1 On 17 October 2005 the Council of the New South Wales Bar Association (the Council) filed an application for original decision which sought the following orders against David Keith Louis Raphael (the barrister):

1.That David Keith Louis Raphael is guilty of unsatisfactory professional conduct or both professional misconduct and unsatisfactory professional conduct.

2. Such further or other orders as are provided for in s.171C (1) (a) – (f) of the Legal Profession Act 1987 as the Tribunal thinks fit.

3. IN THE ALTERNATIVE TO 2 such further or other orders as are provided for in s.[562] (2) (a) – (e) of the Legal Profession Act 2004 as the Tribunal thinks fit.

4. That David Keith Louis Raphael pay the Bar Association’s costs of the proceedings.

5. Liberty to apply.

3 The ground of the amended application was as follows:

That David Keith Louis Raphael (“the Barrister”) is guilty of unsatisfactory professional conduct or professional misconduct because in writing to Messrs McIntosh McPhillamy & Co on or about 16 January 2002, when acting for Mr Peter Knudsen (“Knudsen”), solicitor, in terms that included paragraphs 6 (a) and (b) of that letter, the Barrister:
a) sought to induce a material witness or witnesses in proceedings No.012043 (“the Disciplinary Proceedings”) before the Administrative Decisions Tribunal (“the Tribunal”) not to give evidence before the Tribunal;

b) sought to induce a material witness or witnesses to inform the Informant in the Disciplinary Proceedings that he or they would “specifically decline to give evidence in the Proceedings”;

c) was party to obstructing the Disciplinary Proceedings;

d) alternatively to (c), was party to an attempt to obstruct the Disciplinary Proceedings.

(a) is of the view that the barrister was not guilty of professional misconduct; but

(b) is of the view that the barrister engaged in unsatisfactory professional conduct.

5 On 12 March 2001 the partners of the firm of solicitors McIntosh McPhillamy & Co commenced proceedings in the Local Court at Bathurst against two defendants seeking recovery of counsel’s fees payable to a Mr Hamman. The first defendant had retained McIntosh McPhillamy & Co to provide legal services on behalf of her children and the fees payable to Mr Hamman were incurred for legal services provided by him on behalf of those children.

6 The second defendant in those proceedings was a solicitor, Mr Peter Knudsen. McIntosh McPhillamy & Co had released their files to Mr Knudsen and waived their lien. In the process of doing so they obtained an undertaking from Mr Knudsen to meet payment of the fees owing to Mr Hamman.

7 The Local Court proceedings commenced by McIntosh McPhillamy & Co alleged that Mr Knudsen breached his undertaking and did not make payment of the fees payable to Mr Hamman. The plaintiffs claimed the amount of those fees namely $11,860 and interest of $3,308.11.

8 In about March 2001 McIntosh McPhillamy & Co lodged a complaint with the Law Society of New South Wales (the Law Society) about Mr Knudsen’s conduct in connection with his failure to honour the undertaking.

9 On 14 December 2001 the Law Society filed an information, instituting disciplinary proceedings in this Tribunal against Mr Knudsen, alleging that he was guilty of professional misconduct on the ground that he failed to honour the undertaking. In support of that application the Law Society filed an affidavit sworn on 12 December 2001 by Mr Christopher John Nichols, one of the partners of McIntosh McPhillamy & Co.

10 On 17 December 2001 the Law Society wrote to the barrister confirming a telephone conversation with him in which he stated that he had instructions from his client, Mr Knudsen, to accept service of the information. Sealed copies of the information and the affidavit of Mr Nichols and another affidavit were enclosed with the letter.

11 The Local Court proceedings were fixed for hearing at Bathurst on 17 January 2002 and the barrister was briefed to appear for Mr Knudsen at the hearing of those proceedings. Mr Kearney of counsel was briefed to appear for McIntosh McPhillamy & Co at that hearing.

12 On 15 or 16 January 2002 Mr Knudsen instructed the barrister to seek to settle the proceedings provided that the best terms he could negotiate were satisfactory to Mr Knudsen.

