Carson v Legal Services Commissioner and Anor.

Carson v Legal Services Commissioner and Anor. - [2000] NSWSC 64 - NSWSC 2000 case summary — Zoe

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INTRODUCTORY 1 This is a claim for judicial review of two decisions made under the authority of the Legal Profession Act 1987 ("the Act"). It will be necessary from time to time to refer to various provisions of the Act. For ease of reference the relevant provisions (as they stood at the relevant time) are extracted and annexed as Appendix A to these reasons. Also annexed, as Appendix B, is a list of persons, natural and artificial, who figure in the proceedings, arranged alphabetically by the abbreviated titles which I shall use in the course of this judgment, together with their full titles, and, where appropriate, a short description of their role or involvement with others in the proceedings. With no disrespect to any individual, I will refer to them all uniformly by their surnames. Annexed as Appendix C is a list of relevant authorities and previously decided cases to which reference will be made during the course of these reasons. Appendix D is a list of the various proceedings that feature in this judgment. 2 The claimant is a legal practitioner and a partner in the firm of solicitors formerly known as Messrs Dawson Waldron ("DW"). The first opponent is the Legal Services Commissioner ("the LSC") appointed pursuant to the provisions of the Act and performs the statutory functions entrusted to him thereunder. The second opponent is the Legal Services Tribunal ("the Tribunal") constituted under the Act. The Tribunal has filed a submitting appearance. 3 The issues raised involve Part 10 of the Act which is entitled, and concerned with, "Complaints and Discipline". 4 S 123 identifies as the general objects of Part 10 the redress of consumer complaints of users of legal services, the ensurance of compliance by individual legal practitioners with necessary standards of honesty, competence and diligence, and maintenance at a sufficiently high level of the ethical and practice standards of the legal profession as a whole. 5 Ss 124 and 125 set out, respectively, the objects of Part 10 relating to users and providers of legal services. 6 By s 129 of the Act the office of the LSC is created. The functions of the LSC are set out in s 131. These are predominantly concerned with receipt and handling of complaints about the conduct of legal practitioners. By s 162 the Tribunal is constituted. Its principal function is to hear and determine proceedings in relation to complaints about the conduct of legal practitioners. 7 By s 134 any person may make a complaint to the LSC about the conduct of a legal practitioner. Such complaint is to be dealt with in accordance with the provisions of Part 10 (subs (2)). By s 138 such a complaint may only be made within three years after the date of the conduct the subject of the complaint, but by subs (2) the LSC is empowered to extend that time, if satisfied that it would be just and fair to do so, having regard to the delay and the reason for the delay (para (a)), or if satisfied that the complaint concerns an allegation of professional misconduct and that it is necessary in the public interest to investigate it (para (b)). By s 127, a distinction is drawn between "professional misconduct" and "unsatisfactory professional conduct", both of which are defined. The LSC is empowered to dismiss a complaint if it is not supported by appropriate particulars or verification (s 141(a)), or if it is frivolous or vexatious (s 141(b)). (The latter provision has been amended since the present complaint was made: Legal Profession Amendment Act 1996). 8 On receipt of a complaint the LSC may refer it to either the Council of the Bar Association or the Council of the Law Society for investigation (s142), or may conduct an investigation himself (s147A). For the purposes of the investigation the legal practitioner against whom the complaint is made may be required to provide information or produce documents (s152(1)). 9 After an investigation is completed a complaint is to be dealt with in accordance with s 155. Where the LSC or the relevant Council is satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct he or it is obliged to institute proceedings in the Tribunal. However, if the LSC or Council is satisfied that the legal practitioner will be found guilty only of unsatisfactory professional conduct and not of professional misconduct, he or it may instead either, with his/her consent, reprimand the legal practitioner (s 155(3)(a)); or, if satisfied that the legal practitioner is generally competent and diligent and has not been the subject of other material complaints, may dismiss the complaint (s 155(3)(b)). 10 If the LSC or the relevant Council is satisfied that there is no reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of either unsatisfactory professional conduct or professional misconduct, he or it is obliged to dismiss the complaint (s 155(4)). 11 By s 156, in respect of each investigation, the LSC or relevant Council is required to keep a record of his or its decision with respect to a complaint, together with the reasons for the decision. 12 Where proceedings have been instituted in the Tribunal, the Tribunal is required to conduct a hearing into each complaint (s167(2)). 13 By s 168, where the Tribunal is conducting a hearing into a question of professional misconduct, it is to observe the rules of evidence (subs (1)), but for the purpose of conducting any other hearing it is not bound to observe the rules of evidence, and may inform itself of any matter in such manner as it thinks fit (subs (2)). An important distinction is thus drawn as to the procedure governing the conduct of hearings into allegations of professional misconduct and allegations of unsatisfactory professional conduct. A second such distinction is drawn in s 170 which provides by subs (1) that a hearing is to be held in the presence of the public but by subs (2) that a hearing is to be held in the absence of the public if the Tribunal so directs; by subs (3) the Tribunal is required to direct that a hearing (or part of a hearing) relating only to a question of unsatisfactory professional conduct be held in the absence of the public unless the Tribunal is of the opinion that the presence of the public is in the public interest or the interests of justice. By sub s (4) the Tribunal may direct that a hearing or part of a hearing relating to any other question (ie any question other than an allegation of unsatisfactory professional conduct) be held in the absence of the public if it is of the opinion that the presence of the public is not in the public interest or the interests of justice. 14 S 171C specifies the courses of action available to the Tribunal if satisfied that a legal practitioner is guilty of professional misconduct or unsatisfactory professional conduct. The options available range from ordering that the legal practitioner undertake and complete a specified course of further education, to ordering that his/her name be removed from the roll of legal practitioners (applicable to a finding of professional misconduct only), or ordering cancellation of the legal practitioner's practising certificate. S171J requires the LSC to cause a decision with respect to a complaint, together with reasons therefor, to be notified to the complainant and the legal practitioner the subject of the complaint. 15 The Act came into effect on 1 January 1988. The present Part 10 was substituted for the pre-existing provisions with effect from 1 July 1994. During the course of preparation of these reasons, legislative changes were enacted. One significant change was the abolition of the Tribunal and the transfer of its jurisdiction to the Administrative Appeals Tribunal. While it seems to me that these changes ought not affect the substance of the matters necessary for me to decide, and I have continued to refer to the formal procedure, I will give the parties an opportunity to be heard in this regard. 16 On 8 July 1994 Lesjek Rajski ("Rajski") lodged with the LSC, pursuant to s 134 of the Act, a complaint against the claimant. The complaint was extensive and was detailed in a "complaint book" that ran to 175 pages. It concerned conduct of the claimant alleged to have taken place between 1986 and 1989. A number of quite separate matters were particularised as conduct the subject of the complaint. 17 By reason of s 138(1) of the Act Rajski's complaint was prima facie statute barred. On 30 March 1995 the LSC decided to exercise the discretion conferred by s 138(2) in favour of Rajski and accepted the complaint out of time. This is the first decision challenged by the claimant. 18 On 17 December 1996, pursuant to s 155(2) of the Act, the LSC decided to institute proceedings in the Tribunal with respect to the complaint. He did this by filing in the Tribunal an Information, alleging that, on seven separate grounds, the claimant's conduct constituted either professional misconduct or unsatisfactory professional conduct. The precise terms of the Information are more fully set out below, at para 59. The decision to file the Information is the second decision challenged by the claimant.

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5.5 there are not reasonable prospects that the [claimant] will be found guilty of professional misconduct; 5.6 the subject matter of the information is substantially the same as the subject of contempt proceedings by the complainant against the [claimant] in the Court of Appeal." 21 The grounds of challenge essentially fall into two groups which might be categorised as procedural and substantive. Those described as procedural include those which allege contravention of the rules of natural justice and/or procedural fairness (grounds 1.1, 2.1), and those that allege irregularity of procedure (grounds 3.1, 3.2, 4.1, 5.1, 5.3, 5.4). Should the claimant be successful in his challenge on any of the procedural grounds the result may well be an order that the LSC re-consider the relevant decision according to law. The second group, those I have categorised as substantive, would, if successfully argued, almost inevitably have the consequence that the decision concerned be quashed. These grounds include those that allege that the decisions are unreasonable (1.2, 2.3) or that the conduct of the claimant the subject of the complaint fell outside the applicable statutory provisions (4.2, 4.3). 22 Having regard to the manner in which the Information is framed, with seven distinct grounds, and to the bases on which the challenge is mounted, it will be necessary to treat each of the seven grounds in the Information as, in effect, a separate proceeding. For example, it may be that the decision to institute proceedings in respect of one ground of complaint has been shown to have been unreasonable but that others have not. This applies equally to the decision to accept the complaint out of time in so far as that decision is challenged on the ground of unreasonableness, since one of the claimant's arguments is that the complaint ought not to have been accepted as there are no reasonable prospects that he will be found guilty either of professional misconduct or unsatisfactory professional conduct.

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The Background 24 It is now convenient to set out a little of the background to the present application. In some respects relevant and non-contentious background facts have been drawn from the recitation of facts in earlier judgments. 25 The relevant events commenced sometime before 1980. Rajski claimed to have been the author or inventor of a computer language system named Raybol. Raybol was said to be a system that itself produced software systems. Rajski was a director and shareholder of Raybos Australia Pty Limited ("Raybos"). 26 By agreement dated 15 February 1980 Rajski and Raybos agreed to sell the rights to Raybol to the Tectran Corporation ("Tectran") and Tectran agreed to develop and market the programme, to employ Rajski for that purpose, and to make progressive payments to Rajski and Raybos. Tectran was one of a number of companies that constituted the Arunta Group of Companies ("the Arunta Companies"). 27 By the end of 1980 Tectran executives were disenchanted with Raybol and with the progress being made towards its marketability. In December 1980 Tectran issued a statement of claim in this court (No.16938/80) against Rajski and Raybos, alleging breaches of a number of implied terms of the agreement, breach of express warranty, misrepresentation and negligence, and claiming damages and consequential orders. Central to the claim was an assertion that Raybol was ineffective for the purpose for which Tectran had purchased it. 28 The issue of the statement of claim precipitated an extraordinary saga of litigation in this Court, much of which can be traced through numerous reported and unreported judgments, to some of which it will be necessary to refer. It is this litigation and events surrounding it, and particularly the claimant's involvement in it, that are at the heart of the present proceeding. Appendix D is a list of the relevant proceedings, identified by the short reference I shall use during the course of these reasons. 29 Rajski and Raybos filed a defence to Tectran's claim. On 3 February 1981 Raybos (but not Rajski) filed a cross claim, naming as cross-defendants Tectran and Arunta Investments Pty Ltd ("Arunta Investments"). They alleged breach of contract and anticipated breach of contract against Tectran, and claimed damages, injunctions and other orders. The proceedings, including the cross claim, came to be known as the 1980 proceedings, terminology I will continue to use. In 1981 Rajski and Raybos issued a statement of claim in the Equity Division of this Court against Computer Manufacture and Design Pty Limited ("CMAD"), Prometheus Pty Ltd ("Prometheus"), and Tectran, alleging breach of the obligation of confidentiality in relation to Raybol, and claiming damages, injunctions and other orders. I will refer to this as "the CMAD proceeding". 30 In each of these proceedings, Messrs Allen Allen and Hemsley, solicitors ("AAH"), represented Tectran and Arunta. In the CMAD proceeding DW represented CMAD and Prometheus. In each case Rajski and Raybos were granted legal aid pursuant to the Legal Aid Commission Act 1979 ("the LAC Act"). In July 1985 Rajski and Raybos issued another statement of claim in this Division naming as defendants Tectran, Arunta Properties (NSW) Pty Ltd (formerly known as Scitec Corporation Pty Ltd) ("Scitec"), Arunta Investments, various directors, officers and employees of one or more of the corporate defendants, and the partners, former partners and one employee of AAH. Among the Tectran/Arunta officers named were Messrs Garry Richardson ("Richardson") and Moshe Yerushalmy ("Yerushalmy"), identified in the pleading respectively as Chairman of the Boards of Tectran, Scitec and Arunta, and Managing Director of Tectran and Scitec. The allegations contained and particularised in the statement of claim are extensive and need not here be detailed. The substance of the claim was that the defendants had conspired together to harm Rajski and Raybos and that the issue and service of the 1980 statement of claim constituted an actionable abuse of the processes of this Court. I will refer to this as "the 1985 proceeding". Messrs Carneys, solicitors ("Carneys"), acted for Rajski and Raybos. AAH continued to represent Tectran and the Arunta Companies. 31 In October 1982 CMAD and Prometheus successfully sought a stay of the CMAD proceeding pending the payment by Rajski and Raybos of the sum of $30,000 by way of security for the costs of that proceeding (Rajski v Computer Manufacture and Design Pty Ltd [1982] 2 NSWLR 443, per Holland J.) 32 Later in 1985 Rajski and Raybos filed a notice of motion seeking to amend Raybos' cross claim in the 1980 proceedings. Among the amendments sought was the joinder of Rajski as a cross-claimant. In substance Rajski and Raybos then sought to add a number of cross-defendants to the cross-claim, including the partners and two employed solicitors of AAH and counsel who had previously appeared for Tectran, and to plead causes of action in conspiracy, malicious prosecution and abuse of process. All allegations arose out of the issue of the 1980 statement of claim. Rajski and Raybos alleged, inter alia, that the various existing and proposed cross-defendants had conspired together to present false evidence to the court and to misuse the processes of the court, their purpose being to delay the hearing of the 1980 proceeding and thereby exhaust the financial resources of Rajski and Raybos so that they could not continue to defend the claims against them or pursue their own cross-claim, and to force them into a position of weakness in bargaining with Tectran. The proposed amended cross-claim was, in effect, a re-working and expansion of the 1985 proceeding. The motion for amendment was heard by Miles J over thirty days between November 1984 and May 1985. In a judgment delivered on 5 June 1985 his Honour identified as a principal issue for his determination whether Rajski and Raybos had shown that they had an appropriately arguable case (on the substance of their proposed amendments) on a tenable evidentiary basis (Tectran Corporation Limited and Others v Raybos Australia Pty Limited and Another, Miles J, 5 June 1985 unreported, p 10). 33 Two former employees of Tectran, Alexander Donaldson ("Donaldson") and Adrian Wood ("Wood"), swore affidavits and gave oral evidence in support of Rajski and Raybos. Both attested to the general effectiveness of Raybol, notwithstanding their acknowledgment that the product needed enhancement and improvement. 34 Although his Honour expressly found that, in respect of some of those Rajski and Raybos sought to add as cross-defendants (including AAH), there was an appropriately arguable case on a tenable evidentiary basis, in the exercise of his discretion he dismissed the notice of motion. He left open the prospect of Rajski and Raybos pursuing their claims in a separate proceeding. 35 One consequence of his Honour's conclusions was that AAH then ceased to act for Tectran and the Arunta Companies and their directors, executives and employees. They remained, of course, as parties to the 1985 proceeding. 36 In July 1985 DW assumed carriage of the litigation on behalf of the former clients of AAH. The claimant undertook the general oversight and responsibility of the litigation. He did not, however, have the full day to day carriage of the matters. That was entrusted principally to a then employed solicitor (later a partner), Christopher Davidson ("Davidson"), with the assistance of another employed solicitor, Raol Lake ("Lake") and a paralegal, Catherine McCarthy ("McCarthy"). 37 There now arises a minor complication in recounting these facts. The evidence discloses a vast amount of correspondence between DW and others, some of which is of crucial importance in the allegations made against the claimant in the Information. Much of the correspondence emanating from DW was prepared by one or other of the employed solicitors, and not by the claimant. Often it was another partner who actually signed and authorised the dispatch of particular letters. Having regard to the system by which DW's correspondence was prepared and sent, it has not always been possible to identify the claimant as the actual author or signatory of (as distinct from the partner accepting ultimate responsibility for) some of the correspondence of which complaint is made. Since, in some cases, some significance attaches to the identity of the author or signatory of particular documents, it will be convenient in the course of this outline of the background facts, to attribute the correspondence only to DW, without attempting to identify the actual author or signatory. Where necessary, that will be explored at a later point. 38 The claimant set about the preparation of the litigation on behalf of Tectran and Arunta. In the course of doing so, he approached both Wood and Donaldson with a request for their assistance. The circumstances of this request, and the manner of the approaches, are the foundation for the first ground in the Information. A detailed examination of the claimant's conduct and the allegations against him, can be found at paragraphs 193 to 230. 39 The complainant then took steps to achieve the cancellation of the grant of legal aid to Rajski and Raybos. His efforts in this regard are the foundation for the second ground in the Information. 40 Acting on behalf of Tectran and Arunta, DW wrote to the LAC making a number of assertions about Rajski and Raybos, and requesting a review of the grant of legal aid. In February 1986, again acting on behalf of Arunta and various executives and officers of the Arunta Companies, he issued a summons in the Administrative Law Division of the Court, naming the predecessor of the LAC (then known as the Legal Services Commission of NSW) as defendant and claiming review of the decision to grant legal aid. I will refer to this as "the LAC proceeding". The detailed allegations are set out at paragraphs 231 to 285. They are the foundation for the second ground in the Information. 41 Towards the end of 1985, it appears, the directors of Scitec were contemplating floating the company on the Stock Exchange. Carneys, who continued to act for Rajski and Raybos, wrote to the Chairman of the Stock Exchange, drawing attention to the relationship between Scitec, Arunta Investments, Richardson and Yerushalmy. They advised the Chairman that Rajski and Raybos had instituted the 1985 proceeding, and that the damages claimed by them had been quantified at $600 million, and asserted that Arunta Investments had disposed of approximately $15 million in assets in the preceding five years. As a result of the letter, two of the companies in the Arunta Group (Gavemer Pty Ltd and Arunta Investments) and Richardson and Yerushalmy commenced proceedings in defamation against the partners of Carneys. I will refer to these proceedings as "the Carneys defamation proceedings". 42 DW acted for each of the four plaintiffs. The claimant was the partner responsible for the litigation. His conduct in commencing the proceedings, and in related respects, is the subject of the third ground in the Information. The allegation in this respect are detailed at para to 286 to 312. 43 On 28 November 1985 Rajski issued a summons in the Court of Appeal (CA452/85) alleging that the claimant was guilty of contempt. He particularised as the conduct constituting contempt the claimant's attempts to have the grant of legal aid to himself and Raybos terminated, and the claimant's approaches to Wood and Donaldson in relation to giving evidence on behalf of Tectran and Arunta. I will refer to this as "the first contempt proceeding". It has never been brought on for hearing. 44 On 3 January 1986 Tectran issued a further statement of claim in this Division against Raybos and Rajski. To some extent its subject matter was repetitive of that of its 1980 statement of claim, but there was an important addition to the case now pleaded. Tectran claimed that, contrary to representations it alleged Rajski had made, and in breach of an implied term of the 1980 agreement, Raybol was not Rajski's invention, but was a copy of another programme called "Count 11", of which copyright was held by Lopfer and Long Inc of the USA, and that Rajski had made material false representations about Raybol prior to the agreement. It explicitly alleged fraud against Rajski. I will refer to this as "the fraud proceeding". 45 In July 1986 Rajski and Raybos issued yet another statement of claim. They named the claimant and DW as defendants and alleged conspiracy in the conduct of the 1980 and the 1985 proceedings. I will refer to this as "the 1986 proceeding". They alleged, inter alia, that Tectran had made false allegations in the 1980 statement of claim and that by 1985 the claimant was aware that the allegations were false; that the claimant, when he sought review of their grant of legal aid, had done so for the purpose of and in furtherance of a conspiracy to obstruct them in the pursuit of their rights against Tectran and Arunta, and to pervert the course of justice; that the claimant and others had conspired wrongfully to keep the 1980 proceeding on foot in order to exhaust their financial resources and force them to a weaker bargaining position; that the claimant and others had wrongfully conspired to assist Tectran and Arunta in abusing the processes of the court and to pervert the course of justice; that the claimant's actions in contacting Wood and Donaldson were taken in furtherance of a conspiracy wrongfully to pursuade each of them to alter the evidence he had previously given, and to pervert the course of justice; that the claimant, acting for Tectran, Arunta and their executives, instituted the Carneys defamation proceedings for the purpose of coercing Carneys to withdraw their legal representation of Rajski and Raybos. 46 During the course of preparations for litigation, the claimant, with others, conferred with representatives of Tectran and Arunta. In the course of a discussion on 24 February 1986, he gave certain advice to Yerushalmy about his evidence and the manner of giving it. This advice is the foundation for the fourth ground in the Information. Details of the allegations can be found at paragraphs 312 to 318. 47 Despite the enormous amount of activity that is evidenced by the voluminous documentary records (and there was much more than has here been mentioned), none of the substantive litigation - the 1980, 1985, 1986 proceedings, the fraud proceeding, the Carneys defamation proceeding or the first contempt proceeding - was brought on for hearing. There were, however, numerous forays and skirmishes in this Division, the Equity Division, and in the Court of Appeal. 48 In October 1986 various matters were listed before Powell J (as he then was), in the Equity Division, although the evidence does not enable me to say for what purpose. Certainly they were not listed for final hearing. The matters listed included matters in which the claimant was personally a party. Rajski and Raybos sought adjournment of the proceedings. The basis of the application was Rajski's mental or nervous condition of which he tendered psychiatric evidence from a psychiatrist, Dr William Metcalf ("Metcalf"). Powell J refused the adjournment application. 49 Rajski and Raybos appealed Powell J's refusal of the adjournment in the Court of Appeal. A hearing took place over 20 - 23 October 1986. Metcalf gave additional evidence. The claimant, along with the other defendants, was represented by senior counsel. The following morning, as the Court was about to deliver judgment, the claimant announced that he now appeared for himself and wished to put some additional argument on the question of the adjournment application. The substance of his argument was that if the Court granted the adjournment sought on the basis of the psychiatric evidence, the acceptance of that evidence carried the implication that Rajski was mentally unstable and unfit to manage his own affairs, with the consequence that a tutor would have to be appointed to conduct the litigation for him. The claimant's conduct at this time and thereafter is part of the foundation for the seventh ground in the Information. Particulars of the allegations against him in that respect are detailed at paragraphs 383 to 405. 50 In support of his application for adjournment Rajski put before the Court reports by Metcalf. In one report, as part of the history on which his opinion was based, Metcalf recounted allegations that had, it seems, been made to him about the manner in which DW had conducted the litigation. The claimant threatened to institute defamation proceedings against Metcalf. His action in this regard is the foundation for the fifth ground in the Information. This complaint is dealt with at paragraphs 318 to 345. 51 By notice of motion filed in the Court of Appeal on 28 April 1987 Rajski again alleged contempt against the claimant. Part of the substance of the charge on this occasion lay in the claimant's threats to sue Metcalf in defamation. I will refer to this proceeding as "the second contempt proceeding". Like the first, it has never been brought on for hearing. 52 The various proceedings had attracted some media attention and were reported, from time to time, in a weekly law column in the Sydney Morning Herald ("SMH"), a daily newspaper circulating in NSW. The claimant sued the publishers of SMH, John Fairfax and Sons Limited ("Fairfax"), in defamation on two of the articles, and he sued the journalist who wrote the columns, John Slee ("Slee"), on one of the articles. The two claims were heard together in a trial that commenced on 6 June 1989 before Loveday J and a jury. I will refer to these as "the Fairfax defamation proceedings". The claimant gave evidence. The LSC alleges that, in three respects, the evidence he gave was untruthful. This allegation is the foundation for the sixth ground in the Information. It is more fully particularised at paragraph 346 to 372. 53 The seventh ground in the Information is a compendium of various matters already mentioned, with two additions. These concerned attempts to recover costs awarded against Rajski, or Rajski and Raybos, in proceedings before Hunt J and Campbell J. The precise circumstances are examined in paragraphs 373 to 411. 54 There is another circumstance that need here be mentioned, which appears to be unrelated, or no more than peripherally related, to the events I have recounted, but is material to the grounds contained in the Information. In March 1988 the Director of Public Prosecutions for the Commonwealth ("the DPP") proposed to prosecute Yerushalmy for certain offences. He was unable to locate Yerushalmy for the purpose of serving the initiating process upon him. The claimant represented Yerushalmy in relation to other proceedings, including those mentioned in this chronology, to which Yerushalmy was a party. The DPP's officers (or police) communicated with the claimant in relation to the proposed prosecution. The claimant had no instructions to accept service on Yerushalmy's behalf. It is in relation to the claimant's role in this matter that LSC alleges the claimant gave false evidence in the Fairfax defamation proceedings.

