Evidence given by Mr Peter Scanlan
200 Mr Scanlan had been a partner of Cleary & Hoare since 1987. He had completed his two year Articles in 1983 and 1984 and joined Cleary & Hoare in 1985.
201 Mr Scanlan was unable to recall the precise number of transactions in relation to which Cleary & Hoare had received instructions from EMM. Between 1985 and 1990 to his recollection, there were approximately 20 to 30 such transactions and he was involved as a solicitor or partner in all of those transactions. He had many dealings with Mr Reuben Lew and with Mr Richard Lew in the course of those transactions. On his evidence, had more dealings with Mr Richard Lew than with Mr Reuben Lew. [T8-9]
202 Mr Scanlan accepted that he understood the nature of the obligations owed by a solicitor to his client, especially a client who was a lender and a trustee. He accepted that he understood the nature of fiduciary obligations owed by a solicitor to his client and knew that those obligations involved duties of good faith and honesty and of full disclosure and a duty not to prefer the interest of one client over the interest of another client. He was aware of all those matters in June 1990 [T 9]
203 In about June 1990, Mr Scanlan learned of the difficulties involving EMM and became aware that Messrs Richard and Reuben Lew were being investigated for possible criminal offences. These events were discussed by Mr Scanlan with his partners at the time. The discussions were principally with Mr Cleary as he was then the managing partner. [T 11]
204 It is highly likely that Mr Scanlan read an article which appeared in the Australian Financial Review on 8 June 1990 which made plain that the managers of Estate Mortgage Trusts were being investigated for possible criminal offences. It is likely that he noticed from that article the reference to Weltsbarrd and Yossarian Nominees which he likely immediately recalled were companies which had been involved in the transactions undertaken on behalf of BPTC involving PMA companies in 1985 and 1986.
205 The PMA transactions were at the time, the largest transactions which Mr Scanlan had been involved in and to his recollection particularly memorable transactions. [T 11]
206 On 19 June 1990, Mr Scanlan was examined at an NCSC hearing and prior to this examination had spoken with Mr Geoffrey Chettle of counsel who was investigating the affairs of Estate Mortgage Managers Ltd and who explained that the focus of NCSC attention at the time was the Nordemesne transactions and the PMA transactions. [T 12]
207 Prior to attending to be examined, Mr Scanlan, following service upon him of a subpoena, informed Mr Lacey that the consequence of service of the subpoena was that he would be required to have access to and possibly to produce the Nordemesne documents and the PMA documents and this was because he understood that the Nordemesne and PMA transactions were to be the subject of enquiry in the examination which he had been summonsed to attend. It was only the Nordemesne and PMA transactions which he understood had been singled out to him for examination.
208 During the course of the NCSC examination, Mr Scanlan was represented by Mr Nolan, solicitor of Gilshenan & Luton and by Mr Morris of counsel. Prior to the examination, Mr Scanlan went to the trouble of ensuring that Burns Philp was prepared to waive privilege in relation to the production of the PMA documents and this was because Mr Scanlan knew that they would be necessary or required for production in connection with the examination. [T 19]
209 Mr Scanlan accepted under cross-examination, that one of the circumstances which was brought to his attention during the NCSC examination was that the PMA 1 and 2 transactions by which Mr Lew had an interest through Weltsbarrd and Yossarian in the trust funds advanced by Burns Philp, represented an exception to the norm in relation to transactions which took place. [T19] This was something which was brought home to him during the examination by reason of the questions put to him, as was the fact that he did not know of any other transaction involving Mr Lew or any of the Lew companies and funds advanced by the trust or the trustee. [T 19]
210 Another circumstance which Mr Scanlan accepted had been brought to his attention during the NCSC examination on several occasions was that he, as the solicitor for Burns Philp Trustee Company, had a fiduciary relationship to it involving duties of good faith and honesty and full disclosure. He also accepted that it was pointed out to him during the examination that even if there were a reference in some documents to Weltsbarrd or Yossarian, this would not tell the trustee that the Lews were involved in the transaction. [T 20]
211 Mr Scanlan recalled that an issue which had been explained to him during the examination was as to whether, pursuant to his fiduciary duty, it was incumbent upon him to alert the trustee to what was happening. He recalled an issue made plain to him during the examination as to whether it was part of his duty to alert the trustee that Mr Reuben Lew or the Lew family had an interest in the transaction. [T 20]
212 It was also brought to his attention during the examination that the examiner did not understand how Mr Scanlan could assume, as he informed the examiner he did, that the trustee knew about the Lew family being involved in those loans. [T 20] That matter was put to Mr Scanlan forcefully. [T 20]
213 In the course of the examination it was brought to Mr Scanlan's attention, as he accepted, that by the time he came to deal with the PMA 2 transaction he was aware that the Lew family had an interest in both PMA 1 and PMA 2. This is what he stated during the examination.
