Legal Services Commissioner v Piva - [2009] VCAT 1200 - VCAT 2009 case summary — Zoe

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Legal Services Commissioner v Piva

[2009] VCAT 1200

Victorian Civil and Administrative Tribunal|2009-07-22|Before: Honours Mason CJ, Gaudron JJ

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Court

Victorian Civil and Administrative Tribunal

Decision date

2009-07-22

Before

Honours Mason CJ, Gaudron JJ

Source

Original judgment source is linked above.

Judgment (146 paragraphs)

[1]

These proceedings arise out of events in November 2005 when Mr Piva was seeking to purchase a 333 SP Ferrari racing car for $1.378 million. At that time Mr Piva had dealings with Sportiva Macchina International Pty Ltd (Sportiva) with a view to trading in his 360 NGT Ferrari (which he had bought from Sportiva earlier that year) and purchasing the 333 SP.
Sportiva engaged Maranello Motorsport Pty Ltd, a company owned and operated by Mr Mark Coffey, to sell cars on its behalf for a commission. Mr Coffey represented Sportiva in the dealings with Mr Piva about the 333 SP.
The parties ended up in dispute about whether Mr Piva had agreed to buy the 333 SP.
On 30 March 2006, Mr Piva commenced proceedings in the Supreme Court of Victoria against Sportiva and Maranello (proceeding No 5464 of 2006) seeking the return of the 360 NGT Ferrari of which Sportiva had taken possession on the basis that it had been traded in and a new contract had been made to purchase the 333 SP. Mr Piva acted for himself in that proceeding, assisted by an articled clerk under his supervision. At all material times Mr Piva was an Australian legal practitioner within the meaning of the Legal Profession Act 2004 (the 2004 Act).
Sportiva counterclaimed, seeking damages for breach of contract as a result of Mr Piva's repudiation of the contract to purchase the 333 SP. Sportiva alleged that Mr Piva had contracted to buy the 333 SP on 9 November 2005 and that the contract was partly in writing and partly oral. Mr Piva denied he had contracted to buy the 333 SP. In the alternative he said any such contract was subject to finance.
Mr Piva's role in the Supreme Court proceedings ultimately led to charges being brought against him by the Legal Services Commissioner pursuant to s 4.4.13(2) of the 2004 Act. It is those charges with which we are presently concerned.

[4]

On 18 September 2006 his Honour Justice Hargrave gave judgment for Sportiva on its counterclaim for breach of contract. His Honour found the relevant facts as follows.
On 5 November 2005 Mr Piva met with Mr Coffey and discussed the possibility of purchasing the car. Mr Coffey said the price was $US850,000 and calculated that the Australian dollar equivalent was $1,378,800.
Mr Piva informed Mr Coffey that the only way he could afford the $1,378,800 asking price was if he could transfer the lease on his 360 NGT for $480,000 to the new car and pay the balance at a later date. Mr Coffey indicated that he thought that deal could be done. Mr Piva indicated that he would speak to Mr Michael Pratt, his finance broker, about arranging finance.
On 7 November 2005, Mr Piva spoke with Mr Pratt by telephone and told him about the car. Mr Pratt told the practitioner that he did not see any problems with obtaining financing, but said that he would have to make an application to the Adelaide Bank (which was the existing financier for the 360 NGT).
On 9 November 2005, after seeing the car in operation on 7 November 2005, Mr Piva telephoned Mr Coffey and said that he wanted to purchase the car at the asking price, less a trade-in allowance for the 360 NGT of $480,000. Mr Piva said he would have the financing on the 360 NGT transferred over to the car and would pay the balance of $898,800 on 3 April 2006. That conversation concluded with Mr Coffey asking Mr Piva to put a proposal for the purchase of the car in writing and to fax it to him. Mr Piva wrote out such a facsimile, signed it in three places and faxed it to Mr Coffey.
Later that day, Mr Coffey telephoned Mr Piva and told him that he accepted his proposal to buy the car, and congratulated him on the purchase. The practitioner said he would contact Mr Pratt about finance.
On Friday 18 November 2005, Mr Piva emailed Mr Coffey and said he had changed his mind and did not want to purchase the car. Mr Coffey replied by stating he had taken the car off the market for two weeks 'based on our agreement' and asked Mr Piva to call him to discuss the matter. The next day the practitioner visited the Sportiva showroom and spoke with Mr Coffey. He confirmed that he did not wish to purchase the car.
By 22 November 2005 Mr Piva had changed his mind and he again spoke with Mr Coffey and told him that he would proceed with the purchase of the car in accordance with the terms stated in the 9 November facsimile, except that he wanted to change the date for payment of the balance of the purchase price from 3 April to 9 May 2006. Mr Piva confirmed this by email. Mr Coffey accepted his request for an extension of the date for payment of the balance of the purchase price.
The practitioner's evidence in the Supreme Court proceedings about his communications with Mr Coffey forms the basis of charge 2.
After Mr Piva confirmed that he would proceed with the purchase of the car, he instructed Mr Pratt to apply for finance of $580,000 on the car.
Critically for present purposes, on 23 November 2005 Mr Piva instructed his insurance broker, Mr Mike Mier, to insure the 333 SP Ferrari. Mr Mier is a broker at OAMPS Insurance Brokers Ltd (OAMPS). By email of that date, he wrote:

