1. Mr Harle is found guilty of one charge of professional misconduct within the meaning of section 4.4.3(1) of the Legal Profession Act 2004, being misconduct at common law.
2. The matter is to be listed for a further hearing on the question of the penalty which should be imposed.

1. One of the fundamental obligations of lawyers is not to mislead the courts. This applies to Australian lawyers whether or not they hold practising certificates at any particular time. Here, a lawyer is accused of telling 'half truths' in an affidavit he swore in the course of litigation relating to his own personal business affairs.
2. Mr Matthew Harle practised as a solicitor in Victoria from 1970 to 2004. In 2010, he became involved in a joint venture to exploit a process which had been discovered to recover energy enriched water from fruit. It was intended to produce and market a healthy new drink, called 'Aura Water'. The vehicle for the joint venture was a company known as Botanical Water Holdings Pty Ltd (BWH). The venture failed, and the participants fell out. Supreme Court proceedings[1] were commenced by three parties associated with Dr Ambrosis 'Bruce' Kambouris, (the inventor of the process) and his friend, Mr Andrew Moussi. The defendants were four parties associated with Mr Ayman Abdou, Mr John Papadimitriou and Mr Harle. The fifth defendant was ASIC. The sixth was BWH itself.
3. A complaint was made to the applicant (LSC) by Mr Moussi, including in relation to an affidavit sworn by Mr Harle in the Supreme Court proceedings dated 22 September 2011, which is the subject of these disciplinary proceedings. Broadly, the LSC alleges that the affidavit contains a number of 'half truths', which created a false and misleading impression, in effect, that:
   • Mr Harle had at all relevant times been 'free' to apply for a practising certificate and his right to practise had not been impeded by disciplinary proceedings.
   • He had been a member of the CPA until 2008, when he ceased to maintain that membership, impliedly of his own volition.
4. The true position in relation to Mr Harle's entitlement to practise as a legal practitioner and as a CPA is as follows.
5. Mr Harle had relinquished his practising certificate in 2004. In 2008, the LSC brought disciplinary proceedings against him at VCAT in relation to conduct in 2002-3. The outcome was that he was prohibited from applying for any form of practising certificate from 21 October 2008 to 1 July 2011 (a period of two years and eight months).
6. Mr Harle was also accredited as a Certified Practising Accountant (CPA) by CPA Australia from 1976. However, as a result of disciplinary action by CPA Australia on 17 June 2009, his membership of that body was forfeited until 1 July 2011. This was expressed to be on two bases: first a decision handed down in the County Court of Victoria on 17 October 2008 which found Mr Harle had engaged in misleading or deceptive conduct, and unconscionable conduct in respect of two clients. Second, the VCAT decision of 21 October 2008 referred to above, which found Mr Harle guilty of professional misconduct. It was common ground that these two findings arose out of generally the same conduct relating to two former clients of Mr Harle.

1. The single charge brought by the LSC against Mr Harle is as follows:

The respondent is guilty of professional misconduct within the meaning of section 4.4.3(1) of the Act, in that his conduct on or about 22 September 2011 in approving and swearing an affidavit in circumstances where he:

(a) knew and intended that it would be filed and served in a Supreme Court proceeding in which he was personally involved; and

(b) knew that its content did not set out the whole truth concerning the relevant history of:

(i) his entitlement to apply for a practising certificate, particularly as at 21 September 2010; and/or

and thereby created a false or misleading impression as to the true state of facts,

was conduct that lawyers of good repute and competency would regard as dishonourable and disgraceful, and thereby constituted misconduct at common law.

1. The plaintiffs in the Supreme Court proceeding sought first, a declaration that a purported rearrangement of the shareholding in BWH which diluted Dr Kambouris' interest from 51% to 30% of the BWH share capital, was invalidly carried out. Second, they sought an order rectifying the ASIC register, so as to restore Dr Kambouris as a director of BWH following the lodgement of a return which purported to record the revocation of his position as a director of BWH.
2. Affidavits were filed by a number of persons on behalf of the plaintiffs around the end of August 2011. These included Dr Kambouris and Mr Greg Gregory, an accountant who had been involved in the administration of the joint venture entities. Mr Gregory was a registered ASIC agent, and this meant that he was able to lodge forms from his office to change the details of a company through an on-line portal run by ASIC.
3. Affidavits in reply were filed around 22 - 23 September 2011 by a number of persons on behalf of the defendants, including by Mr Harle. Mr Harle was a director of one of the defendant companies, which held 1% of the shares in BWH. So he had an interest in the outcome of the proceeding.
4. Dr Kambouris' affidavit included the statement that in around March 2010 he was induced by Mr Abdou and Mr Harle to believe that the latter was a practising solicitor, such that Dr Kambouris believed Mr Harle was under a fiduciary duty to act in his best interests.
5. Dr Kambouris' affidavit stated at paragraph 13:

On the morning of 21 September 2010 I became aware of certain matters, including:

1. information provided to me by Abdou and Papadimitriou regarding the progress of their capital raising was false and that they had no prospect of raising capital;
2. Papadimitriou was an undischarged bankrupt and had failed to disclose this; and

1. Matthew Harle was serving a current ban from acting as a legal practitioner because of previous professional misconduct.