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Facts 61 The complaint was received by the LSC on 11 July 1994. It related to events and conduct alleged to have occurred between six and nine years earlier. It was, therefore, as previously noted, prima facie statute barred. 62 On 22 September the LSC met Rajski. What happened at that meeting is not disclosed by the evidence, but it seems clear that one matter discussed, at least, concerned the exercise of discretion under s 138(2). On 20 January 1995 the LSC wrote to the claimant advising that the complaint had been lodged, noting the range of dates between which the conduct the subject of the complaint was alleged to have occurred, and drawing attention to the provisions of s 138, including s 138 (2), the provisions conferring upon him a discretion to accept a complaint out of time. He expressly said that he was considering exercising his discretion under s 138(2)(b). That paragraph empowers the LSC to accept a complaint outside the three year limit if: "satisfied that the complaint concerns an allegation of professional misconduct and that it is necessary in the public interest to investigate the complaint". 63 Although s 138(2)(a) authorises the LSC to accept a complaint out of time if it is just and fair to do so, having regard to the delay and the reason for the delay, there has never been any suggestion that the LSC might extend the time by reference to that provision and that paragraph can be put to one side. 64 In the letter the LSC went on to express the view that, if Rajski's allegations were proved, the conduct to which they related would amount to professional misconduct. He added: "Further when the "public interest" is being considered my discretion to exercise the power is a wide one. In this case the allegations are very serious and their investigation would be consistent with the objects of Part 10 of the Act to ensure compliance with necessary standards of honesty as well as competence and diligence and further, to maintain at a sufficiently high level the ethical and practice standards of the legal profession as a whole. The substance of the allegations have only recently been passed upon in defamation proceedings so it can be fairly said that the truth of the allegations remain very much in the public domain at the present time. It is also a fact that there has been much publicity concerning the allegations. Therefore it is for these matters and the underlying object of the Act to create public confidence in the legal profession in this State that I am considering the exercise of the discretion in s 138(2)(b) of the Act. Accordingly, I now wish to give you the opportunity to provide your views on the matter before I make a decision on whether to exercise the discretion."

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(iii) an allegation that the claimant conspired during 1988 with Yerushalmy to avoid service of the summons and thereby assist in the preparation and "pursuance" of a no bill application; the LSC said it was alleged that the manner in which the claimant represented Yerushalmy amounted to misconduct by seeking to pervert the course of justice and to avoid the proper criminal process in favour of his client's commercial interests. 66 There followed some correspondence which is immaterial for present purposes, and on 6 February 1995 the claimant provided his detailed response which ran to ten pages of typescript and was accompanied by many annexures. He acknowledged that Rajski's allegations amounted to allegations of professional misconduct and turned his attention to whether it was necessary, in the public interest, for the LSC to investigate the complaint; he argued that it was not and urged the LSC to consider whether the complaint was frivolous and vexatious and should accordingly be dismissed under s 141(b). It is unnecessary, for the purposes of the present argument, to be more specific about the content of the response made by the claimant. Its detail, and the attention he paid to the specifically relevant parts of the legislation, are important, demonstrating that he was well aware of the nature of the opportunity being afforded to him. 67 On 17 February 1995 the LSC replied, relevantly in the following terms: "I note your letter contains background to the matter and your detailed submission in reply to my request for your views about the exercise of my power pursuant s 138 (2)(b) of the Legal Profession Act in relation to Dr Rajski's complaint. Please note that prior to me making a formal determination as to whether or not to accept the complaint, I will contact the parties for the purpose of clarifying any further matters or seek final submissions if necessary." 68 On 28 February 1995 the LSC again wrote to the claimant, relevantly as follows: "I refer to the above matter and advise that I have now received a response from Dr. Rajski to your submission dated 6 February 1995.

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(a) Do the rules of procedural fairness apply to a decision under s 138(2)? 72 The competing positions of the parties are clear. The claimant argued that the rules of procedural fairness do apply to a s 138(2) decision; the LSC to the contrary. 73 Senior counsel for the LSC advanced two separate lines of argument in support of his proposition. Firstly, he relied upon the authority of the Court of Appeal in Commissioner of Police v Reid (1989) 16 NSWLR 453. The statutory provision there under consideration was s 341 of the Crimes Act 1900 which provided that no prosecution for perjury could be instituted without the leave of a court. The question was whether, when such leave was sought, the person the subject of the proposed prosecution was entitled to an opportunity to be heard on whether leave should be given. Meagher JA, with whom Clarke JA agreed, held that the rules of natural justice did not apply, for two reasons, of which he described one as "broad" and one as "technical". (Priestley JA took a contrary view.) The technical reason was to do with the construction of the Act in which the section there under consideration appeared. There are no real parallels with s 138(2) and this reason need not be further pursued. The broader reason was that a grant of leave really "does nothing"; even when leave had been granted, a prosecutorial decision still had to be made by the appropriate authority. A decision to commence criminal proceedings does not require observance of the principles of natural justice (see the authorities cited at p 461); it followed that a decision in relation to an anterior step did not require observance of those rules. The LSC sought to draw an analogy with this decision based on the proposition that a decision to commence professional disciplinary proceedings, like a decision to prosecute criminally, does not require observance of the rules of natural justice, and, therefore, conformably with Reid, neither does a comparable anterior decision. For reasons that appear below, the analogy fails. 74 The decision in Reid is, in my view, distinguishable. A decision under s 138(2) to accept a complaint after the statutory time limit has elapsed cannot be described as one that "does nothing". It has the consequence of setting in train an investigation of a legal practitioner's conduct, of exposing the legal practitioner to the provisions of s 152, requiring provision of information and production of documents; it may be the starting point of a chain of events that, at its worst, could culminate in the removal of the legal practitioner's name from the roll of legal practitioners. (In this respect, I appreciate that there is some correlation with the decision to grant leave to prosecute for perjury, in that that decision could be seen as the starting point of a chain that could culminate in a prosecution for perjury, and, at its worst, imprisonment.) The distinction is that the next step in a perjury prosecution decision (ie the decision to prosecute) is not subject to the rules of natural justice: the next (or a subsequent) step to a s 138 decision is a decision under s 155 to institute proceedings in the Tribunal, a decision which is subject to those rules: Murray v Legal Services Commissioner and Another [1999] NSW CA 70. (The decision in Murray was delivered after oral and written argument concluded in the present case.) 75 The decision in Reid does not persuade me that the LSC, in considering the exercise of power under s 138(2), is not obliged to observe the rules of natural justice. 76 The LSC's second argument depended upon the structure and scheme of the Act. The opening section of Part 10 is s123, which defines the general objects of the Part as: "(a) to redress the consumer complaints of users of legal services; and (b) to ensure compliance by individual legal practitioners with the necessary standards of honesty, competence and diligence; and

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(g) to give complainants the right to seek an independent review of decisions of Councils to dismiss complaints or merely reprimand legal practitioners." (emphasis added) 78 There are in s 125 no equivalent provisions designed to ensure that legal practitioners have "a reasonable opportunity to rebut statements" of complainants, or "receive adequate notice" of the institution and status of disciplinary proceedings, or be given the right to an independent review of decisions. From this, the argument ran, it should be inferred that the legislature did not intend to afford to legal practitioners corresponding rights to those afforded to complainants. 79 Further, in s 125 there is one provision only concerned with ensuring that legal practitioners have the benefit of the rules of natural justice. That appears in paragraph (a) which is in the following terms: "(a) to ensure that the rules of natural justice (being rules for procedural fairness) are applied to any disciplinary proceedings taken against legal practitioners;". 80 The application of the rules of natural justice is therefore restricted, the LSC argued, to "disciplinary proceedings" and does not extend to anterior decisions. That raises a question as to the reach of the phrase "disciplinary proceedings" as used in s 125(g). The LSC argued that "disciplinary proceedings" are proceedings instituted in the Tribunal once he or a Council has reached the requisite satisfaction under s 155 (2). S 167(1), providing for the institution of "proceedings" in the Tribunal, and s 167(2), requiring the Tribunal to conduct a "hearing" were called in aid of this submission. If "disciplinary proceedings" are so confined, it may be inferred from s 125(a), and the absence of any other reference to the rules of natural justice or procedural fairness in relation to a legal practitioner, that the legislature did not intend those rules to apply at any earlier stage of proceedings. In other words, the application of the rules of natural justice is required only in relation to proceedings in the Tribunal. 81 There is much to support the proposition that the reference to "disciplinary proceedings" in s125 (a) is a reference to proceedings in the Tribunal and not to the processes that precede such proceedings. One such indicator is s 131(1), which sets out the functions of the LSC. The functions are wide and varied, extending from the receipt of complaint to the institution of proceedings in the Tribunal. The only occasion on which the word "proceedings" appears is in connection with the LSC's function in relation to the institution of proceedings in the Tribunal. All other functions are described by different nomenclature. Senior counsel also pointed to ss 141, 142, 147A(1), 152 and 154 as sections concerned with the powers and functions of the LSC, and the processes and procedures to do with the objects and purposes of the Part, but that do not use the word, or easily come within the description, "proceedings". On the other hand, s 167, which does use the word, is concerned with proceedings in the Tribunal. 82 There is thus a consistency in the language used in the Act; "proceedings" are proceedings in the Tribunal, for which procedures and practices are prescribed, and which, by reason of the potentially serious consequences, have a degree of formality. 83 I am prepared to accept that "disciplinary proceedings" referred to in s 125(a), and in relation to which the rules of natural justice are expressly applied, are proceedings (or hearings) in the Tribunal. The argument continued, however, that because the rules of procedural fairness are expressly applied to those proceedings by s 125(a), the legislature has evinced an intention to exclude those rules in relation to other procedures and functions of the LSC under the Act. The conclusion does not necessarily follow from the premise. 84 In recent times, the starting point for an understanding of circumstances in which the rules of procedural fairness applies is the judgment of Mason J (as he then was) in Kioa v West (1985) 159 CLR 550. 85 Commencing at p 582, his Honour wrote: "It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it: [authorities cited]. The reference to 'right or interest' in this formulation must be understood as relating to personal liberty, status, preservation of livelihood and reputation as well as to proprietary rights and interest.

