Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Council of the New South Wales Bar Association v Nash [2012] NSWADT 220
• Hearing dates: 4, 5, 6, 7 and 12 June 2012
• Decision date: 29 October 2012
• Jurisdiction: Legal Services Division
• Before: P Blacket SC - Judicial Member; R J Wright SC - Judicial Member; J Tingle - Non-judicial Member

Decision

The Tribunal:

1. Finds that the Respondent has engaged in professional misconduct on the bases set out in Grounds 1(b), 1(c) and 1(d) in the Amended Application for Original Decision.

2. Otherwise dismisses the Amended Application for Original Decision.

3. Stands the matter over to 7 November 2012 at 9.30am for directions for the preparation of the matter for hearing as to the appropriate relief.

• Catchwords: Legal Practitioners - Disciplinary Proceedings - Barrister - Professional Misconduct - Giving knowingly false evidence
• Legislation Cited: Legal Profession Act 2004 (NSW); Administrative Decisions Tribunal Act 1997 (NSW); Evidence Act 1995 (NSW)
• Cases Cited: Sudath v Health Care Complaints Commission [2012] NSWCA 171; Briginshaw v Briginshaw (1938) 60 CLR 336; NSW Bar Association v Cummins (2001) 52 NSWLR 279; Coe v NSW Bar Association [2000] NSWCA 13
• Category: Principal judgment
• Parties: Council of the Bar Association of New South Wales (Applicant); Christine Nash (Respondent)
• Representation: Counsel; M Johnston (Applicant); P Taylor SC and A Horvath (Respondent); Hicksons (Applicant); Moray & Agnew (Respondent)
• File Number(s): 112007

REASONS FOR DECISION

1 LEGAL SERVICES DIVISION (P Blacket SC - Judicial Member, R J Wright SC - Judicial Member, J Tingle - Non-judicial Member): By an Application for Original Decision filed on 22 March 2011 the Council of the New South Wales Bar (the "Applicant") sought a number of orders including inter alia:

1. Findings that the Respondent, Christine Nash ("Ms Nash"), has been guilty of professional misconduct with respect to the conduct contained in each of the Grounds for Application.

Background

2 It was not in dispute that the Respondent, Ms Nash, was an "Australian lawyer" within the meaning of s 5 of the Legal Profession Act 2004 (the "LPA") and an "Australian legal practitioner" within s 6 of that Act at the time of the conduct in question in this matter and at the time of the hearing in the Tribunal.

3 The parties prepared a Statement of Agreed Facts which set out the background to this matter and which was admitted into evidence. In the light of the parties' express agreement as to these facts, the Tribunal accepts and relies on them. Much of the background information that appears below is taken from those agreed facts.

4 The Respondent was admitted to the New South Wales Roll of Barristers (as it then was) on 16 December 1981 and commenced practicing as a barrister in 1983.

5 She was issued with a practising certificate from their introduction on 1 July 1988 and held one up until 30 June 2003. From 11 November 1985 up until 30 June 2003 the Respondent practised as a Public Defender. The Respondent was issued with an unrestricted practising certificate on 15 September 2004 and has held one continually since that date.

6 This matter arises out of Ms Nash's conduct as a party and witness in proceedings in the District Court of New South Wales, No. 2804 of 2005, George Ferizis as Trustee of the Kallithea Trust v Christine Nash & Ors. The Respondent was the First Defendant in those proceedings which were heard before Rein DCJ (as his Honour then was) on 24, 25, 26 and 27 October 2006, 12, 13, 14, 15, 16 and 19 and 22 March and 13 April 2007.

7 Rein DCJ delivered judgment on 27 April 2007 - Ferizis v Nash (2007) NSWDC 108. In those reasons for judgment his Honour made certain adverse findings against the Respondent and (at paragraph [100]) directed the Registrar of the District Court to forward a copy of the reasons to the Office of the Legal Services Commissioner so that "consideration may be given by the Commissioner as to what further action or investigation, if any, should be undertaken".

8 The Tribunal should note here that the Applicant sought to tender a copy of Rein DCJ's reasons but the Respondent objected to the tender of the reasons for judgment as well as the correspondence contained in the submissions that were made to the Bar Council in response to the original complaint that disclosed to some extent the findings made by Rein DCJ.

9 It was submitted by the Mr Taylor, Senior Counsel for the Respondent, that Rein DCJ's relevant findings concerning Ms Nash were merely expressions of opinion that were irrelevant and inadmissible in the proceedings in this Tribunal. In addition, it was said that the submissions that were previously put by Ms Nash's legal advisers to the Bar Council focused on issues that were not relevant for this Tribunal to consider.

10 Mr Johnson for the Applicant accepted that Rein DCJ's findings were opinions and irrelevant for the purposes of the consideration by this Tribunal of the matter before it. He consequently did not press the tender of the District Court's reasons for judgment.

11 The relevance of prior hearings and findings by a Court in disciplinary cases was considered in Sudath v Health Care Complaints Commission [2012] NSWCA 171 (in particular see [83] to [104]), a decision that was handed down after the completion of the hearing in this matter.

