the Reasons set out a number of pertinent paragraphs from the decision of the Full Court in Lander.[9] The Senior Member notes that Mr McDonald argued that the allegations contained in his correspondence with Lander & Rogers were all 'soundly based' in accordance with the Lander decision. The Senior Member then set out the additional submissions made by Mr McDonald as to the basis upon which he says his comments in the 30 August and 2 September letters were justified.[10]

19 Although he stated that the relevant factors lean in favour of an acceptance of Mr Catanese's version, the Senior Member was unable to determine to the requisite Briginshaw standard[11] what precisely was said in the telephone conversation of 24 August 2011.[12] Rather, he considered that it was quite conceivable that, in the course of a conversation where two opposing solicitors were having a first discussion about a new claim, where they had never spoken to each other before and with each focusing on their client's position, they could take different meaning out of the conversation.[13]

20 Having thus considered the evidence as to what, in fact, happened during the course of the 24 August telephone conversation, the Senior Member goes on to consider a range of factors in determining whether Mr McDonald is guilty of unsatisfactory professional conduct, stating that:

While Mr McDonald personally had a firm belief in his version of what was said in the telephone conversation, it is necessary to enquire what constitutes a response which complies with Rule 21 (and what response does not) in all the circumstances.[14]

(a) It should have been clear to Mr McDonald by 25 August 2011, when he received the letter of the same date from Lander & Rogers stating that there was disagreement as to what had been said between Mr McDonald and Mr Catanese on 24 August 2011, that no purpose would be served by continuing to make an emphatic assertion that Mr Catanese was lying, in circumstances where Mr McDonald was aware that he had no conclusive proof of this.

(b) As a result of the telephone conversation with Mr Proietto on 26 August 2011, Mr McDonald must have been aware that it was possible to seek to negotiate with Lander & Rogers on behalf of his client, and therefore no interest of his client would be served by continuing to argue in relation to what had now become a moot point.[15]

(c) Mr McDonald should have considered the possibility that he was mistaken in his belief that Mr Catanese had lied.

(d) The Senior Member did not accept Mr McDonald's submission that the overall effect of all the communications he had received from Lander & Rogers up to 30 August 2011 constituted a serious threat to his practice and reputation and therefore justified him making the assertions he did in his letter dated 30 August 2011. Rather, the Senior Member considered that 'even accepting that [sic] Mr McDonald's earnest belief in his own version of the phone conversation, his reaction was so extravagant as to breach Rule 21.'

(e) The Senior Member rejected Mr McDonald's submission that he was 'the subject of a uniquely aggressive attack, quite unlike anything which would take place from time to time in conducting practice at the plaintiff law firm, which required the response he gave.'[16]

(f) Looking at the correspondence and sequence of events, the Senior Member concluded that Mr McDonald had 'overreacted', saying that:

The two firms of solicitors were obviously involved in a robust exchange of assertions, designed to further the strategic interests of their respective clients. In all the circumstances, I do not regard the content of the letters from Lander and Rogers of 24 and 25 August as being unjustified or outrageous, as Mr McDonald contended. The references to misrepresentation of the matters discussed in the telephone conversation and the 24 August 2011 letter from Mr McDonald being likely to mislead a court or tribunal if produced at a later date, were not an unreasonable statement of their position. ...[17]

(g) Mr McDonald's letter of 30 August 2011 was in 'intemperate terms'. This was despite the fact that there had been a conversation between Mr McDonald and Mr Proietto on 26 August 2011 in which the issue about the conversation was ventilated, and there had been a further four days to reflect. The Senior Member concluded:

After hearing Mr McDonald's evidence and submissions, it appears the most likely explanation for this is that the comments about Mr Catanese were written in anger, following receipt of the $500 offer the day before. Indeed, the offensive statements to Mr Catanese were contained in the same short letter of 30 August 2011 as Mr McDonald's rejection of the offer as not genuine, not meeting the requirements of the Civil Procedure Act and demonstrating a lack of good faith.[18]