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See also Annetts v McCann (1990) 170 CLR 596; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564). 86 A decision of the LSC to accept a complaint out of time affects, at the very least, the interests of the person the subject of the complaint, and that person's legitimate expectations. The legitimate expectation may be simply stated as an expectation that any conduct engaged in more than three years earlier will be free of official investigation under the Act. The decision to extend time under the subsection clearly affects the expectation of a legal practitioner that he or she will be able to continue to practise free of the obligation to answer for conduct that occurred prior to the cut off date. While subs (2) permits that expectation to be dislodged, it does not exclude the right the legal practitioner would otherwise have to be heard in opposition to that course being taken. 87 It has long been accepted law that, where the rules of procedural fairness would otherwise apply, Parliament may displace the presumption, but that such a legislative intention must be made unambiguously clear: Twist v Randwick Municipal Council (1976) 136 CLR 106; Kioa, p 584, p 585. The mere fact that s 125(a) specifically applies the rules of natural justice to the proceedings in the Tribunal, but the Act nowhere else provides for their application to, for example, a s 138(2) decision, does not persuade me that the Parliament intended to displace the application of the rules of natural justice to a decision under that sub section. In my opinion, the decision is the very kind of decision which Mason J had in mind in Kioa, and which one would expect would attract the rules of natural justice. I discern no contrary intention, explicit or implicit, in the Act. 88 The argument also suffers as a result of the decision of the Court of Appeal in Murray. The LSC's argument did not differentiate between decisions under s138(2) and s 155, most of which he contended were decisions to which the rules of procedural fairness do not apply. The decision in Murray, rejecting that contention in relation to s 155, render it suspect also in relation s 138(2). 89 This view is consistent with that of the Full Court of the Federal Court of Australia in Oates v The Honourable Daryl Williams (in his capacity as the Attorney General of Australia) and Senator Amanda Vanstone (in her capacity as the Minister for Justice for the Commonwealth of Australia), (1998) 84 FLR 348 per Foster, Von Doussa and Finkelstein JJ. In that case it was held that a decision by a Minister of the Crown to permit a criminal prosecution outside the prima facie time limit was one in relation to which the person the subject of the decision is entitled to be heard. (The decision was reversed (on other grounds) by the High Court on 5 August 1999 ([1999] HCA 34)). 90 I am therefore satisfied that the first question should be answered in favour of the claimant. The rules of procedural fairness do apply to a decision under s 138(2) of the Act.

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(b) Was the obligation to observe the rules of procedural fairness adequately discharged? 91 I have set out the correspondence above. On 20 January 1995 the LSC outlined (in my view, inadequately) the substance of the complaint and invited the claimant to provide his "views". If that were all the information the claimant received, I would be of the opinion that he had not been properly informed of the nature of the case against him. However, the claimant made a detailed response on 6 February 1995. The deficiency in the original notification was remedied when, on 28 February 1995, the LSC provided him with a copy of the original complaint book, and Rajski's 21 February response to the claimant's letter of 6 February. He invited final submissions within a specified time and, at the request of the claimant, extended that time. The claimant again responded, in a letter (24 March 1995) which demonstrated that (as one would expect of a solicitor of his standing and experience) he was well aware of the nature of the task that confronted him. 92 The criticism that was made of the procedures adopted by the LSC concerned the fact that he had had meetings with Rajski, the content of which was not disclosed to the claimant. Counsel for the claimant sought to have inferences drawn from the nature of the cross-examination of the claimant, and from documentary material tendered into evidence on behalf of the LSC, that there had been further contact between Rajski and the LSC, during which Rajski had supplied material to the LSC additional to that contained in his original complaint and subsequent response. 93 It may well be the case that the LSC had personal meetings with Rajski. Indeed, having regard to the functions of the LSC (especially as set out in s 131 (1)(b), which requires him to assist and advise complainants, including assisting them to clarify their complaints and put them in writing) it might be surprising if he had not done so. It could hardly be expected that he would or could provide a transcript or even a summary of what transpired at any and every such meeting to the claimant, nor to disclose every document he had received, whether he considered it material or not. No authority was cited to support the proposition that the LSC's obligation to accord procedural fairness to the claimant in respect of the s 138(2) decision extended to disclosing details of every contact and discussion with the complainant. There were, in practical terms, two issues on which the claimant was entitled, at that stage, to be heard. The first, which he did not contest, was whether the allegations amounted to allegations of professional misconduct; the second, whether it was necessary in the public interest for the LSC to investigate the complaint. (It may be said that a third issue for the LSC was whether, having reached the requisite state of satisfaction about the nature of the complaint and the necessity to investigate it, a further separate question of discretion arose, but no argument was directed to such a question and I do not propose further to consider it. So far as it was argued, it was in the context of the contention that the decision was relevantly unreasonable.) 94 The claimant based a further argument on the fact that the Information, as ultimately filed, contained grounds that did not appear in Rajski's original complaint (see paragraphs 164 to 168). The argument was that the claimant was left in ignorance that the LSC had these matters under consideration and was thereby deprived of the opportunity to make any submission in relation to them. That may have been a powerful argument if the only grounds on which the Information was based were drawn otherwise than from Rajski's complaint, or if the grounds that were contained in Rajski's original complaint did not satisfy the two tests of s 138(2)(b); but it is a significantly diminished argument in relation to this question, in the light of the LSC's conclusion that Rajski's allegations did amount to allegations of professional misconduct and that it was necessary in the public interest to investigate them. The additional grounds have significance in another respect (see paragraph 168), but they do not assist the claimant on this issue. 95 I am satisfied that the LSC did everything reasonably practicable to afford the claimant the opportunity to seek to dissuade him from accepting the complaint out of time, and to advance such argument and material as he considered pertinent. The requirements of procedural fairness were adequately met. The claimant's responses show that he knew precisely what was in issue at that time.

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(c) Reasonableness 96 The final matter in relation to the first decision is the claimant's argument that to accept the complaint out of time was unreasonable. The argument concerns the proper interpretation of the phrase "necessary in the public interest to investigate the complaint". 97 Essentially, the argument was to this effect. Given the mass of litigation that the 1980 proceeding had spawned, many of the issues that were raised by the LSC in the Information were the subject of at least one judicial proceeding elsewhere. It could not, therefore, reasonably be concluded that it was necessary in the public interest that they be separately investigated by the LSC. 98 It is true that some of the matters raised in the grounds of the Information duplicate matters raised elsewhere. Ground 1 of the Information is the allegation that the claimant had, in 1985, made improper approaches to Wood and Donaldson with a view to having them change the evidence they had given in the hearing before Miles J. Ground 2 of the Information is the claim that the claimant's attempts to have the legal aid grant terminated were made for an improper purpose, that is, to prevent or thwart Rajski and Raybos pursuing their rights in the litigation against Tectran. Ground 3 of the Information is the claim that in commencing defamation proceedings against Carneys on behalf of the Tectran executives, the claimant sought wrongfully to intimidate that firm of solicitors. 99 Each of these grounds replicates allegations made by Rajski in the first contempt proceeding, and was, therefore, already within the jurisdiction of the Court of Appeal, and could have been brought on for hearing had Rajski sought to do so. An alternative forum was thus well placed to hear and dispose of the issues raised in these grounds. Moreover, complaints of essentially the same nature were made in the 1986 proceeding in which Raybos and Rajski sued the claimant and his partners alleging conspiracy. This statement of claim was filed in the Commercial List of this Division. Thus a second forum was seized of the allegations the subject of the first three grounds in the Information. 100 Ground 5 of the Information is the allegation that the claimant improperly intended to intimidate Metcalf in relation to evidence he had given supporting Rajski's application for adjournment before the Court of Appeal, by threatening to sue him in defamation. That was one of the issues raised by Rajski in the second contempt proceeding, filed in 1987, and, like the first, never brought on for hearing. 101 Thus, so far as grounds 1,2,3 and 5 are concerned, judicial proceedings already on foot elsewhere raised the very same issues or so it was argued Finalisation of those proceedings would ventilate and resolve the issues raised by the grounds in the Information and satisfy the public interest in seeing serious allegations of impropriety against a legal practitioner determined. It could not reasonably be held to be necessary that they be investigated by the LSC. 102 There is one minor factual premise in this argument that should be corrected. Counsel for the claimant acknowledged that the Court of Appeal had ruled that hearing of both contempt proceeding should be deferred until after the conclusion of the substantive proceeding. It was not, therefore, within Rajski's power to bring those matters on for hearing. This represents a serious flaw in the argument. However, it is not the complete or final answer to the argument, to which I will come in due course. 103 A further argument put on behalf of the claimant was that, where the allegations are properly characterised as allegations of contempt, the preferred course is so to deal with them, rather than as disciplinary matters. In support of this proposition counsel relied upon a passage in Cordery on Solicitors, 8th ed. p 321, and the cases there cited. 104 It is sufficient to observe that, while the author does appear, in the opening words of the sentence referred to, to suggest that a solicitor will not usually be struck off for contempt, "the proper procedure being committal" that is immediately followed by an acknowledgment that "in a case where his contempt amounts to professional misconduct, he may be struck off". It is, in my view, a question of properly assessing the conduct said to constitute contempt for the purpose of determining whether it may properly be characterised as professional misconduct, and then if it is, determining what consequences ought follow. Not every act of contempt will amount to professional misconduct but the converse, inherent in the argument - that is, that no act of contempt by a legal practitioner should be dealt with as professional misconduct - certainly does not follow. 105 Counsel for the claimant also argued that, in relation to grounds 5 and 6 of the Information (concerning the threat to sue Metcalf, and the allegedly false evidence he gave in the Fairfax proceedings) the claimant was acting in a personal, not professional, capacity. He was the litigant in the latter, the putative litigant in the former. Accordingly, relying on the authority of In the Matter of Thomas James Wallace (1866) L R 1283, counsel argued that disciplinary proceedings were inappropriate and the ordinary legal processes that would apply to any citizen who engaged in the kind of conduct alleged against the claimant should apply to him. The proper remedy in respect of the conduct alleged in ground 5, the threat to sue Metcalf, is (if anything) a prosecution for contempt; the proper remedy for giving false evidence is a prosecution for perjury. Again, I do not accept the argument. The conduct of a legal practitioner cannot be so rigidly compartmentalised, his/her behaviour in a personal capacity sealed off from his/her conduct in a professional capacity, as s 127(1)(b) recognised. It is a matter for judgment in every case. I am satisfied that an unwarranted threat to sue, and the giving of untrue evidence in a legal proceeding, may, in appropriate circumstances, constitute professional misconduct. 106 Although the remaining grounds of the Information are not specifically the subject of already existing proceedings, a similar argument was mounted, to the effect that the issues raised in these grounds could have been raised in other proceedings. For example, it was argued, such matters could have been raised in the Fairfax proceedings. In those proceedings the claimant sued the publishers of, and a journalist employed by, the SMH, in defamation arising out of the publication of articles about his conduct of the Rajski litigation. He pleaded that the matter complained of conveyed the imputation, in effect, that his conduct amounted to professional misconduct. It would, had Fairfax and Slee elected to do so, have been open to them to seek to defend the claims on the basis that the imputations were true and were published on an occasion of qualified privilege or related to matters of public interest. Fairfax and Slee opted against that course. I have not the least difficulty in rejecting this argument. What course a private organisation and individual choose to take when sued for defamation can have no possible bearing on whether it is necessary in the public interest that allegations of professional misconduct (which could have been, but were not, litigated in the defamation proceedings) be investigated by the LSC in the performance of his functions under the Act. Even if they had there been litigated, that Court was not the Tribunal to determine whether the facts now alleged amount to professional misconduct, and certainly that Court had no power to take any remedial action appropriate to an allegation of misconduct. 107 Although the argument that because grounds 1, 2 and 3 of the Information duplicate factual issues raised elsewhere, it is not necessary in the public interest to investigate them is less unmeritorious, I reject it also. I accept that the allegations made against the claimant could have been examined in a variety of ways, in a variety of fora, and that proceedings may have been initiated by a variety of individuals, organisations or bodies. The fact that alternative means exist to reach a determination of the truth of factual allegations does not bear upon the decision the LSC has to make. What he had was a series of serious allegations about the conduct of a senior and experienced legal practitioner, concerning conduct alleged to have taken place over an extended period of time, allegedly for improper purposes and by improper methods. It would not have been open to the LSC to take the view that, since some other Tribunal was seized of the same or similar factual allegations, he was relieved of his obligations under the Act. The LSC was not party to any of the other proceedings and had no control of the issues litigated or the evidence presented. He had no influence on whether the proceedings ever came to a hearing. The courts in which the various other proceedings were listed lacked power to take appropriate measures if it were found that the claimant's conduct was improper in any way. The ultimate issue in relation to the present allegations is whether the claimant 's conduct amounted to professional misconduct. That was not an issue for determination in any of the other proceedings. A supplementary issue if professional misconduct is established, is the appropriate remedy for the misconduct. At worst, the Tribunal would be required to consider the claimant's fitness to practise as a legal practitioner. That was not an issue for determination in any other proceedings. It is only necessary to look to s 123, setting out the general objects of Part 10, to recognise the fallacy in the claimant's argument. The LSC would, in my view, have been derelict in his duty if he had refused to accept the complaint on the ground that some of the factual matters raised were also raised in other pending proceedings; even more so, had he done so on the basis that those same factual matters could have been, but had not been, raised in concluded litigation between the claimant and other parties. It was not the role of Fairfax or Slee, or their legal representatives, to conduct litigation against them with a view to discharging the LSC's functions under the Act. 108 It may have been different had the various allegations been litigated to finality, and the claimant cleared of the kind of wrongdoing then alleged; in those circumstances the LSC may well have taken the view that the public interest did not require further investigation of what had already been thoroughly investigated with factual findings in the claimant's favour. But that was not the case. Further, if the allegations had been litigated, and the claimant found guilty of contempt or perjury, it is almost axiomatic that the LSC or the Council of the Law Society would have been obliged to give consideration to the procedures provided for by Part 10 of the Act. 109 One additional and important reason for rejecting the argument is the very aggregation of factual matters that were before the LSC. It is one thing for an individual allegation of contempt to be disposed of. It is quite another, from the point of view of the objects of the Act, to consider the whole of the claimant's conduct of which complaint was made. 110 Nor do I accept that the decision in Wallace is conclusive that the allegations concerning the claimant's conduct when acting in a personal rather than professional capacity should be dealt with other than under the disciplinary provisions of the Act. It would be a surprising proposition if the LSC could not institute disciplinary action against a legal practitioner said to have lied on oath in a judicial proceeding, simply because he was giving evidence in a personal rather than professional capacity. And, in any event, the claimant's conduct in threatening to sue Metcalf can properly be seen only in the context of the whole of the Rajski litigation. It was inextricably linked with his representation of his clients. 111 In any event, the definition of "professional misconduct" in s 127(4) makes clear, in paragraph (b), that personal conduct may amount to professional misconduct. 112 I am far from persuaded that the claimant has shown that the LSC's decision to accept the complaint out of time was unreasonable in the relevant sense. That concludes the issues raised in relation to the decision to accept the complaint out of time.