12 The possibility or potential for this Tribunal coming to different conclusions on factual matters on the same evidence that was essentially before Rein DCJ is of concern. However, the Tribunal believes that in the circumstances it must determine the matter on the basis of the evidence adduced by the parties before it. In view of the attitude of the parties to Rein DCJ's reasons and the fact that the parties did not have the opportunity to consider and make submissions in the light of the decision in Sudath, the members of the Tribunal have refrained from reading Rein DCJ's reasons for judgment. We note the express concession made during the hearing before the Tribunal that Rein DCJ found in the District Court proceedings that Ms Nash was a guarantor of the obligations under the option deeds that were the subject of those proceedings.

13 On 12 July 2007 the Registrar of the District Court wrote to the Legal Services Commissioner advising of the matters raised by Rein DCJ in his reasons for judgment.

14 On 30 July 2007 the Legal Services Commissioner determined to initiate a complaint against the Respondent in accordance with s 504 of the LPA.

15 On 29 January 2008 the Respondent wrote to the Legal Services Commissioner advising that an Amended Notice of Appeal with Appointment had been filed on 14 December 2007 in relation to Rein DCJ's judgment. In that letter the Respondent requested that the "processing of a complaint be deferred until the outcome of the appeal".

16 By way of letter dated 27 February 2009 the Respondent advised that the appeal from the District Court had been dismissed by consent on 25 February 2009. By letter dated 6 March 2009, the Commissioner referred the matter to the Applicant for investigation.

17 On 23 September 2010 the Applicant resolved that the particulars (1D, 1F, 1G, 1H, 1I, 2A, 2B and 3A) of the complaint made by the Legal Services Commissioner be referred to this Tribunal pursuant to s 537(2) of the LPA. Those particulars were as follows:

Complaint 1 - Ms Nash misled the Court

D. as modified, in that she falsely verified a defence knowing a material particular in the defence was not true.

F. in that she asserted in her evidence that she did not have an interest in a building development known as the Balmain project (the subject of the proceedings) or a reason for giving a guarantee in relation to the Balmain project, when that was false.

G. in that she asserted in her evidence that the plaintiff had not asked for guarantees, when she knew that was false.

H. in that she attested to the fact that Mr Lahood, a solicitor, witnessed her signature on the "the four signature page" (a page of a document known as the Option Deed), when that had not occurred.

I. in that she denied in her evidence that she had agreed with the plaintiff that the directors would give guarantees when that was false.

(i) Complaint 2 - Ms Nash engaged in misleading conduct

A. in that she executed a guarantee to guarantee the obligations of the company LNG Holdings Pty Limited as a director of that company when she was not, to her knowledge, a director.

B. in that she represented to Mr Ferizis that Mr Graham Vaughan was a director of LNG Holdings Pty Limited when she knew that to be false and, further, knew Mr Vaughan was an undischarged bankrupt.

(ii) Complaint 3.A, as modified, that Ms Nash was a party to the false attestation of documents.

18 On 23 September 2010 the Applicant also resolved that the balance of the particulars (1B, 1C, 1E and 4B) should be dismissed pursuant to s 539(1)(a) of the LPA.

19 On 22 March 2011 the Applicant filed the Application for Original Decision in this matter in the Tribunal. On 18 May 2011 Ms Nash filed a Reply to an Application providing a response to the Grounds of Complaint in the Application for Original Decision.

Pleadings

20 The Applicant's Application for Original Decision alleged that the Respondent had engaged in professional misconduct upon the following grounds:

Ground 1

18. The respondent, during District Court proceedings (No 2804 of 2005), misled the court:

(a) The respondent falsely verified a Defence knowing a material particular in the Defence was not true.

(b) The respondent asserted in her evidence that she did not have an interest in the building development known a the Balmain project (the subject of the proceedings) or a reason for giving a guarantee in relation to the Balmain project, when that was false.

(c) The respondent asserted in her evidence that the plaintiff had not asked for guarantees, when she knew that was false.

(d) The respondent attested to the fact that Mr Lahood, a solicitor, witnessed her signature on 'the four signature page' when that had not occurred.

(e) The respondent denied in her evidence that she had agreed with the plaintiff that directors would give guarantees, when that was false.

...

[Detailed particulars of each ground were then set out]

...

Ground 2

36. The respondent engaged in misleading conduct:

(a) The respondent executed a guarantee to guarantee the obligations of the company LNG Holdings Pty Limited as a director of that company when she was not, to her knowledge, a director; and

(b) The respondent represented to Mr Ferizis that Graham Vaughan was a director of LNG Holdings Pty Limited when she knew that to be false and further, knew Mr Vaughan was an undischarged bankrupt.

...

[Detailed particulars of each ground were then set out]

...

Ground 3

52. The respondent was a party to the false attestation of documents.

...

[Detailed particulars of this ground were then set out].

21 At the commencement of the hearing on 4 June 2012, the Respondent was given leave to file in the Tribunal an Amended Reply to the Application. Apart from a minor amendment to what had previously been pleaded, the purpose of the Amended Reply was to raise the issue that the conduct the subject of Grounds 2(a), 2(b) and 3 occurred on or before 20 June 2003 which is more than 3 years before the complaint initiated by the Legal Services Commissioner on 30 July 2007.

22 Section 506 of the LPA provides:

(1) A complaint may be made about conduct of an Australian legal practitioner irrespective of when the conduct is alleged to have occurred.

(2) However, a complaint cannot be dealt with (otherwise than to dismiss it or refer it to mediation) if the complaint is made more than 3 years after the conduct is alleged to have occurred, unless a determination is made under this section that:

(a) it is just and fair to deal with the complaint having regard to the delay and the reasons for the delay, or

(b) the complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint.