(h) The Senior Member rejected Mr McDonald's submission that the offer of $500 was made by Lander & Rogers in order to set Mr McDonald up. The Senior Member considered that the more likely scenario, consistent with the correspondence, was that the $500 offer was a response to what was perceived to be a claim not supported at that stage by any particulars that could justify an offer of any real substance.[19]

(i) Even if Mr McDonald was provoked, his letter of 30 August 2011 constituted 'an unnecessarily offensive and personal attack on Mr Catanese.' Even on the basis that Mr McDonald firmly believed Mr Catanese had made the statement attributed to him by Mr McDonald, it was discourteous, offensive and provocative to write a letter stating that a solicitor he had never dealt with before was 'fundamentally dishonest' and had started off 'at an early stage of his career telling lies' on the basis of a conversation the content of which he had known for five days was contested. This was especially so given that he knew that the content of the conversation could not be objectively proved. The letter of 30 August 2011 purports to make a damning judgement about the character of a solicitor, with whom Mr McDonald had had only minimal contact.[20]

(j) Mr McDonald's letter of 2 September 2011 compounded the matter further, particularly by repeating and expanding his allegations that Mr Catanese had engaged in deliberate and calculated dishonesty.[21]

(k) The Senior Member did not accept that Mr McDonald's letters were 'a measured and temperate' response and that he was not seeking to escalate the situation.[22]

(l) There was no apparent interest of Mr McDonald's clients being served by the making of the assertions about Mr Catanese. Rather, these were letters to another practitioner relating to that practitioner's conduct, a distinction that was recognised by the Court in Lander. On this basis, the Senior Member distinguished Lander from the present case.[23]

(m) In conclusion, the Senior Member stated that:

It is not sufficient in this case for Mr McDonald to say that his assertions are to be regarded as 'soundly based' because they were not proved to be wrong. Here, they were inherently incapable of conclusive proof - it was his word against Mr Catanese's. To persist with such allegations in the circumstances of this case - where the question was whether Mr Catanese had lied to him in a telephone conversation, where the outcome of the alleged lie would have no bearing on the matter between the respective clients - was provocative, because nothing could come of this except trouble. And it was offensive, because of the seriousness of the allegation that the solicitor was 'fundamentally dishonest'. Then, four days later, even after he had time to reflect, Mr McDonald repeated his provocative and offensive assertions, and broadened them. This conduct has the potential to undermine the integrity and reputation of the profession. It undermines co-operation between practitioners which is important to promote the efficient operation of the justice system, and the conduct of legal business.[24]

(n) The Senior Member concluded that the two charges against Mr McDonald were proved.

22 Similar to this case, the issue in Lander was whether the relevant tribunal had fallen into error in finding Mr Lander guilty of unsatisfactory professional conduct in relation to comments made in correspondence. Mr Lander was acting for a teacher, who was seeking medical retirement from the Department of Education and Training. Having dealt with the Department on a number of occasions in the past, and having unsuccessfully attempted to seek an update on the status of his client's medical retirement, Mr Lander sent a letter to the Department and the relevant Minister, which relevantly stated as follows:

Your Department has a long history of failing to communicate at all or to communicate substantively and honestly.

This has been documented in hundreds of cases and shows no sign of improvement.

I act for Mr Boutsis. In my brief encounters with officers of your agency, they have been rude, unhelpful, obsessive and compulsive in relation to their own ego and their own self-importance and otherwise unresponsive.

This persists to the present time.

Mr Boutsis has been the subject of a recommendation which your Department has that he be promptly medically retired and despite the fact that your Department has held that report for about six weeks, it has not communicated to Mr Boutsis; or, at his specific request, to his solicitor, this firm, what it is doing about having him medically retired or arranging pre-retirement payment or anything else.

This is consistent as we say with years of malpractice and maladministration by your organisation. It appears that nothing will change that conduct and that the Department bears grudges against people who engage lawyers, particularly competent ones.

...

