Federal Court of Australia|1993-11-02|Before: Black CJ

Terence John Chamberlain v the Law Society of the Australian Capital Territory [1993] FCA 527; (1993) 43 FCR 148 (2 November 1993)

TERENCE JOHN CHAMBERLAIN v THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL

BLACK CJ(1), LOCKHART(2), JENKINSON(3), WHITLAM(4) AND BEAZLEY(5) JJ

Legal Practitioners - Misconduct, Unfitness and Discipline - practitioner acting in relation to his own affairs in litigation between himself and the Deputy Commissioner of Taxation - mistake by Deputy Commissioner - whether practitioner fostered mistake by opponent - whether taking advantage of mistake by opponent amounts to professional misconduct or conduct unbefitting a barrister and solicitor - appropriate penalty.

Legal Practitioners Act 1970 (ACT) ss 29, 36, 37, 41, 42D

Rules of the Supreme Court of the Australian Capital Territory O. 4 r. 6, O. 42 r. 11

Chamberlain v Commissioner of Taxation (1991) 28 FCR 21

Deputy Commissioner of Taxation (NSW) v Chamberlain (1990) 93 ALR 729

Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502

Chamberlain v Deputy Commissioner of Taxation (1987) 13 FCR 94

Port of Melbourne Authority v Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589

Practice Direction 5 (1981) 38 ACTR 14

Rossco Developments Pty Ltd v O'Halloran (1980) 29 ACTR 1

Re Guild and Re Legal Practitioners Ordinance 1970 (1979) 32 ACTR 13

Ex parte Attorney-General for the Commonwealth; Re a Barrister and Solicitor (1972) 20 FLR 234

Clyne v The New South Wales Bar Association [1960] HCA 40; (1960) 104 CLR 186

Ziems v Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279

Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563

Re R, A Practitioner of the Supreme Court and Re A, A Practitioner of the Supreme Court [1927] SAStRp 9; (1927) SASR 58

Counsel for the Appellant: Mr P.G. Hely QC with Mr P. Dodson

Counsel for the Respondent: Mr H.D. Sperling QC with Mr G.C. Lindsay

and Mr R.C. Nicholls

Instructed by: Abbott Tout Russell Kennedy

1. The appeal be allowed in part;

2. The order of the Supreme Court of the Australian Capital Territory

that the right of the appellant to practise in the Australian

Capital Territory be suspended for a period of six months be set

aside and in lieu thereof it be ordered that the appellant be

reprimanded;

3. The appeal be otherwise dismissed;

4. The appellant pay the costs of the appeal of the Law Society of

the Australian Capital Territory on a party and party basis.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

BLACK CJ The appellant is a barrister and solicitor of the Supreme Court of the Australian Capital Territory. He appeals to this Court from an order of the Supreme Court that his right to practise in the Australian Capital Territory be suspended for a period of six months. The appellant also appeals from an order that he pay the costs of the respondent, the Law Society of the Australian Capital Territory, on a solicitor and client basis. The Law Society had moved the Supreme Court for orders that the appellant show cause why he should not be dealt with by the court for misconduct or for conduct unbefitting a barrister and solicitor.

2. The facts are fully set out in the reasons for judgment of Lockhart J which I have had the advantage of reading and it is unnecessary for me to refer to them in any detail. At the heart of the matter lies a mistake made by officers of the Deputy Commissioner of Taxation in preparing the endorsement on the writ in an action commenced by the Deputy Commissioner against the appellant in the Supreme Court of the Australian Capital Territory in July 1984. It was common ground that the particulars in the endorsement correctly set out amounts that had been assessed by the Deputy Commissioner of Taxation as being due by the appellant and correctly set out credits to which the Deputy Commissioner conceded the appellant was entitled. It was, however, also common ground that although the arithmetically correct total of the amounts claimed by the Deputy Commissioner, after allowing for the credits, was $255,579.20, the endorsement showed the total as $25,557.92 and the Deputy Commissioner's claim was expressed to be for that sum. Evidently, the decimal point was put in the wrong place by mistake, resulting in the amount claimed being some $230,000 less than it should have been.

3. The appellant was well aware of the Deputy Commissioner's mistake and determined to take advantage of it. He did this by getting the Deputy Commissioner to sign a document entitled "Terms of Settlement" and to consent to judgment for the sum mistakenly claimed, $25,557.92. In cross-examination before the Supreme Court the appellant, when asked why he did not respond to the endorsement on the writ by simply paying the sum claimed, including the amount for costs, agreed that this was a course that was open to him but explained that he did not take that cause because he had a particular object in mind. He explained that object as follows:

"My object was to lock him (the Deputy Commissioner) in as

tight as I reasonably could to secure the best possible

position for on-going negotiations. To do that I got him to

consent to judgment. He did that."

4. The appellant then explained why the terms of settlement were expressed to be "without admission of liability" and concluded:

"Now, the fact is I set about locking him in reasonably and

I think I did so reasonably well."

5. The appellant expected the Deputy Commissioner to move to set aside the judgment. He thought the Deputy Commissioner would probably succeed but that there was a 20% chance of what he described as "holding" the judgment. If that chance materialised, he agreed, the result would be that the Deputy Commissioner would be precluded from bringing further proceedings to recover anything more than $25,557 in respect of the assessments specified in the writ. The appellant agreed that after a consent judgment had been entered for $25,557.92 he had withdrawn his objections to the assessments so as to provide himself with a basis upon which to contend that the Deputy Commissioner was estopped from moving to set the judgment aside.

6. The Supreme Court was constituted by Miles CJ, Gallop J and Higgins J. The Chief Justice concluded that the appellant had induced the Deputy Commissioner's officers to sign terms of settlement and that his conduct in doing so and in procuring judgment for $25,557.92 amounted to grave impropriety affecting his professional character and was properly to be characterised as professional misconduct. The Chief Justice concluded too that if the conduct was not professional misconduct it was nevertheless personal misconduct that so directly bore on the appellant's fitness to practise that it justified disciplinary intervention by the court. Gallop J also concluded that the conduct in question amounted to grave impropriety and professional misconduct. Higgins J dissented. His Honour was unable to construe the solicitor's conduct as inducing the Deputy Commissioner's mistake or as fostering it, or as using deception to avoid the detection of the mistake.

7. The primary submission on behalf of the appellant before this Court, as it was before the Supreme Court, was that the appellant's behaviour did not amount to conduct calling for disciplinary action. It was submitted that to rely upon an opponent's mistake, in the context of adversary litigation, was not of itself reprehensible and that it was only in the most attenuated sense that the appellant "induced" the Deputy Commissioner to execute the terms of settlement or procured the entry of judgment. The Deputy Commissioner, it was put, signed the documents after taking legal advice and because of his own error. The appellant's conduct was, it was submitted, within the range of conduct regarded as professionally acceptable.

8. The system for the maintenance of proper standards in the legal profession in the Territory is established by Part V of the Legal Practitioners Act 1970. Division I of Part V makes provision for a body to be known as the Disciplinary Committee of the Law Society of the Australian Capital Territory. Division 2 concerns inquiries by the Disciplinary Committee. By s. 29(1) the Council of the Law Society may make a complaint to the Disciplinary Committee regarding the "professional behaviour" of a barrister and solicitor. The Disciplinary Committee is required to inquire into a complaint made to it under s. 29 and is given various powers for that purpose. If the Disciplinary Committee finds that the professional behaviour of the barrister and solicitor has been such to justify it in so doing it may by order either reprimand the barrister and solicitor or impose a fine not exceeding $2000: see s. 36(1).

9. The Disciplinary Committee has an obligation to prepare a report for the court if, on the evidence given at an inquiry before it, it forms the opinion that there are reasonable grounds for believing that the conduct of the barrister and solicitor should be dealt with by the court: see s. 37(1). No doubt it is envisaged that serious cases of misconduct should be reported to the court.

10. Division 3 of Part V relates to proceedings before the Supreme Court and contains the provision relied upon by the Law Society in this case, namely s. 41(1). That provision is in the following terms:

"41.(1) Where it is proved to the satisfaction of the

Court that the conduct of a barrister and solicitor has been

such as to justify it in so doing, the Court may, by order -

(a) reprimand the barrister and solicitor;

(b) impose on the barrister and solicitor a fine not exceeding

$10,000;

(c) suspend the right of the barrister and solicitor to practise

in the Territory for such period as the Court thinks proper;

or

(d) direct that the name of the barrister and solicitor be

removed from the Roll of Barristers and Solicitors."