214 One of the accusations levelled at him by Mr Chettle during the NCSC examination was that he did not raise with the trustee, the interests which the Lew family had had in PMA 1 and PMA 2.
215 Mr Scanlan's evidence was that he said during the NCSC examination, that he presumed that the trustee knew of the involvement of Weltsbarrd and Yossarian in the transactions and that it had taken him by complete surprise when Mr Chettle mentioned at that time, an issue as to whether the trustee had known of this involvement.
216 The point made to Mr Scanlan at the NCSC examination was that despite his assertion that he presumed that the trustee had been aware, he was not able to assist the examiner at that time as to how the trustee had known. Mr Scanlan accepted that during the NCSC examination he kept saying to Mr Chettle that Cleary & Hoare had received instructions from the manager and that he, Mr Scanlan, had presumed that the trustee knew what the manager was doing. [T 21]
217 Mr Scanlan recalled that at one stage during the examination on 19 June, Mr Morris had objected on his behalf to certain questions put to him. Mr Scanlan accepted that in making those objections, Mr Morris was seeking to protect Mr Scanlan from the adverse consequences to the line of questions. Mr Scanlan presumed that the transcript of his evidence could have been used against him in civil proceedings. [T 23]
218 Mr Scanlan knew at the time that it was important to avoid evidence which might have implications for any civil liability. [T 23]
219 It was made clear to Mr Scanlan during the examination that his personal involvement in the PMA transactions was the subject of enquiry, as was the Lew's involvement in those transactions. The examiner made clear that the Commission was investigating whether Mr Scanlan may have been involved in wrongful conduct in the PMA transactions. [T 23]
220 Mr Scanlan understood that the wrongful conduct being investigated related to the way in which it came about that the Lews had a 50 per cent financial interest in the PMA transactions and why he had taken no steps to inform Burns Philp at the time. [T24.5]
221 Mr Scanlan recalled that the essence of the conduct which was being investigated in relation to this part of the examination was that matter and that Mr Morris on his behalf, had objected on a number of occasions to questions relating to or referring to Mr Scanlan's fiduciary duty and duty of care. He accepted that the factual context in which those questions arose related to the failure on his part, whether it was justified or not, to notify Burns Philp of the involvement of the Lews in the transactions. [T 24] He accepted that those duties, if breached, might give rise to a civil liability, a matter which he knew at that time as it was obvious, this being the very reason why Mr Morris was keen to object to questions about those duties. [T 24]
222 Mr Scanlan accepted that what Mr Chettle put to him during the examination as the essential question was why he, Mr Scanlan, did not tell Burns Philp about the involvement of the Lew family in the PMA transactions. Mr Scanlan accepted that his answer during the examination on that issue was that he had presumed that the trustee knew all about the involvement of the Lew family in the PMA transactions. He accepted that if that answer was not good enough or were not correct, it was quite obvious that he may have breached his duty as a solicitor to the trustee. [T 24]
223 When Mr Scanlan left the witness box on 19 June, it was obvious to him that there was an unresolved issue as to whether he could satisfy the examiner that he had not breached his duty in not informing Burns Philp of the above matter.