My wife remains a teacher in your system and I ask that no recriminations be taken against her because her husband happens to be a solicitor acting for teachers.[25]

23 In response to Mr Lander's correspondence, Mr Bateman of the Department informed him that the submission for invalidity retirement was forwarded to the relevant superannuation provider some two weeks after the medical report was initially received, that approval had been obtained and that the invalidity retirement was proceeding through the superannuation provider. In addition, Mr Bateman stated that:

In your letter you have also made a number of general statements about the Department of Education and Training and its staff failing to communicate, being dishonest, rude, unhelpful, obsessive and compulsive, bearing grudges against people who engage lawyers, as well as general allegations of 'malpractice' and 'maladministration'. Your comments are totally inappropriate and it is impossible to respond in any meaningful way to such generalised and unsubstantiated allegations. Nonetheless, the Department of Education and Training wholly rejects those allegations.

You have also implied that the Department of Education and Training may engage in recriminations towards your wife, who is a teacher in the Territory, an employee of the Department, and who has no involvement in Mr Boutsis' case. The department takes your implication very seriously. To suggest that this department or any of its officers would engage in such behaviour is totally inappropriate and is rejected in the strongest possible terms.

It is my intention to refer your letter to the ACT Law Society for investigation as to whether your conduct has breached the standards expected from a legal practitioner.[26]

24 Mr Lander was charged with a breach of r 25 of the Legal Profession (Solicitors) Rules 2006 (ACT), which was for all intents and purposes identical to r 21 of the Rules. At first instance, the Tribunal found Mr Lander guilty of unsatisfactory professional conduct, stating that 'the language of the respondent's letter of 24 October 2006 contains in several paragraphs discourteous remarks and offensive and provocative language...'[27] In overturning this decision on appeal, the Full Court in Lander relied on the High Court's emphasis on free speech in Clyne.

25 It is apparent from the judgment in Lander that the Court was concerned not to unduly constrain a solicitor's right to free speech and, more importantly, to adequately draw a line between those circumstances in which comments should be judged in accordance with r 25 and those circumstances in which they should not. In drawing such a distinction, the Court focused on a lawyer's duty to fearlessly speak out and denounce the conduct of others in such strong terms as seem appropriate in his or her discretion.[28] The privilege was held not to apply in relation to comments that were 'extraneous to the matters legitimately being pursued',[29] as was the case in Karageorge. In this respect, the Court went on to say that 'it seems to us that that principle in no way diminishes the right, indeed the duty, of a solicitor to represent his or her client's interests forthrightly and without fear or favour.'[30]

26 Thus, the Court applied a dichotomous test, whereby any comment extraneous to the legitimate pursuit of a matter would be assessed against r 25, and any comment made in the client's interests would be assessed on whether there was a 'reasonable basis' for the allegation. Unfortunately, as has been demonstrated in this case, it is difficult to determine with precision what conduct is done in the legitimate pursuit of a matter, and this can give rise to disagreement. In this respect, the Court gave some further guidance, saying that:

It may well be the case that the choice of confrontation rather than persuasion was not effective advocacy on the part of the solicitor. That is not for us to say. What is important is that it is not unsatisfactory professional conduct to choose a less effective option in representing a client to one which others might choose. Clearly, as the client's response shows, he approved of the solicitor's mode of representation, although the Tribunal rightly observed, that could not excuse, for example, the making of false and defamatory statements without a reasonable basis for doing so.[31]

27 Thus, the fact that a solicitor has not adopted the optimal course for resolving a dispute does not mean that he or she is not legitimately pursuing the client's interests. Rather, the right or freedom of speech referred to by the High Court in Clyne's case is applied to any comments made with a reasonable basis in the legitimate pursuit of a client's matter, regardless of their effectiveness in that regard. Whether the client knows and approves of the conduct will be a relevant, but not determinative factor.

28 In Karageorge, the relevant comments involved a solicitor referring to fellow practitioners as a 'fucking Arab' and a 'fucking Jew'. It seems trite to observe that not all cases will be so clear cut. As such, it will fall to the courts to determine in the circumstances of each case whether the relevant comments are sufficiently extraneous to fall outside the scope of the privilege. However, that is not to say that some allegations may not contain a mixture of extraneous and non-extraneous comments. For example, if a solicitor were to write a letter of demand alleging a breach of contract and finished by calling the other party a 'dirty rotten crook', there is no doubt that such a statement would be extraneous in the Karageorge sense. This would be so even if there was a reasonable basis for the allegation of breach of contract.