1. Mr Gregory's affidavit stated:
   • That at a meeting on 10 September 2010, Mr Abdou requested that Dr Kambouris be appointed as a director of BWH.
   • Mr Harle was a 'legal advisor' to Mr Abdou and Mr Papadamitriou, and he understood Mr Harle was a former solicitor who was no longer able to practise due to disciplinary proceedings. (In actual fact, the position was that Mr Harle was barred from holding a practising certificate in September 2010, but this prohibition expired on 1 July 2011, so he was not barred as at 29 August 2011, when Mr Gregory's affidavit was sworn.)
   • On 21 September 2010 he (Mr Gregory) had lodged with ASIC a change of shareholding notice (diluting Dr Kambouris' shareholding) which had been given to him by Mr Harle at a meeting in Mr Gregory's office that day. At that time Mr Gregory believed the notice to be authentic.
   • That he (Mr Gregory) had not lodged the documents purporting to revoke the appointment of Dr Kambouris as a director of BWH. The implication was that this was done fraudulently on 21 September 2010, by a person in the defendant's camp, using Mr Gregory's computer to file the record with ASIC, without his knowledge.

1. Mr Harle's affidavit of 22 September 2011 stated that he had read the affidavits by Mr Abdou, Mr Papadamitrou and a Mr Mariopoulos (filed on behalf of the defendants) and that he agreed with the contents of those affidavits. These asserted versions of events which had occurred in 2010 relating to meetings and decisions made about shareholdings, directorships, and other financial arrangements for the establishment of the business, which were different to those that had been deposed to in affidavits by Dr Kambouris, Mr Moussi and Mr Gregory, on behalf of the plaintiffs.
2. The three paragraphs which form the basis of the LSC's case against Mr Harle are paragraphs 7 - 9. These were as follows:
   1. I was formerly a solicitor, having commenced practice in 1970 and continued until I elected not to renew my practising certificate after 30 June, 2004. I do not provide legal services as I am neither registered nor insured for same. I have not provided legal services in this matter.
   2. In 1976 I was admitted as a Certified Practising Accountant and maintained such membership until 2008. I observe that although Gregory claims to be an accountant he is not a member of and I believe he has never been a member of any of the three accountants registration bodies recognised by statute in Australia.
   3. It is false of Dr Kambouris to say that on 21 September 2010 that he made certain decisions because he learnt that I serving (sic) 'a current ban from acting as a legal practitioner' as I advised him when I first met him that I retired as a legal practitioner in 2004. I remain an Australian Lawyer as defined in the Legal Profession Act 2004 and am free to apply for a Current Practising Certificate if I so desire which I do not.
3. Mr Harle's affidavit described certain company secretarial work he did in relation to the incorporation and administration of companies associated with the joint venture. It stated that he attended various meetings and was offered, and accepted, a 1% share in the company in lieu of being paid for his work.
4. Mr Harle's affidavit went on directly to contradict Mr Gregory's affidavit. He stated he did not attend Mr Gregory's office on 21 September 2010. So he did not hand to Mr Gregory the minutes of a resolution changing the shareholding in BWH, as Mr Gregory had stated.

1. Ultimately, Mr Harle did not give evidence in the Supreme Court. In fact, only Mr Abdou did. The outcome of that case was that the plaintiffs succeeded in their first application: a declaration was made to the effect that the shareholding was as originally established, that is, without Dr Kambouris' interests being diluted. But the plaintiffs failed in their second application, which was to reinstate Dr Kambouris as a director of BWH.
2. The Supreme Court, comprised by Justice Robson, made adverse findings about the credit and conduct of the participants. His honour referred to 'the apparent improper behaviour by all parties in establishing the joint venture'[2]. He also said for various reasons, he did not have confidence in the evidence of Mr Abdu, Dr Kambouris or Mr Moussi. Further, he noted Mr Papadimitriou was an undischarged bankrupt and Mr Harle had been prevented from holding a practising certificate.[3]

1. The parties were in agreement as to the relevant facts. The issue to be decided is whether Mr Harle's admitted conduct constitutes professional misconduct at common law.
2. The LSC's key contentions were set out in paragraph 26 of the application for order:

In the premises, paragraphs 7, 8, and 9 of the Harle Affidavit:

(a) contradicted the sworn evidence of Dr Kambouris and Mr Gregory concerning their knowledge of the respondent's right to practice as a legal practitioner, by representing that:

(i) he had at all relevant times been 'free' to apply for a practising certificate; and/or

(ii) his right to practice had not been impeded by disciplinary proceedings;

(b) drew a distinction between the respondent's prior qualification as a CPA, and Mr Gregory's absence of any such qualification; and

(c) were directly relevant to the credit of Dr Kambouris and Mr Gregory as witnesses for the plaintiffs in the Proceeding.