13 On 15 or 16 January 2002 Mr Kearney spoke to the barrister and made him an offer to settle the matter for $11,860 plus $5,000 costs.

14 On 16 January 2002 the barrister spoke to Mr Kearney and made a counter offer to settle the matter for $8,000 inclusive of costs or for $10,000 inclusive of costs if Mr Nichols declined to give evidence in the Disciplinary Proceedings.

15 Annexed to an affidavit sworn by Mr Kearney on 11 July 2006 and filed in these proceedings on behalf of the barrister, was a copy of the back sheet of the brief delivered to Mr Kearney. Mr Kearney made notes on that back sheet and those notes indicate that on 16 January 2002 there were further negotiations between Mr Kearney and the barrister which included:

a) an offer by Mr Kearney to settle for $15,000 with Mr Nichols providing a letter to the Law Society withdrawing the complaint;

b) a counter offer by the barrister of $12,500 with $3,000 payable at that time, the balance in 6 months and a letter withdrawing the complaint;

c) an offer by Mr Kearney of $13,000 payable within 28 days; and

d) an offer by the barrister of $13,000 payable within 5 weeks together with a letter from Mr Nichols to the Law Society withdrawing the complaint.

17 As Mr Kearney and the barrister negotiated towards a settlement, they agreed that the barrister would put in writing a proposed heads of agreement and fax it to McIntosh McPhillamy & Co. It was understood that this would be handwritten by the barrister and that McIntosh McPhillamy & Co would have it typed.

18 On 16 January the barrister faxed to McIntosh McPhillamy & Co for the attention of Mr Nichols a handwritten offer to settle the proceedings for $13,000.

19 Paragraph 6 of that document was in the following terms:

a) That you will not swear any further Affidavit nor will you offer to give evidence against Mr Knudsen in the proceedings instituted by the Law Society against him and numbered 012043/01; and

b) That you will write to the Law Society within seven (7) days after payment of the said sum of $13,000.00 informing the Law Society that the undertaking has now been honoured and that you specifically decline to give evidence in those proceedings and will send a copy of that letter to Mr Knudsen of even date with that to the Law Society.

21 By letter dated 17 January 2002, McIntosh McPhillamy & Co sent to Mr Knudsen a copy of a draft letter to the Law Society for approval. The draft letter included the following:

We wish to advise that the undertaking has now been honoured and the writer wishes to withdraw the complaint previously made against Mr Knudsen.

If the Law Society of New South Wales wishes to maintain the professional conduct proceedings against Mr Knudsen, the writer declines to give evidence against him in such proceedings.

We wish to make it clear that, although we are indicating that we are unwilling to give evidence, we will not resist a subpoena to give evidence if such is issued.

24 On about 4 April 2002 McIntosh McPhillamy & Co sent a letter to the Law Society in the terms of the draft letter that was forwarded to Mr Knudsen on 17 January 2002.

25 By his reply filed in these proceedings, the barrister admitted that at all material times, he was aware that Mr Nichols was a person who had sworn an affidavit in connection with the disciplinary proceedings and was a material witness in those proceedings.

26 On 16 July 2002 the Law Society wrote to Mr Nichols confirming the dates (14 and 15 August 2002) for hearing of the disciplinary proceedings against Mr Knudsen. The letter included the following paragraph:

As presently advised, it will be necessary for you to give evidence in these proceedings. The Society will assume, unless it hears from you to the contrary, that it will not be necessary to issue a Subpoena.

28 The Law Society served Mr Nichols with a summons to give evidence and the afternoon before he gave evidence he attended a conference with counsel for the Law Society. He gave oral evidence in this current application that he gave the Law Society his fullest cooperation.

29 Mr Knudsen and the barrister regarded the proceedings in the Tribunal against Mr Knudsen as unnecessary and ill-founded. (In its written submissions the Council accepted that the barrister considered that the initial complaint made by the Law Society was made to place pressure on Mr Knudsen to meet his undertaking and that he genuinely believed that the disciplinary proceedings should not continue.)