29 The respondent submitted that, in order to fall within the scope of Lander, the allegations must be in respect of conduct that negatively impacts on the solicitor's client, and the comment itself must be raised in the interests of the client. I reject these submissions. Such statements are not to be found anywhere in the Full Court's judgment in Lander, and certainly are not contained within the paragraph relied upon by the respondent in support of this contention. The specific statement cited in this respect was as follows:

If the conduct of public officials adversely impacting on a client is considered on reasonable grounds to be 'rude, unhelpful' or any similar characterisation, it is no breach of the obligation of courtesy to point that out to those in authority, even though those criticised, may consider the criticism unwarranted and offensive. Such communication may well be regarded as discourteous and provocative but, nevertheless, a subject that needs to be raised in the interests of the client as well as generally.[32]

30 I do not consider this statement as supporting a claim that allegations can only be made in respect of conduct that is directly negatively impacting on a client. Rather, the Court is simply applying the 'reasonable basis' test in that context, as those were the factual circumstances before it.

31 One final issue to be determined in relation to the appeal is whether the test set out in Lander is subjective or objective. The question of law to be answered is whether the principle from Lander requires that a solicitor's allegations be false or without foundation, to his knowledge in order to constitute unsatisfactory professional conduct. The Court does specifically state that 'the real issue was ... whether the accusations and criticisms he made were false or without foundation, to his knowledge.'[33] This suggests that the test is a subjective one. However, the judgment repeatedly refers to the question of whether there was a 'reasonable basis' for the allegations,[34] which connotes an objective test.

32 Having considered the context in which the decision in Lander was made, I consider that the Court was effectively setting out an objective test. The primary reason for this conclusion is that the 'reasonable basis' test is referred to on a number of different occasions throughout the judgment, whereas the 'false or without foundation to his knowledge' test is mentioned only once. This may be explained by the fact that, in Lander, the Department had in fact processed Mr Boutsis' claim in a timely fashion. However, having failed to inform either Mr Boutsis or Mr Lander of this fact, to Mr Lander's knowledge no progress had been made in some seven months. In my view, it was this fact that was being emphasised by the Court in adding the words 'to his knowledge'. That is, it was Mr Lander's subjective knowledge that was to be used in determining whether there was an objectively reasonable basis for his accusations and criticisms of the Department.

33 In my view, the principles set out in Lander apply to any and all comments that are made by a legal practitioner. The purpose of the decision is to set out the circumstances in which breach of r 21 (or its equivalent) will be sufficient to demonstrate unsatisfactory professional conduct or professional misconduct, and the circumstances in which r 21 cannot be applied. The decision is founded on a lawyer's right and duty to be forthright in denouncing the conduct of others without fear or favour. The Court then goes on to outline the circumstances in which the right does not apply; that is, in circumstances where the comments are extraneous to the legitimate pursuit of a client's matter.

34 As such, the question whether to apply the 'reasonable basis' test in Lander is one that must be determined at first instance on the basis of the factual circumstances in the proceeding. As set out in Lander, the first question that must be addressed is whether the comments were made in the legitimate pursuit of the client's matter. If not, then r 21 is applied to determine whether the practitioner is guilty of the charges. If so, then the 'reasonable basis' test must be applied to determine whether the practitioner is guilty of the charges. In either case, the principles laid out in Lander must be applied in reaching a decision.

