Sandbach v Victorian Legal Services Commissioner [2024] VSCA 143

(a) available material by which the allegation could be supported provides a proper basis for it; and

(b) the client wishes the allegation to be made, after having been advised of the seriousness of the allegation and of the possible consequences for the client and the case if it is not made out.

Sandbach v Victorian Legal Services Commissioner [2024] VSCA 143 | Case summary | Zoe

[7]

The charge concerns the applicant's conduct in a proceeding in the Costs Court of this Court between Mathieson Nominees Pty Ltd ('Mathieson Nominees') and Mr Ian Mathieson, and AJH Lawyers Pty Ltd ('AJH') being proceeding no SCI 2015 05894 (the 'Costs Proceeding').
The background to the Costs Proceeding requires some explanation. In early 2012, Mathieson Nominees approached AJH and asked it to act for the liquidators of Sprint Homes Pty Ltd (in liq) ('Sprint Homes') in relation to the liquidators' public examination of various individuals in relation to the affairs of Sprint Homes. AJH agreed to do so and entered into a costs agreement with the liquidators and Mathieson Nominees. Mathieson Nominees was funding the public examinations.
In February and March 2012, AJH rendered bills totalling $35,709.10 (the 'AJH bills') to Mathieson Nominees for work performed by it in relation to the public examinations. Mathieson Nominees paid the bills in full. Mr Sergey Sizenko (the 'Complainant') is a legal practitioner whose firm (Victorian Legal Cost Assessors) was instructed by Mathieson Nominees and one of its directors, Ian Mathieson (collectively, the 'Mathieson parties') to seek a review of the costs claimed in the AJH bills. As a result, in May 2012, the Complainant issued a summons for taxation against AJH on behalf of the Mathieson parties.
On 17 February 2014, Gourlay JR determined to reduce the AJH bills by $1,000 and ordered AJH to repay that sum to the Mathieson parties. Gourlay JR also ordered AJH pay the Mathieson parties 50 per cent of the costs of the summons for taxation, save for their costs of the referral of the matter to the Trial Division and their costs of 17 February 2014.
AJH undertook a series of reviews and appeals (including seeking special leave from the High Court to appeal the decision of the Court of Appeal) from the costs order made by Gourlay JR. All of these were unsuccessful and resulted in further costs orders in favour of the Mathieson parties against AJH.
On 17 November 2015, the Mathieson parties filed a summons for taxation (the 'Summons') supported by a bill of costs claiming the sum of $421,109.43 (the 'taxable bill of costs') i.e. the Costs Proceeding. That was made up of disbursements of $95,828.05 and solicitors fees of $325,281.38. We note that the Complainant had prepared the taxable bill of costs and he continued to act for the Mathieson parties in the Costs Proceeding. Shortly after the filing of the Summons, AJH raised questions as to whether the indemnity principle prevented recovery of the full amount of the taxable bill of costs by the Mathieson parties. In summary, the indemnity principle only allows for the recovery of costs which the relevant party is liable to pay its solicitors but does not require those costs to have been paid. In short, AJH submitted that the Mathieson parties had no liability to pay the Complainant the costs which were the subject of the Summons.
The Complainant issued a tax invoice for professional fees of $320,000 plus GST of $32,000 (i.e. the 15 February invoice). It was issued by Victorian Legal Cost Assessors to Mathieson Nominees and relevantly provides:

[63]

As a result, the judge concluded that the most sensible conclusion as to why the Complainant issued the 15 February invoice was to provide additional evidence to Gourlay JR in addition to the existing costs agreement. Further, the judge found it was reasonable that the Complainant had not created the invoice at an earlier stage as it was natural that additional fees would accrue due to the ongoing nature of the relevant proceeding.[31]
Second, the judge did not accept the applicant's submission that there had been a delay of two years between when the invoice could have been created and when it was created (which provided a basis for alleging fraud). This is because the 15 February invoice was created only three months after the taxable bill of costs. As noted above, the 15 February invoice recorded on two occasions that it was prepared 'as per bill of costs dated 16 November 2015' but included all work up to 9 February 2016. The judge concluded that, even if the delay were two years, that was not a proper basis for alleging fraud.[32]
Further, the judge concluded that, even if the timing of the 15 February invoice was 'convenient' to the Complainant and the Mathieson parties, that was not sufficient in all of the relevant circumstances to suggest the invoice was fraudulent. The judge referred to the fact that this conclusion was consistent with the views expressed by Gourlay JR at the 30 June mention, who did not accept the applicant's allegation of fraud in relation to the 15 February invoice, stating 'I don't believe that it is a fraud'. The judge also noted that, despite Gourlay JR's comments, the applicant continued to repeat the fraud allegation.[33]
Third, the judge considered it to be of 'significance in determining that [the applicant's] belief in the allegation was not reasonable' that the applicant stated at the 30 June mention that an affidavit confirming the Mathieson parties' liability to pay the Complainant's legal costs would be satisfactory to discharge his allegation. Alan Mathieson had deposed to this effect in: (a) the 15 July Mathieson affidavit which was provided to the applicant prior to him repeating the fraud allegation at the 20 July mention; and (b) the 27 July Mathieson affidavit, both of which were provided to the applicant prior to him repeating the fraud allegation at the CPA hearing. The judge concluded that this demonstrated recklessness by the applicant in continuing to repeat the fraud allegations.[34]
Fourth, the judge did not accept the applicant's submission that the 'rounded' amount in the 15 February invoice ($320,000) was 'evidence that it is fraudulent, or that the figures bear no connection to those on the taxable bill [of costs]'.[35] This is in light of the Complainant's explanation to the effect that the 15 February invoice represented the total figure for solicitors' costs in the taxable bill of costs excluding disbursements ($325,281.38) rounded down to the nearest $10,000 ($320,000) plus GST.[36]
Fifth, the judge did not accept the applicant's contention that the 15 February invoice was not and did not purport to be calculated by reference to the Supreme Court scale of costs. This was for a number of reasons including that the 15 February invoice referred to the taxable bill of costs and that the costs agreement between the Complainant and the Mathieson parties made specific reference to the Supreme Court scale as being applicable to that agreement. The judge accepted that the 15 February invoice was based upon the Supreme Court scale despite it lacking express reference to that scale.[37]
Sixth, the judge did not accept that two other matters raised by the applicant supported a proper basis for making a fraud allegation in respect of the 15 February invoice: namely, that the 15 February invoice included reference to 'freight and shipping', and that it was not signed by the Complainant. As to the first matter, the judge concluded that these items were included because the 15 February invoice had been created using the MYOB software which contains pre-existing invoice templates for freight and shipping but that the invoice did not have any figures recorded against these items.[38] As to the fact that the 15 February invoice was not signed, the judge concluded, in substance, that this was not a matter which any reasonable practitioner would take to demonstrate that an invoice was false or fraudulent.[39]
Relatedly, the judge also found that the applicant's submissions as to what a solicitor would 'usually' do in respect of an invoice were 'similarly unhelpful' in concluding that the 15 February invoice was fraudulent - even if the invoice was unusual, 'that does not make it fraudulent'.[40]
Seventh, the judge referred to the cross-examination of the Complainant before the Tribunal. The judge concluded that the Complainant was a reliable witness and that the applicant in his cross-examination 'regularly attempted to lead the witness down unnecessary and even inappropriate paths'.[41] The judge noted that the applicant also suggested in cross-examination that the Complainant allowed Alan Mathieson to file his affidavits knowing they were false.[42] The judge concluded that the applicant's submissions at the VCAT hearing and his cross-examination of the Complainant did not persuade her that the 15 February invoice was in fact fraudulent nor that the applicant 'could have had a reasonable belief in this allegation at the time it was made'.[43]
As a result, the judge concluded:
1. The various pieces of evidence in this matter available at the time the allegations were made - including the [15 February invoice], the taxable bill [of costs], the affidavits of Alan Mathieson, the [applicant's] awareness of the costs agreement and continual representation of Mathieson [Nominees] by the Complainant, and the initial comments of Gourlay JR made prior to the repetition of the allegations - all lead to the conclusion on an objectively reasonable construction that the [15 February invoice] was not fraudulent. There was no proper basis for the [applicant] to hold any contrary belief.
Having found Question A(i) (i.e. r 65(a)) was not satisfied, the judge's consideration of Question A(ii) (i.e. r 65(b)) was strictly unnecessary. Nevertheless, the judge went on to find there was not enough evidence upon which the applicant could reasonably conclude his client wished for the fraud allegations to be made after being advised of the seriousness of that allegation and of the possible consequences for the client if it was not made out (consistent with r 65(b)).[44] This finding was the subject of proposed ground 6. We will address the judge's reasons in relation to Question A(ii) in the context of proposed ground 6 below.
Further, the judge went on to consider whether r 66 of the Uniform Conduct Rules could protect the applicant from a breach of r 65.[45] Rule 66 provides that:

[71]

In the course of oral argument, counsel for the applicant focused his challenge to three main issues.
First, the applicant submitted that the judge's analysis in the Liability Reasons was directed at the wrong questions. The applicant submitted that the judge focused on whether the 15 February invoice was a fraudulent or a false document and/or whether the applicant had a reasonable belief that the 15 February invoice was a fraudulent or a false document. Rather, the applicant submitted that r 65 required the judge to consider whether the applicant believed on reasonable grounds that the available material by which the allegation could be supported provided a proper basis for that allegation. The applicant referred in particular to paragraph [116] of the Liability Reasons.
Second, the applicant submitted that in considering the wrong question, the judge had looked at each of the features of the 15 February invoice relied upon by the applicant individually rather than in combination. The applicant asserted this was evident from the judge's reasoning from [92]-[118] of the Liability Reasons, and in particular, her conclusion at [116].
Third, the applicant contended that on the evidence before the judge the only conclusion open was that there was a reasonable basis for alleging that the 15 February invoice was a fraud or a sham. In doing so, the applicant relied upon the decision of the High Court in Raftland Pty Ltd v Federal Commissioner of Taxation ('Raftland')[52] to support the contention that a finding of a sham or false document has two requirements: first, that a document is wrong or inaccurate and second, that the document is put forward by the author knowing of the wrongness or inaccuracy. In oral argument, counsel initially submitted that the relevant inaccuracy was that the 15 February invoice represented that it was payable within 10 days, relying upon the words 'Terms: Net 10' in the 15 February invoice. Later, counsel sought to rely upon several alleged inaccuracies as giving rise to falsity and sham.
While the applicant contended there was an overlap between these main challenges and proposed grounds 2 to 10, we will address:

[74]

We have set out above at [85] the basis upon which the applicant submitted that the judge's analysis was wrong, namely by considering whether the 15 February invoice was a fraudulent or a false document (proposed ground 2) and/or whether the applicant had a reasonable belief that the 15 February invoice was a fraudulent or a false document (proposed ground 3). The applicant submitted that, pursuant to r 65, the judge should have considered whether the applicant had a proper basis for the fraud allegations. The applicant noted that the judge concluded that she was not satisfied that the Complainant falsified the 15 February invoice in order to rebut the presumption of the indemnity principle at [93] of the Liability Reasons.
In relation to proposed ground 2, the applicant submitted that the judge misstated several of the applicant's submissions before VCAT as being directed to the ultimate question of the truth of the fraud allegations with respect to the 15 February invoice at [92], [57], [58] and [60] of the Liability Reasons. The applicant contended that this error was repeated throughout the Liability Reasons in the judge's consideration of the various factors relied upon by the applicant.[53]
In relation to proposed ground 3, the applicant contended that the judge asked a fundamentally inappropriate and irrelevant question, namely whether the applicant had 'a proper basis for a belief or a reasonable belief or a conclusion (reached by himself)' that the 15 February invoice was false or fraudulent.[54] Rather, the judge should have asked whether the applicant had a reasonable basis to allege that the 15 February invoice was a fraudulent or a false document. The applicant submitted it was not appropriate for an advocate to assume the function of a judge or to refrain from putting a case unless the advocate believes the arguments to ultimately be correct and that this was the effect of the judge's analysis.
At the hearing before this Court, the applicant's counsel focused on [116] of the Liability Reasons. We pause to note that this paragraph was also the subject of submissions under proposed ground 4, which we will address below. As noted above, this paragraph states_:_

[76]

Counsel submitted that this paragraph discloses error because the judge reached a conclusion that the 15 February invoice was not fraudulent, and therefore the applicant could not have had a reasonable basis for his belief. The applicant contended that this method of reasoning is 'inappropriate' because it puts the matter 'the wrong way around' and was an error of law in itself. The applicant submitted that to jump from a finding that the 15 February invoice 'was not fraudulent' to the conclusion that there 'was no proper basis for the [applicant] to hold any contrary belief' ignores the fact that different minds may have different views of facts. The applicant contended that this demonstrates an error of law due to the absence of reasoning from the 'wrong issue' to the ultimate conclusion.
VLSC addressed proposed ground 2 and 3 together. In summary, VLSC submitted that the judge properly analysed the question raised by the charge. In support of its position, VLSC relied upon the actual order made, the recording of the applicant's submissions at [55]-[56] of the Liability Reasons, the language in the Liability Reasons, including that the judge posed the correct question at [86], stated the correct position at [89]-[90] and [103], and in her finding at [111].
Further, VLSC contended that the applicant's case before the Tribunal was that the 15 February invoice was in fact fraudulent and hence his allegations had a proper basis. In oral argument, counsel for VLSC referred to certain paragraphs of the applicant's written submissions before VCAT and his cross-examination of the Complainant to demonstrate that the applicant was making this positive case. VLSC submitted that it sought to meet the applicant's case by raising matters in response to those raised by the applicant in order to establish that the 15 February invoice was not fraudulent and to prove that the factors identified by the applicant did not provide a proper basis for so alleging. VLSC submitted that, for these reasons, it was unsurprising that the judge analysed the parties' submissions in the terms that she did.
VLSC addressed the particular paragraphs of the Liability Reasons which the applicant submitted reveal an error. As to [93] (which says, in substance, that the judge was not satisfied that the Complainant falsified the 15 February invoice to rebut the presumption of the indemnity principle) VLSC submitted that paragraph was a conclusion on the applicant's submission and not the ultimate question that the Tribunal answered. So too, VLSC submitted, were several other paragraphs that each analyse and make findings with respect to the applicant's submissions,[56] with the conclusion on this point appearing at [111]. As to the ultimate question, VLSC submitted that [116] contains a finding that, on the basis of the facts at the time the applicant made the fraud allegations, there was no proper basis for the applicant to believe that the 15 February invoice was fraudulent.

[77]

We would grant leave to appeal in relation to proposed grounds 2 and 3 but dismiss the appeal in relation to them.
The Liability Reasons clearly disclose that the judge was aware of, and applied, the correct legal test. This is evident from Question A identified by the judge for determination by the Tribunal in respect of r 65.[57] Question A(i), which is set out at [62] above, relevantly states 'Did the [applicant] believe on reasonable grounds that: (i) the available material by which the allegation could be supported provided a basis for that allegation'. During the course of oral argument, counsel for the applicant agreed that the judge correctly stated the question at [86(a)(i)] and [103].
Thus, the judge posed the correct legal question in light of r 65. Further, her analysis is consistent with answering that question. This is evident from a number of other paragraphs of the Liability Reasons including [89] and [90] which refer to the need for the formation of a 'reasonable belief' that the allegation can justifiably be made and that there existed an 'objectively reasonable' basis to conclude the 15 February invoice was fraudulent (referred to in [63] above).
As to [116], we do not accept the submission of the applicant that, in the context of the Liability Reasons as whole, this paragraph evidences that the judge posed and answered the wrong question. Rather, the judge considered all the factors relied upon by the applicant to assert that the 15 February invoice was false or there was a proper basis for him to allege that it was false. We can see no error in the judge's reasoning in this regard.
It is true that on occasions the judge considered whether the 15 February invoice was fraudulent or false. This appears to be because, while the ultimate issue for VCAT was whether the applicant believed on reasonable grounds that the material available provided a proper basis for the fraud allegations, it was implicit and/or inherent in the submissions of the applicant (who appeared for himself before VCAT) that the 15 February invoice was a fraudulent and false document and that he believed it to be so. This is evident in the section of the applicant's written opening before VCAT which, as noted above, addressed the principal factual issues in dispute under the heading 'Falsity of the Complainant's Tax Invoice'. We have already set out the substance of paragraph [27] of the applicant's written VCAT opening at [41] above. The applicant also submitted that the language and title of the 15 February invoice 'superficially indicates that it is a regular and valid invoice comprising a genuine request for payment'. Further, he also submitted:

[81]