11. The Law Society also relied upon the inherent powers of a Supreme Court in relation to the conduct of practitioners. It was entitled to do so because s. 42D, which is also contained in Division 3, provides:

"42D. The provisions of this Division are in addition to,

and do not restrict or limit in any way, the jurisdiction

and power that the Court has, apart from this Act, in

relation to the control and discipline of barristers and

solicitors."

12. As I have noted, the Supreme Court characterised the appellant's conduct as involving "grave impropriety". Professional conduct that may be so characterised would ordinarily be at the most serious end of the scale. The expression was used in this context by Rich J in Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563, a case of removal from the Roll. However, as the Full Court recognised, conduct justifying disciplinary action under s. 41 of the Act or misconduct justifying action under the inherent jurisdiction of the Supreme Court need not be conduct so serious as to justify removal from the Roll or suspension of the right to practise in the Territory.

13. The scope of s. 36 and s. 41(1) of the Act (then sections of the Legal Practitioners Ordinance 1970-1972) was considered by the Supreme Court of the Australian Capital Territory, (Fox, Blackburn and Woodward JJ) in Ex parte Attorney-General for the Commonwealth; Re a Barrister and Solicitor (1972) 20 FLR 234. The court said (at 245) that no definition of professional misconduct for the purposes of s. 36 should be undertaken and that it was equally unwise to attempt a definition for the purposes of s. 41 but after considering Australian and English cases and the terms of the Legal Practitioners Ordinance the court concluded, adopting the language of the Supreme Court of South Australia in Re R, A Practitioner of the Supreme Court and Re A, A Practitioner of the Supreme Court [1927] SAStRp 9; (1927) SASR 58 at 61, that misconduct within s. 36 included:

". . . conduct which may reasonably be held to violate, or

to fall short of, to a substantial degree, the standard of

professional conduct observed or approved of by members of

the profession of good repute and competency"

14. Their Honours also recognised that a breach of standards of that nature would fall within the ambit of s. 41. Although the court did not take the view that the solicitor in that case had acted disgracefully or dishonourably it considered that he had been guilty of conduct that was unprofessional and that the conduct required a reprimand. In Re Guild and Re Legal Practitioners Ordinance 1970 (1979) 32 ACTR 13 at 36, Blackburn CJ, Connor and Davies JJ adopted the principles enunciated in Ex parte Attorney-General for the Commonwealth; Re a Barrister and Solicitor.

15. In some States, for example in Victoria and in New South Wales, a distinction is drawn in the legislation regulating the legal profession between a "standards breach" or "unsatisfactory professional conduct" on the one hand and "misconduct" or "professional misconduct" on the other (see Legal Profession Practice Act 1958 (Vic) s. 2A; Legal Profession Act 1987 (NSW) s. 123) but in the Territory the whole range of professional misconduct, and also personal conduct bearing upon a practitioner's fitness to be on the Roll, may be dealt with under s. 41(1) although it would be expected that the less serious cases of misconduct would in practice be dealt with by the Disciplinary Committee.

16. Accordingly, even if the conduct in question here is not properly to be characterised as involving "grave impropriety" it may still be conduct requiring the disciplinary intervention of the Supreme Court as being conduct clearly falling short of the standard of professional conduct observed or approved by members of the profession of good repute and competency.

17. The obligations of a practitioner in adversarial litigation may point in several different directions and they are not always easy to reconcile. In A Guide to the Professional Conduct and Etiquette of Solicitors (1960) Sir Thomas Lund said (at p. 54):

"... a solicitor is bound to act with the utmost fairness

with regard to his own client; he is bound to use his utmost

skill for his client, but he is not bound to degrade himself

for the purpose of winning his client's case. He ought

never to fight unfairly, though he is bound to use every

proper and fair effort to bring his client's cause to a

successful issue."

18. Similar notions are reflected in the Guide to Professional Conduct and Etiquette adopted by the Council of the Law Society of the Australian Capital Territory in September 1984, the month following the events with which this appeal is concerned. As Miles CJ observed, many of the provisions of the Guide simply reformulate or repeat well accepted general principles. Among the provisions are the following:-

"3.3 A Practitioner should take such action consistent with the

retainer as is necessary and reasonably available to protect

and advance the client's interests.

. . .

16.1 A Practitioner should not engage in conduct (whether in pursuit

of his or her profession or otherwise) which is dishonest or

which may otherwise bring the legal profession into disrepute

or which is prejudicial to the administration of justice.

16.2 A Practitioner should not attempt to further a client's case by

unfair or dishonest means.

. . .

20.1 A Practitioner should treat his or her professional colleagues

with courtesy and fairness."

19. An apparent tension between some of these obligations is particularly likely to arise when one party has made a mistake about a matter of form or procedure. Some mistakes made in the course of litigation may bear upon the real merits of a case but mistakes in matters of form or procedure will often be far removed from any connection with the merits of either side's case. However, rules and procedures must include provisions for their enforcement so as to promote, amongst other things, the efficient disposition of a court's business and so whilst it would obviously be improper to induce an opponent to make a mistake by means of a deliberate misrepresentation, it may, in different circumstances, be quite acceptable to take advantage of an opponent's mistake. In this area a line obviously has to be drawn somewhere and given that it is acceptable, in the context of an adversarial system, to take advantage of a mistake in some circumstances but not in others, some quite fine distinctions may need to be made. In this difficult area the Guide offers practitioners in the Territory the assistance of a specific paragraph, to which Miles CJ referred in his reasons for judgment. Paragraph 20.2 provides:

"20.2 If a Practitioner observes that another Practitioner is making

or is likely to make a mistake or oversight which may involve

the other Practitioner's client in unnecessary expense or delay,

the Practitioner should not do or say anything to induce or

foster that mistake or oversight and should, except where so

doing might prejudice his or her own client, draw the attention

of the other Practitioner to that mistake or oversight." (My

emphasis.)

20. Miles CJ noted that the Guide was a binding code which the Supreme Court considered had been set by solicitors themselves in the interest of the public and in the interests of the maintenance of proper standards within the profession and that, whilst the court was not bound by the Guide, it ordinarily would give careful consideration to treating breaches of its provisions as instances of professional misconduct.

21. Although the Guide was not adopted until about a month after the events in question, it was clearly open to the Supreme Court to regard the Guide as a reliable and important indicator of the accepted opinion of the members of the profession in the Territory at a time shortly before its formal adoption by the Law Society. Indeed, it was open to the court to treat the Guide as essentially a codification or consolidation of the views then held by the profession, rather than as a formulation of new and altered views. When the Guide was tendered in evidence before the Supreme Court counsel for the Law Society drew attention to the date of its adoption and the document was admitted without objection.

22. Paragraph 20.2 reveals an approach that is generally discouraging of advantage being taken of an opponent's procedural mistake, and in some circumstances there is a positive obligation to draw the attention of an opponent to a mistake, except when to do so might prejudice a practitioner's own client. Thus a balance is sought to be achieved between a desire to avoid unnecessary expense and delay occasioned by mistakes or oversights on the one hand and the interests of a practitioner's client on the other. Paragraph 20.2 does not therefore rule out that, in appropriate cases, advantage may properly be taken of a procedural mistake or oversight that may involve the other practitioner's client in unnecessary expense or delay, but it does speak against a practitioner doing or saying anything to induce or foster a mistake that may have those consequences, and it speaks without qualification against that conduct.

23. In a system of adversarial litigation, in which it is accepted that advantage may be taken of an opponent's mistake in some circumstances, it is easy to see how notions of fairness and common decency would point to the drawing of the line where it is in fact drawn by paragraph 20.2. Whilst in some circumstances it may be in order to take advantage of a mistake, in other circumstances the attention of the practitioner should be drawn to a mistake or oversight. But, in any event, where there is a mistake that may involve the other practitioner's client in unnecessary expense or delay the practitioner should not do or say anything to induce or foster that mistake. To induce or foster such a mistake would be detrimental to a relationship characterised by courtesy and fairness that ought to exist between members of the legal profession. A relationship of that nature, which is the relationship reflected in paragraphs 16.2 and 20.1 of the Guide, has as its justification not merely social and ethical mores; it has an additional justification referrable to the public interest, in that courtesy and fairness contribute materially to the effective and expeditious performance of legal work: see, as to the public interest, the official commentary to the 1987 Code of Professional Conduct of the Canadian Bar Association. It may be noted that Chapter XVI of the CBA Code provides that a lawyer's conduct towards other lawyers should be characterised by courtesy and good faith - the same notions as those reflected in the Guide. And it has been held in Canada that the courtesy and good faith rule expressed in the Code is a duty, not merely an optional course of conduct: see B.G. Smith, Professional Conduct for Canadian Lawyers (1989) pp. 114, 115-116.