35 In the section entitled 'Analysis' in the Reasons, there are two sub-headings. The first section of analysis is entitled 'The true content of the telephone conversation on 24 August 2011'. The second section of analysis is entitled 'Was Rule 21 breached?' In this latter section, the Senior Member clearly asks himself whether Mr McDonald's conduct was in breach of r 21 in all the circumstances. One short paragraph is devoted to Lander, in which that case is distinguished.[35] His conclusion is as follows:

To persist with [the] allegations in the circumstances of this case ... was provocative, because nothing could come of this except trouble. And it was offensive, because of the seriousness of the allegation that the solicitor was 'fundamentally dishonest'. Then, four days later, even after he had time to reflect, Mr McDonald repeated his provocative and offensive assertions, and broadened them. This conduct has the potential to undermine the integrity and reputation of the profession. It undermines co-operation between practitioners which is important to promote the efficient operation of the justice system, and the conduct of legal business.[36]

36 In this conclusion, the Senior Member repeatedly utilises the words of r 21, emphasising that the primary issue that has been considered and determined by him is whether the conduct is in breach of that rule. In spite of the fact that, according to Lander, such consideration must be preceded by a finding that the accusations were extraneous to the legitimate pursuit of the client's matter, this was the first and only issue to which the Senior Member truly turned his mind.

37 The respondent submitted that the Senior Member did find that Mr McDonald's conduct was extraneous to the legitimate pursuit of his client's matter. Having closely examined the Senior Member's reasons, I cannot conclude that this is the case. The primary reason for this is that the Senior Member failed to consider the possibility that Mr McDonald's conduct was merely ineffective advocacy, as required by Lander. In fact, looking at the wording of the relevant passages in the Reasons, it is entirely possible that, had the Senior Member turned his mind to this issue, he would have concluded that Mr McDonald's conduct was merely an ineffective but legitimate attempt to advance his client's matter. In particular, the Senior Member said:

In the circumstances, it should have been apparent to Mr McDonald when he received a letter of Thursday 25 August 2011, that no purpose would be served by continuing to make the emphatic assertion Mr Catanese was lying, in circumstances where Mr McDonald was aware that he had no conclusive proof of this. It was always going to be his word against Mr Catanese's.

Second, as a result of the telephone conversation with Mr Proietto the next day, Mr McDonald had also become aware that it was possible to seek to negotiate with Lander and Rogers on behalf of his client. So no interest of his client's would be served by continuing to argue what had now become a moot point.[37]

38 Looking at this reasoning, it is apparent that the Senior Member was describing what would have been an optimal or preferred course of action, more effectively furthering the client's interests. As set out by the Full Court in Lander, this is not the test for whether conduct is in the legitimate pursuit of a client's matter.

39 In addition, throughout the Reasons, the Senior Member uses language that implies that he considered that there was an appropriate response in the circumstances, but that Mr McDonald's comments went too far. He described Mr McDonald's letters as 'intemperate' and an 'over-reaction', saying that the response was 'extravagant' and 'written in anger'. Again, a finding that Mr McDonald's comments went beyond what would have been considered an appropriate response in the circumstances does not constitute a finding that the comments were extraneous in the Karageorge sense. Indeed, the contention that such a finding was made is undermined by the following passage in the Reasons:

Looking at the correspondence and sequence of events overall, it is apparent Mr McDonald over-reacted. The two firms of solicitors were obviously involved in a robust exchange of assertions, designed to further the strategic interests of their respective clients.[38]

40 On this basis, I am of the view that the Senior Member failed to make a finding of fact that Mr McDonald's comments were extraneous to the legitimate pursuit of his client's matter. This resulted in an error of law in that he failed to properly apply the test in Lander, instead looking only at whether the comments were in breach of r 21.

41 This leads me to the second point made by the respondent, that the Senior Member correctly distinguished Lander on the basis that the principle of that case does not apply to communications between practitioners. The relevant passage in the Reasons is as follows:

The present circumstances are different to those in the case of Lander relied upon by Mr McDonald. Here, no apparent interest of Mr McDonald's client was being served by the making of the assertions about Mr Catanese. These were letters to another practitioner relating to that practitioner's conduct, not the client's. This distinction was recognised by the Court in Lander.[39]

42 The paragraphs of the judgment in Lander relied on by the Senior Member to support this conclusion read as follows:

Mr Burnside QC, for the solicitor, submitted that there was a contrast between the terms of the Rules relating to dealings with other practitioners and those relating to third parties. The difference is that an obligation of courtesy is expressed in relation to dealings with other practitioners, as well as the obligation to act with honesty and fairness and to avoid 'offensive or provocative language or conduct'.