(3) A determination under this section:

(a) in the case of a complaint made to or by the Commissioner-is to be made by the Commissioner, or

(b) in the case of a complaint made by a Council-is to be made by the Council.

(4) A determination made under this section is final and cannot be challenged in any proceedings by the complainant or the Australian legal practitioner concerned.

23 The Respondent relied upon s 506(2) to argue that the complaints contained in Grounds 2(a), 2(b) and 3 could not be dealt with otherwise than by dismissal or reference to mediation because no determination had been made by the Commissioner under that provision.

24 The parties were content for this point to be dealt with as a preliminary matter at the commencement of the hearing. In the light of the provisions of the LPA and the absence of a determination by the Commissioner under s 506(2), the Applicant indicated that it did not press and wished to withdraw Grounds 2(a), 2(b) and 3. The Tribunal was of the view that the appropriate course was for the Application, in so far as it related to those grounds, to be dismissed. Accordingly, the Tribunal indicated that the Application would be dismissed to that extent in the Tribunal's orders.

25 As a consequence, the only grounds which remained for determination by the Tribunal were Grounds 1(a) to (e).

26 Finally, on 5 June 2012 an application was made by the Applicant to amend Ground 1(d) as follows:

(d) The respondent attested to the fact that Mr Lahood, a solicitor, witnessed her signature on 'the four signature page' knowing when that it had not occurred and was false.

27 Mr Johnson indicated that no further evidence was to be adduced in support of the amended ground by the Applicant. Mr Taylor SC conceded that he could meet the amendment if the Tribunal proposed to allow it. At the crux of the decision of the Tribunal is whether Ms Nash's conduct in this regard was, in the circumstances, an innocent mistake or something that was deliberately false.

28 The Tribunal granted leave on 5 June 2012 to the Applicant to amend the pleading as sought.

29 Before proceeding to consider each of the remaining grounds relied upon by the Applicant, it is necessary for a proper understanding of the grounds to refer in more detail to the District Court proceedings and what gave rise to them.

The District Court Proceedings and What Gave Rise to Them

30 The proceedings in the District Court related to 2 of 10 units that were to be built on a block of land at 140-148 Beattie Street, Balmain as part of a building development. The Plaintiff, Mr Ferizis, as a trustee for the Kallithea Trust, had negotiated to acquire options from Property and Equity Developments Pty Limited ("PED") and LNG Holdings Pty Limited ("LNG") to purchase units 7 and 8 in the Balmain development for $675,000 and $700,000 respectively. The cost of the options was $250,000 each, refundable together with interest if the options were not exercised. The option deeds were signed, and the Plaintiff paid the agreed amount of $500,000 by cheque, on 20 June 2003.

31 As at 20 January 2003, Lyall Gorman was the sole director of LNG. It was an agreed fact that as at that date the shareholders of LNG were Mr Gorman and Mr Vaughan but this did not apparently take into account that, at this time, Mr Vaughan was an undischarged bankrupt. Mr Vaughan had filed a statement of affairs on 28 November 2000. The end date of the bankruptcy was 29 November 2003. It was also agreed that Mr Vaughan was appointed a director of LNG on 5 March 2002 and resigned on 23 August 2002 but the impact of his bankruptcy on his ability to hold such an office was not commented upon.

32 As at 20 June 2003 Peter Dixon and Matthew Kelly were the directors of PED. At that same date, Ms Nash was not a director of LNG or PED but she did become a director of LNG between 3 and 20 November 2004.

33 As it turned out, the options were not exercised and Mr Ferizis sought to recover the $500,000 plus interest. He was not able to recover anything from PED or LNG. As a result, in the District Court proceedings, Mr Ferizis sued Ms Nash, Mr Vaughan, Mr Dixon and Mr Kelly, as the First, Second, Third and Fourth Defendants respectively, alleging that they had each signed documents (which formed part of each option deed) which had the effect that they each guaranteed PED's and LNG's obligation to repay the sum of $500,000, originally paid under the option deeds and refundable if the options were not exercised, together with interest. Thus, from the Respondent, Ms Nash's, perspective, a major issue in the District Court proceedings was whether she, by signing the documents, had agreed to guarantee the repayment to Mr Ferizis.

34 The other persons who played a part in the transaction which was the subject of the District Court proceedings were the solicitors for the parties to the option deeds. The solicitors acting for Mr Ferizis as trustee of the Kallithea Trust were George Shad & Partners and the solicitor with carriage of the matter was Mr James Lahood. The solicitors for PED and LNG were Hughes and Taylor and Ms Lynne Hughes was the solicitor with carriage of the matter.

35 Evidence concerning how the documents came to be signed by Ms Nash on 20 June 2003 was given in the District Court proceedings by Ms Nash, Mr Ferizis, Mr Lahood, Ms Hughes and others. Further evidence relating to this issue was also given before the Tribunal by Ms Nash and Mr Ferizis and there were a number of documents recording parts of what occurred. In the Tribunal's assessment, Mr Ferizis was a careful witness who answered questions to the best of his recollection without embellishment or exaggeration. His evidence was assisted by his contemporaneous notes of conversations and dealings, was consistent with the documentary records from himself and others and was inherently credible. No significant part of his evidence was effectively challenged in cross examination before us. Despite some confusion on Mr Ferizis's part as to the exact dating and sequence of some events, the Tribunal has no hesitation in accepting his general account of what occurred.