24. Another vice of conduct that induces or fosters a mistake is that it may easily involve, or in practical terms be close to, misrepresentation. In this way such conduct is, of its nature, liable to be in tension with the overriding duty of honesty that practitioners owe to the courts, their clients and to their fellow practitioners.

25. In the course of argument, it was submitted that the Supreme Court should not have been critical of the failure on the part of the witnesses who gave evidence about standards of professional practice to make any reference to the Guide but for the reasons I have given, the Guide was, in my view, a valuable document to take into account. It may well be that acceptable standards of conduct in relation to the formal or procedural mistakes of an opponent have become stricter over the years but the Supreme Court, aided by the Guide, was in a particularly good position to determine what were the appropriate standards were in 1984.

26. I noted earlier the submission of counsel for the appellant that it was only in the most attenuated sense that the appellant "induced" the Deputy Commissioner to execute the terms of settlement or "procured" the Deputy Commissioner to enter judgment. It is true that the appellant did not do anything to force the Deputy Commissioner to sign the terms of settlement or to agree to judgment being entered by consent for the amount incorrectly claimed. The Deputy Commissioner is a very experienced litigant with great resources at his disposal and having, by his officers, made one mistake he then, despite the resources available to him, made another mistake - a mistake that turned out to be fatal. But he made the mistake that turned out to be fatal as a consequence of the appellant having put into operation a plan that was designed to get him to do what he in fact did. Whether or not, in a technical sense, the appellant induced the second and fatal mistake, he fostered the first mistake and by his own deliberate actions created a set of circumstances that brought about the second mistake. In practical terms, the situation was aptly described by what the appellant frankly said in cross-examination, namely that he "got him (the Deputy Commissioner) to consent to judgment". The practical effect, and the object, of what was done was to use the Deputy Commissioner's original mistake as an element in a trap into which, if the original mistake were fostered, the Deputy Commissioner might fall.

27. In engaging in these activities the appellant was using his knowledge and skills as a legal practitioner and I agree with Miles CJ that his conduct should be looked at as professional conduct, despite the fact that he was acting with respect to his private affairs. I also agree with Miles CJ that although the Guide makes no reference to the standard owed to an unrepresented opponent, that standard cannot be lower than that owed to a fellow practitioner and the standard is not to be lowered when a solicitor is acting for himself against an unrepresented opponent.

28. In these circumstances, irrespective of how the appellant's instructions to his employee Ms Reid might be viewed, and irrespective of whether the entry of judgment in the circumstances involved an abuse of the process of the Supreme Court, I am of the opinion that the majority in the Supreme Court was correct in concluding that the appellant's conduct was outside the range of conduct that was professionally acceptable and that it was conduct calling for the disciplinary intervention of the court.

29. I should add that I agree with Lockhart J that the use by the appellant of the process of the Supreme Court for the entry of judgments in all the circumstances of the case was improper, founded as it was on a consent by the other party that was brought about by a fostered mistake.

30. I should also add, in relation to the instructions given to Ms Reid, that there was not the slightest suggestion that Ms Reid was informed about or knew of the mistake. Apart from anything else that might be said about this situation, by not telling Ms Reid the full story, the appellant deprived himself of the advantage of discussion about the matter with an experienced practitioner who was detached from the litigation.

31. I turn now to the question of penalty. I agree with what Lockhart J has written on this question and reluctant as an appellate court should be to depart from the view of the Supreme Court about an appropriate penalty, I too would substitute for the penalty of suspension imposed by the Supreme Court the penalty of a reprimand. I place particular emphasis upon the isolated nature of the appellant's conduct and the evidence of his good character. I would also point out that a reprimand, although not necessarily having the adverse consequences for a practitioner's partnership, reputation and income of an order suspending his right to practise, is nevertheless a serious matter.

32. I would therefore not disturb the finding of the Supreme Court that the appellant was guilty of professional misconduct but I would set aside the penalty of six months suspension of the appellant's right to practice and would substitute an order that the appellant be reprimanded. I would not disturb the Supreme Court's order that the appellant pay the costs of the Law Society of the Australian Capital Territory on a solicitor and client basis of the proceedings before the Supreme Court, and I would order that the appellant pay the costs of the Law Society of this appeal on a party and party basis.

LOCKHART J This is an appeal from the judgment of the Supreme Court of the Australian Capital Territory in a disciplinary matter concerning the appellant, a barrister and solicitor of that Court. The Supreme Court (Miles CJ and Gallop J, Higgins J dissenting) held that the appellant was guilty of professional misconduct and ordered that he be suspended from practice for a period of six months and that he pay the costs of the respondent, the Law Society of the Australian Capital Territory.

2. The appellant appealed to this Court from the Supreme Court's judgment. His counsel submitted that the appellant's conduct did not constitute professional misconduct and that, even if it did, it was not of sufficient gravity to warrant the penalty of suspension from practice for six months.

3. The facts were not in dispute before the Supreme Court or this Court. I shall recite the essential facts. The appellant has practised as a barrister and solicitor in the Australian Capital Territory for some 25 years. He is of high repute and standing amongst his peers. The events that led to this proceeding were an isolated incident.

4. Income tax assessments were issued against the appellant for the years ended 30 June 1975 to 30 June 1983. The amount of tax due under the assessments together with additional tax for late payment less credits amounted to $255,579.20.

5. The appellant objected to the assessments, the objections were disallowed and the appellant requested the Deputy Commissioner of Taxation to refer his objections to an Income Tax Board of Review (which was the administrative body then hearing reviews of this kind, before the Administrative Appeals Tribunal was invested with jurisdiction in 1986), which the Deputy Commissioner did. At the time of the references to the Board the delay in reviews being considered by Boards of Review was in the vicinity of three to four years.

6. Towards the end of 1983 or the beginning of 1984 the appellant made an offer of settlement to the Deputy Commissioner in the sum of $25,000 in full settlement of all the assessments, but the offer was rejected. The Deputy Commissioner demanded payment from the appellant of the full amount of tax due. On 26 July 1984 the Deputy Commissioner issued a specially indorsed writ out of the Supreme Court of the Australian Capital Territory. The indorsement set out the particulars of the individual assessments and amended assessments and additional tax and payments by way of credit. The balance of the items which could be calculated from the various items in debit and credit was $255,579.20; but the writ misplaced the decimal point so that the amount shown on the writ as the amount claimed was one-tenth of the true figure, namely, $25,557.92. The writ was issued, not by the Deputy Commissioner's solicitors, but by the Deputy Commissioner in person.

7. At breakfast on 1 August 1984 the appellant read in the Canberra Times that he was one of five Canberra people being sued by the Deputy Commissioner for substantial amounts of tax. The article stated amongst other things that the Deputy Commissioner claimed from the appellant (who was named in the article) $25,557.92. The writ was not served on the appellant until the evening of 1 August 1984. He read the indorsement and checked the years to which it related. He realized that the Deputy Commissioner had made a mistake in calculating the balance claimed in the writ and that the error in the placement of the decimal point meant that the Deputy Commissioner was claiming one-tenth of the amount in fact due under the assessments. The appellant was angry upon reading the article because he was named in it and he thought that the Deputy Commissioner was trying to exert pressure upon him by releasing information to the media. The source of the information about the issue of the writ and its contents and the names of the persons against whom the Deputy Commissioner was proceeding, is not known. The appellant was about to go overseas and the proceeding commenced by the Deputy Commissioner added but another burden to his busy schedule before his departure. He said that his initial reaction was:

"If that's all they want, (a reference to the $25,557.92 instead of

$255,579.20) they can have it."