224 At the end of the examination, Mr Chettle had stated that he was not suggesting that Mr Scanlan had sat down and conspired with the Lews and that there was no reason to suspect the commission of a criminal offence. [T 25]
225 Mr Chettle had stated:
'We have no reason to suspect that your client has committed criminal offences.' [T 25.55]
226 Mr Scanlan accepted that he knew, following the NCSC examination, that 'there was an unresolved question in the examiner's mind about whether there was a breach of duty, let alone a criminal offence'. [T 27.45]
227 Mr Scanlan accepted that he had been given an indication of the possibility of a claim for breach of duty in relation to the PMA transactions during the NCSC examination. [T 28.10] He accepted at transcript 28 that Mr Chettle put to him the possibility of a claim in relation to the PMA transactions, relating to the possibility that there had been a breach of his fiduciary duty in failing to notify the trustee of the involvement of the Lews. [T 28]
228 Whilst Mr Scanlan's primary preoccupation during the NCSC examination had been the possibility of a criminal offence, he accepted that the examination 'made clear that the possibility of a breach of duty was also in question'. [T 28]
229 On the afternoon following the examination, Mr Scanlan was served with a further notice to produce books by the NCSC which notice specifically directed attention to the files he held in relation to the advance by Burns Philp to PMA 1 and PMA 2 and any further advances relating to them. He informed his partners about the production of the files and in particular informed Mr Cleary of this matter. He also discussed with Mr Nolan the interrelationship between the files which were requested and the evidence which he had given that day.
230 Mr Scanlan accepted that he was keeping Mr Cleary closely informed about the sequence of events in relation to his examination because of all the other partners, he was the one most closely concerned with the subject matter of the investigation into the PMA transactions. [T 30]
231 Mr Scanlan recalled that a few days after his examination, Messrs Reuben and Richard Lew were arrested. He recalled that this caused concern amongst himself and his partners. [T 31]
232 On 22 June 1990, Cleary & Hoare had written to Minet International Professional Indemnity Limited enclosing a proposal form for 'top up' cover for the period 1 July 1990 to 30 June 1991. Cleary & Hoare requested a quotation in the amount of $5 million $7.5 million and $10 million. [DX Vol 6 p 15]
233 Mr Scanlan accepted that it was likely that he told Mr Cleary following his NCSC examination that there was a question as to whether he, Mr Scanlan, had breached his duty to the trustee, although he felt he could justify his actions. [T 33]
234 It was possible although he could not recall for certain, that he made plain to Mr Cleary that allegations of a breach of fiduciary duty would involve, if justified, a civil liability. [T 33]
235 Mr Scanlan was asked and answered as follows:
'Q. . . . the discussion which you said was likely between the partnership as to the need to increase the professional indemnity cover in the light of the unfolding events in relation to the Estate Mortgage Trust took place, did it not, because of the possibility of a civil claim arising from those events which may be greater than the then current level of cover . . .
A. I would say its more than likely that was a matter that was in the mind of certain partners and may have been addressed at a partners' meeting. I simply can't recall . . .' [T 34]
236 Following the examination on 19 June and the provision of documents by Mr Scanlan pursuant to a notice to produce, Mr Nolan retained on Mr Scanlan's behalf, Mr Callinan QC. Mr Nolan later reported to Mr Scanlan that Mr Chettle, in speaking to Mr Nolan, had said that he had looked at the documents produced and regarded the matter as very serious for Mr Scanlan. [T 36]
237 On about 10 July, Mr Chettle had spoken to Mr Callinan and said to Mr Callinan that both Mr Scanlan and Mr Cleary were under suspicion, the clear implication being that they were under suspicion for criminal offences. [T 30]
238 Mr Scanlan accepted that what was apparent to him as early as 9 or 10 July was that the NCSC having looked at the further documents produced, was not satisfied that there was a sufficient reason why he had not informed the trustee about the involvement of the Lew family in the PMA transactions. [ T 37] Hence the possibility of a claim which had arisen in the course of the 19 June NCSC examination had by that stage, on Mr Scanlan's evidence, become more likely.