36 As to Ms Nash's evidence concerning what occurred in about May and June 2003, the Tribunal formed the view that Ms Nash was generally striving to avoid giving any evidence that would harm her case before the Tribunal while accepting what could not be reasonably denied from the documentary records. Some of her evidence, for example concerning why certain documents were signed or her level of involvement, appeared to the Tribunal to be inherently incredible. Some had changed from outright denials in the District Court to a claimed lack of recollection in the Tribunal. We shall deal with various unsatisfactory aspects of Ms Nash's evidence in more detail below. It is sufficient here to indicate that the Tribunal formed the opinion that it could not rely generally on Ms Nash's evidence of events and circumstances where they were in issue and were not confirmed by another witness or by the objective evidence found in the contemporaneous documents. On these bases, the Tribunal makes the findings set out below.

37 By about May 2003 Ms Nash and Mr Vaughan had been in a domestic, personal relationship for some time. In addition, they were in a business relationship in which Mr Vaughan provided project management services for unit developments and Ms Nash provided funding or financing for those projects. In a brochure entitled "Property & Equity Developments Pty Ltd / Company Profile & Current Projects" dated March 2003, Mr Vaughan and Ms Nash were described as joint venture partners with PED in unit developments in Many Vale, Dee Why, Balmain and Chatswood.

38 Mr Ferizis first met Ms Nash on 9 May 2003. At that meeting Ms Nash said to him: "I am a barrister and I work for the Director of Public Prosecutions, Graham is a developer. I have been in law for a long time and I have found that property development offers better rewards for less stress. We have developed a number of properties together successfully and are in the process of developing a few more. We allow investors to share in our developments and reward them handsomely. You or your clients can lend us funds or invest as equity partners." She gave him the PED brochure referred to above. On the second page under the heading "Company Structure" Messrs Dixon and Kelly were shown as part of PED, and Ms Nash and Mr Vaughan were described as joint venture partners.

39 Mr Ferizis made some handwritten notes setting out a summary of his discussions and the various projects which were then apparently available. The notes recorded in part:

"Property & Equity Developments Pty Ltd

Joint Venture with

Christine Nash ) Mezzanine Funding provision

Graham Vaughan )

Peter Dixon

Matthew Kelly

..."

40 Some discussion with Mr Ferizis ensued concerning various projects. Hughes & Taylor at the request of Ms Nash on 27 May 2003 forwarded to him a copy of a draft option for purchase of a unit development property in Hawkesbury Road, Dee Why. Mr Ferizis expressed interest in the Balmain project referred to in the PED brochure which was the proposed unit development at 140 - 148 Beattie St Balmain and he sought more information concerning that project. The telephone message book maintained by Mr Ferizis' office recorded telephone messages being left for Mr Ferizis by Ms Nash on Wednesday 28 May, Thursday 29 May and 2 June 2003. At about this time Ms Nash said to Mr Ferizis concerning the Balmain project: "We have these documents and also have a formal independent valuation on the project, I will gather them and bring them around".

41 On or about 5 June 2003 Mr Ferizis was provided with a bundle of documents including a property report, a property profile, a valuation report as at 8 August 2002 and preliminary drawings for the Balmain project at 140 - 148 Beattie Street, Balmain. The developers were identified in paragraph 4.0 of the property report as PED "in a Joint Venture with LNG Holdings Pty Ltd" and that document also contained photocopies of pages 18, 20 and 22 from the PED brochure which related to the Balmain project. The valuation report was by Herron Todd White.

42 Mr Ferizis had noticed that Ms Nash's and Mr Vaughan's names appeared outside the company structure as joint venture partners on page 2 of the PED brochure. He asked Ms Nash: "You are not directors of the company?" She said "Not of that company, we have another company and our two companies are joint venturers". He said to her "So who are Peter Dixon and Matt Kelly?" She said "They are builders with many years experience". He said "So what is your role?" She replied "We are joint venturers, they look after the construction and we look after the finances".

43 On 5 June 2003 a message was left for Lynne Hughes, the solicitor, from Ms Nash which rather elliptically said "selling off plan, prepare a contract for Balmain 140 - 148 Beattie Street, Balmain" and then words "option deed" appeared. There were also three phone numbers written, one of which was Ms Nash's home phone number. Ms Hughes then had a telephone conversation with Ms Nash on the same day. It appears that Ms Nash also advised on that day that Mr Vaughan was buying out a share of LNG. There is no evidence that Ms Hughes was aware that Mr Vaughan was an undischarged bankrupt.

44 On 12 June 2003, Ms Nash is recorded as having left a message that she had rung Mr Ferizis' office. On that day, Mr Ferizis advised Ms Nash that "My clients are interested in acquiring two units, number 7 and 8, and are prepared to lodge deposits of $250,000 on each, but on the condition that purchase prices would be $675,000 and $700,000 respectively as per the Herron Todd White valuation and not the list sale prices". Mr Ferizis's notes of this occasion recorded that she said that the valuation was 1 year old but nonetheless Mr Ferizis's clients could have them at the valuation price.

45 Further to this on 13 June 2003 he advised Ms Nash that his clients would be proceeding with the deal as discussed the previous day and confirmed the proposed prices for the units. Mr Ferizis asked Ms Nash to supply him with a schedule of finishes and also a feasibility of the Balmain project. On 18 June 2003 he received a fax from Peter Dixon containing those details which had been copied to Ms Nash.