8. On the following day the appellant did nothing about the matter because he was cross and wanted his feelings "to cool". The day after that, Friday 3 August 1984, he prepared a document headed "Terms of Settlement", a form of appearance and a form of judgment by consent for the sum of $25,557.92 for debt and $115 for costs. All these documents bore the name of the firm of solicitors of which the appellant is a member. He wished to speak to one of his partners but that partner was unavailable. The file was then presented by him to a solicitor employed by his firm, Ms Margaret Reid, with a handwritten note in the following terms:

"Happy to pay the bill to get my name out of the papers and a certain

result for the whole thing.

In principle I still say nothing is owing, hence the denial of

liability and nominal protest built into the terms.

Can you confirm and get it cleaned up a.s.a.p."

9. With the documents already prepared by the appellant, Ms Reid telephoned the Deputy Commissioner's office at about 3 pm. She spoke to Ms Joanne Healey, a clerk in the Schemes Unit of the Recovery Sub-section of the Australian Taxation Office, ACT Branch. (Ms Healey was the person who had drafted the writ issued in the Supreme Court.) Ms Reid said that she was acting for the appellant and would like to pay the total claimed on the writ together with costs, subject to a judgment by consent. Ms Healy said that she would have to check before an appointment could be arranged. She spoke to her supervisor, Mr Ingram. Neither of them knew what to do, so Mr Ingram rang Mr Phillip Saxby of the Australian Government Solicitor's Office and relayed the proposal put by Ms Reid. Mr Ingram confirmed that the amount referred to in the judgment was the full amount claimed on the writ. Mr Saxby replied that judgments by consent were "not unusual", and if the full amount of the claim was being paid, there was "no harm in it". However, Ms Healey and Mr Ingram were still troubled by the extent of their own authority and they spoke to Mr Geoff Besgrove, Assistant Director of the Enforcements Branch, Australian Taxation Office, ACT Branch. Mr Besgrove was also cautious, but after being told of the advice received from Mr Saxby, agreed to sign whatever needed to be signed.

10. Ms Reid arrived soon after this (if she had not arrived already) and she was ushered into Mr Besgrove's office. Ms Reid handed the appellant's cheque (for the amount claimed in the writ plus costs) to Ms Healey, and Mr Besgrove signed what he understood was a consent judgment. Ms Healey furnished Ms Reid with a receipt for the cheque. Ms Reid departed from the office leaving the terms of settlement there. It is probable that she also left the appearance and the form of judgment in Mr Besgrove's office, believing that the Deputy Commissioner's officers would arrange for them to be filed in the Registry of the Supreme Court.

11. The document signed by Mr Besgrove was not a consent judgment, but the terms of settlement. The terms bore the heading as in the writ and were otherwise as follows:

"By Consent and without admission of liability:-

1. Judgment for the Plaintiff in the sum of $25,557.92

together with costs to be assessed and agreed at $115.00.

2. The settlement monies to be paid by the Defendant to

the Plaintiff forthwith.

DATED: the 3rd day of August 1984.

G. Besgrove Margaret Reid

For the plaintiff Solicitor for the defendant"

The form of judgment was, apart from the heading, as follows:

" J U D G M E N T

The 6th day of August, 1984

Terms of settlement having been filed herein IT IS THIS DAY

ADJUDGED that the Plaintiff recover against the Defendant

the sum of $25,557.92 for debt and $115.00 for costs.

BY THE COURT

Sgnd: B. Proctor

REGISTRAR"

12. The three documents (appearance, terms of settlement and consent judgment) were lodged in the Registry on 6 August 1984 apparently by an officer of the Deputy Commissioner. The date "3rd" marked on the appearance was altered in handwriting from "this 3rd day of August 1984" to "6th". The alteration was made by the appellant.

13. The appellant had drafted a letter in the meantime to be sent to the Deputy Commissioner withdrawing his objection to the assessments. The letter was sent on 6 August 1984 on his firm's letterhead signed by Ms Reid. It was in the following terms:

"RE: T.J. Chamberlain - File No. 686 883 114

Following upon the settlement negotiated in Supreme Court

proceedings No. 697 of 1984 on the 3rd August 1984, we

confirm that our client has instructed us to formally

withdraw all outstanding objections for income tax

assessments issued in respect of income earnt (sic) up to

and including the financial year ended 30 June 1982.

14. On 6 or 7 August, Ms Healey checked her file, 'thought the amount outstanding was odd' and discovered the arithmetical error. Neither she nor her supervisor, Mr Ingram, was able to explain the failure to notice the discrepancy between the amount previously claimed to be owing and the amount shown on the writ.

15. Mr Saxby was informed of the error and he telephoned Ms Reid and relayed the news to her on 7 August. On the same day the letter signed by Ms Reid the previous day arrived in the Appeals and Review Group Section of the Deputy Commissioner's Office.

16. On 10 August 1984 the Deputy Commissioner commenced a second action against the appellant in the Supreme Court claiming $230,021.28, being the difference between the arithmetical total of the amounts claimed in the previous action, and the amount for which judgment had been entered. The appellant defended this action. On 18 June 1986 Kelly J found for the Deputy Commissioner as plaintiff and ordered that judgment be entered accordingly. During the hearing before Kelly J, counsel for the Deputy Commissioner expressly declined to rely on mistake on the part of the Deputy Commissioner in the first action.

17. The appellant appealed from the judgment of Kelly J to this Court. A Full Bench of the Court, in a joint judgment (reported as Chamberlain v Deputy Commissioner of Taxation (1987) 13 FCR 94), dismissed the appeal on 17 February 1987.

18. The appellant then successfully sought special leave to appeal to the High Court of Australia. The High Court, applying the doctrine of res judicata, granted special leave and allowed the appeal on 12 May 1988 (reported as Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502). In the joint judgment of Deane, Toohey and Gaudron JJ their Honours said at 511:

"So long as the respondent chooses, as he does, to take no step to set

aside the judgment and to raise no issue in the second action as to the

circumstances in which that judgment was obtained, he must accept the

consequences of res judicata."

"As the doctrine of res judicata does not admit of any exception so

long as the first judgment stands, I do not find it necessary to

consider the 'special circumstances' exception addressed in the joint

judgment.

The Commissioner chooses not to impeach the first judgment for mistake;

he chooses not to attack for mistake any agreement which led to the

entry of the first judgment by consent. The first judgment stands."

19. The Deputy Commissioner then commenced a third proceeding; this time to impeach for mistake the agreement which led to the entry of the first judgment. He did this by commencing a proceeding in the Supreme Court to set aside the judgment. The proceeding came before Wilcox J, who, after transferring the proceedings to himself in this Court pursuant to the cross-vesting legislation, found that the first judgment had been obtained by unconscionable conduct on the part of the appellant, and ordered that it be set aside.

20. On appeal by the appellant to a Full Court of this Court, in a judgment of the Court the appeal was allowed on 8 March 1991 (reported as Chamberlain v Commissioner of Taxation (1991) 28 FCR 21). The Full Court applied the principle of estoppel enunciated in Port of Melbourne Authority v Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589, and held that the claim to have the consent judgment set aside should have been litigated in the second action.

21. The Deputy Commissioner made no further application for special leave to appeal to the High Court and has taken no further proceedings to recover the outstanding tax from the appellant. Apart from the payment made on 3 August 1984 at the time of the handing over of the terms of settlement and cheque previously mentioned, the appellant has not made any payments in respect of the outstanding amounts.

22. The reference to an Income Tax Board of Review of the appellant's objections to the assessments was transferred from the Board to the Administrative Appeals Tribunal, and the matters have been listed before that Tribunal for mention from time to time. The present position appears to be that the Tribunal has stood the matters out of its active list, without ruling on the claim made on behalf of the appellant that the objections have been withdrawn, and without ruling on the objections themselves.

23. The Law Society commenced proceedings against the appellant by notice of motion filed in the Supreme Court on 19 June 1992. There was an agreed statement of facts before the Supreme Court together with a number of affidavits on both sides. Most of the affidavits filed on behalf of the appellant gave evidence of his good character.

24. Miles CJ and Gallop J in separate reasons for judgment found that the appellant was guilty of professional misconduct in the sense of personal misconduct which directly bore upon his fitness to practice as a barrister and solicitor. They referred to the Guide to Professional Conduct and Etiquette published by the Law Society in 1984. Their Honours found that the conduct of the appellant was in breach of certain of the canons of conduct mentioned in the Guide doubtless because their Honours took the view that the Guide simply restated the accepted canons of professional conduct and etiquette as they had been before the date of publication, notwithstanding that the relevant events occurred one month before the publication of the Guide.