Rule 65 refers to the barrister's belief on reasonable grounds that the available material by which the allegation of fraud could be supported provides a proper basis for the allegation, rather than a reasonable belief that there has been fraud. Nevertheless, the applicant chose to mount his defence by contending that he believed the 15 February invoice was a fraud and that he had a reasonable basis for that belief. The factors relied on by the applicant to support the reasonableness of his belief that the invoice was fraudulent were the same matters that were said to provide a proper basis for the allegation. It is both unsurprising, and not indicative of any legal error, that the Tribunal considered whether or not the applicant had a reasonable basis for this belief. The Tribunal resolved that question adversely to the applicant. In doing so, the Tribunal responded to the arguments the applicant sought to make.
Such findings were not inappropriate in light of the submissions in fact made by the applicant. Further, such findings do not mean that the judge was not at all times cognisant of the true question to be answered (being what she referred to as Question A(i)) and in considering the applicant's submissions in answer to that question. We refer to [99]-[100] above.
As a result, we can see no error of law in the Liability Reasons in the question posed and answered by the judge in respect of r 65. Further, viewed in the context of the Liability Reasons as a whole, we can see no error in the reasoning of the judge at [116]. In our view, the applicant's analysis of [116] sought for this Court to construe the Liability Reasons in a manner which is inconsistent with the principles summarised in OUX, set out in [54] above. We shall deal with the applicant's assertion relating to [116] further when addressing proposed ground 4.
For completeness, we also note that in oral argument counsel for the applicant indicated that [116] raised an error of law on the basis that the judge's reasons were insufficient or inadequate. No such question of law was raised in the application for leave to appeal, nor in the applicant's written case. With respect, it was not made plain whether this assertion concerned proposed ground 2, 3 or 4. In any event, for the reasons given above and below in relation to proposed ground 4, we are not satisfied that the judge made such an error of law. The reasons reveal the judge's path of reasoning leading to her ultimate conclusion. Further, we refer to comments in the authorities to the effect that a question of law does not arise merely because there is an error in the logic of a tribunal's reasons.[59]
As a result, we would grant leave to appeal in relation to proposed grounds 2 and 3 but dismiss the appeal.

[83]

In summary, the applicant submitted that the judge did not consider the combined effect of each matter relied upon by the applicant to support his contention that the 15 February invoice was false (or that he had a proper basis for making such an allegation). The applicant asserted that assessing all the criticisms of the 15 February invoice together (or in different combinations) justifies greater suspicion as to the character of the invoice. As a result, such an analysis would increase the strength of the reasonable basis for the applicant to have made the fraud allegations.
As noted above, during oral argument the applicant addressed the judge's ultimate conclusion at [116]: he cavilled at the way it is expressed as a 'negative' and submitted that the reasoning is the 'the wrong way around'. Although it was not entirely clear, we understood the applicant to have asserted that the alleged inappropriate reasoning in paragraph [116] assumed additional significance because, as noted below, VLSC submitted that this paragraph demonstrates the judge considered the combined effect of all the pieces of evidence. On this basis, the applicant submitted that the error in the judge's reasoning is evident from her use of the negative formulation, which 'tends to disguise' the fact that the judge conducted a seriatim analysis of individual points. The applicant says that there is no express reasoning on the combinatorial analysis, and just because [116] uses the word 'all' (in reaching the conclusion that the 15 February invoice is not fraudulent) is to 'put it round the wrong way'. He submitted that this proposed ground 4 addresses an 'inappropriate method of reasoning, and that is an error of law in itself'.
VLSC characterised proposed ground 4 as the applicant impermissibly seeking a factual appeal: matters of weight are for the decision-maker and do not constitute questions of law. Further, VLSC contended that the judge's ultimate conclusion at [116] of the Liability Reasons was expressed with respect to 'all' the 'various pieces of evidence in this matter'. In oral argument, VLSC said [111] of the Liability Reasons - where the judge found the applicant's submissions and cross-examination of the Complainant did not persuade the Tribunal that the 15 February invoice was fraudulent or that the applicant could have a reasonable belief in the allegation - demonstrated the judge considered the combined effect of the submissions and evidence.

[84]

In our view, proposed ground 4 does not have a real prospect of success.
First, we are not satisfied that proposed ground 4 identifies a question of law. As noted above, counsel for the applicant referred to the judge having demonstrated an 'inappropriate' or 'wrong' process of reasoning. However, in our view, the applicant failed to establish, with reference to the authorities, how this criticism of the judge's reasoning raised a question of law. In our view, by proposed ground 4, the applicant is seeking to appeal against the manner in which the judge weighed and evaluated various pieces of evidence.
It follows that we are not satisfied that the applicant has established a vitiating error of law. For completeness, we note that we did not understand the applicant to have submitted that the judge's reasoning was illogical or irrational in the legal sense. As a result, proposed ground 4 does not have a real prospect of success and we would reject leave to appeal with respect to it.
Second and in any event, in our view, the judge did consider the combined effect of the various matters the applicant relied upon. As set out above,[60]the judge identified the factors which the applicant relied upon as the basis for his belief in the fraud allegations and/or that the 15 February invoice was fraudulent (and as the basis for a person to believe on reasonable grounds). The judge made detailed findings in respect of each of them.
In our view, the judge's consideration of the combined effect of each factor is evident from the structure and content of the Liability Reasons as a whole. For example, in [100], the judge referred to the fact that the 'convenient' timing of the creation of the 15 February invoice was not sufficient 'in all of the relevant circumstances' to suggest the invoice was fraudulent (i.e. the timing of the invoice did not form a sufficient basis to found an allegation of fraud taking account of all the other circumstances).
Further, in [111] the judge concluded that, after considering the applicant's submissions at the VCAT hearing and his cross-examination of the Complainant, she was not persuaded that the 15 February invoice was fraudulent nor that the applicant could have had a reasonable belief in his fraud allegations at the time they were made. In our view, this is consistent with the judge considering the factors relied upon in combination.
This is confirmed by the judge's reference to consideration of 'all' of the 'various pieces of evidence' in [116]. For our part, we did not understand how the order in which the judge's conclusion was expressed in [116] (i.e. the 'wrong way around') has a bearing on whether or not the judge erred by considering the pieces of evidence in isolation.
Finally, in our view, the judge's consideration of the combination of all of the factors relied upon by the applicant is confirmed by and is implicit in [117] where the judge considers that multiple inferences may be drawn from a given set of facts. The judge concluded:

[88]

As to proposed ground 5, the applicant submitted that the judge failed to account for the early stage that the fraud allegations were made in the Costs Proceeding. Relying on the comments of Logan J in Darnell v Stonehealth Pty Ltd (No 4) ('Darnell'),[62] the applicant contended that the propriety of alleging fraud in a pleading is to be assessed as the position stands at that point in time (i.e. prior to evidence and judgment). He submitted that the interlocutory context in which the fraud allegations were made was equivalent to a pleading. For this reason, the applicant asserted that he did not need to consider whether he would have been able to adduce evidence to establish the fraud allegations. In this context, he submitted that the proper question for VCAT was whether there was a proper basis for raising the issue at the start of the proceeding.
VLSC characterised proposed ground 5 as the applicant impermissibly seeking a factual appeal. Further, VLSC submitted that there is no exception for early-stage allegations under r 65 of the Uniform Conduct Rules. VLSC asserted that the proper response in circumstances where certain matters are unclear is to avoid making allegations until the situation becomes clear. VLSC also relied upon the hearing transcripts to refute the applicant's contention that the fraud allegations were provisional or arguments that his client would make. VLSC also disputed that the fraud allegations were made at an early stage, particularly in relation to the CPA hearing.
As to proposed ground 7, the applicant referred to several paragraphs of the Liability and Penalty Reasons,[63] and submitted that they erroneously characterised his conduct as 'repetitious'. He contended that the judge ought to have found the conduct was a singular instance, comprising one discrete attack on the 15 February invoice in the same or closely related proceedings, in a continuous process of argument and before final determination of the matters raised by the fraud allegations. Counsel for the applicant submitted that the 20 July mention was not a repetition: he submitted that Gourlay JR brought up the allegations made at the 30 June mention and the applicant merely maintained his position. Counsel for the applicant further submitted that proposed ground 7 is important because the 'repetitious' nature of the conduct was the substantial reason that the judge found the applicant's conduct was professional misconduct rather than unsatisfactory professional conduct.
VLSC submitted that there were multiple allegations at three separate hearings before two different judicial officers. On this basis, VLSC contended that it was open for the judge to describe the applicant's conduct as 'repetitious'. Counsel for VLSC submitted that the character of the fraud allegations changed after the 15 July Mathieson affidavit had been filed. Relevantly, any doubt about whether a valid retainer existed was put to rest. Further, to the extent that the applicant wanted to challenge aspects of the 15 July Mathieson affidavit (for example, the Complainant's offer to limit his costs for the Court of Appeal application), he could have moderated his position. Instead, the applicant persisted with the fraud allegations. Additionally, counsel for VLSC submitted that the charge can be proven by either a 'substantial' or 'consistent' failure to meet the standard described in s 297 of the Uniform Law and, in this case, the judge found both were satisfied.