46 Also on 13 June 2003 Ms Hughes recorded a telephone attendance from Ms Nash re Beattie Street Balmain in the following terms:

"Contracts need to go out Monday (buyer going o/s!)"

47 She was requested to courier to Mr Ferizis' office at Bankstown contracts for units 7 and 8 for $675,000 and $700,000 respectively. The purchaser was the same in both cases, the Kallithea Trust. She was asked to note that there was to be a $250,000 release on "assignable option (i.e. replace "rescindable" with assignable)". On 16 June 2003, Ms Nash telephoned at 8.55am and advised that she was sending to Ms Hughes certain diagrams to put in the contract. On that day, Ms Nash also advised that Mr Ferizis was going to Greece on the following Friday, 20 June 2003. On the same day Mr Ferizis spoke to Ms Hughes by telephone and said he was not sure which solicitor was acting for him and requested that the options be couriered to him.

48 At 9.15am on 18 June 2003, Ms Nash left a message at Mr Ferizis' office that "all papers you needed will be sent by courier after 10am today". At 12.15pm on that day she telephoned his office again and advised that the contracts were to come soon. At 3.45pm she requested that Mr Ferizis call her. She made a further request on 19 June for Mr Ferizis to call her.

49 On 19 June Mr Ferizis had a meeting with the solicitor, Mr Lahood. The file note of this meeting recorded "Perused Deeds, explained effect and amendments we seek. He said to go ahead and exchange on the terms. He said Christine Nash and Victor [sic] Vaughan will attend and exchange contracts".

50 On 19 June 2003, at 10.32 am Mr Lahood wrote to Hughes & Taylor in the following terms:

"We are instructed to seek your client's instructions with regard to the following:

(1) What is the debt to equity ratio for the development that our client is proposing to invest into;

(2) Whom are the registered mortgagees upon title?;

(3) Would the directors of the vendor companies provide personal guarantees for the investment that our client proposes?;

......

We advise that our client is travelling overseas tomorrow and is eager to have this matter resolved this day. We would be obliged if you could provide us with your client's instructions. We await your urgent reply."

51 A telephone attendance record of Hughes & Taylor of 19 June 2003 appears to record a conversation relating to Mr Lahood's letter of 19 June 2003. It indicates that the client, whom we take to be Ms Nash, has spoken directly to Mr Ferizis in respect of the first two questions contained in a letter of 19 June. As to the third question, her instructions were that the directors of the vendor or grantor companies would not provide personal guarantees for the investment.

52 Mr Ferizis was not sure whether it was on 18 or 19 June but he did recall having a telephone conversation with Ms Nash and requesting personal guarantees. Mr Ferizis's office telephone message book recorded that on 19 June at 12.20pm Ms Nash attempted to contact Mr Ferizis. She also appears that she left a message for Mr Ferizis at 4.40pm on that day.

53 Mr Ferizis said that he spoke to Ms Nash on 18 or 19 June and that she agreed to provide the guarantee. When he spoke to her she said "Is the money ready as it is imperative to close the deal before you go overseas, otherwise other people will jump in and take it". Mr Ferizis said "The money is ready, however, the funds are provide by a Trust and I would need more security. I would need personal guarantees by all four directors". She said "We have never given personal guarantees. It is not the done thing". Mr Ferizis said "I spoke to the solicitor and he advised me against it unless there are personal guarantees". She said "Who is your solicitor? I will ring him and talk to him". Mr Ferizis said "Irrespective of that I will still need the guarantees. The money cannot be advanced without them". She said "I will talk to the others and get back to you".

54 According to Mr Ferizis, Ms Nash rang Mr Ferizis the next day and said "We will provide you with personal guarantees on this deal, but it is not the done thing".

55 There was also an undated telephone attendance note of Hughes & Taylor indicating the Ms Hughes spoke to Ms Nash and four names were provided namely Dixon, Kelly, Vaughan and Nash and email addresses for Mr Lahood, Mr Dixon, Mr Vaughan and Ms Nash. A further undated telephone conversation was also recorded between Ms Hughes and Ms Nash in which ACNs for LNG and PED were apparently sought. On the same page appeared the relevant ACNs for the two companies in the handwriting of Ms Hughes' secretary. On the word processing system of Hughes & Taylor it appears that there was created about this time an additional page for the option deed containing clauses 20 and 21 and a page containing only 4 signature blocks each in a form suitable for execution of a document as a deed for each of 4 named individuals, Messrs Dixon, Kelly and Vaughan and Ms Nash. The signature block for Ms Nash was as follows:

SIGNED SEALED AND DELIVERED )

By the said CHRISTINE NASH )

In the presence of: ) ....................

............................

56 There is some difficulty with reconciling the dates as recalled by Mr Ferizis, the written request by Mr Lahood for personal guarantees, the dated telephone attendance records and the undated telephone attendance records. Nonetheless, Mr Ferizis's recollection and the objective documentary evidence suggest that despite being reluctant to give personal guarantees, Ms Nash did convey to Mr Ferizis the agreement of the four defendants to the District Court proceedings to sign personal guarantees in order to obtain the cheque for $500,000. Whether this occurred on 19 June or early on 20 June 2003 does not appear to be particularly significant.