30 Mr Nichols also gave evidence that it was his understanding that if he were required to do so, he would cooperate with the Law Society. He also gave evidence that it was his understanding that what he had agreed to in the terms of settlement was not inconsistent with that understanding.

31 Mr Kearney did not give oral evidence as he was not required for cross examination.

Other evidence

32 The barrister also filed affidavits sworn by Mr Priestley QC, Mr Sullivan QC and Mr Slater QC which included evidence in highly supportive terms as to the barrister’s good fame and character; his honesty and trustworthiness; and his truthfulness and ethical conduct.

33 In paragraph 8 of his affidavit Mr Sullivan stated:

I believe it was an error of judgment on the part of Mr Raphael (and also on the part of the legal representatives acting for the plaintiff in the Local Court proceedings) to include as terms of the settlement terms 6 (a) and 6 (b). However, I feel confident that Mr Raphael knew that Mr Nichol’s (sic) could be compelled to give evidence in those disciplinary proceedings and, if so compelled, would co-operate with the Law Society by attending conferences and giving honest and candid evidence. I’m sure that Mr Raphael did not consciously intend to obstruct or interfere with the course of justice in agreeing to the terms of settlement in the Local Court proceedings.

35 During this part of the cross examination the barrister said that he was not attempting in any way to act contrary to his duties as a member of the Bar and certainly was not seeking to obstruct the course of justice. Those matters did not occur to him at the time of the negotiations.

The Council’s submissions

36 The Council’s submissions may be summarised as follows:

a) the Law Society was disadvantaged because Mr Nichol’s voluntary assistance came to an end when the heads of agreement were executed;

b) the essential wrong in the settlement that was negotiated by the barrister was that it sought to take some ownership over Mr Nichols as a witness in the disciplinary proceedings;

c) the barrister’s object was to discourage Mr Nichols from providing voluntary assistance as a witness to the Law Society in the disciplinary proceedings;

d) to discourage a witness from giving evidence is misconduct (cf Deacon v Australian Capital Territory (2001) 147 ACTR 1 at [102]) and that is what the barrister did;

e) some part of the $13,000 related to the promises made by Mr Nichols in paragraphs 6 (a) and (b) of the heads of agreement i.e. some part of the $13,000 was consideration for Mr Nichols’ agreeing to decline to give evidence;

f) it was not necessary for the Council to prove that the barrister had a specific intent to interfere with the disciplinary proceedings or that he knew that it was wrong to do so;

g) the barrister should have realised that what he was doing was apt to interfere with the disciplinary proceedings;

h) Mr Nichols was discouraged as a potential witness from conferring with the Law Society and being interviewed on behalf of the Law Society. Paragraphs 6 (a) and (b) of the heads of agreement discouraged and were intended to discourage Mr Nichols from conferring with the Law Society;

i) the interference with the disciplinary proceedings occurred when the heads of agreement were executed; and

j) the barrister’s conduct was apt to undermine the integrity of the evidence that came before the disciplinary tribunal.

38 It was submitted that the barrister knew that the agreement recorded in the heads of agreement would potentially at the very least interfere with the disciplinary proceedings and that is what he intended to bring about. Counsel stated that he did not go the extra step and say that the barrister knew that was wrong and decided to proceed anyway. The submission was that the barrister should have appreciated that it was wrong and not that he knew that it was wrong.

The barrister’s submissions

39 The following submissions were made on behalf of the barrister:

a) if the Tribunal found that the complained of conduct did not have the effect or was not engaged in with the intention of obstructing proceedings before the Tribunal, the complaint must fail;

b) there was no evidence that the complained of conduct had the effect of obstructing proceedings before the Tribunal;

c) there was ample evidence from three of the four experienced legal practitioners involved in the complained of conduct that none of them had any intention of obstructing proceedings before the Tribunal;

d) there was no evidence that the Law Society would or might have done anything differently but for the complained of conduct. The complained of conduct could not therefore be said to have had the effect of or even the tendency of obstructing proceedings before the Tribunal;