[89]

We have formed the view that proposed grounds 5 and 7 do not have a real prospect of success. As a result, we would not grant leave to appeal with respect to either. We will briefly state why.
As to proposed ground 5, this ground merely challenges the judge's consideration of weight of a particular factor, namely the time at which the fraud allegations were made in the context of the Costs Proceeding as a whole. Consistent with Karakatsanis (set out above at [56]) that does not constitute a question of law as allocating weight to evidence is a matter for VCAT. For completeness, considering the substance of the ground, the judge was correct to reject the applicant's submission based upon Darnell. Rule 65 of the Uniform Conduct Rules is clear: there is no exception or lower threshold for allegations made at an earlier stage in the proceeding. In our view, Darnell does not indicate to the contrary, which appears to be the implication of the applicant's argument. In that case, Logan J made the point that the 'propriety of such conduct by legal representatives and their client [should] be assessed as the position stood in prospect, not after all of the evidence, especially the explanatory oral evidence, has been received at trial and a judgement deliv[64]ed'.64 In our view, that statement is not controversial.
Whether a basis for alleging fraud is 'reasonable' depends upon events and related material at the point in time at which the allegations are made. Before all facts have come to light, there may be multiple interpretations of these relevant events and documents. However, we do not consider that the comments of Logan J suggest that at an early stage allegations of fraud can be made in the absence of a reasonable basis for them. In any event, any such suggestion is not consistent with the clear words of r 65. As a result, the judge did not err by failing to give this consideration any weight.
As to proposed ground 7, this ground concerns the judge's factual finding (i.e. that the conduct was repetitious). As set out above at [56], consistent with Karakatsanis, that will only be an error of law if the factual finding was not open to the judge. We are not satisfied that there has been such an error here. In our view, the judge was more than entitled to conclude that the applicant engaged in a repetitious course of conduct. He made the fraud allegations on three occasions (the 30 June mention, the 20 July mention and the CPA hearing) before two different judicial officers (Gourlay JR and Efthim AsJ). With respect, the submission of the applicant that these three occasions were one singular occasion is non-sensical and without any proper basis. There were three different court hearings, with the third being the CPA hearing. Further, this submission ignores that additional material relevant to making the fraud allegations was provided prior to the 20 July mention and the CPA hearing.
As a result, we would not grant leave with respect to proposed grounds 5 or 7.

[90]

Proposed ground 6 is as follows:
1. The [judge] erred in law by finding that the [a]pplicant had alleged fraud without instructions from his client and without first advising his client of the possible consequences if the allegation of fraud were not made out, when there was no evidence that the [a]pplicant did not have such instructions and no evidence that he did not give such advice.
It is necessary to say something more about the Liability Reasons in relation to this proposed ground. Having concluded that the applicant had failed to establish the matters in r 65(a) by way of defence to the charge,[65] the judge then considered r 65(b) and the related r 66 upon which the applicant relied. This is notwithstanding it was not necessary for her to do so given each of r 65(a) and 65(b) must be established by way of defence. We have set out rr 65(b) and 66 above at [40] and [77] respectively.
In [119] to [128] of the Liability Reasons, headed 'The client's wishes and whether appropriate advice was given', the judge considered whether there was sufficient evidence upon which she could reasonably conclude, consistently with r 65(b), that the applicant's instructor and solicitor-client (Mr Cormie of AJH) wished the allegation to be made (after having been advised of the seriousness of the allegation and the possible consequences if it was not made out) and whether the applicant could, under r 66, rely upon Mr Cormie's opinion as to the credibility of material to support the making of fraud allegation.
The judge accepted VLSC's contention that, because the fraud allegations related to the internal dealings of the Complainant and the Mathieson parties, there is no way that Mr Cormie or anyone at AJH could have had any knowledge that the 15 February invoice was fraudulent and, as a result, there was no basis for AJH to provide such any instructions to the applicant.[66]
The judge referred to the evidence of Mr Cormie to the effect that he believed the fraud allegations to be true.[67] However, she concluded that, when pressed in cross-examination, Mr Cormie did not put forward a sufficient basis for such belief, relying only on the fact that the 15 February invoice was for a substantial sum and had not been paid at the time it was invoiced.[68] Relying upon this evidence, the judge inferred that the applicant 'went beyond the matters he was instructed about by Mr Cormie' and, in these circumstances, it was not 'apparent' that Mr Cormie had been given any advice about the consequences of making the allegations.[69] As a result, the judge determined that the elements of r 65(b) had not been established.[70]

[93]

Second, VLSC relied upon its Murray letter of 19 April 2018 sent prior to charges being laid in accordance with the decision of Murray v Legal Services Commissioner[73] (the 'Murray letter'), which records that there was nothing in the memoranda of instructions instructing the applicant to make the fraud allegations and it asserted that the applicant had not provided a basis for saying he had advised the client as to the seriousness of the allegations or had the client's instructions.
Third, VLSC relied upon the transcript of the CPA hearing, which shows that Mr Cormie was asked whether he instructed the applicant to make the fraud allegations (noting that the question was not persisted with after privilege was claimed by the applicant). Counsel for VLSC submitted that he was not asking the Court to draw any adverse inference from this, but rather, he sought to demonstrate why there was no direct evidence on this point. Counsel for VLSC further said that in respect of r 65(b), the applicant had to discharge an evidentiary onus, if not a persuasive one.
During the course of argument, counsel for VLSC was asked whether this meant that, in circumstances where the client has not waived privilege over their instructions, there will always be a breach of r 65 because the barrister cannot meet the onus in r 65(b). Alternatively, it was suggested that the barrister would nevertheless meet the onus, if they did put forward everything in their possession to establish the fact.
Counsel for VLSC made two points in response. First, this issue was not taken at first instance. Second, while privilege was available at the CPA hearing, at the investigation stage VLSC has power under s 466 of the Uniform Law to obtain documents, including documents subject to claims of legal professional privilege.[74] He indicated that this process is how many of the documents referred to above (including the memoranda of instructions) came into VLSC's possession. On this basis, if material capable of satisfying r 65(b) existed, it would have come to light as part of VLSC's investigation.
As a result, VLSC submitted that while the Court has the power under s 148(7) of the VCAT Act to vary any order of the Tribunal, and it could use this power to exclude reference to r 65(b) in the 22 December orders, it was unnecessary for the Court to use that power in this case.

[94]

We would grant leave in relation to proposed ground 6 but dismiss the appeal.
At the outset, it is important to note that r 65(b) has two elements to be established: first, that the client was advised of the seriousness of the allegation and of the possible consequences for the client and the case if not made out (the 'first element'); and second, after that advice has been given, the client wishes the fraud allegation to be made (the 'second element'). As is evident, unless the first element is established, the requirements of r 65(b) cannot be met.
As noted above, Karakatsanis (and the authorities cited therein) makes clear that in order to establish legal error in the drawing of an inference, it must be established that the conclusion was 'not open' to the decision-maker on the evidence before them.[75] In our view, the applicant has not established that the inference was not open given that, notwithstanding privileged material was provided by the applicant in relation to the elements of r 65 in response to the Complaint, there was no evidence to conclude that the first element had been established.
It is appropriate to set out the materials available before the judge in relation to the charge and how they came to be available.
As noted above, on 7 July 2016, the Complainant made the Complaint against the applicant. On 18 July 2016, the applicant received a letter from the VLSC which notified him that the Complaint would be formally investigated, indicated that if the matters complained of were established they would amount to unsatisfactory professional conduct or professional misconduct, and informed him that the investigation would be carried out by the Ethics Committee.
On 24 August 2016, the Ethics Committee, as delegate of VLSC, wrote to the applicant in relation to the Complaint noting that the Ethics Committee had resolved that the applicant was 'required to provide a full written explanation of your conduct and to attach any other relevant information or documents pursuant to s.371(1) of the [Uniform Law]' by 14 September 2016. The letter also referred to ss 371(2)(a)-(b) and 371(3) of the Uniform Law.
The reference to s 371 is significant. VLSC (and any delegate it appoints as 'investigator')[76] has broad powers under the Uniform Law to investigate a complaint made against a legal practitioner for a breach of the Uniform Conduct Rules.[77] Relevantly, s 371(1) of the Uniform Law enables the investigator to require a lawyer to, among other things, produce any specified document, provide written information, or otherwise cooperate with the investigation of the complaint (the 's 371 requirements'). Section 371(3) prescribes a penalty for non-compliance with a s 371 requirement.
Further, ss 466(2)-(4) of the Uniform Law provides, in relation to a s 371 requirement, that:

[97]

Thus ss 371 and 466 of the Uniform Law enable the relevant investigator to gather evidence in relation to a complaint and ultimately determine whether there is sufficient material upon which to bring a charge against the practitioner. Evidence gathered throughout that process can then inform VLSC's consideration of the complaint and its decision whether to dismiss it or bring a charge. Through this process, VLSC will inevitably gain access to various documents and information, including privileged documents.
As noted above, the applicant responded with the 10 July letter. In that letter the applicant provided an explanation for his conduct relating to the Complaint including by producing redacted copies of the memoranda of instructions. Those memoranda disclosed the privileged instructions from AJH to the applicant in relation to the 15 February invoice and whether, at the time of its issue, there was legal or 'true' liability on the Mathieson parties to pay the Complainant's costs. Further, the 29 June 2016 memorandum of instructions requested the applicant seek orders under the CPA or the Uniform Law against the Complainant or the Mathieson parties 'in relation to the creation, production and reliance on a document [i.e. the 15 February invoice] that amounts to no more than a false invoice'.
In the 10 July letter, the applicant said that in 'light of the matters set out in the enclosed' memoranda of instructions and the documents supplied to him, the applicant had 'formed the view that there was a proper basis to submit to the Costs Court that a number of matters supported the conclusion that the purported solicitor/client bill of that date is a false document'. He then went on to set out some of the factors that he subsequently relied upon before VCAT. In this letter, the applicant noted that as the matter was 'continuing in Court it would be inappropriate for any part of these memoranda to be shown to' the Complainant.
On 18 October 2017, the Ethics Committee wrote to the applicant informing him it was of the 'tentative opinion' that there were proper and substantial reasons for VLSC to conclude he had engaged in unsatisfactory professional conduct. It referred to each of the memoranda of instructions and recorded, in substance, that the 29 June, 24 February and 16 May 2016 memoranda did not suggest that the 15 February invoice was fraudulent and the 29 June 2016 memoranda did not provide any support for the assertion that the 5 February invoice was 'a false invoice'. The applicant was also invited to provide any further information. In response, the applicant wrote again to the Ethics Committee on 9 November 2017 referring to the memoranda of instructions and, primarily, the 15 February invoice itself as providing a reasonable basis for making the fraud allegations. We pause to note that the CPA proceeding had been resolved by this time, with the result that the matter was not continuing before the Court.
Significantly, the applicant did not disclose any communication between himself and Mr Cormie (or AJH) addressing the elements of r 65(b) and most relevantly, the first element. This was raised by VLSC in its Murray letter, which said, among other things, that:

[103]

The underlined parts of this letter highlight that, notwithstanding the applicant's response to the Complaint (including the memoranda of instructions), VLSC had formed the view that the elements required to satisfy r 65(b), and most relevantly, the first element, had not been established.
All this correspondence, together with the copies of the memoranda of instructions, were in evidence before VCAT, together with the cross-examination of Mr Cormie at the CPA hearing. Further, there was no suggestion before the judge at VCAT that the factual elements to be established under r 65(b), and most relevantly the first element, could not be met by the applicant because AJH had claimed legal professional privilege. Such a claim would, of course, be inconsistent with the provision of privileged material already provided by the applicant to the Ethics Committee and the VLSC in the course of the investigation as set out above. In this context, it is significant that the applicant failed to adduce any evidence at VCAT, in addition to that tendered by VLSC, save for his cross-examination of the Complainant.
In all these circumstances, we have concluded that it was open to the judge to infer, based on the material before her, that the first element had not been established, namely that the applicant did not advise Mr Cormie (or AJH) of the seriousness of the allegation and the possible consequences for them if it is not made out.
For completeness, we have reached this conclusion notwithstanding that we agree with the applicant's submission that the extract of Mr Cormie's evidence referred to by the judge did not address the first element of r 65(b), but addressed, more generally, Mr Cormie's evidence as to his belief about whether the 15 February invoice had been paid.
Accordingly, we do not consider that this Court should use its power in s 148(7) of the VCAT Act to amend the 22 December orders by removing any reference to VCAT's finding with respect to r 65(b).
While we would grant leave in respect of proposed ground 6, for the reasons set out above, we would dismiss the appeal.

[107]

We have concluded that proposed ground 8 does not have a real prospect of success.
We accept that the question of whether VCAT reached a conclusion that was not open to it raises a question of law.[80] However, as counsel for the applicant properly acknowledged, establishing an error of law on the basis that a particular conclusion was the only conclusion open on the evidence requires satisfaction of a 'high standard'. Grounds of this nature have also been referred to as 'particularly difficult',[81] involving the applicant satisfying a 'heavy onus',[82] which would be incapable of satisfaction where refusal to reach a particular conclusion is grounded in the 'refusal, open to the tribunal, to accept part or parts of the evidence'.[83] In short, we are not satisfied that such a threshold has been reached in this case.
First, it is important to note that the applicant did not submit on the 30 June mention, the 20 July mention or the CPA hearing that the 15 February invoice was fraudulent only in part or in some limited way. Rather, the applicant submitted that the 15 February invoice was a 'false invoice' or a 'fraud' to defeat the indemnity principle, and 'on no view could this bill be a genuine bill in accordance with any form of retainer in any way referable to the Supreme Court scale'.[84] That is to say, the applicant was, in substance, asserting that there was no liability to pay the amount claimed in the 15 February invoice.
Second, in this context, before the Tribunal, the applicant relied upon a number of factors as providing a reasonable basis for making the allegation that the 15 February invoice was a false invoice and a fraud i.e. the fraud allegations. These factors, which are set out in full at [41] above, included the Complainant's delay in issuing the 15 February invoice, the absence of a demand for payment after it was sent, the fact that the 15 February invoice did not precisely correspond with the taxable bill of costs or the Supreme Court Scale (as the total was a rounded amount), the absence of the Complainant's signature and references to freight and shipping.
Third, as set out above, we can see no error in the judge's analysis of the factors relied upon by the applicant before the Tribunal, either individually or in combination, leading to the conclusion that there was no reasonable basis for the applicant to allege that the 15 February invoice was a false invoice and a fraud.
Fourth, the judge's analysis is confirmed by the 15 July Mathieson affidavit which:

[109]

Fifth, in this context, the judge was right to place reliance upon the existence of a valid retainer, the corresponding liability for costs on the basis of that retainer, that the Complainant had completed legal work, and a taxable bill of costs had been prepared on this basis.
We pause to note that the applicant maintained the fraud allegations at the 20 July mention and at the CPA hearing notwithstanding the contents of the 15 July Mathieson affidavit i.e. he persisted with the assertion that the 15 February invoice was a false invoice and a fraud and submitted that the Mathieson parties had no liability to pay any amount claimed in it.
Sixth, in so far as the applicant now seeks to raise matters not raised before VCAT, we do not consider those additional matters assist the applicant. As to the new submission recorded at [169(a)], that the 15 February invoice was issued to the corporate client, we have formed the view that a reasonable barrister in the applicant's position would not view this fact, either alone or in combination with the other factors relied upon before the Tribunal, as providing a basis upon which to allege fraud. As to [169(d)], the substance of this matter has already been addressed.
As to the matters identified in paragraph [169(b)] and [169(c)], those additional factors do not provide a reasonable basis for believing that no amount in the 15 February invoice was payable. Any allegation now made that the 15 February invoice was not payable within 10 days or within a certain period does not relate to, or provide a reasonable basis for, the fraud allegation in fact made by the applicant, namely that the 15 February invoice was a false invoice and a fraud as there was no liability to pay any amount claimed in it.
As set out above, the 15 July Mathieson affidavit referred to the fact that the Complainant agreed to limit his legal costs relating to AJH's appeal to the Court of Appeal to the amount recovered (if ever) from AJH i.e. the appeal limitation issue. However, as noted above, after this time, the applicant did not seek to limit the fraud allegations to only part of the costs claimed in the 15 February invoice, being the Court of Appeal costs. Rather, he maintained that the entire 15 February invoice was a false document. In our view, any suggestion now that only part of the 15 February invoice was not payable does not provide a reasonable basis for the fraud allegations in fact made by the applicant, namely the 15 February invoice was a false invoice and a fraud as there was no liability to pay any amount claimed in it.
Further and in any event, in our view, the appeal limitation issue does not rise to the high standard required to establish that the only conclusion available on the evidence was that the applicant is not guilty of the charge. Accordingly, we would not grant leave to appeal with respect to proposed ground 8.