1. In relation to Mr Harle's status as a lawyer, the LSC contended that paragraphs 7 and 9 of Mr Harle's affidavit together conveyed the impression that he had voluntarily elected not to renew his practising certificate in 2004, and since then had never been prohibited from acting as a legal practitioner, and had at all times been free to apply for a practising certificate if he chose to do so.
2. The LSC correctly said that given a purpose of his affidavit was to challenge the correctness of statements by Dr Kambouris, Mr Harle was required to be particularly careful to avoid creating a misleading impression.
3. Mr Harle's case comprised submissions put on his behalf by Mr Jones of counsel, and evidence given by Mr Harle himself. It was contended that Mr Harle did not take issue with Dr Kambouris' statement that in September 2010 he was serving a current ban from acting as a legal practitioner. As uncontested evidence therefore, that statement by Dr Kambouris would presumably be accepted by the Court. So Mr Harle was not in fact 'contradicting' the evidence of Dr Kambouris and Mr Gregory concerning their knowledge about the restriction on Mr Harle's right to practise as a legal practitioner. In his affidavit he sought to be concise, and to confine his statements to relevant issues in dispute.
4. There appeared to be some attempt on Mr Harle's part to put responsibility for the drafting of his affidavit on the shoulders of the solicitor acting for him in the Supreme Court proceeding. I reject that suggestion, however. As a solicitor of long experience, Mr Harle knows that when he swears to an affidavit, it is his responsibility to ensure it is completely correct.
5. I also reject the suggestion made on behalf of Mr Harle that there is any significance in the fact that the affidavit was given in Mr Harle's capacity as a 'lay witness', rather than in the course of practising law himself. Mr Harle's duty of candour to the Court applies in the same way as when he swears an affidavit in the course of acting for clients.[4]
6. The LSC contended that the fact that the Court was not in fact misled by Mr Harle's affidavit in relation to his right to practise, was not to the point. Deponents of affidavits are frequently not called to give oral evidence, and so are not cross-examined on the content of their affidavits. Also, a misleading affidavit could provide a real or strategic benefit to a deponent in the conduct of litigation during the period prior to the trial itself (which could be quite long).
7. In any event, it is obviously correct that the duty of candour arises at the time the affidavit is sworn. The fact that a misleading or inaccurate statement in an affidavit would be expected to be clarified if and when the deponent is cross-examined is clearly not a justification for making a misleading or inaccurate statement.
8. Nevertheless, in considering the extent to which paragraphs 7 and 9 of Mr Harle's affidavit were in fact misleading, I believe it is of relevance to consider the Court's response. It is clear from its decision that the Court was well aware that Mr Harle had been prevented from holding a practising certificate as a result of disciplinary proceedings against him.
9. The context in which paragraphs 7 and 9 of Mr Harle's affidavit were prepared indicates a key concern was to respond to the suggestion that he had been providing legal services when he did not in fact hold a practising certificate. Mr Harle was keen to refute that suggestion.[5]
10. Paragraph 9 in particular, is ambiguous and unclear. In the context of the reference to having retired in 2004, the commencing words of paragraph 9 'It is false' followed by the reference to him being banned from acting as a legal practitioner might suggest at first blush that Mr Harle was denying that he had been banned. This impression is supported by the reference to being free to apply for a practising certificate. The first sentence is not so simple, however. It states that it was false of Dr Kambouris to state that he 'made certain decisions' because he learnt that Mr Harle was serving a current ban on acting as a legal practitioner.
11. The first sentence of paragraph 9 might be seen as a suggestion by Mr Harle that Dr Kambouris was gratuitously and unnecessarily introducing a reference to the 32 month ban on practising which had been imposed on him: he did not provide legal services because he had retired, not because he had been banned. The statement that he 'remain[ed]' an Australian lawyer as defined in the Legal Profession Act 2004 adds little. It means simply that his name has not been removed from the Roll of Practitioners. And the statement that he is free to apply for a current practising certificate was literally correct at the time of swearing (September 2011).
12. Taken as a whole, some lay persons might be confused and perhaps misled by paragraphs 7 and 9. This is on the basis that such a person might not be aware that a practitioner could still be disciplined, even after he has ceased to renew his practising certificate, and that a person banned from applying for a practising certificate nevertheless remains an 'Australian lawyer'. However, I do not believe that is the test I should apply. I also note in this case, the plaintiffs were legally represented. Nor, as stated, was the Court misled. Overall, although the affidavit is unclear, I am not satisfied it is positively misleading to a degree sufficient to constitute professional misconduct, or unsatisfactory professional conduct.