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Facts 114 Following receipt of the LSC's letter of 30 March 1997 advising him that he had decided to accept the complaint out of time, the claimant put the matter in the hands of one of his partners, Mr John Pavlakis ("Pavlakis"). On 10 April Pavlakis wrote to the LSC notifying him that he now acted for the claimant, and requesting that future correspondence be directed to him (Pavlakis). 115 Notwithstanding the LSC's statement in the letter of 30 March that he would contact the claimant in relation to the future conduct of the matter and the procedure to be adopted, until 10 December 1997 there was no further communication of any kind between the parties. On that date Pavlakis telephoned the LSC and arranged to meet him, together with another solicitor Mr Craig Murray ("Murray"), on the morning of 18 December. The day before the meeting was scheduled to take place, 17 December, the claimant was served with the Information together with the particulars of the complaint and a statutory declaration made by the LSC. The meeting did not take place. 116 In Murray the Court of Appeal held that a decision under s155 to institute proceedings is one to which the rules of procedural fairness apply, and that the application of the rules requires that the legal practitioner the subject of the decision be provided with a copy of the complaint and be given an opportunity to respond to the allegations made therein (para 88). In Murray, the claimant had not been given a copy of the complaint, despite a number of explicit requests, and, as a result, the decision was declared void, and the Tribunal restrained from proceeding to conduct a hearing into the Information. As a result of the decision in Murray the essential question that here arises for determination is whether the course adopted by the LSC was sufficient to discharge his obligation to afford natural justice to the claimant in relation to this decision. LSC argued that he complied with this obligation. 117 The judgments in Murray were published well after judgment in the present case was reserved. Accordingly, the parties were given an opportunity to make written submissions as to its application or non application to the present case. The Crown Solicitor, acting for the LSC, furnished a submission seeking to distinguish the two cases, and arguing that, in the present case, the duty of the LSC had been properly discharged. 118 There is one significant point of distinction between the two cases. In Murray, because the claimant, despite his express requests, had never been given a copy of the complaint, he did not know, in full, or in clear terms, what was alleged against him. Priestley JA doubted that, if that claimant had at any stage been told the whole substance of the complaint against him, he would have succeeded in his claim of procedural unfairness (paragraph 4). However, on the facts as they emerged in the evidence in that case, the claimant had not been told the entirety of what the LSC was investigating, but only part of it. 119 In the present case the LSC seized upon this point of distinction in order to argue that, as the present claimant had been given a copy both of Rajski's complaint book and his reply to the claimant's original response in relation to the s 138(2) question, the claimant had been given adequate information and that he had had ample opportunity to put his case. 120 There are four reasons why the LSC's arguments cannot be accepted. First, the grounds in the Information that are additional to and go outside the matters raised by Rajski show conclusively that the LSC did not disclose to the claimant the whole substance of what he was investigating. Second, in the letter of 17 February 1997 the LSC confined his invitation to the claimant to put his case on the issues raised by s 138(2)(b). There was no invitation to the claimant then to put his case in relation to the substantive complaint, and it would have been inappropriate to have issued such an invitation at that time. This was reinforced by the LSC's letter of 28 February, in which he effectively told the claimant to confine his submissions to matters relevant to the s138 decision. It was reasonable to infer from the terms of that letter that the LSC separated the two questions, and was , at that time, concerning himself only with the question of acceptance of the complaint out of time. There is a clear hint in the letter, that, if the s138(2) issue were resolved against the claimant, then the subsequent issue, the s155 questions, would be dealt with independently. Third, in the letter of 30 March 1997, advising the claimant that he had decided to accept the complaint out of time, the LSC explicitly told the complainant that he would "shortly" be in touch with respect to the future of the investigation and the procedure to be adopted. Again, it is reasonable to read this letter as telling the claimant that a further opportunity would be given to him to put submissions in relation to the subsequent matter. Indeed, the claimant may well have believed, from the content of this letter, that the investigation had come to a halt, either temporary or permanent. Fourth, and most damning for the LSC, arranging the meeting with the claimant's legal representatives for 18 December, which was aborted by reason of the filing of the Information, could reasonably be construed as nothing other than the commencement of the natural justice procedure. The claimant was entitled to expect that at and following that meeting, he would be provided with full information about the stage the investigation had reached, what precise matters the LSC considered warranted attention, the procedures he proposed to adopt, and the opportunity the claimant would be given to rebut allegations against him. I would add that the very length and detail, and the discursive nature, of the Rajski documents give further support to this conclusion. The claimant could hardly be expected to discern from those documents what the LSC considered to be material warranting further investigation. It was incumbent on the LSC to refine for the claimant the issues he considered required or warranted investigation, and in relation to which the claimant was to be called upon, or given an opportunity, to respond. It is important to observe also the different considerations that arise under s138(2)(b) and s155(2). For the former, the relevant question was whether it was "necessary in the public interest to investigate the complaint". For the latter the question was whether there was a reasonable likelihood that the claimant would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. But there is more than this to a s155 decision. Even if the LSC concluded that there was such a reasonable likelihood, subs(3) obliged him to go further and consider whether there was a reasonable likelihood that the claimant would be found guilty only of unsatisfactory professional conduct and, if so, which of the two alternative courses available to him under that subsection should be adopted. As the judgment of Priestley JA in Murray makes plain, the claimant was entitled to an opportunity to be heard on these questions. 121 The LSC, advanced another argument that part of the basis of the decision in Murray is inapplicable in the circumstances of the present case. This argument was concerned with what the Court of Appeal said about subss (2) and (3) of s 155. By subs(2) the LSC is obliged, once satisfied of the reasonable likelihood that the Tribunal would find the claimant guilty either of professional misconduct or unsatisfactory professional conduct, to institute proceedings in the Tribunal. However, by sub s (3), if he was satisfied that there was a reasonable likelihood that the Tribunal would find the claimant guilty only of unsatisfactory professional conduct and not professional misconduct, then he would have been entitled to reprimand the claimant (if the claimant consented) or (if satisfied that the claimant was generally competent and diligent and that there were no other material complaints about his conduct) to dismiss the complaint. 122 The availability of this option was one reason, but, on my reading of the judgment, an independent reason, that led the Court of Appeal to hold that s 155 attracts the rules of procedural fairness. The LSC's argument was based on the claimant's concession that the conduct alleged against him amounted to professional misconduct, thereby rendering sub s (3) irrelevant. 123 If the obligation to consider the matters relevant to subs(3) were integral to the conclusion in Murray that the rules of natural justice apply to a s 155 decision, there would be some substance to this argument. However, that is not how I read the judgments. In paragraph 88 Sheller JA, with whom the other members of the Court generally agreed, although with additional observations, said that he found it hard to imagine that the LSC could reach the requisite satisfaction (and here his Honour was, I believe, referring to the requisite satisfaction under s 155(2)) without taking into account the legal practitioner's response. 124 In paragraph 89 his Honour went on to refer to the provisions of sub s (3), but, as indicated above, I consider this to have been an additional and independent reason for the conclusion. On a proper analysis of the judgment, in my view, his Honour would have reached the same conclusion in relation to s 155(2)even in the absence of sub s (3). 125 Accordingly, the attempt to distinguish Murray fails. 126 The claimant received no opportunity to be heard on these questions, and instead found that the Information had been filed without the further reference to him that he had been led to expect. The LSC's argument that he complied with the requirement of natural justice fails. 127 The claimant was entitled to, but was not given, the opportunity to respond to the complaint before a decision to institute proceedings in the Tribunal was made. He has established that, in relation to the s 155 decision he was entitled to but was not accorded the benefit of the rules of procedural fairness. 128 The LSC then argued that, in the circumstances that now exist, to follow the course taken in Murray and declare the decision void would be a futility. This is because of the different way in which the claimant in Murray conducted his challenge to the decision there in question. He did not argue that the decision to institute proceedings was unreasonable, and the Court of Appeal therefore did not have the relevant evidence to determine whether a different result might have been reached had that claimant had the opportunity to put information and material before the LSC. 129 In the present case, a great deal of the hearing time was taken with an examination of that material the claimant would have put before the LSC had he been given the opportunity. This enables an appreciation of whether the LSC might have come to a different view - or, more accurately, whether it has been shown that he could not have reached any other conclusion if he had had access to the evidentiary material and argument now put on behalf of the claimant. 130 The question which now arises is what, in the circumstances of this case, flows from the conclusion I have reached. Had the claimant limited himself, in the summons, to the contention that he had been denied procedural fairness, the appropriate course would have been to remit the matter to the LSC to be dealt with in accordance with those rules. But the claimant did not so limit himself. In arguing that the decision to institute proceedings in the Tribunal was unreasonable or an abuse of process he must be taken to have put before me the entirety of material he would, given the opportunity, have put before the LSC. I have already mentioned the volume of evidentiary material put forward by the parties. I am satisfied that it is correct that merely to declare the s 155 decision void and remit the matter to the LSC to be dealt with in accordance with my conclusion would be inappropriate. Having regard to all the material, the only reasonable and practical course is to proceed to deal with what I have called the substantive matters. 131 In reaching this conclusion I have not overlooked the alternative possibility of requiring the LSC to refer the complaint to the Council of the Law Society for independent investigation, but I have concluded that to take that course at this late stage would do no more than prolong these already protracted proceedings. The detailed examination in relation to the grounds in the claimant's summons alleging that the filing of the Information constitutes an abuse of process renders any further preliminary investigation superfluous. 132 The circumstances are analogous with those recognised by the Privy Council in Calvin v Carr [1979] 1 NSWLR 1, in which three classes of case were identified - at one extreme, those cases in which a defective hearing at first instance may be superseded by a subsequent fair hearing; at the other extreme, those in which nothing less than a fair hearing at first instance will suffice, even though some form of review hearing may be seen to offer a cure for the original defect; and intermediate cases dependent on their own circumstances in which it is necessary to decide whether the parties should be taken to have agreed to accept the subsequent hearing and decision in place of the original. 133 In the present case the course initiated by the claimant, in putting all the issues he has before me, has placed this case in that intermediate category (if not in the first) and that it would be quite inappropriate to remit the matter to the LSC (or the Council of the Law Society) for further examination. 134 Finally, the claimant argued that the decision to institute proceedings was wholly unreasonable. As that argument raises the same issues as arise under ground 5 of the summons it will be dealt with concurrently with that ground.

[125]

Facts 145 The Information filed in the Tribunal opens with the words: "The [LSC] complains to the [Tribunal] that, in relation to Grounds 1-7, NICHOLAS RODERICK CARSON , a legal practitioner, is guilty of conduct which constitutes either professional misconduct or unsatisfactory professional conduct." 146 The concepts of "professional misconduct" and unsatisfactory professional conduct" are separately defined in s 127 (1) and (2) respectively. It is unnecessary here to set out the definitions in full. Throughout Part 10, distinctions are drawn between the two concepts, showing that the legislature envisaged that they would be treated differently. For example, under s 138(2)(a), the LSC may accept a complaint out of time in respect to either professional misconduct or unsatisfactory professional conduct provided the relevant test is met; but his powers to do so under s 138 (2)(b) exist only where he is satisfied that the complaint concerns an allegation of professional misconduct and the test there stated is satisfied. 147 Of greater significance is the distinction drawn in s 155, which in subs (2) requires the LSC to institute proceedings in the Tribunal if satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct; but which in subs (2) permits him, if satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct but not professional misconduct, to reprimand the legal practitioner (if he or she consents) or to dismiss the complaint (if satisfied of the relevant matters there set out). 148 Other distinctions are made in ss 168 and 170. Each of these sections concerns the procedures to be put in effect by the Tribunal in the conduct of a hearing. By s 168(1) the Tribunal is to observe the rules of evidence when conducting a hearing into an allegation of professional misconduct, but , by subs (2), is not bound to do so when conducting any other hearing (that is, when conducting a hearing into an allegation only of unsatisfactory professional conduct) but may inform itself of any matter in such manner as it sees fit. By s 170(1) a hearing is to be held in the presence of the public, but by subs (3) a hearing relating only to a question of unsatisfactory professional conduct is to be held in the absence of the public unless the Tribunal is of the opinion that the presence of the public is in the public interest or in the interests of justice. 149 The claimant argued that, because of the distinctions drawn in the Act between the two kinds of conduct, and, most particularly, because of the difference in the procedures governing the conduct of a hearing into the two different kinds of allegations, the LSC is obliged to elect to proceed either on an allegation of professional misconduct, or on an allegation of unsatisfactory professional conduct, but cannot proceed in the alternative, and that the Tribunal is limited to a finding of guilt or otherwise in accordance with the allegation brought by the LSC. 150 I am satisfied that this argument should not be accepted. 151 S 168(1) makes it plain that, where the Tribunal is conducting a hearing into an allegation of professional misconduct, the rules of evidence apply. Subs (2) makes it equally plain that, "for the purpose of conducting any other hearing", the Tribunal is not bound by those rules. "Any other hearing" is a hearing that does not involve a question of professional misconduct. Thus, where the LSC files an Information concerning conduct which he asserts may amount either to professional misconduct or unsatisfactory professional misconduct, the Tribunal conducts a hearing "into a question of professional misconduct" and by s 168(1) the rules of evidence apply. Subs (2) has no application, because the Tribunal is not "conducting any other hearing". 152 Similarly, s 170 (3) requires (prima facie), where a hearing relates "only to a question of unsatisfactory professional conduct" the hearing be held in the absence of the public unless the Tribunal is of the opinion that the presence of the public is in the public interest or in the interests of justice. Where a hearing is into the dual questions of professional misconduct and unsatisfactory professional conduct, s 170(3) has no application. The Tribunal is, nevertheless, entitled to direct that a hearing relating to a question of professional misconduct be held in the absence of the public if of the opinion that the presence of the public is not in the public interest or the interest of justice. 153 In my opinion the correct reconciliation of the sections, and their proper interpretation, involves the proposition that the LSC may institute proceedings in the Tribunal with an allegation that the conduct of the legal practitioner the subject of the allegations amounts either to professional misconduct or unsatisfactory professional conduct. He is not obliged to do so, and may allege one or the other, but if he alleges professional misconduct, whether alone or in the alternative, the Tribunal is bound by the rules of evidence. 154 It was argued on behalf of the claimant that the only reason for the LSC to take the course he did and include the alternative formulation was to gain the benefit of the more relaxed provisions as to the admissibility of evidence. There is no reason to accept that this was the reason motivating the LSC, but if it were, it was based on a mistaken premise. Where the LSC lays an Information framed in the alternative, the rules of evidence must be applied. It is only when the LSC expressly disclaims reliance upon an allegation of professional misconduct that he can obtain the benefit of the more relaxed provisions relating to evidence. In opting to proceed on the basis that the conduct amounts to professional misconduct, he is accepting that the whole of the hearing is to be conducted on the basis that the rules of evidence apply. In any event, I am not here concerned with the motivation of the LSC. What I am concerned with is simply the question whether the procedural distinctions between enquiries into allegations of professional misconduct and unsatisfactory professional conduct have the consequence that the two may not be alleged in a single Information. I am satisfied that they do not. 155 Accordingly, I do not accept the claimant's argument that the Information is vexatious or embarrassing in this respect.

[128]

That the Information alleged unsatisfactory professional conduct in respect of conduct occurring more than three years before the date of the complaint. 159 Strictly speaking, in relation to grounds 1 - 5 and 7, having regard to my conclusions immediately above, it is unnecessary to deal with this argument. However, the question remains alive in relation to ground 6 and should be disposed of. 160 In determining to accept the complaint out of time the LSC confined himself to the discretion conferred by s 138(2)(b), an essential element of which is that the complaint concerns an allegation of professional misconduct. The claimant argued that, having done so, it was not open to the LSC subsequently to allege that the conduct amounts to unsatisfactory professional conduct. 161 This argument should not be accepted. S 138(2)(b) is directed to acceptance of a complaint out of time. The LSC is empowered to accept a complaint out of time, relevantly, where satisfied that the complaint concerns an allegation of professional misconduct and that it is necessary in the public interest to investigate the complaint. The focus of the inquiry at that stage lies in an evaluation of the nature of the allegation. The LSC is necessarily confined to the allegations in the complaint. 162 Those findings, and the decision to accept the complaint, are the starting point of an investigation. It does not follow that an investigation must result either in a conclusion that the conduct is such that there is a likelihood that the legal practitioner will be found guilty of professional misconduct, or is entirely outside the disciplinary provisions of the Act. After investigation, it would be open to the LSC to reach the conclusion that the conduct does not reach the level, or come within the definition, of professional misconduct; he may nevertheless be satisfied that the conduct is capable of amounting to unsatisfactory professional conduct. 163 There is nothing in s 155 or elsewhere in the Act that prevents the LSC, once having accepted and investigated a complaint, concluding that the conduct alleged does not amount to professional misconduct, but does or might amount to unsatisfactory professional conduct. It remains open to him to exercise his powers under s 155(3) if he considers it appropriate to do so and the tests stated in the sub section are satisfied. The delay, and the policy that underlies s 138(2)(b), would be matters highly relevant to the course taken thereafter.

[131]

Delay 171 Except for the ground made in reliance upon the evidence given by the claimant in the Fairfax proceedings (the subject of ground 6 of the Information) the conduct the subject of the Information took place between 1985 and 1988. There are two aspects to the delay. Firstly there was delay on Rajski's part in making the complaint to the LSC. That was a delay of nine years in relation to the earlier conduct, six years in relation to the latest. That Rajski was aware of at least some of that conduct is evident because he was present when it took place, or was involved in the litigation in relation to which it occurred, and, most positively, by his commencement of the two contempt proceedings, in November 1985 and April 1987. Notwithstanding his awareness of that conduct, he made no complaint to the LSC until 8 July 1994. His delay in making a complaint remains unexplained. Thereafter, the delay lies, apparently, at the door of the LSC. It was not until 20 January 1995, more than six months after the complaint was filed, that the LSC informed the claimant of its receipt and sought his comments on whether it should be accepted out of time. His decision to do so was made and notified on 30 March 1995. It was not until almost twenty-one months later, on 17 December 1996, that he instituted proceedings in the Tribunal. He has provided no explanation for any aspect of the delay. 172 In this respect it is relevant to note s 154 of the Act which expressly requires an investigation by the LSC to be conducted "as expeditiously as possible". 173 The claimant relied on the decision of the Court of Appeal in Herron v McGregor (1986) 6 NSWLR 246. That case concerned disciplinary proceedings brought against medical practitioners in respect of treatment of patients that had been given thirteen years earlier (and of a type which had long since ceased). The Medical Tribunal had refused an application for stay on the grounds of delay and prejudice, citing, principally, the seriousness of the allegations, the matters of public importance involved, and what it held to be the overriding public interest in the inquiry's proceeding, even at the cost of substantial prejudice and unfairness to the doctors. 174 McHugh JA analysed the chronology of relevant events, the delay and the explanations given therefor, and the evidence of actual prejudice and presumptive prejudice. In a judgment with which Street CJ and Priestley JA concurred, he held that the issue for consideration was "present fitness" to practise and that, as no current issue of questionable practices arose, and that it was unlikely that thirteen year old conduct could establish present unfitness to practise, the proceedings in the Medical Tribunal should be stayed. It is worth making the obvious observation that that case was decided on its own facts. The judgment does not purport to lay down any guidelines (other, perhaps, than the conclusion that the focus in a disciplinary inquiry is into present fitness to practise). The issue there was the balancing of the public interest in the maintenance of professional standards, the control and supervision of medical practice and the importance of disciplining doctors guilty of professional misconduct against the prejudice occasioned by reason of the lengthy procrastination in bringing the proceedings. The balancing exercise in that case resulted in the evidence of prejudice prevailing over the public interest in pursuing the allegation. 175 There was, in Herron, considerable evidence of actual prejudice. One medical practitioner critically involved in the treatment had died. Lengthy civil proceedings had successfully been conducted against one of the doctors, exposing him to a good deal of adverse publicity. It was supposed that some relevant witnesses would be unavailable or would have had diminished recollections of the relevant events. It was also supposed that some relevant documentation may have been lost. McHugh JA considered the various explanations given for the delay and found them unconvincing. He described the delay in lodging the complaint as "appalling and without justification" (p 265). The treatment was no longer administered. There was no question of any continuation of questionable practices. 176 As I have noted above, there is, in the present case, no explanation advanced either for Rajski's delay in filing the complaint, or the LSC's delay in investigating it. That is a significant factor. It may be inferred that no explanation that could assist the LSC was available. I would not so readily draw a similar inference in relation to the lodging of the complaint by Rajski. He is not a party to this present proceeding. 177 The delay in the institution of proceedings, especially, and the absence of any explanation for that delay, are matters for considerable concern. Together with the procedural irregularities already identified, they raise serious questions about the conduct of the Office of the LSC. 178 However, there was no evidence of actual prejudice to the claimant. The case against him is virtually entirely documentary, and the documentation is extremely thorough. The claimant gave evidence, over six days, was subjected to searching cross-examination, and demonstrated a capacity of recall and a grasp of the subject matter that belies any prejudice by reason of failing memory. 179 Some attempt was made to draw a further parallel with Herron in respect of the finding that the practice the subject of that complaint had been discontinued many years prior to the institution of the complaint. It was put that the conduct the subject of the present complaint occurred in the context of complex, protracted, bitterly fought and diverse litigation notorious in the history of this court. That may be so, but if - and I underline if - involvement in litigation of that description caused the claimant to conduct himself in an unprofessional manner, it is appropriate that that conduct be fully investigated. Such a finding could have a bearing on the question of the claimant's present fitness to practise. It is an argument pertinent to the issues that arise under s 171C rather than at the present stage. I would not regard the fact, if it be the fact, that the Rajski litigation was of such a nature as to give rise to extraordinary behaviour, as a reason supporting a stay of the proceedings.