[14]

The argument advanced in the above paragraph could not have been advanced consistently with the email. The fact that the email - alone of all the OAMPS documents - contradicted the case he was advancing points strongly to the conclusion that Mr Piva's failure to give discovery of the email was not inadvertent. Contrary to his claim before the Tribunal, the email contained information that clearly did not emerge from any of the other OAMPS documents.
Mr O'Bryan, counsel for Mr Piva, contended that the email was not a critical document at all, in fact it was a 'very insignificant document'. It is not a contractual document between the parties to the litigation and was not an admission at all.
We reject this attempt to downplay the significance of the email. The email contains admissions against Mr Piva's interests in respect of the two critical issues in the Supreme Court litigation - the sale of the 360 NGT and the purchase of the 333 SP.
Mr O'Bryan also submitted that Mr Piva had very little motive to conceal the existence of the email because it was a document that fell within the scope of the documents that OAMPS was required to produce under the subpoena. As the document was clearly going to come to light as a result of the subpoena there was no point in withholding the document in the circumstances.
This proposition proceeds on the assumption that Mr Piva had personal knowledge that the subpoena had been served, and its terms. We are not satisfied that the evidence supports such an assumption. There is no direct evidence to this effect. At paragraph 16 of his statement Mr Piva simply says that 'On 28 June 2006, my firm was served with a copy of the subpoena issued against OAMPS' [emphasis added].[7] Given that Mr Piva does not appear to have had a detailed involvement in the day to day conduct of the litigation[8] it cannot be assumed that he had personal knowledge that the subpoena had been served and its scope. We reject the contention that service of the subpoena meant that Mr Piva had very little motive to conceal the existence of the email.
Third, on Mr Piva's own evidence it is likely that he had regard to the email in preparing his witness statement in the Supreme Court proceedings. That statement is dated 11 July 2006 and at paragraph 27 it records that Mr Piva communicated with Mr Mier on 23 November 2005.[9] In his evidence before the Tribunal Mr Piva accepted that he would have needed to refresh his memory as to the date on which he contacted Mr Mier:

[17]

Mr Piva goes on to say that he was not aware of any other document that showed he had contact with Mr Mier on that date.[12]
In response to this point it is put on Mr Piva's behalf that there are other documents that indicate the date on which the request for insurance on the 333 SP was made by Mr Piva to Mr Mier.[13] On this basis it is said that it does not follow that the only document that would have provided the information in paragraph 27 of his witness statement in the Supreme Court proceeding was the email of 23 November 2005 to Mr Mier. We do not find this argument persuasive. We accept that there were other documents available to Mr Piva that imply that insurance cover commenced on 23 November 2005 but these documents do not mention any communication with Mr Mier, either on that date or on any other date. Further, while Mr Piva acknowledged that these documents were available to him at the time he prepared his witness statement he does not say that he referred to them to refresh his memory when drafting paragraph 27 of his witness statement.
Finally, in his evidence to the Tribunal Mr Piva was non-responsive[14] and evasive[15]. He was a far from impressive witness. These matters have led us to treat his evidence with considerable caution.
In addition to the matters we have dealt with Mr O'Bryan contended that Mr Piva's marital difficulties at the relevant time supported a conclusion that his failure to discover the email was inadvertent rather than deliberate.
We find this argument unpersuasive. Mr Piva reconciled with his wife in April 2005, while the events the subject of the Supreme Court proceedings did not occur until November 2005, with discovery taking place after May 2006. Mr Piva may have had some ongoing marital difficulties at the relevant time but we are not persuaded that those difficulties provide any real basis for concluding that his failure to discover the email was inadvertent.
In light of the above, we find that:
- (i) Mr Piva's claim that his failure to give discovery of the email was inadvertent is false;
- (ii) Mr Piva deliberately withheld discovery in relation to the email in order to improve his prospects of successfully prosecuting proceeding 5464 of 2006, and his prospects of defending the cross claim.
For a practitioner to knowingly withhold a relevant document from discovery is a very serious matter that goes to the heart of the administration of justice.[16] It was common ground in the proceedings before us that conduct of this character constitutes professional misconduct at common law.
On the basis of the above findings we find Mr Piva guilty of charge 1.