e) the case of Deacon v Australian Capital Territory was distinguishable on its facts;

f) the complaint made by McIntosh McPhillamy and Co to the Law Society concerning Mr Knudsen’s failure to carry out his undertaking was prima facie an abuse of process;

g) Mr Nichols and Mr Kearney were experienced legal practitioners and their entry into the settlement agreement indicated peer approval of its terms and no cognizance of any impropriety;

h) there was no evidence that the settlement prejudiced the Law Society’s preparation of the complaint for hearing and there was no evidence that the conduct of the barrister had any adverse impact upon the conduct of the disciplinary proceedings before the Tribunal;

i) there was evidence that the barrister, Mr Nichols or Mr Kearney did not intend to obstruct proceedings before the Tribunal;

j) the barrister could not be found guilty of misconduct unless he had an intention to interfere with the course of the disciplinary proceedings;

k) the Council had to prove beyond reasonable doubt that objectively the heads of agreement had a tendency to interfere with the course of the work of the disciplinary tribunal. However the heads of agreement could not possibly do that;

l) the Tribunal should accept the whole of the evidence of Mr Nichols including his evidence that if he were required to do so he would cooperate with the Law Society;

m) the ground of the amended application had not been made out;

n) part of the settlement agreement included a term that if Mr Nichols was served with a subpoena then he would be obliged to give evidence in the disciplinary proceedings;

o) no part of the $13,000 should be attributed to an agreement by Mr Nichols to decline to give evidence without a subpoena;

p) the barrister should be accepted as a witness of truth;

q) neither Mr Kearney nor the barrister had a guilty intention or mens rea;

r) the evidence given by way of affidavit by Mr Priestley QC, Mr Sullivan QC and Mr Slater QC was admissible on the question of the barrister’s credit and on the unlikelihood of his guilt. The Court of Appeal decision in the New South Wales Bar Association v Meakes [2006] NSWCA 340 was distinguishable and in the alternative was wrongly decided; and

s) if the Tribunal finds that the barrister “acted under a mistaken view of the matter, in all the circumstances this was not a failure to understand or practise the requirement of honesty but a lapse not inconsistent with general professional fitness.”

(a), (c), (i), (j) and (q). Intention to obstruct or interfere with the proceedings before the Tribunal does not have to be proved before the barrister can be found guilty of unsatisfactory professional conduct. It is the conduct itself which must be considered and the question asked: did that conduct have the tendency to impair the Tribunal’s capacity to do justice.

(b) See paragraphs 50, 63 and 64 below.

(d) and (h). The conduct must be considered as at the time it was carried out and the question asked: did it have the tendency to impair the Tribunal’s capacity to do justice in the proceedings. It is a proper inference to draw from the evidence and from how litigation is conducted (e.g. legal representatives hold conferences with witnesses and supplementary affidavits are often filed) that the Law Society may have wanted to confer with Mr Nichols and may have required a further affidavit from him. The settlement agreement had the tendency to cause Mr Nichols not to confer or to provide a further affidavit.

(g) The entry into the settlement agreement by Mr Nichols and Mr Kearney shows that the agreement was approved by them, but it is not evidence of wider peer approval.

(k) The standard of proof is the balance of probabilities. As to the balance of this subparagraph see paragraphs 63 and 64 below.

(l) The Tribunal is not persuaded that it was part of the settlement agreement that if required by the Law Society to do so, Mr Nichols would cooperate with the Law Society. Such an understanding is not recorded anywhere and there is nothing in the affidavits of Mr Nichols or Mr Kearney (nor for that matter the affidavits of the barrister) which provide any foundation for that understanding.

(m) See paragraphs 63 and 64 below.

(o) The Tribunal is of the view that some part of the $13,000 was consideration for the promises by Mr Nichols recorded in paragraphs 6 (a) and (b) of the settlement agreement.

(r) New South Wales Bar Association v Meakes is not distinguishable and this Tribunal is bound by it. Accordingly the evidence of Mr Priestley QC, Mr Sutherland QC and Mr Slater QC, with the possible exception of the evidence of Mr Sullivan referred to in paragraph 32 above, is not relevant on the question whether the barrister’s conduct constituted unsatisfactory professional conduct.