25. Miles CJ found that the appellant's treatment of Ms Reid was a matter of some importance. The appellant did not tell her of the relevant background which might have enabled her to exercise her own judgement as a solicitor as to the propriety of what she was instructed to do. His Honour found that she was given the appearance of authority and independence, which she lacked. His Honour found that the note addressed to her by the appellant suggesting that the motivation for the course proposed was simply to get "a certain result" and to keep the appellant's name "out of the papers" was misleading. She was instructed to sign the terms of settlement as "Solicitor for the defendant". His Honour found that she should never have been instructed to do so.

26. The Chief Justice found that the appellant was a competent and respected member of the legal profession and well regarded in the general community. He was the senior partner of a prominent firm of Canberra solicitors. His Honour referred to certain of the character evidence that was presented on his behalf by ten deponents who were fellow practitioners and close friends. His Honour noted that the appellant regarded himself as guilty of no wrongdoing at all, not even of any error of judgment, and that he saw the error as being entirely on the part of the Deputy Commissioner.

"The solicitor was frank in explaining to the Court in his evidence what

the true motivation was for procuring the judgment against himself.

Evidence about that did not appear in his affidavits. His motivation was

to secure a position of strength from which he could bargain with the

Deputy Commissioner for a more favourable settlement of the claim that he

envisaged would still be pursued against him for the outstanding tax,

notwithstanding the consent judgment for the lesser amount. The position

of strength would, he thought, be attained by locking the Deputy

Commissioner into the judgment of the Court, which would prevent the

Commissioner from taking further proceedings in the Court to recover the

outstanding tax unless and until the judgment was set aside. At the time

of procuring the judgment the solicitor considered that he could reduce

Deputy Commissioner's prospects of having it set aside by establishing a

position from which it would appear that he had acted to his detriment,

relying on the consent judgment, thereby raising an estoppel against the

Deputy Commissioner. It was in order to raise an estoppel that he

the letter which Ms Reid signed on his behalf on 6 August 1984, seeking to

have the objections to the assessments withdrawn. He foresaw that, as a

matter of discretion, the Court would be much less likely to set the

judgment aside if he could show that it had resulted in him abandoning

opportunity to pursue his objections in the Board of Review."

28. The Chief Justice found that the course adopted by the appellant was clearly followed in furtherance of his own "narrowly perceived self-interest" and that he took advantage of his experience and position as a solicitor to plan and put into effect the course which he anticipated would prevent the Deputy Commissioner from suing for what he knew was a substantial amount of money over and above the amount claimed on the writ. His Honour said that what the appellant did was to procure the judgment by inducing the Deputy Commissioner's officers to continue or repeat the mistake which they had made. He found that the appellant took advantage of his position as a solicitor and as an employer of Ms Reid so as to make it impossible to divorce his conduct as a practitioner from that of a man acting in a private capacity.

29. His Honour considered the character evidence alleged by the appellant which in the main was to the effect that there was no professional impropriety by the appellant in the views of the deponents. The Chief Justice found that the conduct of the appellant in "inducing" the Deputy Commissioner's officers to sign the terms of settlement and procuring the judgment for $25,557.92 amounted to "grave impropriety affecting his professional character" and that it constituted professional misconduct.

30. His Honour found, correctly, that disciplinary proceedings are not punitive in nature and he considered whether or not it would be appropriate for the Supreme Court to impose a fine, the maximum fine permitted by s. 41 of the Legal Practitioners Act 1970 being $10,000. His Honour also found that the Court had inherent power to impose a fine regardless of that monetary limitation. He said that the appellant was likely to have profited by his misconduct in a sum well exceeding the maximum fine authorized by the Act and that to impose a disciplinary measure which allowed the appellant to continue to practice upon payment of a fine no greater than the maximum provided for in s. 41:

"would be an affront to public decency, because

the community would reasonably assume, as the

solicitor appears not to recognize, that the tax

he has avoided by his misconduct is payable by

other, and possibly less affluent, taxpayers."

His Honour rejected the view that he should impose a fine greater than the statutory maximum and found that the protection of the public and the maintenance of the confidence of the public in the profession and the maintenance of confidence among legal practitioners required that the appellant's right to practise should be suspended for six months. He also ordered that the appellant should pay the Law Society's costs on a solicitor and client basis.

31. Gallop J came to the same conclusion for substantially the same reasons as did the Chief Justice. He found that the appellant's conduct in procuring a judgment for one-tenth of the amount claimed by the Deputy Commissioner amounted to grave impropriety in his professional conduct, conduct which has tended to bring the legal profession into disrepute and which is deserving of much more than nominal punishment. He agreed with the Chief Justice as to the appropriate penalty.

32. Higgins J dissented essentially on the ground that the essence of the charge against the appellant concerned conduct that was not unlawful; and that unless there was some other improper conduct he could not be regarded as having acted disgracefully. His Honour found that what the appellant did was in his own interests lawfully and without deceptive conduct to take proper advantage of an error on the part of the Deputy Commissioner; and that it would have been unconscionable for the appellant to take advantage of that error only if he had induced or fostered it or used deception to avoid its detection. He did not so construe the appellant's conduct.

33. The relevant principles governing disciplinary proceedings of legal practitioners are well established. They were referred to by the High Court in Ziems v Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279 and in Clyne v The New South Wales Bar Association [1960] HCA 40; (1960) 104 CLR 186, see also In Re Davis [1947] HCA 53; (1947) 75 CLR 409. The relevant authorities are collected and examined by the Supreme Court of the Australian Capital Territory in Ex parte Attorney-General for the Commonwealth; Re a Barrister and Solicitor (1972) 20 FLR 234 at 239-241 and 244. See also Re Guild (1979) 32 ACTR 13.

34. The question is whether the appellant remains fit to practice as a barrister and solicitor. The case demonstrates the difficulty of drawing the line between tough but legitimate tactics in an adversary system of litigation and an impermissible intrusion into the prohibited domain of professional misconduct.

35. The position is complicated in this case because, although the appellant is a solicitor, he was acting in relation to his own affairs in litigation between himself and the Deputy Commissioner. It is well established, however, that unprofessional conduct on the part of a legal practitioner may extend to conduct in his private capacity: Ziems' Case.

36. Four courses of action were open to the appellant when he was served with the writ of summons on the evening of 1 August 1984:

(1) inform the Deputy Commissioner of his mistake;

(2) pay to the Deputy Commissioner the amount claimed in accordance

with the indorsement to the writ which would have resulted in a

stay of all further proceedings in the action (see Order 4 rule 6(2)

of the Supreme Court's rules);

(3) do nothing and simply suffer default judgment against him; or

(4) take the course which he did of putting in train the events

leading to a consent judgment.

37. Had the appellant taken course (3) it seems to me impossible to find that he could have been guilty of professional misconduct. Had he taken course (2), although the point is a little less clear, he would not have been guilty of professional misconduct.

38. I have no doubt that the proper course for him to have taken was to have informed the Deputy Commissioner of the mistake which he had made and that it was sharp tactics to have taken the course which he did. It is regrettable that he followed course (4), but that does not necessarily transmute slick conduct into professional misbehaviour. He did not strictly induce the Commissioner to sign the terms of settlement and agree to the entry of a consent judgment. He prepared the necessary documents and through Ms Reid had them presented to the Deputy Commissioner's officers. But it was for the Deputy Commissioner, a senior officer of one of the largest organizations of the Commonwealth and a frequent and skilled litigant before the courts of this country with a great deal of legal advice to support it, to take his own course. The appellant did not seek to dragoon the Deputy Commissioner into submission. The Deputy Commissioner made his own decision to sign the terms of settlement, consent to the judgment against the appellant and accept the appellant's cheque.

39. But the appellant took the course of preparing the terms of settlement, the forms of consent judgment and appearance and drawing a cheque for the sum of $25,557.92 plus costs because he thought it would give him a tactical advantage over the Deputy Commissioner. He thought that it would give him time for further negotiation with the Deputy Commissioner and help establish a case of estoppel should the Deputy Commissioner seek to set aside the judgment entered by consent. He gave himself a 20% chance of holding the consent judgment in the event that it was challenged in due course by the Deputy Commissioner, which he though it would be. As Miles CJ observed, the appellant was quite frank about what he did and indeed saw nothing wrong with it. He said in cross examination before the Supreme Court, in answer to the question that one of the courses open to him was to respond to the indorsement on the writ by simply paying the sum claimed including the amount of costs:

"Yes, it was, but I didn't follow that course and I've explained to you

why. My object was to lock him in as tight as I reasonably could to

secure the best possible position for on-going negotiation. To do that

I got him to consent to judgment. He did that. ... Now, the fact is I

set about locking him in reasonably and I think I did so reasonably

well."