[25]

The Commissioner submits that the Tribunal should find the following facts:
- (i) Mr Piva was aware that Sportiva alleged that he had made a binding contract to purchase the 333 SP Ferrari on 9 November 2005, and that that contract was in part oral. He was therefore aware of the significance of his conversation with Mr Coffey on 9 November 2005 to the disposition of the case;
- (ii) in giving evidence before Hargrave J, Mr Piva was asked on several occasions what was said in his conversation on 9 November 2005 with Mr Coffey of Sportiva. On at least four occasions, Mr Piva answered that he has used the words 'invitation to treat';
- (iii) Mr Piva's examination in chief had concluded at the end of the day on 22 August 2006, and his cross-examination had not yet commenced;
- (iv) at the commencement of proceedings the next morning, 23 August 2006, Senior Counsel for Mr Piva indicated that he wanted to ask Mr Piva an additional question. In answer to the question 'Mr Piva, is there some matter that overnight you have considered about the evidence you gave yesterday in-chief that you wish to change?', Mr Piva said that there was. He then said that the terminology 'invitation to treat' was not actually used during the conversation on 9 November 2005;
- (v) Mr Piva's explanation before both Hargrave J and the Tribunal for having used the words 'invitation to treat', when asked what was said during the critical conversation on 9 November 2005, was wholly unconvincing, and should be rejected. Mr Piva's answers to questions on this topic before the Tribunal were hesitant and evasive. At one point he indicated that he could not recall why he had changed his evidence in the Supreme Court. Later, he referred to the fact that he had been studying contract law texts around the time of the hearing. Even if that is true, it does not explain why he would use terms from those texts when he was asked to recount what was said in a conversation. There is no reason why he should have been confused when asked to recount the terms of a specific conversation.
- (vi) Mr Piva's evidence that he did not discuss his repeated use of the words 'invitation to treat' with his counsel overnight on 22 August 2006 should be rejected. So, too, should his subsequent evidence that he did not recall any conversations that led to him changing this evidence. Mr Piva's evidence is inconsistent with his Senior Counsel's request to ask Mr Piva a further question on the morning of 23 August 2006, because that request shows that Mr Piva must have had a discussion of some kind to the effect that he wanted to change his evidence;
- (vii) the Tribunal should infer that Mr Piva changed his evidence because he was told, or alternatively because he himself realized, that his evidence as to the use of the words 'invitation to treat' was inherently implausible. That inference is strengthened by Mr Piva's failure to call either Mr Wilson QC or Mr Simpson to support his assertion that he did not change his evidence because of anything that was said to him;
- (viii) the Tribunal should further find that Mr Piva's evidence on 22 August 2006 was deliberately false, and was given with a view to him improving his prospects of successfully arguing that no contract had been formed on 9 November 2005. While Mr Piva denied both before Hargrave J and before the Tribunal that this was what he had done, in his witness statement to the Tribunal he admitted that 'When I was giving my initial evidence, what I was trying to do was nothing more than present my case'. As Mr Piva explains it, that evidence was retracted not because it was false, but because 'I reflected on my evidence and realized that I did not present my case in the best light'. That answer reflects lack of contrition on his part.
On the basis of the above, the Applicant contends that the Tribunal should find for itself that Mr Piva gave false evidence to the Court. It is contended that the giving of false evidence involves serious misconduct, even if the evidence is subsequently retracted.
The false evidence which it is said Mr Piva knowingly gave to the Supreme Court consists of his assertion that during a telephone conversation with Mr Coffey on 9 November 2009 he told Mr Coffey that he was interested in putting 'an invitation to treat' to buy the 333 SP. Mr Piva used this expression on four occasions, as set out below:
1. Transcript p 267 lines 8-14

[40]