239 Mr Scanlan was asked and answered as follows:
'Q. But you accept, do you not, that the possibility of civil liability against the firm arose from the very same facts and circumstances which formed the basis of the allegations which you thought unjustified of criminal misconduct . . .
A. Yes.'
[T 37]
240 Mr Scanlan recalled that Mr Cleary had been the person within the firm who was personally responsible for arranging the firm's insurance cover and Mr Scanlan understood that Mr Cleary was the only partner who took that under his personal wing. [T 38]
241 Mr Scanlan's examination by the NCSC had resumed on 27 July, on which occasion Mr Fryberg QC appeared on his behalf. Mr Scanlan recalled that at the commencement of the examination, Mr Fryberg expressed a number of concerns to the delegate of the NCSC who was presiding, including his concerns about possible professional liability of the firm Cleary & Hoare. The point which Mr Fryberg had explained of the concerns which he was expressing, was that the questions should, as far as possible, not go beyond the narrow confines of the subject matter of the investigations set out in the notice which Mr Scanlan had received.
242 The transcript of the NCSC examination in this regard includes, inter alia, the following:
'Mr Fryberg . . . The only other preliminary matter that I wish to raise is in relation to a number of press reports that have occurred since the hearing on the last occasion, in which a particular Melbourne lawyer has been quoted as foreshadowing action, civil action, against the trustee Burns Philp. Burns Philp, it would appear, are quite likely to make claims in turn against auditors and perhaps other professional people who may have been engaged by it. That naturally is a matter of some concern to my clients . . . One particular question or category of questions that is of concern in this regard, having regard to the transcript of the proceedings on the last occasion, are questions directed towards showing the duty owed by the solicitors to their client and the existence or otherwise of any breach of that contractual duty .
These are matters which, as we would see it, are unlikely on any view to fall within the matters of which notice was given this morning and which in fairness - perhaps not deliberately but which did seem to arise from time to time on a previous occasion and which I think perhaps were not intended to be pressed on the previous occasion. . . .'
[DX volume 5 page 310 and 311] [Emphasis added]
243 Mr Scanlan accepted that he understood that Mr Fryberg was there endeavouring to protect the firm Cleary & Hoare against any adverse inference which may arise from answers given in the examination which may result in the possibility of a claim of civil liability against the firm. [T 39]
244 The 27th July resumption of Mr Scanlan's NCSC examination was a Friday. On the following Monday, Mr Cleary sought quotations to increase the firm's cover to $20 million, $30 million and $40 million respectively. [T 39]
245 Mr Cleary was examined also on 27 July in the afternoon following Mr Scanlan's further examination that day.
246 Mr Scanlan was asked:
'Q. Did the two of you discuss, as far as was permissible, the substance of the allegations against either of you individually or against the firm?
A. I believe we sat down and discussed them, but our major relief was that we were told that this would be the end of the matter and that we would have to be witnesses for the Crown, and we were pleased about that.'
[T 39]
247 On 6 August 1990, Gilshenan & Luton wrote to Mr Chettle seeking particulars of the charges which had by then been laid against Messrs Cleary & Scanlan. The particulars sought appear at DX volume 5 page 113 and following.
248 The response to this request for further and better particulars was supplied by the Victorian Corporate Affairs Commission to Messrs Gilshenan & Luton under cover of letter of 14 August 1990. [DX volume 5 page 121] This response set out many pages of particulars and included particulars of the essence of the prosecution allegations against Mr Scanlan and against Mr Cleary in separate paragraphs. The paragraphs are extremely similar in their wording to one another although not identical. It is sufficient for present purposes to set out that which related to Mr Scanlan at DX volume 5 page 128. It read:
'The essence of the prosecution allegation against Mr Scanlan is that he aided and abetted, counselled and procured, the execution of an Equity Sharing Agreement and the transfer of one PMA share between Weltsbarrd Holdings Pty Limited and PMA Development Company No 1 Pty Limited, such agreement constituting a secret commission to Reuben Lew or Weltsbarrd Holdings Pty Limited. Positive steps were taken by Mr Scanlan to keep Burns Philp Trustee Company ignorant of such agreement. The documents were drawn in Queensland and sent to Victoria for execution. Weltsbarrd Holdings Pty Limited was a Victorian company and controlled by Mr Reuben Lew. At the same time Mr Lew was associated with Estate Mortgage Managers Limited which company managed the various Estate Mortgage Trusts on behalf of Burns Philp Trustee Company Limited. . . .'