40. In other words the appellant thought that merely to pay the money to the Deputy Commissioner in accordance with the indorsement on the writ would not necessarily allow him to raise a defence of estoppel. In answer to a prospective claim by the Deputy Commissioner to set aside the judgment on the basis of mistake, it gave him a greater tactical advantage to take the course which he did.

41. He wanted a stronger bargaining position, and time. The fact that on Monday, 6 August he abandoned his grounds of objection speaks, I think, rather eloquently of his view of his prospects of success in the prospective reviews of the disallowance of his objections that would have come in due course before a Board of Review.

42. The appellant's tactics paid off handsomely. The Deputy Commissioner, instead of seeking to set aside the judgment, proceeded to sue for the balance of the tax which he asserted was due to him. This proceeding failed on the basis that the cause of action had merged in the judgment, thereby destroying its independent existence while the judgment stood (see the judgment of the High Court reported at [1988] HCA 21; (1988) 164 CLR 502).

43. The Deputy Commissioner then took the course of seeking to impeach the judgment for mistake, but this failed ultimately before a Full Bench of this Court when the Court applied, as mentioned earlier, the principles enunciated in Anshun. The appellant could hardly have envisaged that his good fortune would be as great as it turned out to be when he took the steps which he did on Friday, 3 August 1984 and again on Monday, 6 August by the letter being written and signed by Ms Reid (to which reference has already been made), whereby he withdrew all his outstanding objections in relation to the income tax assessments.

44. But these later events cannot be laid at the door of the appellant. His conduct, so far as it is susceptible at all of being impugned in this case, relates to the steps which he took on 3 August by preparing the terms of settlement and form of judgment by consent, drawing his cheque for one-tenth of the amount due plus costs and instructing Ms Reid to act as she did without giving her full information about the background of the matter. The only other event one can add to this is that of the following Monday (6 August) relating to the writing of the letter by Ms Reid to the Deputy Commissioner withdrawing the appellant's outstanding objections against the assessments.

45. As mentioned earlier, the appellant did not strictly induce the Deputy Commissioner to enter into the consent judgment. But it was through the appellant's efforts that the proceeding was resolved in that way. He could have simply responded to the indorsement to the writ, paid the sum demanded and obtained a stay of further proceedings in the action. But he thought that this would not give him the greater advantage which he sought of being able to raise a defence of estoppel in any subsequent proceeding by the Deputy Commissioner to set aside the judgment. So he put events in train by preparing the terms of settlement, the forms of consent order and his cheque and using the good offices of Ms Reid, an employee of his firm, to appear on the doorstep of the Deputy Commissioner bearing the terms and consent order which on Monday, 6 August were lodged in the registry of the Supreme Court, after being signed by the appropriate officer of the Deputy Commissioner (Mr Besgrove). The appellant obviously had no idea of what advice the Deputy Commissioner would take or how successful he would be in his desire for entry of a consent judgment.

46. The whole affair was remarkably successful from the appellant's point of view. Having obtained the benefit of entry of the judgment on the Monday, Ms Reid at the behest of the appellant then wrote to the Commissioner withdrawing the outstanding objections to tax, thus again furthering the appellant's case of estoppel because of the prejudice that he would sustain if the judgment were to be set aside, namely, that he would be forever unable to press his review of the objections to the assessments before a Board of Review (it is not necessary to decide whether this will in fact be the consequence in law, but that is certainly how the appellant perceived it).

47. The Deputy Commissioner chose to enter into the settlement with the appellant. He did so by his own mistake of which the appellant was well aware. But without the appellant's efforts there would have been no settlement. The appellant chose deliberately to take advantage of the error (an obvious error) in the writ for his own personal and tactical advantage and, without revealing the error to the Deputy Commissioner, he prepared and placed the trap to ensnare him.

48. He obtained an advantage by more than mere silence. He deliberately set in train the events and documents which (though requiring independent consideration and action by the Deputy Commissioner with the large resources available to him) led to the entry of the consent judgment. He knew the Deputy Commissioner had made a large mistake and took unfair advantage of it for his own benefit.

49. There is a further aspect of the appellant's conduct which causes disquiet. The use by the appellant of the processes of the Supreme Court for the entry of judgments in all the circumstances of this case was improper. The appellant used those processes for a tactical advantage, knowing that there was an eighty per cent chance that the judgment would be set aside and knowing that his twenty per cent chance of holding the judgment rested on the slender footing of an estoppel contrived by reliance on the mistake of the other party to the litigation.

50. In my opinion it has not been shown that the Supreme Court erred in concluding that the appellant's behaviour was professional misconduct. Indeed, I agree with the conclusion of the majority.

51. Whether the appellant acted improperly in using Ms Reid to act as she did at his behest is not a matter which I find it necessary to decide.

52. I take into account the fact that considerable weight must be given in appeals of this kind from decisions of Supreme Courts charged with the conduct of disciplinary proceedings. As Fullagar J said in Ziems at 287:

"... the appellant challenges what is not merely

an exercise of discretion by the Supreme Court,

but an exercise of discretion in a matter which

is in a special sense the province of the

Supreme Court as the highest court of New South

Wales. It relates to the right of a man to

practice in that Court and in other courts of

New South Wales over which that court exercises

a supervisory jurisdiction in certain ways."

53. In Clyne the High Court (Dixon CJ, McTiernan, Fullagar, Menzies and Windeyer JJ) said at 198-9:

"This Court would not interfere with discretion

of the Supreme Court in a matter so peculiarly

the concern of that Court unless it seemed to it

clear that the discretion had been wrongly

exercised."

54. Before leaving this aspect of the case I shall refer to prior proceedings in which the appellant's conduct was criticized by this Court. In the case previously mentioned and heard by Wilcox J at first instance ((1990) 93 ALR 729) his Honour characterized the conduct of the appellant as "unconscionable" and the dealings he caused Ms Reid to undertake with the Deputy Commissioner as "a combination of silence and half-truths amounting to a misrepresentation". He described (at 737) the course taken by the appellant as "the moral equivalent of larceny by a trick". On appeal the Full Court (Davies, Ryan and Foster JJ (1991) 28 FCR 21) accepted Wilcox J's conclusion that the appellant engaged in a "shabby trick" and made a "misrepresentation" to the Deputy Commissioner's officers. Their Honours said at 23:

"The processes of the Supreme Court, which were

designed to facilitate entry of judgment and for

the convenience of litigants and practitioners,

were improperly used."

Nevertheless their Honours held that Anshun prevented the Commissioner from asserting the course of action he should have raised in the proceedings commenced on 10 August 1984. The Deputy Commissioner did not appeal from that decision.

55. The evidence before the Court in that case was in some respects different from the evidence before the Supreme Court in the present disciplinary case. The primary difference is that the appellant and Ms Reid gave evidence before the Supreme Court in the present case, but did not give evidence in the earlier case.

56. I make these observations simply to make it clear that my conclusions are based on the evidence in the present case and are not influenced by the observations of judges in other judgments.

57. The question of penalty now arises. It was argued by counsel for the appellant that the Supreme Court, having found that the appellant was guilty of grave professional misconduct, should have heard submissions from counsel for the appellant before determining the appropriate penalty; but that it did not in fact give an opportunity to counsel to do so. Counsel for the Law Society did not dispute the correctness of this proposition.

58. It does appear from what we were told by counsel for the appellant and the Law Society and from my own perusal of the transcript of proceedings before the Supreme Court that counsel for the appellant assumed that he would have an opportunity to address the Court on the question of penalty if the Court was against him on the question of professional misconduct, and that this opportunity was denied him.

59. Each party to this appeal asked this Court itself to determine the appropriate penalty if the finding of professional misconduct by the Supreme Court is upheld.

60. I am reluctant to depart from the view of the Supreme Court that the appropriate penalty is suspension from practice for six months, but I find myself unable to agree with it.