(s) It is tendency of the barrister’s conduct which is relevant, not what might have brought about that conduct (see paragraph 50 below).

42 Here however the disciplinary proceeding taken in the Tribunal against Mr Knudsen was a matter of public concern. The Law Society alleged that the solicitor was guilty of professional misconduct. That proceeding was primarily directed towards the protection of the public and not the punishment of the legal practitioner (Smith v New South Wales Bar Association 176 CLR 256 at 270, Deane J). The Tribunal is therefore of the view that Kerridge v Simmonds does not support the submission made on behalf of the barrister.

Legal Profession Act 2004

43 The Legal Profession Act 1987 was repealed by the Legal Profession Act 2004. That Act commenced on 1 October 2005. However both parties in effect submitted the Legal Profession Act 2004 was the relevant statute which applied to these proceedings. This would appear to be supported by clauses 16, 17 and 17A of Schedule 9 of the Legal Profession Act 2004. The Tribunal has therefore proceeded on the basis that the 2004 Act is the Act which applies, but notes that due to the similarity of the relevant sections in both Acts, the end result would be the same on the questions whether the barrister was guilty of professional misconduct or unsatisfactory professional conduct.

44 Section 494 (1) of the Legal Profession Act 2004 relevantly provides:

(1) The purposes of this Chapter are as follows:

…

(b) to promote and enforce the professional standards, competency and honesty of the legal profession.

…

For the purposes of this Act:

unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

(1) For the purposes of this Act,

professional misconduct includes:

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

…

Professional misconduct

48 The Tribunal is of the view that the conduct of the barrister would not reasonably be regarded as disgraceful or dishonourable by his professional brethren of good repute and competency and for that reason the Tribunal is of the view that the barrister’s actions did not amount to professional misconduct at common law (see Allinson v General Council of Medical Education and Registration [1894] 1KB 750).

49 The circumstances in which the barrister’s conduct took place are relevant to the question whether his conduct can be regarded as professional misconduct. Here the relevant circumstances included:

a) the negotiations for settlement probably commenced on 16 January 2002, the day before the proceedings were listed for hearing;

b) some of the negotiations took place with both barristers being out of their chambers – the barrister at his farm and Mr Kearney driving to Bathurst – which were not circumstances conducive to mature deliberation as to the consequences of what was being proposed;

c) four lawyers were involved and none of them apparently saw anything wrong with what they were doing;

d) Mr Knudsen and the barrister were of the view that the disciplinary proceedings against Mr Knudsen were unnecessary and ill-founded. (In its submissions to the Tribunal the Council accepted that the barrister considered that the initial complaint made to the Law Society was made to place pressure on Mr Knudsen to meet his undertaking and that the barrister genuinely believed that the disciplinary proceedings should not continue.);

e) it was not part of the settlement that Mr Nichols agreed not to give evidence. It was understood that he would give evidence if served with a subpoena requiring him to do so; and

f) there is no evidence that the barrister was of the view that his conduct was improper. The evidence indicates that it never occurred to him that there was anything improper in the negotiations which were conducted by him and the other three lawyers.

The question to be answered

51 The Tribunal is of the view that the barrister’s conduct can only be regarded as unsatisfactory professional conduct if the settlement agreement had the tendency to impair the Tribunal’s capacity to do justice in the proceedings brought by the Law Society against Mr Knudsen. The question therefore is did the agreement have that tendency.

52 The primary duty of a Court (or Tribunal) is to ascertain the truth by the best evidence available (Harmon Shipping Co SA v Saudi Europe Line Limited [1979] 1 WLR 1380 at 1385B).

53 In Lines MacFarlane & Marshall Pty Limited v Fletcher Constructions Australia Limited (No 2) [2000] VSC 568, the defendant, which was a builder, wrote to one of its sub contractors stating that it was not prepared to provide consent to the subcontractor to disclose any of the details regarding the services or the works to any third party including the plaintiff. This refusal to give consent was justified by the defendant on the basis of a confidentiality provision in the agreement between the subcontractor and the defendant.