249 Mr Scanlan accepted under cross examination that the underlying facts which were described in the particulars, dealing with the essence of the allegations, were the same underlying facts which, whether he had thought were justified or not, had been the subject of his evidence on 19 June. [T 45]
250 On 6 August 1990 an informal meeting of partners [those attending being Mr Cleary, Mr Hoare, Ms King, Mr Scanlan, Mr Hart, Mr Hewlett and Ms Harrington] of Cleary & Hoare was held. Mr Hoare prepared the minutes. [DX 5 p 111(a)].
251 The minutes cover a range of topics concerned with 'damage control' in relation to the charges and the effect of adverse publicity on the firm. The minutes include, inter alia:
'Co-ordination: JH will head up the co-ordinating effort and strategy and will act as a link between the rest of the partners and Don and Peter. The aim is to take as much individual pressure off Peter and Don as possible. John will attend as many meetings as possible with Peter and Don's solicitors and barristers.
Press Publicity Defamation: This is to be co-ordinated by Peter Hall providing all material to Kelli Stallard with a copy to John Hoare and Peter Scanlan. Kelli has instructions to institute proceedings in respect of the Sunday Mail article and any other articles she considers to be defamatory. . . .
Legal Costs: It was resolved that the firm meet Peter's and Don's legal costs in relation to the matter on the basis that the allegations be treated properly as allegations against the firm and therefore a firm expense. Peter and Don are agreeable that in the event of any monies being recovered through defamation or other proceedings, then those monies will belong to the firm. . . .
Law Claims: JH is to write a letter to Law Claims simply advising details of the charges.'
[Emphasis added]
252 On 7 August 1990, Cleary & Hoare wrote to the Manager, Law Claims, Queensland Law Society Incorporated in the following terms:
'Re Donald James Cleary, Peter James Scanlan - Charges laid 1st August 1990
Please find enclosed detail of the charges laid against two partners of our firm on the 1st August 1990. The matters received widespread press publicity. To date, no details of any factual situations supporting those charges have been supplied. No allegations of negligence have been raised against the firm in relation to this matter. We are simply advising you as a matter of courtesy and will keep you informed should there be any further developments whereby negligence is alleged or implied.'
[DX volume 6 page 48]
253 Mr Scanlan accepted that the description of the events forming the basis of the charges which were enclosed with this letter to Law Claims was 'a description of the same underlying facts which were the subject of [his] examination on 19 June'. [T 45.55] Those were matters which he had said gave rise to a question of a possible breach of duty by him in that examination and a possible civil liability against the firm. He accepted that those facts, namely the facts set out in the details of the charges against him, are substantially the same facts as later became the subject of the civil proceedings which were commenced against the firm - it was the same underlying complaint. The complaint was that Cleary and Hoare had not informed the trustee about the investment of the Lews in the PMA transactions. It was clear, he accepted, that the facts which were the subject of his examination on 19 June, gave rise to the charges which were served on 1 August and that the surrounding circumstances in due course gave rise to the subsequent civil proceedings against the firm. In essence, he accepted that 'the essential underlying facts were the same whether they were the subject of [his] 19 June examination or the charges served on 1 August or the first writ which was served'. [T 46]
254 Mr Scanlan accepted that between 14 and 28 November 1985, he was involved in the PMA 1 transaction. He accepted that during that period he acted, subject to Mr Cleary's supervision, as the solicitor for BPTC. [T 46]
255 Mr Scanlan accepted that it was necessary for him in that role to address certain correspondence directly to the trustee company and that in directing correspondence directly to the trustee company he was obliged to fulfil his fiduciary duty to that company including his duties of honesty and full disclosure. He recalled that the instructions which had been given to his firm also required him, in relation to the PMA 1 transaction, to keep the trustee fully informed on all matters incidental to the transaction being an express instruction, additional to any fiduciary duty which he had. [T 47]