1. In relation to the statement at paragraph 8 about Mr Harle's status as a Certified Practising Accountant, however, I find that a misleading impression was created.
2. Paragraph 8 drew a distinction between Mr Harle's (prior) qualification as a CPA, and Mr Gregory's absence of any such qualification.
3. The purpose of the affidavit in relation to Mr Gregory was clearly to contradict the version of events which Mr Gregory had put in his affidavit. In particular, Mr Harle swore that he was not present at the meeting on 21 September 2010, so he could not have handed Mr Gregory minutes recording an alteration in the shareholding of BWH. Mr Harle's affidavit also lends support to the version of events given by Mr Abdou, Mr Papadimitriou and Mr Marinopoulos generally - which take issue with a number of things Mr Gregory deposed to.
4. Mr Harle acknowledged in his evidence that in paragraph 8, was invoking his status as a longstanding CPA member to suggest that he was a more credible witness than Mr Gregory. In these circumstances, to omit any reference to the disciplinary action taken against him by CPA Australia - indeed the forfeiting of his membership in June 2009 - did create a misleading impression.
5. Unlike the situation in relation to his ability to practise law, there was no reference in the affidavits in the proceeding to the restriction on his ability to practice as a CPA. The impression left in relation to his status as an accountant, was that he had been a CPA for 32 years - and as such his word should be accepted over that of Mr Gregory - who he believed had never been a member of any of the three accountant registration bodies recognised by statute in Australia.
6. In Forster v Legal Services Board[6] Kyrou AJA (Weinberg and Harper JJA agreeing) said:

A lawyer who is a party to the presentation of evidence or the making of a statement to the court that is partly true, but which does not amount to the whole truth, can create a misleading impression to the Court and thereby breach his or her duty to the Court.

1. Had readers of the affidavit also been alerted to the fact that he had forfeited his membership as a CPA on the basis of having been found in the County Court to have engaged in misleading or deceptive conduct and unconscionable conduct in respect of two clients, the impression left in relation to the vital issue of credit would have been quite different.
2. In cross examination, Mr Harle accepted that with hindsight, it would have been preferable for his affidavit to have referred to the disciplinary action taken by CPA Australia.
3. Mr Jones contended that the matters which gave rise to the forfeiture of CPA membership were the same as those which gave rise to the prohibition on practising law which VCAT imposed. And so there was nothing additional, in terms of prior conduct, which was not drawn attention to by the failure to refer to the CPA Australia disciplinary action. In my view, however, the very fact that the disciplinary action having been taken by CPA Australia, would have been highly relevant to the impression created by Mr Harle's affidavit. It is a different professional organisation to those involved in the registration and disciplining of lawyers, and the fact that it chose (or was required) to take its own separate disciplinary action against Mr Harle as an accountant was significant in itself.
4. I find Mr Harle's affidavit did create a misleading impression as to the true state of facts. In Forster, Kyrou AJA said

Misleading the Court by presenting a misleading or false document is contrary to the lawyer's duty of honesty and candour, including in his or her capacity as a litigant[7]

1. I find this was conduct that lawyers of good repute and competency would regard as dishonourable or disgraceful. That is, it constitutes professional misconduct under the long accepted test.[8]

1. I have found Mr Harle's actions amount to misconduct at common law in relation to one of the two matters alleged by the LSC in the charge it has brought, namely, his entitlement to practise as a CPA. Accordingly, Mr Harle is found guilty of one charge of professional misconduct within the meaning of section 4.4.3(1) of the Legal Profession Act 2004, being misconduct at common law. The matter is to be listed for a further hearing on the question of the penalty which should be imposed.

[1] Re Botanical Water Holdings Pty Ltd [2013] VSC 96.

[2] Re Botanical Water Holdings Pty Ltd [2013] VSC 96 at [8].

[4] Forster v Legal Services Board [2013] VSCA 73 at [161] - [162] per Kyrou J; Legal Services Commissioner v Piva [2009] VCAT 1200 at [111] per Ross J; and Re Thom; Ex parte The Prothonotary (1962) 80 WN (NSW) 968.

[5] This was part of the complaint made to the LSC about Mr Harle, but no allegation to that effect is made in the present proceedings.

[6] [2013] VSCA 73 at [161].

[7] [2013] VSCA 73 at [162].

[8] Allinson v General Council of Medical Education and Registration (1894) 1 QB 750; Re a Solicitor [1960] VicRp 96; [1960] VR 617 (18 March 1960).