[134]

Improperly obtained evidence 183 The claimant asserts that much of the evidentiary material relied upon by the LSC was obtained improperly. In order to support this assertion he pointed to the nature of the material. As noted above, there was an enormous volume of documentation produced by the parties, much of it by the LSC. Included in that material to which the LSC had access, and on which he relied in making his decision, were a number of file notes, obviously from the files of DW, made by solicitors in that firm in relation to the various proceedings in which it was engaged. Such documents are prima facie privileged, and their possession by the LSC is unexplained. On behalf of the claimant it was hypothesised that such documents would only have been released by DW in circumstances, such as, for example, producing them on discovery in relation to the Fairfax proceedings, in such a way as would attract an implied undertaking not to use them for extraneous purposes: Harman v Secretary of State for the Home Department [1983] 1 AC 280; Ainsworth v Hanrahan (1991) 25 NSWLR 155. I was therefore invited to draw the inference that the documents were improperly obtained, most probably by Rajski, or, if not by him, by somebody on his behalf, or less probably, by the LSC himself. 184 I am not prepared to draw that inference. The evidence does not disclose the source of the material that was in the possession of the LSC, and there may be a number of legitimate or illegitimate means by which those documents came into his possession. There was no direct evidence from any solicitor in DW, including the claimant, that the documents had not been provided in such a way as to be available to Rajski or the LSC, and there was no evidence from any of DW's clients to eliminate any possibility that they had somehow disclosed the documents in such a way that they came into the hands either of Rajski or the LSC. 185 In my view there is no basis for a conclusion that the LSC relied upon improperly obtained evidence.

[135]

Ground 5.5 in the Summons: Abuse of Process 186 By Ground 5.5 it is asserted that the proceedings before the Tribunal are an abuse of process and vexatious and oppressive. In part, to support this ground the claimant relies on the alleged procedural irregularities with which I have already dealt. But the principal thrust of the argument was that there is no reasonable prospect that he will be found guilty by the Tribunal of professional misconduct; put another way, that the proceedings in the Tribunal are "foredoomed to fail". 187 The Court may stay proceedings where they are "foredoomed to fail" (Walton v Gardiner (1993) 177 CLR 378 at 393) and reliance on this principle gave rise to the weightiest and lengthiest single aspect of the proceedings. There is, additionally, power to stay proceedings as an abuse of process in circumstances where the proposed use of the Court's procedures would be manifestly unfair to a party or would bring the administration of justice into disrepute: Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536, quoted with approval by Mason CJ, Deane and Dawson JJ in Walton. 188 In Jago v District Court (NSW) (1989) 168 CLR 23 at 74 Gaudron J said: "…at least in civil proceedings, the power to grant a permanent stay should be seen as a power which is exercisable if the administration of justice so demands, and not one the exercise of which depends on any nice distinction between notions of unfairness or injustice, on the one hand, and abuse of process on the other hand." (also quoted with approval in Walton) . 189 Separate examination is required of the merits of each of the grounds in the Information. 190 The onus of establishing that any ground in the Information is "foredoomed to fail" lies upon the claimant. In the ordinary course the test to be applied would be whether the LSC's case, taken at its highest, and in the absence of explanatory, mitigatory or exculpatory material given by the claimant is capable of providing the foundation for a finding of professional misconduct. (For reasons already given in paragraph 158 no question of unsatisfactory professional conduct need now be considered.) In the circumstances of the present case, that approach is unrealistic and unduly restrictive. The claimant's affidavit and documentary evidence was admitted without objection; he gave lengthy oral evidence, almost all of which was given in response to cross-examination by senior counsel for the LSC; and the argument as to the merits of the allegations took in what I might compendiously refer to as the defence evidence - that is, evidence that would be given by way of defence in the Tribunal upon a hearing. 191 Having regard to the way in which the case was conducted before me, it is inevitable that I will reach conclusions of fact, including findings in relation to the credibility of the claimant. Nevertheless, I bear in mind the limited nature of the exercise in which I am engaged. It is not for this Court to usurp the functions of the Tribunal. If, on all the evidence that is before me, I conclude that it would be open to the Tribunal charged by statute with the determination of matters of the professional conduct of legal practitioners to find the claimant guilty of professional misconduct in relation to any of the grounds of the Information, then the appropriate and proper course is to leave the decision in relation to that ground to the Tribunal. I now turn to the individual grounds in the Information. 192 In s 127 of the Act "professional misconduct" is defined to include: "(a) unsatisfactory professional conduct, where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence, or

[139]

Facts 195 The background to the allegation lies in the notice of motion filed by Rajski and Raybos for leave to amend Raybos' cross-claim in the 1980 proceeding by, inter alia, adding Rajski as a cross-claimant, adding new defendants (including AAH) and adding new claims of conspiracy. 196 The hearing of the notice of motion extended over thirty days in 1984 and early 1985 before Miles J. Both Wood and Donaldson had, at the time of the contract for the sale of Raybol, been employed by Tectran and had computer expertise. Each swore an affidavit which was read in the hearing before Miles J, and each gave oral evidence and was cross-examined. The affidavits were in evidence in the present proceedings, as was his Honour's judgment; the transcript of oral evidence was not. The central issue in the proceeding, as expressed by Miles J, was whether Rajski and Raybos were able to show an appropriately arguable case on a tenable evidentiary basis in relation to new issues raised in by the proposed cross-claim. 197 The basis of the allegations made in the proposed amendment to the cross-claim was that Tectran and AAH had commenced the 1980 proceeding without any adequate foundation, and that its sole or predominant purpose was not to enforce Tectran's legal rights, but to secure an advantage for Tectran in its negotiations with Raybos, or to crush Rajski and Raybos commercially. Accordingly, the inquiry by Miles J was whether Rajski and Raybos had an appropriately arguable case on a tenable evidentiary basis that the allegations made by Tectran in the 1980 proceeding were without foundation. These allegations were, in essence, that Raybol was a defective product, and that Rajski had misrepresented its quality and capacity. The very lengthy proceeding before Miles J was, therefore, intrinsically concerned with the quality of Raybol, and the circumstances that preceded the making of the contract. The effect of the evidence, documentary and oral, of Wood and Donaldson, was, as I understand it, that Raybol was effective for the purpose for which it was purchased although it required improvement and enhancement. The Arunta Companies produced no witnesses or documentation to the contrary, although, it is clear from the judgment, extensive cross-examination was directed to the evidence given by Wood and Donaldson. As well, Wood's affidavit contained considerable detail about the stages preliminary to, and the preparation for, the signing of the contract. While it is reasonable to infer that a good deal of the lengthy cross-examination was directed to Raybol's effectiveness, it is not so clear that the pre-contractual negotiations assumed great importance at that stage. This is a matter of some significance given the nature of the allegations now made by the LSC. Miles J delivered judgment on 5 June 1985. 198 On 9 October 1985 DW wrote to Wood and Donaldson. Each letter contained the following paragraph: "Having regard to your position in the company at the relevant time and your close connection with the project, the assistance you are able to provide to our clients will be critical in both the first and second actions. Accordingly, we are instructed to request your assistance in the preparation of our client's case. We are confident you will have no objection to assisting our client. As a former employee of Tectran we consider that you are morally obliged to support the company in these proceedings . Please contact Chris Davidson so that a mutually convenient time for a conference may be fixed." (emphasis added)

[148]

[The claimant] said that we want the factual basis and chronological history. Beyond that, [the claimant] said that he could not see much further involvement. [The claimant] said that he has the client's interest at heart - he does not want to spend large amounts per hour. However, it is proper that witnesses be paid for their time." 200 There is no evidence of any personal meeting with Donaldson. 201 In his affidavit of 28 February 1997, the claimant gave an account of the circumstances in which the letters to Wod and Donaldson came to be written. He deposed that, in preparation for the anticipated hearing of the substantive proceedings, he had discussed the matters with Davidson, that he had sought information about who had negotiated the contract on behalf of Tectran and that Davidson had told him that it was Wood and Donaldson, but that Davidson did not expect that they would be helpful or prepared to provide a statement for Tectran, as both had given evidence supporting Rajski and Raybos in the proceedings before Miles J. The claimant deposed that, in this context, he then said: "In my opinion an ex-employee has, if not a legal, at least a moral obligation to inform his employer of what took place and what he did while he was an employee." 202 He said that he directed Davidson to write to Wood and Donaldson "pointing out this obligation" and asking them to confer with DW but said that, contrary to his expectation, Davidson had not shown him the letters prior to sending them and that he learned of their contents only after asking if they had been prepared, and being told that they had in fact been sent. Of the content of the letters he said that when he read the copies he realised that the obligation had been expressed in terms different to those which he had used and in terms different to those which he regarded as appropriate. He restated his opinion, which had not changed, that there was a clear obligation (whether legal or moral) on a former employee to tell his employer what he did and what he saw during the employment, but did not consider there was any obligation to do more than that such as attending conferences or court or reviewing material or the evidence of other witnesses. He said that while he noted that in the letters Davidson put the obligation more highly than he would have done, he perceived no problem as all he had in mind was to seek from Wood and Donaldson a statement as to what took place while each of them was in Tectran's employ. He spelled out the distinction he perceived. He said: "…there is a clear obligation (whether legal or moral) on a former employee to tell his employer what he did and what he saw during the employment. I do not consider that to do more than that, for example to attend conferences or court or review material or the evidence of other witnesses, can be put the clear obligation." 203 He added, however, that he discerned no difficulty with what Davidson had written as all he had in mind was to seek from Wood and Donaldson a statement "as to what took place while each of them was in the client's employ." He said it did not occur to him that the letters could be read as attempting to influence the recipients to give false evidence or to refrain from giving evidence adverse to the Arunta interests. He denied that the approaches to Wood and Donaldson were made for the purpose of attempting to influence them to give false evidence or to refrain from giving evidence adverse to his clients. He deposed: "57. It is my practice, when taking instructions in a matter, to find out as soon as possible the basic facts, the factual issues and thus the legal issues. Invariably, I seek to create or cause to be created a chronology of the relevant events. While the papers which [DW] inherited from [AAH] when we assumed responsibility for the 1980 proceedings were voluminous, there was no statement from any executive of Tectran or other witness and no chronology. 58. Initially, I formed the view that the crucial factual issue which would ultimately determine the litigation was whether, and to what extent, Raybol worked. As more information became available about the relevance of the Count 11 program, a more crucial issue emerged, namely whether Rajski had, as he claimed, invented Raybol or whether it was a copy of Count 11. Even then, there remained the issue of whether Raybol worked. 59. I considered that another important matter was to find out why Tectran had entered into the contract with Rajski in the first place and what it thought it was getting from it. The information I sought was the sequence of the negotiations, who said what to whom, what documents there were and, in effect, the specifications. Our efforts were hindered by the absence of those who had direct knowledge of two important areas, namely the formation of the contract and the working of Raybol. It was in this context that I initiated the contact with Messrs Wood and Donaldson. 60. I had read the judgment of Miles J delivered on 5 June 1985 in the 1980 Proceedings. I understood that his Honour to have been considering an application by Mr Rajski to amend the cross-claim to join additional parties. I read his Honour's statement at page 10 of his judgment to the effect that it was not his function to make findings of fact and that if in his judgment he appears to be stating findings as to fact that was not his intention. I understood that his Honour also refused Tectran's application to adduce evidence in relation to that application. I did not and do not now regard his Honour as having determined any issue of fact nor make any findings as to the credit of witness(sic)." 204 The claimant's account of the meeting with Wood is to be found in his February 1997 affidavit. He deposed that Wood said: "I received your letter in which you say I have an obligation to support Tectran. I do not consider I have any such obligation. … I have had to spend a great deal of time on this case and have not been paid for my time. The lawyers are paid professional fees and I don't see why I should not be paid similar fees."

[151]

or words to that effect. He replied: 'Two former employees of the client, namely, Wood and Donaldson who both gave evidence on behalf of Rajski in the proceedings before Miles J.' or words to that effect ." 208 It was suggested to the claimant that at the time he had sworn his affidavit he was aware, because of what had been said to him by Davidson, that Wood and Donaldson had given evidence in the proceeding before Miles J, including evidence about why the contract was entered into and the conduct of the negotiations leading up to the execution of the contract. The claimant denied the suggestion contained in the question and said that he thought their evidence had been as to whether or not Raybol worked. He disagreed with the proposition that he had understood that what had been said to him by Davidson was that Wood and Donaldson had given evidence on the pre-contractual negotiations as distinct from the effectiveness of Raybol. 209 By reference to Lake's notes of the meeting with Wood the claimant was challenged on his evidence that he had corrected the erroneous impression given by the letters of 9 October by saying that the obligation was not expressed with precision, and stating, accurately, his own view about the employee's obligation. 210 It was put to the claimant and argued before me that no such statement appeared in the notes made by Lake, and that it ought therefore be inferred that no such statement was made. The claimant neither conceded nor denied that such a reference was absent from the file note. In fact, in my view, the file note substantiates the claimant's evidence in this regard. On its first page it records Wood as saying that he did not feel morally obliged to Tectran or that he had any other residual obligation to Tectran, and the claimant as saying, in the terms now familiar, that a former employee has an obligation to give information to his ex-employer in respect of events which occurred during the time in which he was employed. That, in my view, having regard to the circumstances in which notes of conversations such as this are taken, is substantial corroboration of the claimant's account of what he said to Wood. So thoroughly was this issue explored that copies of Lake's hand-written contemporaneous notes of the conference, as well as the later typewritten version, found their way into evidence as exhibit H. 211 On 24 February 1986 the claimant, Davidson, Lake and McCarthy conferred with representatives of Tectran and the Arunta Companies in relation to the litigation. Conference notes taken at the time record the following: "[The claimant] mentioned that Wood was a friend of a partner at [AAH]. [The claimant] thought that it was unlikely that we would get a dramatic confession from Wood. [The claimant] said that we would need to spend some time on Donaldson. Donaldson said that Raybol did not work."