57 Mr Ferizis signed the option deeds as previously provided to him and gave Shad & Partners a cheque for $500,000. He then instructed them not to part with the funds without obtaining the personal guarantees. He left for overseas at about 4.00pm on 20 June 2003.

58 Mr Lahood's file note for 20 June 2003 read "CW [which we take to mean conferred with], Christine Nash and Victor [sic] Vaughan - we went through options and made the amendments. Christine advised that she is a retired barrister. We checked amendments and deeds and effected exchange". The reference to "the amendments" appears to refer to a number of pages that were added to the option deeds just before they were signed, as there were no emendations to the wording of the deeds otherwise apparent.

59 It is appropriate here to consider the form of the option deeds that were signed. Apart from the necessary differences caused by reference to unit 7 and its price in one deed and unit 8 and its price in the other, the deeds were in form largely if not exactly identical. They were signed in counterpart. The first 9 pages of each deed contained the heading to the deed, the recitals, definitions and clauses 1 to 19.2. The 10th page contained clauses 20 (headed "Repayment of Option Fee") and 21 (headed "Personal Guarantee of Directors of Grantor") and on the 11th page were the 4 signature blocks for Mr Dixon, Mr Kelly, Ms Nash and Mr Vaughan to sign. The 12th page contained a schedule setting out the details of the grantor, the grantee, the property and the price and option fee as well as the signature block for Mr Ferizis's signature. The next page, the 13th page (but in one copy the 14th page as the pages appear out of order in that copy) contained a continuation of the signature block for Mr Ferizis and the signature blocks for LNG and PED. The 14th page (except for the copy with the pages out of order) contained a statement about the cooling off period under s 66ZH of the Conveyancing Act 1919 and the 15th, 16th and 17th pages were various blank forms of notices that might be given under the deed.

60 In the copies signed by Mr Ferizis, he initialled the first 9 pages and signed against his signature block on the 12th page. He had not initialled or signed the 10th, 11th, 13th, 14th, 15th, 16th or 17th pages. It appears that the 10th and 11th pages may not have been provided to Mr Ferizis prior to the time when he went through the deeds with Mr Lahood on 19 June 2003 and for this reason he did not initial those pages. The Tribunal finds that the insertion of these pages is likely to be the "amendments" referred to in both Mr Lahood's notes of his conference with Mr Ferizis on 19 June 2003 and his notes of his meeting with Ms Nash and Mr Vaughan on 20 june 2003. Nonetheless and in any event, it was not in contest before the Tribunal that the 10th page of each deed which contained clauses 20 and 21 was part of deed for the purposes of the hearing before us.

61 On the counterparts signed by the other side to the transactions, Mr Dixon, Mr Kelly, Ms Nash and Mr Vaughan each signed the 4 signature block page, the 11th page, in both deeds. This page became know in both hearings as the "four signature page". In addition on the 13th page Mr Vaughan signed as a director of LNG (and in at least one version as "sole director/company secretary" of that company) and Messrs Dixon and Kelly signed as directors of PED.

62 Although the wording of clause 21 headed "Personal Guarantee of Directors of Grantor" on the 10th page of each deed was not free from problems, we have proceeded on the basis that it is not appropriate for this Tribunal to consider that matter further, in the light of the express concession made during the hearing before the Tribunal that Rein DCJ had found that Ms Nash was a guarantor of the obligations under the option deeds.

63 It is necessary now to consider some of the evidence given by Ms Nash as to how she actually came to sign the four signature page in each case. The Respondent affirmed an affidavit on 7 June 2006 in the District Court proceedings. At paragraph [120] and following of that affidavit, she gave an account of the meeting that took place at the offices of George Shad & Partners at Bankstown on 20 June 2003. Mr Lahood's file note of that meeting has been referred to already above. After driving to Bankstown together, Mr Vaughan and Ms Nash met Mr Lahood. Her evidence of what then occurred was as follows:

120. Lahood, Graham and I then set down at a table in the said offices of George Shad and Partners. Lahood then put 2 documents on the table that looked like option deeds.

Lahood then said words to Graham to the following effect:

"Before I give you the cheque, you need to sign these documents and you also need to get Matthew Kelly and Peter Dixon to sign the documents and bring them back to this office by today."

121. I then observed Graham signing the two option deeds.

122. Lahood and I then said words to each other to the following effect:

Lahood: "I have been given instructions that everybody has to sign these documents before I hand over the cheque, including you."

Me: "My signature is useless to you as I have no standing in relation to Balmain, as I am not a grantor and I am not a director of the grantor. I have no role in these documents."

123. Graham then said words to the following effect:

"Christine has nothing to do with Balmain."

124. Lahood and I then said words to each to the following effect:

Lahood: "Well sign them anyway so that I can give you the cheque."

Me: "Well it will be worthless to you because I have no reason to be signing these documents I have no role in these documents. However, if it means the cheque going to Graham, well then I will sign the documents."

125. I then signed the documents. Lahood witnessed my signing of the documents and also Graham's signing of the documents.

126. We then said words to each other to the following effect:

Lahood: "Before I hand over the cheque I also need to have Matthew Kelly and Peter Dixon's signatures on these documents and witnessed, but I need to have the documents back before George Ferizis gets on his plane at midday, so that I can ring George and tell him that its all done."

Graham: "How are we going to do this given that Matthew and Peter are not here?"