256 Mr Scanlan accepted that the transaction, namely the PMA 1 transaction, involved two elements, namely a Loan Agreement and an Equity Sharing Agreement. Taken as a whole, those two elements and the documents in relation to those elements, constituted the PMA 1 transaction documents. He drafted certain collateral securities in support of the Equity Sharing Agreement and made at least one alteration to the recitals on the Equity Sharing Agreement. [T 47-48]
257 Mr Scanlan accepted that he would have reviewed the Equity Sharing Agreement and that he noticed that the parties to it were PMA companies on the one hand and Weltsbarrd on the other hand. He accepted that he did not act for the PMA companies but he had acted for the Weltsbarrd company. He accepted that he knew that the persons who stood behind the PMA companies were different from the persons who stood behind Weltsbarrd although his evidence was that he had not known who was behind Weltsbarrd. [T48]
258 Mr Scanlan had known that Mr Remo and Mr Bentley were the individuals who stood behind the PMA group of companies.
259 Mr Scanlan was taken to recital 'H' of the Equity Sharing Agreement. His recollection was vague as to precisely what he had and had not seen. It was necessary for him to draft documents which were related to the Equity Sharing Agreement and he accepted that he had to have some minimum understanding of the operation of that agreement in order to draft those documents. To the extent that his evidence was that he just drafted precedents and did not have a basic understanding of the way in which the Equity Sharing Agreement operated, that evidence is rejected. It should be recalled that he was asked and answered as follows at page 51:
'Q. You could not fulfil, safely, your obligations in relation to the further documentation which you were required to draft for the further advance which occurred on 28 November, without having an understanding of the necessary operative terms of the Equity Sharing Agreement could you?
A. It would be difficult.'
[T 51]
260 At transcript 51, Mr Scanlan accepted that in the PMA 1 transaction taken as a whole, he had acted for the trustee company and for Weltsbarrd. Between 14 and 28 November he had known that the persons who stood behind the PMA companies, Mr Remo and Mr Bentley, were different from the person or persons who stood behind Weltsbarrd. He knew that his instructions from Weltsbarrd came from Estate Mortgage Managers. He was aware of no one who stood behind Weltsbarrd other than those who gave him instructions in relation to it. There was no one he could point to in the period when he was acting in the PMA 1 transaction, from whom he got instructions in relation to Weltsbarrd, other than Messrs Reuben or Richard Lew. [T 51]
261 As to the letter of 27 November 1985, from Cleary & Hoare to BPTC in its original form, Mr Scanlan accepted [at transcript 52] that the letter had his initials located after the initials DJC within the reference and that it was more than likely that he had something to do with the drafting of the letter. He must have had some involvement in the drafting of the letter as his initials were on the letter. His evidence was that the Court could reliably proceed on the basis that the letter was either written by him or part of it was written by him. He accepted that when he wrote the letter or wrote part of it, he did so 'knowing that the letter was intended to be relied on by the trustee'. [T 52.55]
262 At transcript 53, he accepted that the way in which the practice operated was that he would have seen the letter before it was signed. He was asked and answered as follows:
'Q. And the letter was written in so far as it was written by you deliberately, intentionally, not inadvertently?
A. The letter would have been written to, to, it would have been deliberately written to achieve the end result of a settlement.
Q. And the end result which the letter was written to achieve was that it be relied upon by the trustee before advancing moneys to the borrower?
A. Yes.
Q. And the letter which you either wrote or cooperated in writing, referred to certain facts and documents, a series of them, which you thought at that time it was appropriate to inform the trustee about?