[152]

212 It was also suggested that the claimant had sought, in effect, to poison Wood against Rajski, and thus have him withdraw his support for Rajski and Raybos. That suggestion arose in the following way. Lake's file note records that the claimant told Wood that the litigation had got out of control, and the real issue (that is, whether Tectran was entitled to terminate the contract) had been obscured by allegations of fraud and other allegations. This was misleading, it was suggested, because, until January 1986 - that is, after the date of the meeting with Wood - no proceedings alleging fraud had been commenced by the Arunta companies. The allegation of fraud was that Rajski had not invented Raybol, but that it was a fraudulent copy of Count 11. The claimant agreed that, even by 3 January 1986, when the fraud proceeding was filed, the Arunta Companies were in possession of insufficient evidence to justify the necessary verification of a statement of claim alleging fraud (SCR Part 15 R 26). Indeed, it appears, it was necessary to obtain leave to file the statement of claim unverified at that time. It was put to the claimant that he had suggested to Wood that his support for Rajski was not really worthwhile or worthy of him because there was an allegation of fraud about the programme. The claimant said that he did not understand that the reference could be interpreted as putting pressure on Wood by denigrating Rajski. He was asked about the passage in the conference notes of 24 February 1986 in which he was recorded as having said that it was unlikely that they would "get a dramatic confession from Wood". His answer was that if he had said that he thought it would have been in an ironic fashion. Such a comment was made in the context of a suggestion made by others that there was some relationship between Wood and Rajski. He explained the following two sentences, including that in which he is recorded as having said that they: "…would need to spend more time on Donaldson. Donaldson said that Raybol did not work"

[154]

215 It is the LSC's case that, on examination of the whole of the circumstances concerning DW's approaches to Wood and Donaldson, it would be open to the Tribunal to conclude that the purpose of the approaches was improperly to have them change their evidence. This, he asserts, is to be read into the letters of 9 October and into what was said in the conference with Wood as revealed by the file note. The LSC places particular reliance upon the clear suggestion in the letters that a former employee has an obligation to "assist" a former employer. The claimant's position is that the letters do not accurately reflect his direction to Davidson, or the views he held as to the obligations of former employees, and that, even if they are properly to be read as overstating that obligation, the circumstances in which they were written relieve him of the responsibility for their precise content. 216 The LSC's initial argument in relation to the approaches to Wood and Donaldson had, essentially, three planks. The first was that the claimant's evidence as to his motivation for seeking to speak to them should not be accepted, as it is contradicted by the objective documentary evidence. In considering the argument it is necessary to bear in mind that my task is not to determine the facts, but merely to assess what conclusions would be open to the Tribunal. The LSC's second argument was that, even if the letters as originally framed and sent could not, for the purposes of the disciplinary provisions of the Act, be laid at the claimant's door, his failure to take any remedial action in relation to the contents once he had read them was itself misconduct of the relevant kind. This second argument depends upon an anterior proposition, that is that the letters themselves were framed in such a way as to convey an improper suggestion that Wood and Donaldson should give untruthful evidence on behalf of Tectran or at least refrain from giving truthful evidence on behalf of Rajski and Raybos and that the claimant recognised that suggestion. In the particulars of complaint appended to the Information the LSC relied, particularly on the following two extracts:

[157]

218 The claimant was correct in drawing the distinction that he made between the proposition he put to Davidson, and the proposition put by Davidson to Wood and Donaldson in the letters. There can be no quarrel with his assertion that an ex-employee has a moral obligation to inform his employer of what took place and what he did whilst an employee. That, however, is a far cry from an obligation to assist or support one party to litigation as was suggested in the Davidson letter. There is an ambiguity in the obligation so expressed. The latter has the capacity to imply that, regardless of the genuinely held opinions of the employee, the employee is obliged, morally, to side with the employer. This is plainly not correct and dangerously overstates any obligation an employee, or former employee, might have. Nevertheless, the question is whether the Tribunal, acting reasonably, could hold those passages to amount to an improper approach to the witnesses or an improper invitation to them to change their evidence already given. It is trite but apposite to observe that there is no property in a witness. That is as true of a witness who has already given evidence on a particular subject matter as it is of a witness who is still to give evidence. Any legal practitioner, acting for a client involved in litigation, is not only entitled, but may, in appropriate circumstances, have a positive obligation to seek to interview witnesses or potential witnesses. Whether those witnesses have already given evidence and committed themselves to a particular position or not, the legal practitioner is bound to abide by the ethical rules governing the collection of evidence. It would be improper to attempt to persuade a witness in evidence to depart from his or her genuinely held recollection or observation of factual matters, or, where the witness's opinion is relevant, to depart from his or her genuinely held view. It is not necessarily improper to invite a witness to change evidence already given. It is quite legitimate for a party or a legal practitioner to invite a witness, whether expert or lay, to reconsider evidence already given, a statement already made, or an opinion already expressed, or to do so in the light of additional information or argument that might quite properly be put to the witness. A legal practitioner doing so, however, must exercise the utmost care to give no suggestion that he or she is seeking or proposing to have the witness untruthfully change his or her evidence. For the letters to constitute impropriety, it would be necessary for the Tribunal to hold that the passages complained of amounted either to an invitation to Wood and Donaldson to change their evidence, contrary to their genuinely held opinions and/or recollections, or amounted to improper pressure upon them to do so. I have grave doubts whether it would be open to the Tribunal so to conclude. Having regard, however, to the conclusion I have reached in relation to the authorship of the letters, it is not necessary to reach a firm view on this question. 219 The authorship of the letters in the next question. For reasons I have already given, I accept that the claimant was not the author of the letters, and did not see them until some time after they had been sent. For disciplinary purposes, he cannot be held accountable for their contents. 220 The next basis on which it is suggested that the claimant behaved improperly in relation to Wood and Donaldson concerns his failure to make any attempt to correct what is said to be: "the imputation contained in the letters that the witnesses should change their evidence given and tested in the litigation…"

[158]

Instead, the LSC alleges, the claimant: "improperly allowed the imputation to continue." 221 It is true that there was, so far as the evidence goes, no follow-up or correcting letter written by the claimant or on his instructions once he became aware of the manner in which the letters had been phrased. When on 24 October the claimant met Wood at his office he spoke to him in the terms set out in the first paragraph extracted from the file note. The opening sentence contains a correct statement of the claimant's earlier expressed views, and is unexceptional. It should have corrected any lingering misapprehension conveyed by the letter. There having been no further meeting with Donaldson, it seems there was no equivalent correction of any false impression he may have drawn from the letter directed to him. 222 The LSC's contention in this regard depends essentially not only upon there being the imputation in the letters that the witnesses should change their evidence, but recognition by the claimant of its presence. Although, taking the most adverse view to the claimant possible, it might be possible to discern such an imputation in the letter, it is not the imputation which most obviously emerges and not one which I would expect would have presented itself to the claimant when he read the copy letters. I am not satisfied that the imputation is so obvious that he must have read it into the letters, and indeed, I am doubtful whether it is one reasonably open to an ordinary careful reader. He was aware that the obligation was overstated, but reasonably perceived no real or immediate problem with that overstatement. 223 It is next suggested by the LSC that, in the conversation with Wood on 24 October the claimant: "attempted to place blame for the litigation on Mr Wood in particular by inferring that it was because of him that Tectran was being sued by Raybos and Rajski." 224 This, it seems, is said to be drawn from the invitation to Wood to put himself in the position of being sued "for something done by an employee." 225 Again, it seems to me that, stretching the language used by the claimant to its outer limits, it might be possible to read such pressure into what he said to Wood. However, the task of the Tribunal is not to place the very worst, no matter how tortured, construction on what is said, but to determine, firstly the true intent with which the words were spoken, and, secondly, if necessary, what the words would have meant to a reasonable listener in the position, in this case, of Wood. I do not think casting blame upon Wood can reasonably be read into what the claimant said on that occasion. A similar approach must be taken to the contention that the claimant improperly pressured Wood by telling him that Tectran and CMAD had said Raybol did not work. In the circumstances, it was quite open to the claimant to tell Wood of the position adopted by his client (s) and to obtain Wood's response to that. 226 One final aspect of this ground must be put to rest. As part of the ground as framed the LSC asserts that the claimant made the approaches, knowing that Wood and Donaldson were critical witnesses for Rajski and Raybos, that they had given evidence on behalf of Rajski and Raybos before Miles J, and that the claimant knew that the evidence given by them had been accepted by Miles J after they had been extensively cross-examined on behalf of the claimant's clients. 227 The assertion contained in the closing clause of the ground does not accurately reflect the proceeding before Miles J or his Honour's judgment. He was at pains to point out the limited scope of his fact finding role, having regard to the nature of the application before him that is, an application to amend a cross-claim. He said: "…I have adopted the approach that the applicants must show an appropriately arguable case on a tenable evidentiary basis. It is not my function to make findings of fact. If in this judgment I appear to be stating findings as to facts, that is not my intention. What I intend to state are the facts as they are open to be found by a tribunal of fact at a trial, on the evidence as it now exists ." (p10) (emphasis added)

[192]

…" 249 On 21 March 1986 Carneys served notices of ceasing to act in the litigation. The circumstances in which this occurred are considered in more detail under Ground 3 of the Information. Following receipt of these notices DW, on 26 March 1986, wrote again to the LAC, noting that Carneys had ceased to act, and added: "We presume that, in accordance with usual practice, the grants of legal aid to Raybos and Rajski were made on terms and conditions specifying the legally aided person's solicitor, namely Mr Arthur Carney. The breach of that term and condition presumably terminates the grants or requires a variation of the terms and conditions." 250 The letter concluded by requesting that, if any further application for legal aid were made by Rajski or Raybos, including any application for variation of the terms and conditions, Tectran be informed of the application and given the opportunity of being heard in relation to it, and that the LAC take into account the changes in legal representation of Rajski and Raybos, the reasons for the changes and the additional costs thereby incurred both to the LAC and to DW's clients. 251 The LAC proceeding itself spawned side issues. As had been foreshadowed in the conference of 24 February, DW, acting on behalf of Tectran, issued a subpoena to the LAC for production of material in the possession of the LAC relating to Rajski and Raybos. By notice of motion the LAC sought to set aside the summons, or alternatively, to set aside the subpoena. When the matter came on for hearing before Lee J, Rajski was, for the first time, joined as a party to the proceedings. The LAC was unsuccessful in its first claim, but succeeded in setting aside the subpoena. Tectran sought leave to appeal to the Court of Appeal on the subpoena issue, unsuccessfully, and, on 2 December, sought special leave to appeal to the High Court. 252 On 30 October 1986 the Crown Solicitor, who acted for the LAC, advised DW that the grants of legal aid in relation to the 1980 and 1985 proceedings had been terminated, but that a grant of legal aid to Rajski for the LAC proceeding remained on foot (Ex 39). However, on 23 February 1987 the matter was listed for mention in the Court of Appeal. The transcript of what occurred that day indicates that Rajski had sought review of the decision to terminate the grant of legal aid and a decision was anticipated during March of that year. Subsequent correspondence between DW and the LAC (Ex Q) tends to confirm that further consideration was being given by the LAC to that question. 253 Notwithstanding the Crown Solicitor's letter of 30 October, both the application for special leave to appeal to the High Court in relation to the subpoena issue in the LAC proceeding, and the substantive LAC proceeding, were, by 12 March 1987, still extant. On that date DW wrote to the Crown Solicitor with reference to the High Court application. The letter contains the following: "If the grants have, for whatever reason, been terminated absolutely, our client's purpose in the litigation has been achieved and the prosecution of it (including the present application) becomes unnecessary. Accordingly, please let us know by Monday 16 March whether or not the grants have been terminated absolutely. If they have, we would expect to receive instructions to withdraw the application. If no decision has been reached, we propose to ask the High Court to adjourn the hearing of the application until a decision is made." 254 On 28 April 1987 the claimant wrote again to the Crown Solicitor on the same subject. He referred to a letter of 19 March (which is not in evidence) and to telephone conversations, and wrote: "The termination of the grants of legal aid to Rajski and Raybos Australia Pty Limited makes the prosecution of these proceedings unnecessary … We confirm the agreement between Tectran Corporation Pty Limited and the [LAC] that Tectran and the [LAC] will pay their own cost (sic) of these proceedings." 255 On 29 April 1987 the application for special leave was discontinued.

[193]

• • • 256 The activity outlined above was unequivocally and admittedly a direct attempt to secure the cessation of funding to Rajski and Raybos in the Tectran litigation. The LSC alleges that the claimant also employed a less direct means to achieve the same object. This concerned the commencement of the Carneys' defamation proceedings in which the partners of the legal firm representing Rajski and Raybos were sued for defamation by Arunta Companies and executives arising out of Carneys' letter to the Stock Exchange. Something of this has been said above. The circumstances surrounding the commencement of the Carneys' defamation proceeding constitute a separate ground in the Information and will be examined in detail in the consideration of ground 3 of the Information below. The LSC alleges that the commencement of those proceedings was a devious and improper ploy to ensure that Carneys would cease to represent Rajski and Raybos. This may have more significance than would initially appear. There was evidence that, at the time, it was the practice of the LAC to require, as a condition of a grant of legal aid, that the legally aided person's solicitor be a solicitor nominated in the grant. Thus, should that solicitor cease to represent the legally aided person(s) the grant would automatically come to an end, or at least require review and variation of the terms and conditions. This explains the letter written by DW to the LAC on 26 March 1986 (para 249). 257 The LSC asserts that, by reason of the facts set out above, and inferences properly to be drawn from them, there is a reasonable likelihood that the claimant would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. 258 In particularising the Information in the Tribunal the LSC claims:- (i) that the claimant attempted to coerce the LAC by the threat to commence legal proceedings against it; and that the threat should not have been made as the purpose of the threatened proceedings was the improper purpose of securing the termination of the grant of legal aid, in order to assist his clients to early victory in the Tectran litigation;

[199]

"If legal aid was withdrawn from either Rajski or Raybos or both, then the person from whom it was withdrawn would have to put up security for costs and thereby the actions may die" and "… the important points are: … (2) withdrawal of legal aid." (ii) the letter to the LAC of 26 March 1986 (paragraph 249), which the LSC alleges misleadingly attributed blame for Carneys' withdrawal to Rajski and Raybos; (iii) the letter to the Crown Solicitor of 12 March 1987, especially the passage: "Our client's purpose in the litigation has been achieved and the prosecution of it … becomes unnecessary."; (iv) (the letter to the Crown Solicitor of 28 April 1987 (paragraph (254) recording the agreement of the parties to pay their own costs. 260 In addition, the LSC points to evidence that emerges from other documentation produced. 261 On 14 November 1985 the claimant, with Davidson and Lake, met representatives of the Arunta Companies. On the agenda for the meeting eleven matters were listed for discussion. Amongst these was the question of the legal aid grant. A file note (Ex M) of the meeting shows that there was an initial lengthy discussion of that matter, and that, from time to time, those present returned to the subject. It is worth reproducing some extracts from the file note: "Discussion as to whether Rajski would appear himself if deprived of legal aid. It was noted that his lawyers, in particular [counsel then appearing for him] would probably not act for nothing. It is illegal in Australia to act for contingency fees. … It was pointed out that the [LAC] follows certain guidelines in deciding whether legal aid should be granted. It could be argued that in regard to Rajski the [LAC] must use the same criteria as for others. We do not know at this stage whether the Commission has done this but are exploring it. Any application to review the grant of legal aid may fail because the Court may see that it has no jurisdiction under the Supreme Court Act…" 262 Some time later in the conference during the discussion identified in the notes as on the subject of "interlocutory applications" the following is recorded as having been said: "[Davidson] mentioned that Raybos did not receive legal aid until July, 1985. We may be able to wind Raybos up. [The Claimant] mentioned that it was for us to keep the pressure on Rajski by making positive moves, not just responding to him ." (emphasis added) 263 Finally, in the record of a discussion about the defamation proceedings brought by Rajski against the claimant and DW, the following appears: "[The claimant] said that tactically there are two thrusts. Firstly, the primary issue was whether Raybol worked or not. Secondly, [DW] and the clients are not to be put off by peripheral issues but should add to them to stretch Rajski. We must keep the pressure on Rajski . [The claimant] said that although he does not wish to squander the resources of the client, it is worth it to push Rajski and his legal advisers ." (emphasis added) 264 On 12 February 1986, acting on behalf of Tectran (and other Arunta Companies and individuals), DW filed the summons challenging the grant of legal aid commencing the LAC proceeding. The sole defendant was the LAC. Neither Rajski nor Raybos was named as a party despite their obvious interest in the subject matter of the litigation. 265 The file note then recorded some discussion about the possibility of obtaining an injunction restraining Rajski from writing letters of the kind he had written in relation to the Scitec float and which was allegedly defamatory. It goes on: "[The claimant] agreed that we should sue Rajski for an injunction. Even if we do not get the injunction it will show that we are serious about the defamation. [The claimant] said that he would double check with Hughes [Hughes QC] in case he thinks that we are being silly by seeking an injunction.

[200]

[The claimant] said that… the next possibility was that without legal aid, Rajski will flounder . We will begin to get judgments in our favour. If Rajski brings further proceedings, then he will be declared a vexatious litigant." (emphasis added) 266 The claimant swore an affidavit on 9 April 1986, to be filed in the first contempt proceeding. He deposed: "6. My approach to the litigation in the light of my client's instructions was to seek to bring it to a resolution as early and as cheaply as possible. In October 1985 I believe that an impediment to such an early resolution was that Rajski and his company had legal aid. I believed that the grant of legal aid increased the prospect that he would be able, without penalty, to engage in unlimited diversionary litigation and avoid a final hearing on the merits." 267 A further meeting between representatives of DW and the Arunta Group took place on 19 June 1986. In relation to the question of legal aid, the file note records: "[The claimant] then proceeded to discuss the two proceedings which we have initiated. Firstly the legal aid proceedings, which he thought was only proper for us to initiate, and secondly the defamation proceedings, again only proper in that genuine loss had been suffered. The outcome of the defamation proceedings being that Carneys no longer act for Rajski so that he has been deprived of legal representation. Gary Richardson then asked [the claimant] whether he still thought it was appropriate for us to pursue the legal aid issue. [The claimant] felt that it definitely was, and that if we lose before Lee J we may choose to appeal, (which could be heard and over by August) or wait and leave the matter in limbo." 268 The reference to the proceedings before Lee J was a reference, not to the substantive LAC proceeding, but to the two interlocutory matters which had arisen, concerning the subpoena issued to the LAC by Tectran in the LAC's notice of motion for dismissal of Tectran's summons. 269 In an affidavit sworn on 16 July 1986 in support of the application for leave to appeal to the Court of Appeal Davidson deposed: "Without the material which [Tectran] seeks to have the [LAC] produce on subpoena, [Tectran] would have no reasonable prospect of succeeding were it to continue with the proceedings to review the decision of the [LAC]" 270 As a result of an application made by Rajski for adjournment of matters then pending in the Court of Appeal DW arranged for his psychiatric examination by Dr John Shand ("Shand"), who reported to DW on 2 February 1987. In the course of his report Shand wrote: "However, there is no doubt in my mind that for the primary case to have any chance of completion, let alone the other ones, he must have adequate legal representation in court, whatever the source may be." (Ex 1C/95)

[201]