Me: "Well I, I can witness their signatures."

Graham: "Well, then give us the documents and we will drive over to Darling Harbour where Peter and Matthew have their office and get them to sign the documents and bring the documents back to you."

Lahood: "Well, Christine, if you witness them signing the documents, I can then say to George that the documents are properly witnessed."

127. Graham and I then drove to the offices of PED in Cockle Bay Wharf Sydney with the said option deeds and got Peter Dixon and Matthew Kelly to sign the documents.

128. Graham and I then drove straight away back to the offices of George Shad Partners.

129. Graham parked the car in the car park immediately adjacent to the office building where the said offices were located. I then waited in the car while Graham took the said option deeds into the said office building.

130. Graham then returned shortly thereafter with a cheque.

64 It was common ground at the hearing that Mr Lahood did not witness the signing of the documents by Ms Nash in his office or elsewhere. It was also accepted that both Mr Lahood and Ms Nash gave evidence before the District Court that, to put it neutrally, was erroneous on this issue. Her signature on each of the four signature pages was witnessed by a Mr David Haywell, an assistant at Mr Dixon's architectural practice whose office was at Darling Harbour.

65 A single cheque for $500,000 was provided to Mr Graham Vaughan following execution of the option deeds for Unit 7 and Unit 8. And, on 20 June 2003 the cheque was deposited into the trust account of Hughes & Taylor, the solicitors for LNG and PED.

66 It was agreed between the parties before the Tribunal that under the terms of the option deeds Mr Ferizis could not call for the return of funds for 11 months. At the expiry of the 11 months, in the manner required by the Deeds, he advised he did not wish to exercise the options and called for the return of the money. He was not repaid.

67 As explained above, Mr Ferizis commenced proceedings in the District Court by Statement of Liquidated Claim (No. 2804 of 2005) dated 7 July 2005 against four individuals, Ms Nash (as First Defendant), Mr Vaughan (Second Defendant), Mr Dixon (Third Defendant) and Matthew Kelly (Fourth Defendant). The latter two defendants entered no appearance and judgment was entered against them prior to the hearing.

68 Both PED and LNG had been placed into liquidation by the time of commencement of the District Court proceedings.

69 Ms Nash and Mr Vaughan filed a Defence on 30 September 2005. The documents were incorrectly stamped 30 September 2015. The Defence included a verification by each of the First and Second Defendants dated 30 September 2005. Also on 30 September 2005 Ms Nash filed a Statement of Cross-claim. The cross-claim was abandoned on the second day of the District Court hearing on 25 October 2006.

70 The solicitor for the First and Second Defendants in the District Court proceedings was Stephen Velik of Velik Solicitors, Level 3, 55 York Street, Sydney. On 24 October 2006, the first day of the hearing, the Plaintiff, Mr Ferizis, was given leave to file an Amended Statement of Liquidated Claim. On 16 March 2007 Ms Nash filed, with leave of the District Court granted on 25 October 2006 and 14 March 2007, an Amended Defence.

71 Mr Ferizis filed an affidavit sworn on 24 January 2006 and Ms Nash filed affidavits affirmed on 7 June 2006 and 29 June 2006. Mr Vaughan filed an affidavit affirmed on 29 June 2006. There was also other affidavit evidence relied upon by the parties.

72 The District Court proceedings were heard before Rein DCJ on 24, 25, 26 and 27 October 2006, 12, 13, 14, 15, 16 and 19 and 22 March and 13 April 2007. Rein DCJ delivered judgment in the above matter on 27 April 2007.

73 With that background, the Tribunal will consider in turn each of the remaining grounds relied upon by the Applicant in its Application for Original Decision.

Ground 1(a)

74 Ground 1(a) is to the effect that during the District Court proceedings the Respondent misled the Court by falsely verifying a Defence knowing a material particular in the Defence was not true.

75 The only Defence particularised in respect of this ground was the Defence dated and verified on 30 September 2005 and filed on that same day (notwithstanding the Court's stamp stating that it was filed on 30 September 2015). As noted above, there was a subsequent Amended Defence dated, verified and filed on 16 March 2007, in response to an Amended Statement of Liquidated Claim filed on 24 October 2006. That later defence and its verification were not included in the particulars and, accordingly, were not relied upon by the Applicant in relation to this ground.

76 It is necessary to set out here portions of the relevant District Court pleadings. There was no dispute as to what these documents contained. The original Statement of Liquidated Claim (filed 7 July 2005) alleged in paragraphs 1, 2 and 7 as follows:

1. Pursuant to the provisions of a deed dated 20.6.03 in respect of Unit 7 of a proposed development at 140-148 Beattie St Balmain made between the Plaintiff, LNG Holdings Pty Ltd ("LNG"), Property & Equity Developments Pty Ltd ("P&E"), the First Defendant, the Second Defendant, the Third Defendant and the Fourth Defendant ("the Unit 7 deed") the Plaintiff paid an option fee of $250,000 ("the Unit 7 option fee") to LNG and P&E.

2. Pursuant to the provisions of a further deed dated 20.6.03 in respect of Unit 8 of a proposed development at 140-148 Beattie St Balmain made between the same parties as the Unit 7 deed (" the Unit 8 deed") the Plaintiff paid an option fee of $250,000 ("the Unit 8 option fee") to LNG and P&E.

...