61. I place due weight upon the fact that the exercise of discretion by the Supreme Court in a disciplinary appeal is very much its concern. However, in my opinion and with due respect to the Supreme Court, the discretion on penalty was wrongly exercised. The behaviour of the appellant, though constituting professional misconduct, is at the lower end of the scale of such conduct. The appellant was an experienced solicitor of some 25 years standing and of high regard in the community. What occurred in this case was an isolated incident and out of character for the appellant. Some conduct is so grave that disbarment or suspension is obvious. This is not such a case. In my view a suspension from practice of some six months was disproportionate to the gravity of the offence. I would substitute for the penalty imposed by the Supreme Court the penalty of a reprimand.

62. I would therefore affirm the finding of the Supreme Court that the appellant was guilty of professional misconduct; but set aside the penalty of six months suspension from practice and substitute in lieu thereof an order that the appellant be reprimanded. I would affirm the Supreme Court's order that the appellant pay the costs of the Law Society on a solicitor and client basis of the proceedings before the Supreme Court and order that the appellant pay the costs of the Law Society of this appeal on a party and party basis.

JENKINSON J The reasons for judgment of Lockhart J, which I have had the advantage of reading, fully disclose the circumstances of this difficult case. Although the appellant was here the litigant, not the lawyer, the conduct impugned was in that sphere of activity in which the lawyer engages when he practises his profession. The standard is that "observed or approved of by members of the profession of good repute and competency". (Ex parte Attorney-General (Cth); Re a Barrister and Solicitor (1972) 20 FLR 234 at 242-243, quoting from Re R. [1927] SAStRp 9; (1927) SASR 58 at 60-61). It is a standard which must be framed and given content in the realisation that a solicitor, no less than the barrister of whom Kitto J wrote (in Ziems' Case [1957] HCA 46; (1957) 97 CLR 279 at 298), "is more than his client's confident, adviser and advocate ..... He is, by virtue of a long tradition, in a relationship of intimate collaboration with the judges, as well as with his fellow-members (of the profession), in the high task of endeavouring to make successful the service of the law to the community". In this court, in which a cause is often tried on affidavits drafted by solicitors who never address, and sometimes do not even see, the judge, one may easily recognise the importance of that collaboration, the value of which so greatly depends on the honesty, as well as the skill and learning, of the solicitor.

2. There is another tradition, at least as long as that of which Kitto J wrote, which allows advantage to be taken in litigation of error, even merely formal error, by one's adversary. For centuries statutes and judicial loosening of formulary bonds have steadily diminished the number of the errors of which any decisive advantage may be taken. But the tradition, so largely emasculated, has endured in the legal conscience which shapes both of the two classes of rules of which the High Court wrote in Clyne's Case [1960] HCA 40; (1960) 104 CLR 186 at 199-200:

"The rules which govern the conduct of members of a body of

professional men, such as the Bar of New South Wales, may (though

there is, of course, no logical dichotomy) be divided roughly into

two classes. In the one class stand those rules which are mainly

conventional in character. To say this is not to deny their

importance from the point of view of the client. But they are

designed primarily to regulate the conduct of members of the

profession in their relations with one another. Many of these rules

are reduced to writing, and they are from time to time interpreted,

and perhaps modified to fit specific cases, by resolutions of the

governing body of the profession. Examples of this class in the

case of the Bar are the rule which forbids advertising, the rules

with regard to retainers, the rule that one of Her Majesty's counsel

must not appear without a junior. A breach of any of these rules is

treated seriously, but would not warrant disbarment-at least unless

it were shown to be part of a deliberate and persistent system of

conduct.

Rules of the other class are not merely conventional in character.

They are fundamental. They are, for the most part, not to be found

in writing. It is not necessary that they should be reduced to

writing, because they rest essentially on nothing more and nothing

less than a generally accepted standard of common decency and common

fairness. To the bar in general it is more a matter of 'does not'

than of 'must not'."

The advantage taken by the appellant of the error he perceived was not one that my experience would suggest to be in contravention of that standard observed or approved by members of the profession of good repute and competency. Less experience of a kind relevant in this case is vouchsafed a judge than a legal practitioner. Perhaps the consciences are nicer now in members of good repute and competency than they were during the thirty years which followed the end of the Second World War. But one must, while recognising that the matter is "in a special sense the province of the Supreme Court" of the Australian Capital Territory, find for oneself the content of the standard which measures fitness to practise.

3. Much of that content must necessarily be derived from "a generally accepted standard of common decency and common fairness". But when economic or other human interest is opposed to another's interest in litigation what common decency or common fairness requires must under our system of law be ascertained without overlooking, and without denying expression to, the claims of the contending parties fully to utilise the weapons which the law allows the combatants. Although one of them was not a legal practitioner, nor formally represented by a legal practitioner, those combatants were equally matched in the skills of which they had need. Further, the error was not of law, but of calculation or transcription. I agree with Lockhart J that the appellant would not have been guilty of professional misconduct if he had paid the amount claimed and the amount stated in the indorsement on the writ to be claimed for costs and disbursements, a course contemplated by Order 4 Rule 6 of the Rules of the Supreme Court of the Australian Capital Territory; or if he had failed to appear to the writ and had suffered judgment in default of appearance under Order 14 Rule 3. That is because it has not been thought misconduct to take an advantage afforded by procedural law, even when the opportunity to gain the advantage derives from an opponent's mistake. It is said that those not improper courses are to be distinguished from the course the appellant took by the circumstances that he did not merely remain inactive and he did not merely make a payment which procedural law contemplated and the Deputy Commissioner's indorsement on the writ impliedly invited, but he made to the Deputy Commissioner an invitation and prepared the documents to be used in doing what he invited the Deputy Commissioner to do. I can see no distinction relevant for present purposes between the invitation impliedly made by tender of a cheque, the course contemplated by Order 4 Rule 6, and the express invitation to take the course contemplated by Order 42 Rule 11, which provides:

"11.(1) Subject to subrule (5), where:

(a) the solicitor for a party to a cause or matter has lodged

with the Registrar a draft order or judgment in proper form;

and

(b) there is endorsed on the draft the consent for the purposes

of this rule of the solicitor for each party to the cause or

matter who would be affected by the proposed order or judgment;

the Registrar shall sign and seal the order or judgment.

(2) A draft lodged with the Registrar for the purpose of subrule (1)

shall include a statement that the order or judgment is made or

given by consent of specified parties.

(3) An order sealed in accordance with subrule (1) has effect as

if the order had been made by the Court on the day on which the order

was so sealed.

(4) Where a judgment has been sealed in accordance with subrule (1),

the judgment has effect, and the preceding rules of this Order apply,

as if the judgment had been pronounced by the Court on the day on

which the judgment was so sealed.

(5) The Registrar shall not sign or seal an order or judgment

under subrule (1) if he is of the opinion that the order or judgment

is not such as the court would make or pronounce by consent."

A moral distinction cannot in my opinion be based on the circumstance that a consent judgment afforded the appellant a better chance of ultimate forensic success than a stay by virtue of Order 4 Rule 6, or that the appellant thought it did. If, as has been suggested, the course taken involved an abuse of the process of the Supreme Court, how can it be said that payment of the amount claimed in order to attract the operation of Order 4 Rule 6 did not. Only, as I think, by looking beyond what the appellant did, and beyond the immediate procedural advantage of terminating the Deputy Commissioner's action in exchange for payment of one tenth of the amount which the Deputy Commissioner desired to recover, and by looking to the appellant's intention that what was done should be the first steps to the creation of an estoppel against such a recovery. The learned Chief Justice observed:

"It is of particular relevance that the solicitor procured the judgment

in the positive belief that there was little chance of resisting an

application to set it aside and with the intention of increasing that

chance by appearing to act in reliance on the judgment to his own

detriment by withdrawing the objections to the assessments that were

before the Board of Review. It is the procurement of the judgment

through inducing mistake on the part of the defendant and the intention

to create thereafter an estoppel which distinguish the conduct of the

solicitor in this case from other situations which commonly occur, for

instance, when a solicitor acting for a plaintiff signs interlocutory

judgment for want of an appearance or defence, knowing that the

defendant has a high chance of having the interlocutory judgment set

aside and being allowed in to defend."