A. Yes.
Q. And you thought it appropriate to refer to those facts and documents in the sense that you thought all of that information was relevant information which you were required to provide to the trustee in the fulfilment of your duty?
A. Yes.
Q. The letter was intended to be furnished to the trustee in the fulfilment of that very duty wasn't it?
A. Yes.
Q. In fulfilment of your fiduciary duty to act with honesty and full disclosure towards the trustee?
A. Yes.
Q. And in fulfilment of your expressed contractual requirement to keep the trustee fully informed on all the matters incidental to the transaction?
A. That's correct.'
[T 53]
263 Mr Scanlan was closely cross-examined in relation to the message of a telephone call from Mr Lew seeking to speak to him at 8.32 am on 28 November and to the following events including his telephone discussion with Mr Lew and the redrafted letter sent out by facsimile at 9.20am on the same morning.
264 In being shown his handwritten note of the telephone conversation with Mr Lew, his evidence was that he could recall Mr Lew 'requesting that the material be separated'. [T 54]
265 He was asked and answered as follows:
'Q. Well, whether you recall it or not, it is reasonable to conclude, is it not, that one thing he did say to you was that there was to be no reference to the Equity Sharing Agreement in Burns Philp Trustee Company correspondence?
A. That's what, yes, it says. "No reference to Equity Share in BP correspondence".'
[T 54]
266 As far as Mr Scanlan could recall, it was more than likely that the conversation was with Mr Reuben Lew.
267 He believed that after his conversation with Mr Reuben Lew, he would have spoken with Mr Cleary and probably would have said: "Mr Lew rang up, and this is what he said" [T 55], no doubt repeating what Mr Lew had in fact said or the substance of what he had said.
268 Mr Scanlan accepted that following the conversation with Mr Lew and his further conversation with Mr Cleary, it is likely that he wrote the letter of 28 November 1985, sent under cover of the facsimile sheet at 9.20am on that day. [T 56]
269 He accepted that he recorded on a copy of the 27 November 1985 letter on his file, the words 'further certificate done on 28 November' and that this followed the conversation with Mr Lew and that Mr Lew had, in effect said to him 'change the letter'. [T 56]
270 He was asked:
'Q. Mr Lew said to you, in effect, "change the letter" didn't he?
A. Yes he did.
Q. And you had sent the first letter to him?
A. Yes that is normally the procedure.
Q. So it was obvious that the letter was not going to be sent to the trustee company until you changed it?
A. That's possible, yes .
[T 56]
271 Mr Scanlan believed that Mr Lew had phoned wanting the correspondence to be changed and Mr Scanlan's evidence was that he did not think that there was anything wrong with this. [T 57]
272 Mr Scanlan also accepted that the letter of 28 November was written intentionally and deliberately and that there was nothing accidental about the content of the letter and that it was a considered letter which he intended the trustee to rely upon. He was asked and answered as follows:
'Q. You deleted, in this letter, reference to the encumbrance over the land in favour of Weltsbarrd, didn't you?
A. Yes, because that is what Mr Lew asked me to do .
Q. And you deleted reference to the Equity Sharing Agreement, didn't you?
A. Yes .
Q. And by doing so, in your capacity as a solicitor acting for the trustee company, you chose not to tell the trustee of certain facts and documents which the previous day you had considered appropriate to inform it about?
A. That's correct, because Mr Lew had given us instructions and I relied on the client's instructions.
Q. So you knew what you were doing?
A. Yes .'
[T 57]
273 At transcript 58, Mr Scanlan was asked:
'Q. . . . The letter of 28 November concealed certain information which was in the letter of 27 November, didn't it?
A. Yes.
Q. And that was your choice, wasn't it?
A. What do you mean my "choice"?
Q. You chose to do that?
A. Me, personally. I don't know if Mr Cleary did it or I did it . . .
Q. Mr Scanlan what you did was choose to follow the instructions of Mr Lew, rather than perform your duty to the trustee in the way which you had originally proposed to do so, didn't you? . . .
A. Yes, I followed Mr Lew's instructions.