In the matter before us we are not persuaded - having regard to matters set out at paragraph 64 above - that Mr Piva embarked on a deliberate strategy to mislead the court.
In Young a barrister was removed from the roll on the ground that she knowingly gave false evidence before an Inquiry into electoral fraud by the Criminal Justice Commission. The barrister had given sworn evidence to the Inquiry 30 November and 6 December 2000. The falsity of her evidence was uncovered after she was shown a document during the course of her evidence on 6 December by counsel assisting the Inquiry. The barrister voluntarily returned to the Inquiry to give further evidence on 12 January 2001. On that occasion she said she had previously made false assertions from which she wished to resile. The fact that Ms Young had deliberately misled the Inquiry is apparent from her signed statement of 19 December 2000 in which she says that the evidence she gave at the Inquiry was 'tailored by me to an extent which included false assertions'. Ms Young said that she adopted this course because of (among other things) a 'fear of being implicated in electoral fraud.' However, in the proceedings before us there is no admission by Mr Piva that he sought to deliberately mislead the Court.
We have also had regard to Justice Hargrave's observations and his characterisation of the 'invitation to treat' evidence as 'the false evidence of Mr Piva'. But it is important to note that his Honour's observations were made in the context of assessing Mr Piva's credibility in order to determine a separate question - namely whether he had deliberately failed to discover the email of 23 November 2005. This is made plain from paragraph 39 of his Honour's judgment.
On balance we are not persuaded that Mr Piva is guilty of misconduct at common law in knowingly giving false evidence in breach of his oath and his duty not to mislead the court. In reaching this conclusion we have had particular regard to the matters set out at paragraph 64 above. We are also conscious of the fact that the Applicant bears the onus of proving the charge and that 'clear and cogent' evidence is required before such a serious allegation can be established to the reasonable satisfaction of the Tribunal. We are not so satisfied in this case.
We find Mr Piva not guilty of charge 2.

[49]

The factual matrix which forms the basis of charge 3 is as follows:
- (i) By emails dated 6 December 2005, Mr Coffey asked 'As discussed are we on track for settlement with Pratt tomorrow?' and Mr Piva replied 'Mark, just spoke to Michael and he said he is nearly there, I will monitor it'.
- (ii) By email dated 20 December 2005, Mr Piva wrote to Mr Coffey stating 'I just got the news from Michael Pratt that he is not too far off completing the payment of the $580,000 ... the balance of funds will be paid in accordance with my email to you on the 22nd November 2005, namely the 9th May 2006'.
- (iii) Both of the above communications were false.
- (iv) Mr Coffey was aware that Mr Piva is a solicitor. Indeed, in the past Mr Piva had acted for him.
These facts are not in dispute and are consistent with, and supported by, the finding made by Hargrave J. Further, in his evidence before the Tribunal Mr Piva acknowledged that he had made a deliberate decision to lie to Mr Coffey because he was 'trying to commercially keep the thing alive to see if I could buy the car because I really - it was a very rare car, I don't know if I'd ever have the opportunity of ever entertaining a purchase of that nature'.[22]
The issue in dispute is whether the admitted facts give rise to a finding of misconduct at common law.
The Commissioner contends that Mr Piva was not honest and trustworthy in his professional dealings with Mr Coffey. Instead, he lied in order to ensure that the 333 SP was not sold for a period of weeks so that he could preserve his options while deciding what to do. He adopted this course without regard to the possibility that it might cause loss to Sportiva.
The Commissioner accepts that the above conduct did not occur in the course of practice, but contends that professional misconduct at common law is not limited to conduct that occurs in the course of practice. Conduct unrelated to practice which manifests the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice may constitute professional misconduct at common law. In this case, it is said that Mr Piva's dealing with Mr Coffey, a former client, occurred in the context of a commercial dealing and that his behaviour demonstrated the absence of honesty and integrity, both of which are critical elements of acceptable professional conduct.
Mr Piva contends that it is not every indiscretion by a practitioner, occurring otherwise than in connection with the practice of law, that will constitute misconduct at common law. In this context Mr Piva relies on the observation of Fullagar J in Ziems v The Prothonotary of the Supreme Court of NSW[23] that professional misconduct (i.e. misconduct occurring in connection with the practice of law) is likely to have a more direct bearing on a person's fitness to practice than personal misconduct. Further as Kitto J observed in that case:

Legal Services Commissioner v Piva

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Cases Cited (13)

Legal Services Commissioner v Piva (Legal Practice) [2009] VCAT 1200 (22 July 2009)