[111]

The applicant contended that the Liability Reasons disclose that the judge failed to address a significant submission advanced by the applicant, namely that matters in the 15 July Mathieson affidavit provided a further basis 'to doubt the genuineness' of the 15 February invoice. The applicant submitted that, as this was a significant submission before VCAT, the judge's failure to address it resulted in an error of law, relying on Hunter v Transport Accident Commission ('Hunter').[85] In particular, the applicant referred to the paragraphs of the 15 July Mathieson affidavit relating to the appeal limitation issue and the timing issue, which he submitted provide a further basis for the applicant to have made the fraud allegations. In oral argument, the counsel for the applicant further submitted that the judge had used the 15 July Mathieson affidavit to confirm that a retainer between the Complainant and his clients existed, when she ought to have instead considered whether the 15 July Mathieson affidavit supported the validity of the applicant's attack on the 15 February invoice.
VLSC submitted that the Tribunal was not required to deal with every issue raised. Further, VLSC contended that, contrary to the applicant's position, the substantive issue relating to the 15 July Mathieson affidavit was that a valid retainer existed, which was addressed in the Liability Reasons.[86] In this context, VLSC submitted that the real substance of the 15 July and 27 July Mathieson affidavits make the applicant's position considerably worse. VLSC contended that the judge accepted this at [103] of the Liability Reasons.[87] In this context, VLSC asserted that the timing issue raised by the applicant is of small moment. VLSC noted that the 15 July Mathieson affidavit was also discussed in other parts of the Liability Reasons.[88]
In relation to the appeal limitation issue, VLSC made three submissions. First, the contents of the 15 July Mathieson affidavit have no bearing on the fraud allegations made at the 30 June mention. Second, the Mathieson parties had a liability for the Court of Appeal application costs and this issue merely concerns recovery. Third, VLSC submitted that the applicant's contention only relates to a subset of the total costs in the 15 February invoice, being the Court of Appeal portion, rather than full amount.

[126]

Second, in 2018, the Victorian Bar Council ('Bar Council') (as the delegated authority of VLSC) determined that the applicant was not a fit and proper person to hold a practising certificate. As a result, the Bar Council cancelled the applicant's practising certificate effective 31 December 2018 and disqualified him from applying for a further practising certificate for four years from that date (the '2018 Bar Council determination').[104]
The 2018 Bar Council determination was based on the applicant's conduct in respect of his tax affairs, which encompassed certain tax-related conduct, the applicant's conduct in court proceedings relating to his tax affairs and his conduct appearing before a Counsel Committee hearing on 12 February 2018.[105] The tax-related conduct included failing to lodge tax returns and pay GST, previous convictions for failing to lodge returns and claiming unlawful deductions by using a device or scheme in which he assigned fees derived from his practice as a barrister to Campus Martius Pty Ltd (a company in which his wife and sons were the only shareholders and his wife was the sole director).[106] As part of this scheme, from 2009, the applicant had assigned fees in purported payment of interest accruing on book debts; the assigned fees were not declared as income and no tax was paid on them.[107]
The applicant initially applied to VCAT for review of the 2018 Bar Council determination, before later seeking to withdraw this review application. In Sandbach v Legal Services Board (Legal Practice) Judge Hampel (who was the then VCAT Vice President) granted the applicant leave to withdraw his application for review (the '2019 VCAT decision').[108] In her reasons, Judge Hampel recorded aspects of the matter's procedural history before recording that:
1. The Applicant sought judicial review of the decision by the Taxation Commissioner before the Administrative Appeals Tribunal (AAT) and Federal Court in respect of his tax affairs following the audit. The AAT and the Federal Court made adverse findings about the Applicant's conduct both in respect of the Campus Martius scheme and the manner in which he conducted the review proceedings. In subsequent bankruptcy proceedings brought by the Taxation Commissioner, the court found he had engaged in conduct apt to mislead the court.
2. The Bar Council also made adverse findings about the Applicant's conduct following his appearance before a counsel committee on 12 February 2018. The Bar Council found the Applicant failed to understand, or was unwilling to confront, the seriousness of the conduct identified in the taxation proceedings or to address what appeared to be a disregard of the law and his professional obligations to be truthful and act with integrity.
We will now return to the Penalty Reasons.
The judge recorded the parties' submissions as to the appropriate penalty. VLSC had submitted that the applicant demonstrated no insight or remorse including in response to the warnings and comments of judicial officers during the 30 June mention, the 20 July mention and the CPA hearing.[109] The applicant had submitted that:

[128]

The judge then addressed the principles relating to the imposition of penalties in disciplinary proceedings for legal practitioners as established by the authorities.[111] There is no challenge to these principles.
First and most relevantly, the judge noted that, while the protective purpose of penalties is paramount, specific and general deterrence are relevant to deter both the offending legal practitioner and all other practitioners from engaging in similar conduct. The judge referred to the fact that specific and general deterrence depend upon sanctions having a 'punitive effect'.[112] The judge concluded that this was of some significance in the present case given that she formed the view that the applicant had shown no insight or remorse. The judge also noted that the nature and seriousness of the conduct will inform the extent to which general deterrence should be taken into account.[113]
Second, the judge observed that while legal disciplinary proceedings are not criminal in nature, it is well-established that criminal sentencing principles apply by analogy. She referred to the relevance of proportionality and parity, before setting out a number of cases in which courts have denounced unethical legal practitioners' conduct and removed them from the Supreme Court Roll.[114] The judge concluded that:
1. ...The trust vested in legal practitioners by the community in the course is the moral standard which is breached when a practitioner engages in professional misconduct. Repeated breaches of that trust will increase the gravity of the overall conduct.
2. The extended period of time over which the [applicant] repeatedly engaged in the conduct and his inability in that time to comprehend the unethical nature of the conduct (despite warnings from the Bench), is therefore highly relevant. I also acknowledge the observations of the Bar Council in its decision referred to above (see paragraphs [6] and [7]) and the warnings sounded by the Victorian Legal Profession Tribunal in allowing the [applicant]'s appeal in 2003.[115]
Finally, the judge referred to the fact that reprimanding a legal practitioner for professional misconduct plays an important and necessary part in the penalty process, even where other more punitive measures are also imposed.[116]
The judge then considered the facts of this case and, in particular, the gravity of the applicant's misconduct. The judge concluded that the gravity of the offending was 'closer to the lower or moderate position of the scale of professional misconduct'.[117] Nevertheless, she was of the view that aspects of the applicant's behaviour aggravated the seriousness of the conduct.[118]
First, she referred to the fact that the conduct consisted of fraud allegations relying upon the comments of this Court in Rees v Bailey Aluminium Products Pty Ltd that an 'allegation of fraud, when there is no factual basis for it, constitutes a serious dereliction of duty and misconduct by counsel'.[119] On this basis, she concluded that the applicant's breach of r 65 was made more serious due to the fact that the allegations pertained to fraud (rather than a less serious allegation).[120]
Second, the judge referred to the repetition of the fraud allegations despite the 'clear' warnings of Gourlay JR (see [20] and [23] above). This meant the applicant's conduct demonstrated an additional level of willingness to neglect his professional dutie[121]nd overstep the line.121
Third, the judge relied upon the 'brazenness' of the applicant's repetition of the fraud allegations despite the 15 July and 27 July Mathieson affidavits. She rejected the applicant's submission that he 'never indicated that such an affidavit would have any bearing on the genuineness or otherwise' of the 15 February invoice by relying upon the transcript of the 30 June mention extracted above at [[[122]](#_Ref1594251 (a) the applicant demonstrated a lack of insight and remorse and an inability to rehabilitate or otherwise curtail his behaviour following the warnings and reactions of the judicial officers, and particularly of Gourlay JR. The judge concluded that underpinning the applicant's inability to do so was his 'patent inability to comprehend the unethical nature of the conduct';