That there is a difference is, as Mr Burnside QC submitted, not surprising. It may be necessary to write a letter of demand accusing the recipient of fraud or other misconduct. The recipient, particularly if the accusation is untrue, will be offended, even outraged. He or she may well regard it as provocative. Yet, if the solicitor had received apparently reasonable information supporting such an accusation, he or she is bound to put it to the recipient. Nor is the mere fact that the accusation is made robustly a valid cause for complaint.[40]

43 However, in order to understand these comments, it is necessary to look at the context in which they were made. In Lander, these passages were almost immediately preceded by another relevant statement:

The Tribunal noted, correctly in our view, that there is an obligation on a practitioner to deal with all persons, practitioners or not, opponents or not, with honesty and fairness. The question of courtesy is more difficult to assess. Courtesy connotes politeness. That clearly varies depending on the circumstances.

44 In this context, it can clearly be seen that the Court was in fact discussing the distinction between the level of courtesy that will be considered necessary when dealing with other practitioners as opposed third parties. The fact that more courtesy may be required in the former case than in the latter does not mean that the principle of Lander is seen to be inapplicable in the context of communications between practitioners. These comments are not intended to draw a line in the sand between communications with other solicitors and communications with third parties. The only relevant question when determining which test to apply in relation to an allegation by a solicitor is whether it was made in the client's interests. To see this, we need only look at the development of the principle and the Court's reasoning in Lander.

45 The statement of principle in Lander commences with the High Court's statement that:

Cases will constantly arise in which it is not merely the right but the duty of counsel to speak out fearlessly, to denounce some person or the conduct of some person, and to use such strong terms as seem to him in his discretion to be appropriate to the occasion.[41]

46 This statement, in a case in which one practitioner made allegations about the conduct of another practitioner, is endorsed by the Full Court in Lander. The Court then goes on to say that:

... of course, it is misconduct to abuse that privilege by making unfounded accusations knowing that there was no reasonable basis for them, worse if done gratuitously or even more pertinently, if it were to be shown for a collateral purpose.[42]

47 These two statements are the very foundation of the decision in Lander, setting the stage for the Court to go on and outline when the privilege applies and when it does not, and the circumstances in which a practitioner will be found guilty of misconduct in spite of the fact that their comments fell within the scope of the right. Importantly, the right applies in both cases such as Clyne, involving communications between practitioners, and cases such as Lander, involving communications with third parties.

48 To argue that assertions about another practitioner's conduct can never be made in the legitimate pursuit of a client's matter is to ignore the very real impact that another practitioner can have on one's client. Examples include the (rather common) allegation that solicitors are intentionally driving up the cost of litigation in order to price a plaintiff out of pursuing their matter in court. So long as there is a reasonable basis for making such an allegation, it cannot be misconduct for a solicitor to do so, even if it is done 'robustly' or using 'such strong terms as seem to him in his discretion to be appropriate to the occasion', and even if it causes offence.

49 One final issue remains to be addressed in relation to whether the Senior Member's reasons contain an error of law. That is, whether he made a finding of fact that Mr McDonald's assertions had no reasonable basis, thus rendering him guilty of unsatisfactory professional conduct regardless of which test was applied. There are only two paragraphs in which the Senior Member addresses this issue. First, in outlining Mr McDonald's reliance on Lander, he says:

Mr McDonald argued that his responses to Lander and Rogers were all 'soundly based', in accordance with paragraph [53] of the Lander decision. He argued that given no evidence was led that his assertions about Mr Catanese were untrue, it was not shown the test applied in Lander of 'soundly based' has not been satisfied.

50 In his conclusion, the Senior Member stated that:

It is not sufficient in this case for Mr McDonald to say that his assertions are to be regarded as 'soundly based' because they were not proved to be wrong. Here, they were inherently incapable of conclusive proof - it was his word against Mr Catanese's.

51 Neither paragraph contains an explicit finding that there was no reasonable basis for the allegations made by Mr McDonald. It is correct to say that the fact that the assertions were not proved wrong does not mean they were soundly based. However, the fact that they were not proved right does not mean that they were not soundly based. The Senior Member had already come to the conclusion that Mr McDonald had a firm belief in his version of the telephone conversation. The question to be asked is whether, taking into account that firm belief and all the information available to Mr McDonald, there was an objectively reasonable basis for the making of the accusations.