There can be no doubt that, if at any time after the appellant had withdrawn his objections against the assessments he had represented that he had not known at the time he withdrew the objections that the Deputy Commissioner's consent to judgment had been given by mistake, that representation would have constituted serious misconduct. But there is no satisfactory evidence that the appellant contemplated making such a representation, or that he did make such a representation. His defence to the action tried by Wilcox J put in issue the allegation that he was aware of the Deputy Commissioner's mistake when the consent judgment was entered, but no evidence was given by him on the issue and his counsel did not submit that Wilcox J should not find that he was aware. The reference in the letter dated 6 August 1984, by which the objections to the assessments were withdrawn, to "the settlement negotiated in Supreme Court proceedings No. 697 of 1984 on the 3rd August 1984" is, as Miles CJ and Gallop J point out, a false suggestion : there was no negotiation, and no settlement in the sense suggested by the phrase. But the evidence does not, as I think, justify the inference that the appellant intended to use the letter to support a representation by him that he was not aware of the Deputy Commissioner's mistake. The letter may have been drafted with the intention of causing the Deputy Commissioner to apprehend, during the negotiations which the appellant expected to follow the Deputy Commissioner's discovery of his mistake, that such a representation would or might be made.

"Mr. Sperling drew useful analogies with hypothetical situations

occurring in supermarkets and the like, but none of them bore exactly on

the ultimate question that needs to be decided in the present case. The

analogies, however, did bring home the message that, apart from the

opinion of legal practitioners, ordinary standards of decency in the

community would condemn as unfair the solicitor's conduct in engaging

Ms. Reid to induce the Deputy Commissioner's officers to sign so-called

terms of settlement in order to procure the so-called consent judgment."

It is, I think, precisely because the instinctive reaction of decent people would be to condemn the appellant's conduct as unfair that his conduct should be carefully considered in the context of a forensic culture which still tolerates, if it no longer encourages, procedural manoeuvre and the taking advantage of an opponent's error. To reduce the expense of litigation courts now commonly discourage what are perceived to be ill-judged manoeuvres of that kind. The most likely result of the appellant's conduct, considered on the evening of 6 August 1984 by a competent lawyer apprised of the facts now known, was the setting aside of the judgment and an order that the appellant pay the costs occasioned by what he had done. I am not persuaded, however, that legal practitioners of good repute and competency would, or that a court should, characterise what he did as professional misconduct.

5. I would allow the appeal, set aside the orders of the Supreme Court, dismiss the motion of the Law Society, and make no order as to costs.

WHITLAM J I agree with Black CJ and Lockhart J that the appellant's behaviour amounted to professional misconduct.

2. The Deputy Commissioner's staff made two mistakes: (1) claiming the wrong amount in the indorsement on the writ of summons, and (2) signing and filing the terms of settlement. The second mistake had its origin in the first mistake but was, in my view, induced and fostered by the appellant.

3. Had the appellant taken advantage of the first mistake by paying to the Deputy Commissioner the amount claimed, further proceedings would have been stayed under the Rules of the Supreme Court. I agree with Lockhart J and Jenkinson J that such a course would not have constituted professional misconduct. After all, such a payment, whilst it results in the proceedings being "stayed", is designed merely to minimize a defendant's costs: Rossco Developments Pty Ltd v. O'Halloran (1980) 29 ACTR 1; 42 FLR 236. (In England this is referred to as the indorsement of 14-day costs.) I have no doubt that, once the Deputy Commissioner's staff realized their mistake, an amendment to the indorsement would have permitted (perhaps on terms) to reflect the net amount owing in respect of the particulars on the claim. In any event, the appellant did not follow such a course. Instead he chose to propound a consent judgment.

4. It is useful, therefore, to bear in mind the provisions of Order 42 of the Rules of the Supreme Court dealing with entry of judgment. Rule 11 was added in 1978 to permit judgments and orders by consent to be entered by the Registrar without a matter being listed in the motion list. However, the very terms of Rule 11 itself and the Practice Direction issued by the Judges of the Supreme Court (38 ACTR 14) make it clear that this facility is only available where the consenting parties are both represented by solicitors. As Miles CJ observed in the Supreme Court, Rule 11 was not complied with on 6 August 1984.

5. I think that the evidence establishes a somewhat more elaborate role being played by the appellant in procuring the entry of judgment than that described by Lockhart J. His Honour adds to the steps taken by the appellant on 3 August 1984 only one event, namely, writing the letter dated 6 August 1984 withdrawing the outstanding objections. However, it seems to me that the appellant arranged to file both his appearance and the draft judgment on 6 August 1984, knowing full well that the terms of settlement had already been signed on behalf of the Deputy Commissioner on the previous Friday. I shall briefly explain why I have formed this view.

6. Early in his cross-examination, the appellant did say it was his "belief" that the terms of settlement, the appearance and the draft judgment were held by the Deputy Commissioner over the weekend and filed by the Deputy Commissioner on the Monday. However, he later allowed that it "might be" that "the terms of settlement and the appearance were engrossed on the Friday and the judgment was not engrossed until the Monday." Also the appellant said that he signed the appearance and that he altered the date which had been typed on the engrossed document from "3rd" to "6th" August in his handwriting.

7. Ms Reid had no recollection of leaving with the officers of the Deputy Commissioner any document other than the terms of settlement. The Deputy Commissioner's officers all depose to only one document being left with them, namely, what they call the "consent judgment." This is plainly the terms of settlement signed on behalf of the Deputy Commissioner. According to one of these officers, Ms Reid was given a photocopy of this document.

8. The statement of agreed facts tendered in the Supreme Court records that "(on) 6 August 1984 an appearance was filed on behalf of the (appellant) by his solicitors." This is entirely consistent with the appellant's own evidence and should be accepted. The statement also records, unexceptionably in my view, that on 6 August 1984 the terms of settlement document was filed by the Deputy Commissioner, but it then goes on to state that "(on) 6 August 1984 the Deputy Commissioner of Taxation arranged for judgment to be entered in his favour as plaintiff against the (appellant) as defendant for $25,557.92 for debt and $115 for costs." This last statement seems to me not to be a conclusion that flows from the evidence.

9. The draft judgment was engrossed by the appellant with the date of 6 August 1984, being the date, no doubt, that he expected it to be signed and sealed by the Registrar. That is the same date as the letter which the appellant says he dictated to his secretary after "the settlement was done", that is, after the terms of settlement had been signed. It may be readily inferred that the draft judgment was typed at the same time as the letter. There is no suggestion that anyone visited the Deputy Commissioner's office more than once on behalf of the appellant.

10. This means that the appellant directly arranged the entry of a corrupt judgment. I use the term corrupt deliberately because, as Miles CJ said, "the consent was not a true consent at all, as it was based on a mistake of which the (appellant) was aware and which he was concerned to perpetuate." The appellant must have known that whoever signed on behalf of the Deputy Commissioner was under the misapprehension that the terms of settlement would result in a judgment for the net amount owing in respect of the tax assessments mentioned in the writ.

11. Black CJ and Lockhart J explain why the appellant's conduct transcended mere "sharp tactics" and why his "slick" behaviour must be labelled professional misconduct. Particularly too, I agree with Miles CJ that: "Conduct of such a nature tends to bring the legal profession into disrepute in a general sense." That is a bad thing for which the appellant must bear appropriate blame.

12. So far as penalty is concerned, were it up to me, I would consider a reprimand sufficient censure, particularly having regard to the isolated nature of the appellant's conduct and the evidence of his good character. However, I do not regard the penalty fixed by the Supreme Court as so disproportionate to the gravity of the offence as to indicate that its discretion was wrongly exercised.

BEAZLEY J I agree with the Reasons for Judgment of the Chief Justice and Lockhart J and the orders proposed by them.

Profession Practice Act 1958

"View LawCiteRecord") Re Guild and Re Legal Practitioners Ordinance 1970

Legal Practitioners Act 1970(ACT)ss 29, 36, 37, 41, 42D

Legal Practitioners Ordinance 1970

Re Guild and Re Legal Practitioners Ordinance 1970

Terence John Chamberlain v the Law Society of the Australian Capital Territory [1993] FCA 527;

At a glance

Court

Decision date

Before

Source

Judgment (176 paragraphs)

Terence John Chamberlain v the Law Society of the Australian Capital Territory [1993] FCA 527; (1993) 43 FCR 148 (2 November 1993)

Parties

Legislation Cited (6)

Cases Cited (10)