271 I have said above, and I repeat, that a litigant has a legitimate interest in the existence of a grant of legal aid to the opposing party. A grant of legal aid is, potentially, an instrument of oppression to the opposing litigant. Equally, however, the termination of a grant of legal aid may operate to kill off any prospect of success in the legally aided party by being able to mount an effective claim or defence. Both the existence and the non existence of the legal aid grant may, in certain circumstances, operate adversely and unfairly to one or other party. 272 The ordinary rule that costs follow the event, including in relation to interlocutory proceedings, and the power of a court to limit or vary costs orders where the successful party has, for example, unnecessarily protracted proceedings, or pursued false issues, ordinarily operate to deter a party from pursuing unmeritorious claims or defences or side issues. The brake on unbridled enthusiasm so created may be deprived of its potency when a party is in receipt of a grant of legal aid. There is then no costs disincentive against the pursuit of frivolous issues, or in favour of rational decision making in the selection of issues to pursue. While the LAC may be expected to act as some kind of restraining influence on over-enthusiastic litigation of peripheral or false issues, it will not always have the relevant information or be in a position to control the proceedings it funds. Thus s 47 could have the added effect of causing the burgeoning of proceedings where a legal aid certificate is in force. In such cases, the opposing party would have an even greater interest in the continuation or otherwise of the grant. 273 There is, however, another side to this coin. To deprive an impecunious party of legal aid may be the death of that party's legitimate and proper claim or defence. In any litigation, but particularly complex commercial litigation, legal representation is virtually essential if the issues and evidence are to be properly, fully and effectively presented and litigated. A party which is able to provide its own legal representation, but whose opponent is deprived of legal aid, and therefore of legal representation, is placed in a position of immeasurable relative strength. For that reason, it is legitimate to look with scepticism, if not suspicion, on a party that is able to provide for its own legal representation, but which seeks to place its opponent in the disadvantaged position of litigating without representation. 274 It is for these reasons that the claimant's motivation and conduct in what can fairly be described as his strenuous attempts to bring about the termination of the legal aid grant to Rajski and Raybos must be scrutinised with great care. In his February 1997 affidavit the claimant referred to senior and junior counsel who had been briefed in relation to the LAC proceedings, and said that none of them had ever suggested any impropriety in the bringing of the proceedings. He said that he was aware of evidence that had been given in the proceedings before Holland J as to transfer of funds by Rajski to his mother or an alleged aunt in South America, and said he had available objective material to warrant his claim that Rajski and Raybos had not made complete disclosure of their assets and financial position. He explained the letter to the LAC by saying that it was his view that it was proper to write a letter before action. 275 There may be a fine distinction between the adoption of tactics designed to squeeze an opponent into a position of weakness, of which unfair advantage might be taken to secure resolution of the outstanding litigation in favour of one party, and the adoption of tactics designed to prevent oppression coming from the opposing party. That, as I see it, encapsulates the present issue. The LSC's position is that the evidence leaves open the interpretation that the claimant's tactics were of the former kind; he relies on the evidence I have referred to above. If that is correct, then the appropriate order is one that will leave this question (subject to the other matters already dealt with) in the hands of the Tribunal. 276 There is, however, some evidence that the latter was, if not the dominant, at least one of the claimant's motives. This is principally to be found in the transcript of the claimant's oral evidence. He accepted the proposition that, in late 1985 he had taken the view that one difficulty facing his client was the ability that Rajski and Raybos had to continue with what was described as "a multitude of litigation" because they were legally aided, and he seemed to assent to the proposition that one way to overcome that problem was to attack "the fundamental issue, that is the propriety of the legal aid". He added: "And there was also, the client was very upset that it had spent nearly a million dollars by the time they got to us and that was in 1985 on costs and their opponents were funded by the public purse and they were very upset about that." (T 227) 277 A little later, when asked about tactics adopted to "stretch" Rajski and his legal advisers, the claimant said: "There was certainly the intention to put pressure on them to stop the peripheral things and get the main action on … It was to try and get the case on and in that context the interlocutory application we wanted to pursue was the application for the tapes. …" (T231) 278 And Shand's advice, that the proceedings would not come to an end unless Rajski and Raybos had adequate representation should not be overlooked. 279 There is also some material to found a conclusion that the claimant did not intend to attempt settlement negotiations with Rajski and Raybos while the legal aid grant was in force. The file note of the meeting of 23 September 1985 (Ex J) records: "[the claimant] re-iterated that [DW] are not yet in a position to look at settlement. He advised the clients not to talk to Carney's (sic) in relation to settlement at this stage. These circumstances may change if the other side are able to get a QC who is willing to take the case at the legal aid rate ($600.00)." 280 This file note was not made by the claimant, and in his oral evidence he doubted that the file note accurately reflected the context in which he had made the statement, observing that the following passages in the file note showed that his view was that settlement discussions could not really be commenced until an expert report was available as to the effectiveness of Raybol. 281 A file note made by another solicitor during the course of what was obviously a rather lengthy and wide ranging conference involving a number of individuals, particularly when the maker of the file note is not called to give evidence, is a fairly fragile basis for a finding of improper motives. The qualification placed by the claimant on the context in which the remark is recorded has a good deal of validity. Alone, this piece of evidence would be quite insufficient to justify any adverse conclusions being drawn against the claimant. However, it does not exist in isolation. Together with the other matters to which senior counsel for the LSC has pointed, it is a factor available in an enquiry into whether the claimant, in acting as he did in relation to the grant of legal aid, acted improperly and went beyond the legitimate protection of his clients' interests. If such a conclusion were drawn, I am of the view that the Tribunal could then find that the claimant was guilty of professional misconduct. 282 On behalf of the claimant it was argued that the LAC proceeding was commenced by Tectran, and not by the claimant, and that he, therefore, cannot be held accountable for it. This argument, in my opinion, is disingenuous. A legal practitioner has an obligation to act responsibly in the conduct of litigation and this may include taking steps to restrain an over-eager client from embarking on an action that constitutes an abuse of process: White Industries (Qld) Pty Ltd v Flower and Hart (a firm) per Goldberg J, Federal Court of Australia, 14 July 1998, unreported; on appeal Flower and Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773. The extent to which a legal practitioner is obliged to apply the brake to a client is not really here relevant. There is no evidence before me that it was Tectran, or its executives, who conceived the idea of the LAC proceeding. So far as the evidence goes, that idea came from the claimant during the first conference of which there is evidence, after he took over conduct of the Tectran/Arunta litigation. The principle that a legal practitioner ought not participate in unmeritorious litigation will not always be easy to apply. The principle is capable of conflicting with its corollary, enshrined most formally in the rule of ethics applicable to barristers, and known colloquially as "the cab rank rule", that even an unpopular litigant, a litigant whose cause is unpopular, or whose prospects of success do not appeal to the legal practitioner, is entitled to representation. The distinction between a claim or defence with some, but slim prospects of success (pursuit of which would not be an abuse of process) and one without any prospects of success (persistence in which would or might be an abuse of process) is not clear cut, and will in many cases depend upon individual perception and judgment. But the point here is not a claim that the claimant persisted in an untenable claim. The inquiry is whether, on behalf of his client Tectran, he initiated the LAC proceeding for the improper purpose of depriving Rajski and Raybos of legal aid and forcing them into negotiation in which they would be disadvantaged. 283 It is necessary here to emphasis that it is not my function to reach a conclusion about whether or the not the claimant's conduct did cross the line between legitimate attention to his clients' cause and improper conduct. My function is limited to determining whether, in the light of the whole of the evidence before me, it would be open to the Tribunal to conclude that it did so. The Tribunal is the body charged by statute with such a determination. If the evidence is capable of establishing that he did so then it would be wrong for me to trespass on the Tribunal's function. 284 Because of my conclusion in regard to the claimant's dealings with the LAC it is unnecessary further to consider, in relation to this ground, the allegations in relation to the proceedings against Carneys. Those facts would, however, be available in the Tribunal's deliberations. 285 I do not find that the commencement of proceedings in this respect constituted an abuse of process.

[214]

The imputations alleged to have been conveyed concerning the individual plaintiffs were in substantially parallel terms. 291 Each plaintiff claimed aggravated damages alleging that Carneys had knowingly or recklessly misrepresented the effect of the judgment of Miles J by omitting to mention that his Honour was not making findings of fact. 292 The claimant acted for all plaintiffs in these proceedings. 293 The next letter of significance is a letter of 12 December 1985 written by the claimant to the Director of Lawcover, the insurance company that provides professional indemnity insurance to solicitors in New South Wales. As, on at least one view, the Carneys letter was written in the course of, and as part of, their legal representation of Rajski and Raybos, it might have been expected that they would look to their insurance cover for representation in relation to the defamation claim. The claimant was in 1985 a director of Lawcover (or a member of its Management Committee). Anticipating that Carneys might make a claim on Lawcover for indemnity and for legal representation in the defamation proceedings, the claimant wrote to Lawcover to draw attention to a potential conflict of interest consequent upon his role in acting for the Arunta Companies and individuals, and his position in Lawcover. The letter reads: "The defamation alleged is the publication by Carneys of a letter to the Chairman of the Sydney Stock Exchange. On the face of the letter, it is written by Carneys themselves rather than on behalf of their client in which case their liability would not arise from practise(sic) as a solicitor and they would not be entitled to indemnity under the policy. On the other hand, it may be that they will say that they were instructed to write the letter and that they were acting as solicitors and they may seek indemnity under the policy. As I have become very much entwined in the various proceedings between my clients and the clients of Carneys, in the event that a claim is made by Carneys under the policy, would you please ensure that I am kept isolated from any material relating to it." 294 On 18 December 1985, having filed and served the statements of claim, DW wrote to Carneys separately (but in identical terms) in relation to each statement of claim. In part, the letters read: "On our instructions, one of the consequences of your letter, if steps are not taken to correct it, is that our client will suffer significant financial damage. Indeed, it appears that this was the purpose of the letter. There is nothing on the face of the letter to indicate any other reason why you regarded it as appropriate to draw the attention of the Chairman of the Stock Exchange to the matters set out in your letter." 295 The letter went on to allege that the Carneys letter contained a number of statements which were either false, or, by being put out of context, would give a false impression to a reader, and invited Carneys to write to the Chairman of the Stock Exchange, before further damage was done, correcting the errors. A draft suggested letter was attached. 296 Messrs Phillips Fox, Solicitors were retained by Carneys to represent them in the defamation litigation. On 6 January 1986, on behalf of Carneys, Phillips Fox wrote to the Chairman of the Stock Exchange, essentially confirming that the claim of losses of $600,000,000 had not been determined and that the claim would be defended, that Miles J had not made findings of fact in relation to the claims made in the 1980 proceeding, that no reference had been made in the original letter to acquisition of assets by the Arunta Companies (this presumably being intended to provide a balance to the inference to be drawn from the assertion that assets had been disposed of) and that the injunction application had not been heard by a court. 297 On 9 January 1986 DW wrote to Phillips Fox in the following terms: "We note that at the directions hearing on 20 December, 1985 Counsel instructed by your clients' former solicitors informed the Court that he was instructed to file a Notice of Motion to strike out the Statement of Claim as an abuse of process. He stated that on his instructions the dominant purpose of the proceedings was improper. We are instructed that there is no basis for any assertion that the purpose of bringing the proceedings was improper or that the proceedings are an abuse of process. Our client will claim aggravated damages in respect of the statements made by counsel on behalf of your clients."

[226]

• • • 307 In relation to the first of these matters, the claim that it should or could be inferred that the Carneys defamation proceedings were commenced for an improper purpose because, the facts asserted in the Carneys letter being true, the claim could not succeed, it is sufficient to say that that approach denotes an over-simplification of the law of defamation. I am satisfied that Carneys letter was, on its face, defamatory, and, had the matter proceeded to trial, the issues would have been whether Carneys could have established any defences which they might have pleaded. Proof of the truth of the imputations conveyed in the letter would be one significant step towards establishing relevant defences under the Defamation Act 1974, but it is not possible in these proceedings to reach a conclusion that the claims as framed were so untenable as to permit an inference, from that fact alone, that their purpose was other than the purpose that appears on the face of the claims. That is, it would not be open to the Tribunal to conclude solely from the material relating to the Carneys defamation proceedings that they had been commenced for an improper purpose. 308 However, what does emerge is that, almost from the time the claimant took over the litigation on behalf of the Tectran/Arunta Companies, the steps adopted by and on behalf of his clients drew Rajski's and Raybos' legal representatives personally into the litigation in a way that is almost certainly unprecedented and which must inevitably have created a conflict between the lawyers and their clients. A single action, taken in isolation, might be insufficient to demonstrate an improper purpose; a pattern of conduct, however, may do so. 309 On particular concern is the letter to Lawcover. The last paragraph, drawing attention to the claimant's involvement in the litigation and the need therefore to quarantine him from Lawcover decisions in relation to any claim made on their policy by Carneys, is quite unexceptionable and indeed very proper. The preceding paragraph, however, is inexplicable in terms other than an attempt to draw to the attention of the directors of Lawcover a basis on which they might refuse indemnity (and representation) to Carneys and further to enmesh Carneys personally in the dispute between Rajski on the one hand and the Tectran/Arunta Companies on the other. The claimant's oral evidence in this respect I found unsatisfactory. He was asked directly about the purpose of that paragraph, and it was put to him that his stated purpose could have been achieved without the inclusion of that paragraph. His reply was: "No. I mean, it may be that no claim would be made, the first thing. The second thing is that my clients had a substantial claim for damages at that stage against Carneys. They were suffering considerable loss by reason of the delay of the prospectus and if Carneys had insurance, there was a fund to pay it. If they didn't have insurance, there wasn't. So that I didn't want to be saying to Lawcover: 'Look, this is a claim which you have got to meet'. I just put that on its face, they have done it personally, but they may well say they were acting as solicitors." 310 The answer does not address the proposition that was put in the question, nor the obvious inference to be drawn from the paragraph. I accept that the letter provides some evidence on which a conclusion may be drawn that the claimant's conduct overall was directed to the purpose alleged. That is, of course, far from the only conclusion that could be drawn, but, as it is an available inference, it is a matter for the Tribunal. 311 I have come to the view that, on the whole of the evidence, it would be open to the Tribunal to conclude that the claimant's conduct was for the purpose alleged. I do not think it would be appropriate, therefore, to embark upon a complete analysis of the evidence, which could only result in the expression of a conclusion that could usurp the function of the Tribunal.

[250]

(c) That he undertake in the future not to make or publish any matter defamatory of our clients. If these requirements are met, our clients do not intend to take any action against your client." 326 There were also in evidence a series of file notes made by Hewett, on 15 April apparently recording telephone conversations. These cannot all be put in their correct chronological sequence. However, in two of the notes Hewett has recorded himself as having told Metcalf's solicitor, O'Brien, that, the deadline imposed having expired without receipt of the response sought, he was instructed to proceed to issue a statement of claim. In oral evidence the claimant said that this was incorrect and that Murphy and Moloney did not have instructions to issue a statement of claim, and indeed, that such instructions could not have been given without a decision of DW's Management Committee. The file notes are relied upon by the LSC as further evidence of pressure being applied by the claimant to Metcalf. As I have earlier noted, I generally accept the claimant's evidence, and I do so on this occasion. In any event, there is no direct evidence that Murphy and Moloney in fact had the instructions referred to; all that is in evidence is the file notes, which prove only that O'Brien had made the statements he attributed to himself. Ordinarily, of course, a statement by a solicitor that he had instructions to undertake a stated course of action would be accepted as evidence that he did in fact have those instructions. However, misunderstandings can arise, and, in the face of directly conflicting evidence from the claimant, it could not be concluded that such instructions had been given. The rationale given by the claimant, that issue of the statement of claim would require a decision of DW's Management Committee, is compelling. 327 On 1 May Murphy and Moloney forwarded a letter, substantially in terms as drafted by the claimant, to Metcalf. Of particular relevance, the demands with which DW's draft had concluded were incorporated in the letter.