54 On an application for indemnity costs, Nathan J held that the confidentiality provision had no application. At paragraph 32 of the judgment his Honour stated:

I must confess that I have not exhaustively examined the matter of public policy. However, it must be that the freedom of expression of a witness should not be curtailed, especially in respect of a matter which does not affect the financial welfare or otherwise, of the proposed witness and could potentially distort the evidence available to a Court, so that it may adjudicate upon matters of fact.

56 The solicitors for the plaintiff then filed a notice of motion seeking a declaration that the defendant’s solicitor refrain from informing potential witnesses that there was any legal impediment to their giving statements to the plaintiff’s solicitor and refrain from discouraging such potential witnesses in any way from giving information or making statements to the plaintiff’s solicitor.

57 Higgins J concluded that the matters relied upon by the solicitor for the defendant, provided no legal basis for the witnesses not to provide a statement.

58 At paragraph 102 his Honour stated:

I have concluded that it would tend to impede the course of justice for a person, whether a party or a solicitor for a party or otherwise, to discourage a witness or potential witness from offering evidence relevant (possibly) to another party’s case.

Thus, while it no doubt serves the interest of justice for a witness to come forward for the purposes of aiding the prosecution of litigation, whether civil or criminal, there is no generally enforceable duty on that person to do so. It follows that a solicitor, whilst not permitted to obstruct or hinder or dissuade a witness from coming forward or cooperating with inquiries, would not be acting unlawfully merely by advising the witness that he or she is not obliged to come forward or respond to inquiries.

The defendant’s solicitor would be impeding the course of justice if he ... discouraged such potential witnesses from giving information to or making statements to the plaintiff’s solicitor about the facts of this matter.

Findings

62 Paragraph 8 of Mr Sullivan’s affidavit could be taken as an expression of an opinion by him that the barrister’s conduct was inappropriate (and perhaps unsatisfactory professional conduct). The barrister’s evidence recorded in paragraph 33 above, could be taken to be an admission by him that his conduct was inappropriate (and perhaps unsatisfactory professional conduct). However Mr Sullivan was not cross examined and the Tribunal does not propose to base its decision on Mr Sullivan’s evidence nor on the possible admission by the barrister.

63 By the terms of the settlement agreement, Mr Nichols did not agree that he would not confer with the Law Society. However the Tribunal is of the view that the settlement agreement would have tended to cause Mr Nichols to be reluctant to confer with the Law Society.

64 The position therefore is that prior to the settlement being agreed, Mr Nichols had provided an affidavit to the Law Society in the disciplinary proceedings and was one of the partners of the firm who had lodged the complaint with the Law Society. It would have been correct to describe him as a willing witness. One would have expected him to confer with the Law Society when requested and assist it in the prosecution of the complaint by providing any further information which might be required and any further affidavits which might be required.

65 However after the settlement was agreed, Mr Nichols informed the Law Society that he wished to withdraw the complaint. He was no longer a willing witness. He informed the Law Society that he declined to give evidence against Mr Knudsen. He was a party to an agreement which, in the view of this Tribunal had the tendency to cause him to decline any request to confer with the Law Society or provide a further affidavit. By reason of those matters the Tribunal finds that the settlement agreement had the tendency to impair the Tribunal’s capacity to do justice in the proceedings. Accordingly the Tribunal finds that the barrister engaged in unsatisfactory professional conduct by negotiating the settlement agreement. The Tribunal finds that ground (b) of the amended application has been established.

66 It is irrelevant that subsequently Mr Nichols conferred with counsel for the Law Society and that he may have given the Law Society his fullest cooperation. The barrister’s conduct has to be gauged at the date when the settlement was agreed.

Order

1. Tribunal finds that the barrister engaged in unsatisfactory professional conduct

2. The Tribunal orders that the application is stood over to a date to be fixed for the Tribunal to receive evidence and submissions as to the appropriate dispositive orders.