(b) the applicant offered no apology to the Complainant, the Tribunal or the legal profession in light of the Liability Reasons and had continued to submit in the VCAT penalty hearing (which the judge did not accept) that he genuinely believed the fraud allegations, that they were not tactical, and were made in the routine course of oral argument;

(c) the applicant's inability to comprehend the unethical nature of the conduct is evident in, and aggravated by, the ongoing nature of the conduct over an extended period of time, where the conduct was repeated on at least ten occasions across the 30 June mention, the 20 July mention and the CPA hearing. At each instance, the fraud allegation was met with surprise and displeasure from the relevant judicial officer, which should have given the applicant reason to consider whether the fraud allegation should be maintained: he did not do so, and the judge found that he continued to proceed without developing insight; and

(d) this is the third occasion that the applicant had been before the Tribunal (or its predecessor) in relation to matters of professional conduct and, on each such occasion, 'adverse findings or commentary have been made as to his integrity and failure to meet the standards expected of a legal practitioner and questioning his capacity for insight'.[124]

[129]

Fifth, the judge considered other applicable sentencing factors.[125] Most relevantly, the judge observed that there 'are few' mitigating factors in this case. The judge had regard to the Upjohn affidavit, the applicant's bankruptcy status and that he is 65 years of age and would therefore not have many practising years left.[126]
The judge considered '[u]ltimately community protection, denunciation, and both specific and general deterrence are at the forefront of the Tribunal's mind in exercising the discretion as to penalty'.[127] As to community protection, the judge concluded that making the fraud allegations in court and repeatedly 'demonstrates a great disrespect to the legal profession and the broader community'.[128] The judge acknowledged that there is nothing inherently wrong with robust advocacy, but took the view that by making the fraud allegations the 'line has been crossed by the [applicant]'.[129] In this context, the judge then referred to the fact that sentencing processes and patterns in punitive legal proceedings are impacted by the general societal standards applicable at the relevant time.[130]
The judge referred to the applicant's own characterisation of his prior conduct record as 'unblemished' and 'exemplary', which was maintained in order to support a submission that specific deterrence was less relevant to his sentencing. However, the judge did not accept this submission, stating that this was not the applicant's 'first warning of this kind' and that she did not accept that his sentencing started from the 'baseline position when it comes to specific deterrence'.[131]
Indeed, the judge expressed the view that the applicant's characterisation of his prior record was 'problematic' in light of the 2018 Bar Council determination. She agreed that it was 'technically accurate' to say that the cancellation of the applicant's practising certificate did not arise from any disciplinary matter or matter arising from the professional conduct of his legal practice.[132] However, the judge went on to say:
1. ...[T]he underlying behaviour and the findings of the Victorian Bar as to his behaviour ... does not sit comfortably with this submission. I am not of the view that the [applicant] can be said to have an "exemplary record". Although this existing cancellation arises from conduct which post-dates the conduct in question in the present matter, and therefore it is not a 'prior matter', and despite it relating to conduct not occurring in the direct course of his legal practice, it is still indicative of the [applicant]'s character. The adverse finding as to his behaviour before the counsel committee is of a different and adverse ilk.[133]
Finally, the judge rejected the applicant's submission to the effect that general deterrence was not significant given that breaches of r 65 are not commonplace.[134] The judge concluded:
1. Legal practitioners, by the nature of their office, are held to a high standard of ethical behaviour. Ultimately, the penalty the Tribunal imposes must reflect that high standard and work towards correcting the public confidence in the profession which is been jeopardised by the [applicant's] behaviour.
As a result, the judge determined that the appropriate penalty was a combination of a reprimand and a prohibition on practice for a period of 12 months, commencing on 16 April 2023 (being the time at which the prior prohibition on the applicant obtaining a practising certificate was to cease).[135]

[134]

The applicant submitted that [62] of the Penalty Reasons is wrong because no adverse findings or commentary about the 'integrity' of the applicant were made in the Liability Reasons, the 2019 VCAT decision or in the 2003 VLPT determination. The applicant emphasised that the reasons of Judge Hampel in the 2019 VCAT decision merely recited the conclusions reached by the Bar Council, the Administrative Appeals Tribunal ('AAT') and the Federal Court of Australia, respectively, in the context of the applicant's tax affairs and bankruptcy (rather than his professional conduct).
In the course of oral argument, counsel for the applicant clarified three matters relating to this proposed ground. First, he submitted that the judge 'misunderstood' what had been said by the Tribunal on the previous occasions, as none of the comments went to the question of the applicant's integrity. The applicant reads [62] as 'going only to the integrity point' and not being concerned with findings or commentary relating to the applicant's failure to meet the standards expected of a legal practitioner and questioning his capacity for insight. Second, the applicant agreed that both [10] and [11] of the 2019 VCAT decision are relevant to consider. Third, this proposed ground raised a House v The King error, namely that the judge assumed a factual matter which has no basis (i.e. that the Tribunal or its predecessors had criticised the applicant's integrity).
VLSC submitted that [62] of the Penalty Reasons must be read in context. VLSC contended that each of the Liability Reasons, the 2003 VLPT determination and the 2019 VCAT decision do include findings about the applicant's integrity.
As to the Liability Reasons, VLSC referred to paragraphs concerning the applicant's adherence to the standards required of a legal practitioner, including with respect to his paramount duty to the court and professional dignity.[137]
As to the 2019 VCAT decision, VLSC referred to Judge Hampel's summary of the 2018 Bar Council determination. VLSC submitted that the fact that this was a finding of the delegate of the Victorian Legal Services Board (the 'VLSB'), rather than the Tribunal, is not to the point. The 2018 Bar Council determination was an adverse decision of the delegate of the relevant regulator as to the applicant's fitness to practise, and VLSC submitted that such 'internal' decisions are regularly taken into account in determining an appropriate outcome.[138] Counsel for VLSC also submitted that failure to pay tax over the course of some decades is a matter of integrity.
Third, as to the 2003 VLPT determination, VLSC points to VLPT's criticism of the applicant, namely that the applicant 'erred in judgment' and that the applicant's conduct 'should not take place and reflects no credit on' the applicant.[139]

[136]

Second, as to the 2019 VCAT decision, in our view, the applicant was relevantly 'before the Tribunal' in relation to a matter of professional conduct. This is because the applicant was seeking to appeal from the 2018 Bar Council determination that the applicant was not a fit and proper person to hold a practising certificate, in circumstances where VLSB was the relevant regulator and the Bar Council was acting as its delegate.
The 2019 VCAT decision was made in a context where Judge Hampel was considering the applicant's application to withdraw his application to review the 2018 Bar Council determination. As such, Judge Hampel's comments relate to adverse findings about the applicant's conduct in respect of his tax affairs from various sources, including the Bar Council and in proceedings brought by the Commissioner of Taxation in the AAT, the Federal Court, and in subsequent bankruptcy proceedings.
Most relevantly, at [10] of the 2019 VCAT decision Judge Hampel noted that, in relation to bankruptcy proceedings brought by the Taxation Commissioner, the Court found that the applicant had engaged in conduct that was 'apt to mislead the court'.[147] In our view, although the word 'integrity' is not specifically used, a barrister engaging in 'conduct apt to mislead the court' demonstrates a lack of integrity on that barrister's part.
Further, at [11] of the 2019 VCAT decision, Judge Hampel also referred to the fact that the Bar Council found, following the applicant's appearance before a Counsel Committee, that the applicant had 'failed to understand, or was unwilling to confront, the seriousness of the conduct identified in the taxation proceedings or to address what appeared to be a disregard of the law and his professional obligations to be truthful and act with integrity'.[148] In our view, these comments also relate to the applicant's integrity, his failure to meet the standards expected of a legal practitioner and question his capacity for insight.
Third, as to the 2003 VLPT determination, the extract above at [213] indicates that the Tribunal made adverse comments about the applicant, namely that his use of the word 'untruths' in the context of opposing counsel's submissions was 'inappropriate', 'should not take place', and that the applicant 'should exercise more care with the use of language in court relating to his oppo[149]t'.149 In our view, these comments can fairly be read as relating to the applicant's failure to meet the standards expected of a legal practitioner and/or question his capacity for insight.
As a result of these conclusions, the applicant has not demonstrated that the judge's reasoning was infected by a House v The King error and we would refuse leave in respect of proposed ground 11.