52 It is important to note at this point that the onus of proving that there was no reasonable basis for the allegations falls on the respondent. It is not for Mr McDonald to prove that he was not guilty of unsatisfactory professional conduct. The Senior Member did reject a number of contentions advanced by Mr McDonald in support of his argument that there was a reasonable basis for his comments regarding Mr Catanese. He rejected that Mr McDonald was being set up, that the Lander & Rogers comments were outrageous or unjustified, and that Mr McDonald's comments were a measured and temperate response to those letters.

53 However, it was not Mr McDonald's responsibility to prove that there was a reasonable basis for his allegations. The onus of proving that there was no reasonable basis for the comments fell on the Legal Services Commissioner. In the absence of any discussion of evidence led by the Commissioner that supported a conclusion that there was no reasonable basis for the comments, and especially in the absence of an explicit statement that the comments lacked such a reasonable basis, I cannot find that the Senior Member made such a finding.

54 I am of the view that the Senior Member fell into error in his Reasons for finding Mr McDonald guilty of the two charges of unsatisfactory professional conduct. The errors identified are as follows:

(a) The Senior Member failed to determine whether Mr McDonald's comments were made in the legitimate pursuit of his client's matter or whether they were extraneous to his client's interests, so as to determine the applicability of the 'reasonable basis' test outlined in Lander;

(b) The Senior Member applied the test outlined in r 21 without first considering the applicability of that test, as required by Lander; and

(c) The Senior Member incorrectly distinguished Lander on the basis that it did not apply in relation to comments made in communication with another practitioner about that practitioner's conduct.

55 On this basis, I would set aside the Senior Member's decision and remit the matter back to VCAT to be decided in accordance with the principles of law outlined in this judgment.

[2] Legal Services Commissioner v McDonald [2013] VCAT 1943 ('Reasons').

[4] Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186, 200-1 (Dixon CJ, McTiernan, Fullager, Menzies and Windeyer JJ).

[5] Lander (2009) ACTSC 117, [39], [52]-[53], [58] (citations omitted).

[6] Law Society of New South Wales re Constantine Karageorge Solicitor's Statutory Committee (15 July 1987).

[7] Lander (2009) ACTSC 117, [35]-[36].

[8] See Legal Profession Act 2004 (Vic) s 1.2.1 (definition of 'legal profession rules'), Sch 2 cl 2.5(2); Legal Practice Act 1996 (Vic) s 72, as repealed by Legal Profession Act 2004 (Vic).

[9] Reasons [35], referring to Lander (2009) ACTSC 117, [53], [56] and [58].

[11] As set out in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336.

[17] Reasons [57] (emphasis in original).

[25] Lander (2009) ACTSC 117, [4].

[34] Ibid [32], [48], [54], [56].

[37] Ibid [51]-[52] (emphasis added in bold).

[40] Lander (2009) ACTSC 117, [46]-[47].

[41] Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186, 200-1 (Dixon CJ, McTiernan, Fullager, Menzies and Windeyer JJ).

[42] Lander (2009) ACTSC 117, [32].

Legal Profession (Solicitors) Rules 2006(ACT)

Civil and Administrative Tribunal Act 1998

Conduct and Practice Rules 2005

Professional Conduct and Practice Rules 2005

Legal Profession (Solicitors) Rules 2006(ACT)

Civil and Administrative Tribunal Act 1998

Conduct and Practice Rules 2005

Professional Conduct and Practice Rules 2005

Legal Profession (Solicitors) Rules 2006(ACT)

Civil and Administrative Tribunal Act 1998

Conduct and Practice Rules 2005

Professional Conduct and Practice Rules 2005

Legal Profession (Solicitors) Rules 2006(ACT)

Civil and Administrative Tribunal Act 1998

Conduct and Practice Rules 2005

Professional Conduct and Practice Rules 2005

At a glance

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Legislation Cited (24)

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