[251]

328 The submission of the LSC in relation to this ground can be stated succinctly. It is that there was never any proper basis for suing Metcalf in defamation, and the threats to do so were taken for the purpose of intimidating him and persuading him to withdraw his support for Rajski. It really matters very little whether instructions had been given to issue the statement of claim. What matters is that the threat was made to Metcalf, and the purpose for which it was made. 329 A number of submissions were made on behalf of the claimant. Firstly, it was observed that the claimant was, on this occasion, acting not as a legal practitioner but as a client. Accordingly, the conduct could amount to professional misconduct only if it came within the description in s 127(1)(b) - that is, conduct occurring otherwise than in connection with the practice of law which, if established, would justify a finding that he was not of good fame and character or was not a fit and proper person to remain on the roll of legal practitioners. 330 I do not accept that the distinction between conduct by the claimant as an individual and conduct by the claimant as a legal practitioner can be so rigidly drawn. In these proceedings the claimant was predominantly acting as the solicitor for the Arunta Companies and their various directors and executives. He, it is true, became caught up in the litigation, to the extent of being made a defendant to various proceedings brought by Rajski and/or Raybos, but this was always as a result of, and entwined with, his role as a legal practitioner. Moreover, if the LSC's claims are established, it would be legitimate to conclude that the claimant, in seeking to remove Rajski's various forms of professional support, was acting not only on his own behalf, but on behalf of his clients. In any event, I am of the opinion that on no view of it could the conduct be said to have occurred "otherwise than in connection with the practice of law." However the conduct is examined, it was in connection with the practice of law. 331 A second submission made on behalf of the claimant is that, in relation to the proposed proceedings against Metcalf, he acted at all times: "with the benefit of the advice of independent solicitors and Mr Nicholas QC, senior counsel very experienced in the field." 332 It is interesting to note that it was not submitted that the claimant acted on or in accordance with the advice of independent solicitors and counsel. The documentation to which I have referred makes it reasonably plain that the claimant himself took a very substantial role in the preparation of correspondence. The file notes show a great deal of caution and reservation on the part of his counsel. 333 A further submission was that the proceedings were not ultimately instituted: "because it later became apparent that Dr Metcalf would give evidence that he had released the report in circumstances which would involve no liability on his part." 334 The claimant's argument went on that, notwithstanding those circumstances, DW were entitled to request an apology "for the serious and baseless allegations" they considered had been made against them. 335 The fact that proceedings were not ultimately instituted does not assist the claimant. It is the threat of proceedings, and the context in which the threat was made, that is significant. It must always have been apparent that a report, written by a medical practitioner for a court would, other than in exceptional circumstances showing some form of mala fides on the part of the practitioner, be privileged. 336 Another argument was that: "No impropriety is involved in a lawyer acting for a client in proceedings even if they are known by the lawyer to be hopeless, and a fortiori if he does not know them to be hopeless." 337 Authority was cited to support the first of these two propositions: Rondel v Worsley [1969] 1 AC 191, 275; Rajski v Bainton (1990) 22 NSWLR 125, 146A; S v M (The Times, 26 March 1988); Szerdahelyi v Bailey (SC NSW, Badgery-Parker J, 28 August 1997, unreported). 338 The submission, as I understand it, was that a lawyer may, without impropriety, act for a client pursuing a cause that the lawyer knows to be hopeless. It follows logically that a lawyer may, without impropriety, act for a client pursing a cause not known by the lawyer to be hopeless. The claimant sought to build on these propositions by pointing out that he was not acting as a lawyer but as a client and that he sought expert legal advice. 339 The composite submission provides no answer to the LSC's claim. Firstly, the authorities cited do not support the first of the general propositions, that there is no impropriety in a lawyer acting for a client in a cause known to be hopeless. By way of example, the passage cited in Rajski v Bainton at p 146A merely records an argument advanced in that case on which the court did not finally rule. 340 Secondly, a letter was sent to Metcalf containing demands of withdrawal and apology and a threat of legal action. This was sent well before the conference with senior counsel. Thirdly, the question is not whether the claimant, either as litigant or lawyer, wrongly pursued a hopeless cause. The question is whether, in making the threat to sue Metcalf, his purpose was to attempt to intimidate the doctor and circumvent his support for Rajski. 341 A further argument for the claimant was that, in so far as it is alleged that he sought to intimidate Metcalf, it is not contended that he was in fact intimidated, and no complaint to that effect was made at the time by Metcalf or his lawyers. I do not consider this a relevant consideration. If, successfully or unsuccessfully, a legal practitioner set out to intimidate a witness in any proceeding, that is capable of amounting to professional misconduct. 342 The final argument was that the correspondence directed to Metcalf and his lawyers distinguished between use of the report in evidence before the court and any other publication of the letter, such that it could not reasonably be concluded that whatever the claimant was seeking to do, it included preventing Metcalf giving evidence in court in accordance with his report. In my view that submission is inconsistent with the clear words of the correspondence. In the first letter Metcalf was required to "withdraw the allegations … and send a copy of that withdrawal and apology to each person to whom the letter was published"

[268]

This note does not identify the nature of the proceedings brought against Yerushalmy and this is of some, obvious, significance. 355 Another file note, bearing Davidson's initials, is dated 31 March. (It can be found in NRC 7, p 38). Its significance is that it is headed "Arunta Investments Pty Limited. Re. Yerushalmy - Perjury." Yet another, also bearing Davidson's initials, dated 5 April 1988, is headed "Arunta Investments Pty Limited. Re Rajski. Re Yerushalmy - Perjury." (NRC 7, p 39) It records an enquiry made by Davidson of Phil Dart: "Whether we might obtain a copy of the summons issued and to be served on Yerushalmy. I noted that we had no instructions to accept service of that summons." 356 On 29 April 1988 DW wrote to the Solicitor for Public Prosecutions, in the following terms: "We understand that process has issued against Mr Yerushalmy by the Director of Public Prosecutions but has not been served. We are instructed to make representations in the nature of a "No Bill" application that the summons be withdrawn. Before we do we need to know the nature of the charge and the particulars relied upon." (NRC 1 annexure 60). 357 On 2 May 1988 the Solicitor for Public Prosecutions wrote to DW, conforming that an information alleging perjury against Yerushalmy had been laid and that difficulties were being experienced in serving the summons. The letter concluded: "I note that you decline to accept service of the summons on Mr Yerushalmy's behalf" 358 DW replied on 10 May 1988 same day, saying: "3. In your letter you say that we declined to accept service of the summons on behalf of our client. Mr Davidson did inform Mr Dart that we did not have instructions to accept service of the summons. You did not ask us to seek such instructions." 359 On 6 May 1988 the claimant wrote to the SMH concerning the article that had been written by Slee. The letter included the following paragraph: "Since 17 March 1988 we, as Mr Yerushalmy's solicitors, have been seeking particulars of the charge apparently made against him (as the letter which you quote correctly records.)" (Ex 18)

[273]

362 The LSC's claim in this regard depends entirely upon the inferences he seeks to have drawn from these documents. They are incapable of legitimately giving rise to such inferences. It would not be open to the Tribunal to reach a conclusion, on this material, that a request to accept service was made. In this respect some answers given by the claimant in cross-examination strengthened the view that I would, in any event, have reached. He said, as he had said in the Fairfax proceedings, that a summons for perjury, perjury being an indictable offence, could not properly be served through solicitors. No argument having been put to the contrary, either in the Fairfax proceedings or in the present proceeding, I am prepared to work on the assumption that it is a correct statement of law. That fact alone renders it less likely - indeed unlikely - that such a request would have been made. 363 The Information in this respect cannot succeed. Ground 6 (a) must be deleted from the Information. 364 The remaining two passages in the evidence given by the claimant in the Fairfax proceedings are, so far as I can see, to the same effect: that is, that, at the time to which he was referring in his evidence, the claimant was not aware of the nature of any charge the Director of Public Prosecutions proposed to lay against Yerushalmy. 365 The LSC's argument, again, depends upon inferences to be drawn from the various documents which have been extracted above. 366 He relies upon the file note of the conference of 17 March 1988 prepared by Davidson. It is to be remembered that this file note was prepared on 11 May 1988 - almost two months later - from contemporaneous notes made at the conference. There is a significant discrepancy between the two. The later file note states that Parsons had referred to proceedings commenced against Yerushalmy for perjury; in the contemporaneous note, although it is noted that proceedings had been commenced against Yerushalmy, the charge was not identified. Further, the later file note is headed "Yerushalmy - Perjury"; the contemporaneous note has no such heading. There is nothing in the contemporaneous note to show that, at the time of the conference, those present were aware specifically of the nature of the charge. The two file notes of 31 March and 5 April are also each headed "Perjury", and there is no suggestion that they were not made on the dates they bear. Certainly, by those dates, it may be taken that Davidson was aware, in general terms, of the charge that would be laid against Yerushalmy. 367 While Davidson's knowledge does not necessarily imply that the claimant was aware of the general nature of the charge, given the close supervision which the claimant gave to all matters concerning Arunta, Tectran and their associated companies and individuals, I think it is a reasonable inference that he had substantially the same information and knowledge as Davidson had. 368 There is, therefore, a basis on which the Tribunal could conclude that the evidence he gave in these two respects was inaccurate. 369 Giving inaccurate evidence could not, of itself, amount to professional misconduct, and this is recognised by the LSC in the formulation of the Information, which alleges that the evidence went beyond inaccuracy, and was false or misleading - implying, at least, knowledge of its inaccuracy, and an intention to mislead the court. Merely to give mistaken evidence could not amount to professional misconduct. 370 There is no evidence capable of supporting a finding of professional misconduct in respect of the evidence given in the Fairfax proceedings. This ground must be deleted from the Information. 371 I should add that senior counsel for the LSC put a final submission, to the effect that this court had not had the benefit of the potential evidence of Parsons or Davidson, an advantage which may be available to the Tribunal: s 171(1). 372 I do not accept that the present decision should be made by speculating about evidence that might become available. Firstly, although he may not have had powers of compulsion, there was nothing to stop the LSC seeking information from either Parsons or Davidson in the course of his investigation; there was no evidence that he sought to take this course. There was no reason why either or both of those gentlemen should not have been required, by subpoena if necessary, to attend at this Court for the purpose of giving any relevant evidence they may have been able to give. It would be quite wrong to determine that there is adequate evidence to go to the Tribunal on the basis that some additional information may be forthcoming. I reject the submission. Ground 7 in the Information 373 By Ground 7 in the Information the LSC alleges that the claimant:

[277]

Facts 377 In 1985 Rajski sued the partners of DW for defamation. DW applied, successfully in the first instance, for summary dismissal of the claim. On 16 May 1986 Hunt J directed entry of judgment in favour of DW and ordered Rajski to pay their costs. On 7 July 1986 Rajski was granted leave to appeal that decision in the Court of Appeal. In accordance with the leave granted, on 21 July 1986 he filed a notice of appeal. 378 Notwithstanding the grant of leave and the filing of the notice of appeal, on 30 July 1986 DW's solicitors, Murphy and Moloney, served Rajski with a certificate of taxation of costs quantified at $8,861.83. On 11 August 1986 DW's solicitors demanded payment of the costs by 18 August, with a threat of legal action in the event of non payment. On the same day Rajski wrote to DW's solicitors seeking consent to orders setting aside the certificate of taxation of costs and staying Hunt J's order for costs pending the hearing of the appeal. On 18 August the Court of Appeal stayed the costs order pending the hearing of the appeal. 379 There is no evidence that either the claimant or DW on their clients took any formal steps towards commencing bankruptcy proceedings against Rajski. The sole evidence concerning any consideration of bankruptcy proceedings is to be found in a file note of the conference of 19 June 1986, to which reference has been made in relation to ground 3. The file note discloses that the claimant reported on the status of the defamation proceeding, that Rajski had sought leave to appeal, and that, in the claimant's view, Rajski would ultimately lodge an appeal. It was following that report that the question of bankruptcy arose. The file note records the following: "[The claimant] also mentioned that when we get a certificate as to costs we will then move to send Rajski bankrupt. Gary Richardson asked whether there would be any advantages re the main proceedings if Rajski is bankrupt. [The claimant] replied that only so far as asking the question where Rajski's money has gone and what assets he does have…. [The claimant] was hopeful that within a couple of weeks we would have a certificate on which we could base the bankruptcy notice. [The claimant] then noted that he would need to get the [DW] general committee to approve issuing a bankruptcy notice." 380 The LSC also relied on the evidence, earlier referred to, of the claimant's intention to maintain pressure on Rajski, to "push" him, or to "stretch" him: (see paragraph 263.) 381 Later, from a file note recording a conference of 27 October 1986, (Ex Z) it is clear that further consideration was being given to the same action. Under the sub heading "Re Items to Action" appears the following: "So far as orders for costs were concerned Bainton QC had advised it was worthwhile bankrupting Rajski. [The claimant] said that we should get the orders for costs before the High Court taxed and noted that the orders for costs in the defamation matter against [DW] had been taxed but the Court of Appeal had stayed that order… Gary Richardson then enquired re the effect of bankrupting Rajski and Raybos? [The claimant] explained that if the company is wound up the court appointed liquidator would stand in for Rajski and presumably that the liquidator would need to be funded; but legal aid may cover this action."

[280]

Facts 384 On 13 October 1986 a number of proceedings were listed before Powell J then in the Equity Division. These were the 1980, the 1985 and the 1986 proceedings. The last of these was the proceeding commenced by Rajski and Raybos alleging conspiracy against, inter alia, the partners of DW. The claimant was personally a party to this action. 385 The evidence does not clearly disclose for what purpose or purposes these proceedings were listed, other than that they involved interlocutory applications (Ex1C, document no. 141). Rajski and Raybos sought adjournment. Powell J refused. Rajski and Raybos sought leave to appeal the refusal to the Court of Appeal. The application came before the Court of Appeal (Kirby P, Glass and Priestley JJA) on 22 October 1986. Rajski appeared for himself and also represented Raybos. All defendant/respondent parties, including the claimant, were represented by Bainton QC. The transcript of proceedings of that day is not in evidence. The Court reserved its decision overnight, and re-convened the following morning for, it seems, the purpose of delivering judgment, or at least announcing its orders. The extracts from the transcript of that day suggest that also before that Court was the second contempt proceeding, (which had been filed in the Court of Appeal) and in which, again, the claimant was personally a party. 386 The precise manner in which Rajski advanced his application for adjournment before Powell J is not in evidence before me. In the Court of Appeal he supplemented whatever material he had put before his Honour with a report by Metcalf of 17 October 1986. According to the particulars subscribed to the Information, Metcalf also gave oral evidence in the Court of Appeal. That evidence is not before me. In the report Metcalf expressed the opinion that Rajski had been: "becoming increasingly anxious over a period since August this year … is on the verge of a nervous breakdown … is acutely anxious and depressed and may well become totally unable to cope in a rational way. He needs rest and treatment."

[285]

In answer to a question put by Glass JA, the claimant said: "I do not wish to embark on a long discussion because I wish to make these submissions short, but I am not able to accept what your Honour Glass JA puts. I would have thought it follows if this Court finds this claimant [Rajski] is unable because of his mental state to conduct the litigation then he must be a mentally disabled person. It may change in the future and the tutor can be removed, but at the moment, for the purpose of this litigation, that is what he is and that is his claim." 388 The consequence of a finding that a litigant is "a disable person" within the meaning of SCR Part 57 Rule 7 as it then stood, was that the litigant was not permitted to make decisions about his or her own litigation; such decisions were entrusted to a court appointed tutor. Obviously, such a finding is of considerable significance. 389 There was no formal application to the Court for any declaration that Rajski was a disable person within the meaning of the Rule, or for any other orders to similar effect. 390 The Court of Appeal granted the adjournment and ordered a stay of the proceedings before Powell J. In giving reasons for that decision on 29 October, Kirby P described the suggestion that a tutor might be appointed as "misconceived on the present state of the evidence." (Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (1986) 6 NSWLR 674) 391 It is clear that active consideration was subsequently given to the possibility of seeking such a declaration. On 27 October 1986 the claimant attended a conference with representatives of the Tectran/Arunta Companies. A file note of the conference records: "The following more general issues were then discussed. 1. Psychiatric Evidence : [the claimant] pointed out that if Dr Metcalf comes to the conclusion that Rajski is disable, Tectran may then apply to have a tutor appointed to conduct his litigation." 392 As a consequence of the orders made, the matters were again before the Court of Appeal on 15 December 1986. During the course of the discussion that then took place, Bainton QC, who continued to appear for the Arunta and DW parties other than the claimant, sought and was granted an order that Rajski submit himself to psychiatric examination on behalf of those parties he represented. As page 15 of the transcript makes clear (and page 1 does not) the claimant was separately represented. 393 On 18 December 1986 DW wrote to Shand. They provided him with a much abbreviated history and outline of all proceedings and, in particular, the events of 23 October 1986 in the Court of Appeal. They outlined the reasons for the orders the Court had made in the following way:

[287]

Unless he has convincing documented support for the allegations of conspiracy, fraud etc by Jones of [AAH], Baynton (sic) [the claimant] and, which I have to doubt on the basis of common sense, his allegations should be regarded as delusions, and therefore paranoid. If this is true, he may have great difficulty instructing counsel. However, there is no doubt in my mind that for the primary case to have any chance of completion, let alone the other ones, he must have adequate legal representation in court, whatever the source may be." 396 On 2 February 1987 the second contempt proceeding was again listed in the Court of Appeal. It may well be that the other matters were also listed, although the transcript (Ex 1C/144) does not suggest that this is so. In any event, the question of the purpose of the examination by Shand was raised, and Davidson, who is recorded as appearing for the DW parties, assented to the proposition that the dual purpose to the hearing was to respond to Metcalf's evidence, and: "in relation to the appointment of a tutor." 397 In oral evidence the claimant said that either Davidson was wrong about this or, if he were correct, the listing for that purpose had been arranged without the claimant's knowledge. 398 Metcalf reported again on 15 February 1987 (Ex 1C/93) He wrote: "In my opinion Dr Rajski is not deranged and needs no tutor but he does need the assistance of legal representation that any sane person in our society would require under similar circumstances." 399 The matter was in the Court of Appeal again on 23 February 1987. The transcript records that Bainton QC appeared for the DW parties, including on this occasion, it seems clear, the claimant. There was considerable discussion about the medical reports, and it was accepted that by Bainton QC one reason for obtaining the Shand report was to consider a foreshadowed possible motion that a tutor be appointed for Rajski on the basis that he was a disable person. Kirby P raised the question whether that "application" would be pursued. No final answer was given and the matter was left, to some extent, in abeyance. 400 On 11 March DW wrote to Shand, again setting out a number of asserted facts, and enclosing a number of documents, and asking a number of specific questions about Rajski and the psychiatric examination that had taken place. Importantly, he was asked this question: "…is Mr Rajski suffering from any mental or emotional condition which does now or will in the future affect his capacity to either instruct lawyers or conduct litigation himself? If so, what is that mental or emotional condition and what treatment is necessary to deal with it?" 401 On 23 March 1987 the matter was yet again listed in the Court of Appeal. On this occasion the claimant appeared for all DW defendants, including himself. He stated that the matter was in the list that day for two purposes, one of which was the determination of whether or not any of the opponents wished to make any application to have a tutor appointed. He subsequently reiterated this. He then said: "I think the question of appointment of a tutor is perhaps a red herring. It arose in these circumstances; about last October or November evidence was being put forward by Mr Rajski that he was incapable of conducting this case. It seemed to us either he was capable of running the case or he was incapable. If he was incapable, the Court was bound to appoint a tutor. It is not a question of our application to appoint a tutor. If the court finds he is incapable of conducting litigation, then by the rules it is bound to appoint a tutor." 402 No application for appointment of a tutor was ever made. The LSC's case in this respect is, again, that "the application … for appointment of a tutor" was made for an improper purpose. It is for this reason that I have emphasised no formal application was ever made. The LSC overstates the case in referring to "an application".

At a glance

Court

Decision date

Before

Source

Judgment (425 paragraphs)

Parties

Cases Cited (17)

Cited By (2)