[137]

Proposed grounds 12 and 13 are related grounds, and, as a result, we will deal with them together. In the course of oral argument, counsel for the applicant referred in particular to the following findings of the Penalty Reasons which provide:
1. The [applicant] characterised his prior conduct record as "unblemished" and "exemplary" and utilised this to submit that specific deterrence is less relevant, in that the present finding against him alone is warning enough to deter further conduct. But this is not his first warning of this kind and therefore, I cannot accept we are starting at the baseline position when it comes to specific deterrence.
2. The [applicant's] characterisation of his prior conduct as "unblemished" and "exemplary" is also problematic in light of the cancellation is practising certificate in 2019 (following the withdrawal of the 2018 appeal). The [applicant] submitted that "the cancellation of his practising certificate in 2019 did not arise from any disciplinary matter or matter arising from the professional conduct these legal practice". Whilst this may be argued to be technically accurate, the underlying behaviour and the findings of the Victorian Bar as to his behaviour... does not sit comfortably with this submission. I am not of the view that the [applicant] can be said to have an "exemplary record'. Although the existing cancellation arises from conduct which post-date is the conduct in question in the present matter, and therefore is not a 'prior matter', and despite it relating to conduct not occurring in the direct cause of his legal practice, is still indicative of the [applicant's] character. The adverse finding at his behaviour before the council committee is of a different and adverse ilk.
Proposed grounds 12 and 13 are as follows:
1. The [judge] erred in law by treating the decision of the Victorian Bar [i.e. the 2018 Bar Council Determination] as to the [a]pplicant's fitness to hold a practising certificate as admissible and relevant on the question of penalty when neither the [a]pplicant nor the [r]espondent had sought to rely on that decision and there had been no Tribunal or judicial finding in relation to that matter.
2. The [judge] erred in law by determining the question of penalty on the basis that the [a]pplicant's behaviour before the Counsel Committee of the Victorian Bar Council was blameworthy and of an adverse ilk when there was no evidence of any misbehaviour by him before that Committee.

[138]

As to proposed ground 12, the applicant submitted that the judge ought not to have placed any weight on the 2018 Bar Council determination for two primary reasons. First, the determination concerned the applicant's fitness to hold a practising certificate in the context of his 'tax affairs and bankruptcy' and was not a matter in respect of which there had been any Tribunal or judicial determination. Second, neither the applicant nor VLSC advanced any submission at the VCAT penalty hearing with regard to the 2018 Bar Council determination. As a result, the applicant submitted that the 2018 Bar Council determination should have been regarded as irrelevant to the question of penalty and the Tribunal's reliance on this matter constitutes a fundamental flaw in the Penalty Reasons.
At the hearing of this application, counsel for the applicant submitted that the judge mischaracterised the applicant's submissions at [72] of the Penalty Reasons (set out above) insofar as the judge said the applicant characterised his prior conduct record as 'unblemished' and 'exemplary' in order to support a submission that specific deterrence was 'less relevant' to him. Rather, counsel for the applicant contended that the applicant relied on his 'unblemished record of ethical conduct in the course of his practice' (i.e. which excluded tax-related conduct). The applicant noted that this submission was correctly recorded by the judge at [32] of the Penalty Reasons. Counsel for the applicant submitted that tax-related conduct might make a person unsuitable for practise, but it did not mean such conduct was committed 'in practice' (i.e. in the course of practice).
As to proposed ground 13, the applicant referred to the final sentence of [73] of the Penalty Reasons (set out above) in which the judge raised the issue of the applicant's behaviour before the Counsel Committee of the Bar Council. The applicant submitted that there was no material before the Tribunal that provides any indication of the applicant's behaviour before that Committee including whether it was blameworthy. This is notwithstanding the comments of Judge Hampel at [11] of the 2019 VCAT decision.[150] The applicant submitted that these comments were merely speculation and, absent any evidence, the judge's finding and reliance upon them were unsafe.
VLSC advanced several submissions with respect to proposed grounds 12 and 13. First, VCAT is not bound by the rules of evidence and may inform itself on any matter as it sees fit.[151] Second, VLSC noted that the formal notification of the 2018 Bar Council determination (being a letter from the Victorian Bar Council dated 13 November 2018) and the 2019 VCAT decision, were exhibited to the affidavit of Ms Wynd of 27 January 2023, concerning the applicant's relevant professional history and no objection was taken to this affidavit. Counsel for VLSC submitted that if the applicant had either objected to Ms Wynd's affidavit or claimed that the 2019 VCAT decision incorrectly recorded the Bar Council's findings, VLSC would have tendered the Bar Council's findings in full. Third, VLSC submitted that [72] of the Penalty Reasons was addressed to the applicant's submission that his prior conduct was 'unblemished' and 'exemplary', which was a baseless submission.
Fourth, VLSC submitted that the applicant's characterisation of the 2018 Bar Council determination as merely relating to 'tax affairs and bankruptcy' was inaccurate as Judge Hampel's summary of that determination related to applicant's professional obligations and integrity. VLSC submitted that the fact that there were no further details with respect to these findings did not mean that these findings ought not be taken into account; rather, the question is one of weight. Further, VLSC submitted that there was clearly a finding in the 2018 Bar Council determination that the applicant's conduct was blameworthy, otherwise he would not have been found to be unfit to practise at that time and for a further four years.
Relatedly, VLSC submitted that the applicant gave no reason for why, in considering what was in the public interest, the Tribunal ought not have regard to all relevant information before it. VLSC contended that the fact that the Bar Council determined the applicant was not a fit and proper person was clearly of relevance, and its relevance was not undermined by the fact that it was not a judicial determination.

[139]

In our view, proposed grounds 12 and 13 do not have a real prospect of success.
As to proposed ground 12, we reject the applicant's contention that the judge ought not to have had regard to or placed any weight on the 2018 Bar Council determination. The 2018 Bar Council determination was made by the Victorian Bar as delegate of the VLSB. A finding was made that the applicant was not a fit and proper person to hold a practising certificate in the context of his 'tax affairs and bankruptcy'. We have set out the nature of the applicant's conduct above. Further, as noted above, findings were made that the applicant failed to understand or was unwilling to confront the seriousness of this conduct or address what appeared to be a disregard for the law and the applicant's professional obligations to be truthful and act with integrity.
In our view, there can be no doubt that these matters were relevant to the penalty to be imposed once the charge had been established. It is not to the point that there had not been any Tribunal or judicial determination of these matters. The 2018 Bar Council determination was a decision of the relevant regulator with respect to the applicant's professional history.
Further, the relevant matters relied upon by the judge were established on the material before the Tribunal i.e. in the 2019 VCAT decision. The judge, in exercising her jurisdiction at VCAT, was entitled to have regard to all relevant material before her - including the 2019 VCAT decision - in reaching her conclusion as to penalty. Further, VCAT is not bound by the rules of evidence. As a result, the judge was entitled to rely upon the matters recorded in the 2019 VCAT decision (including the 2018 Bar Council determination) without the need for firsthand or other evidence of the underlying facts. While VLSC may not have made specific submissions based on the 2018 Bar Council determination, as noted above, that decision was exhibited to the affidavit of Ms Wynd shortly before the VCAT penalty hearing. This is in a context where the applicant submitted to the Tribunal that specific deterrence was of less relevance on account of his 'unblemished record of ethical conduct in the course of his practice' and his 'exemplary record' of good professional conduct.
Finally, we do not accept that the judge mischaracterised the applicant's submissions by failing to distinguish between unblemished or exemplary behaviour 'in the course of practice' (which excluded tax-related conduct) as opposed to his work-related conduct more generally. This is because the applicant's 'tax affairs and bankruptcy' are not distinct from, or irrelevant to, the applicant's professional conduct. Rather, the findings about his tax affairs and bankruptcy raised doubt about the applicant's regard for his professional obligations, including to be truthful and act with integrity. As the New South Wales Court of Appeal's comments in DEJ v Council of the New South Wales Bar Association made clear, a barristers' tax-related conduct has a strong relationship with their professional conduct in the course of practising law.[152] In our view, this is of more significance to this case, in circumstances where the applicant primarily specialised in taxation matters.[153]
As to proposed ground 13, in our view, the applicant's complaint regarding the Tribunal's observations with respect to his behaviour before the Counsel Committee is misconceived. In our view, the judge was entitled to take into account the material before her relating to the applicant's behaviour before the Counsel Committee in deciding what penalty to impose. The relevant findings of the Bar Council relating to the applicant's appearance before the Counsel Committee are set out at [11] of the 2019 VCAT decision. It is appropriate to set out the last sentence of that paragraph again:

At a glance

Court

Decision date

Before

Source

Judgment (210 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (21)

Sandbach v Victorian Legal Services Commissioner [2024] VSCA 143 (27 June 2024)