7. The Unit 7 deed and the Unit 8 deed each contained covenants by each of the First Defendant, the Second Defendant, the Third Defendant and the Fourth Defendant that they guaranteed the obligations of LNG and P&E under the said respective deeds.

77 The original Defence of Ms Nash, the First Defendant, and Mr Vaughan, the Second Defendant, stated in response to these paragraphs the following:

The First Defendant and the Second Defendant rely upon the following facts and assertions:

1. As to paragraph 1 of the Statement of Liquidated Claim, the First Defendant and the Second Defendant:

(a) admit that the Plaintiff, the Second Defendant, the Third Defendant and the Fourth Defendant signed an option deed (the "Draft Unit 7 Option Deed") expressed to be in relation to draft lot 7 ("Draft Lot 7") in the land situate at and known as 140-148 Beattie Street, Balmain having certificate of title reference folio identifier 11/1032495 (the "Balmain Land");

(b) further admit that the Draft Unit 7 Option Deed is expressed to be between the Plaintiff, the Second Defendant, the Third Defendant, the Fourth Defendant, LNG Holdings Pty Limited ACN 099 795 678 ("LNG") and Property and Equity Development Pty Limited ACN 095 570 728 ("PED"), is expressed to be dated 20 June 2005 [sic];

(c) deny that LNG executed or entered into the Draft Unit 7 Option Deed;

(d) do not admit that PED executed the Draft Unit 7 Deed

(e) deny that the Plaintiff, the First Defendant, the Second Defendant, the Third Defendant, the Fourth Defendant, LNG and PED entered into or made the Draft Unit 7 Option Deed;

(f) admits that the Plaintiff made a payment of $250,000 in relation to Draft Lot 7 (the "Draft Lot 7 Payment");

(g) does not admit that the Draft Lot 7 Payment was made to LNG and PED;

(h) otherwise deny paragraph 1 of the Statement of Liquidated Claim.

2. As to paragraph 2 of the Statement of Liquidated Claim, the First Defendant and the Second Defendant:

(a) admit that the Plaintiff, the Second Defendant, the Third Defendant and the Fourth Defendant signed an option deed (the "Draft Unit 8 Option Deed") expressed to be in relation to draft lot 8 ("Draft Lot 8") in the Balmain Land;

(b) further admit that the Draft Unit 8 Option Deed is expressed to be between the Plaintiff, the Second Defendant, the Third Defendant, the Fourth Defendant, LNG and PED, is expressed to be dated 20 June 2005 [sic];

(c) deny that LNG executed or entered into the Draft Unit 8 Option Deed;

(d) do not admit that PED executed the Draft Unit 8 Deed

(e) deny that the Plaintiff, the First Defendant, the Second Defendant, the Third Defendant, the Fourth Defendant, LNG and PED entered into or made the Draft Unit 7 Option Deed;

(f) admits that the Plaintiff made a payment of $250,000 in relation to Draft Lot 8 (the "Draft Lot 8 Payment");

(g) does not admit that the Draft Lot 8 Payment was made to LNG and PED;

(h) otherwise deny paragraph 1 of the Statement of Liquidated Claim.

...

7. As to paragraph 7 of the Statement of Liquidated Claim, the First Defendant and the Second Defendant:

(a) admit that each of the Draft Unit 7 Option Deed and the Draft Unit 8 Option Deed express the First Defendant, the Second Defendant, the Third Defendant and the Fourth Defendant to guarantee certain obligations; and

(b) otherwise deny paragraph 7 of the Statement of Liquidated Claim.

78 The 30 September 2005 Defence included a verification sworn or affirmed by the Respondent on 30 September 2005 in the following terms:

1. I am the defendant.

2. I believe that the allegations of fact contained in this defence are true.

3. I believe that the allegations of fact that are denied in this defence are untrue.

4. I do not know after reasonable enquiries that the allegations of fact that are stated in this defence to be not admitted are true.

79 The substance of this ground, as submitted by the Applicant, was that the Respondent's statement in paragraph 4 of the verification, that she did not know after reasonable enquiries that the allegations of fact that were stated in her Defence to be not admitted were true, was false in at least 2 respects.

80 First, paragraph 1(d) of the Defence contained the Respondent's non-admission that PED executed the Draft Unit 7 Deed. Paragraph 4 of the verification (read with paragraph 1(d) of the Defence) amounted to a statement that after reasonable enquiry Ms Nash did not know that PED executed the Draft Unit 7 Deed. But, it was said, Ms Nash gave evidence in the District Court on 29 October 2006 in which the Draft Unit 7 Deed and the Draft Unit 8 Deed were being discussed, as follows:

Q So you knew, didn't you, from that time [20 June 2003] that Property and Equity Developments Pty Limited had executed the two deeds?

A I knew that they had executed an option agreement, yes, and I knew that they had signed, I remember Graham [Vaughan] asking Peter [Dixon] and Matthew [Kelly] to sign before the cheques could be handed over, yes, I remember that.

Q But you knew because you saw them sign on behalf of Property and Equity Developments Pty Limited -

A That's right. Yes.

Q -- that Property and Equity Developments Pty Limited had executed those two deeds?

A Yes.

81 Thus, the Applicant submitted, Ms Nash had known from 20 June 2003 that PED had in fact executed the deed. Consequently it was false to say, as she did in paragraph 4 of the verification, that she not know that the facts stated in paragraph 1(d) of the Defence were true.

82 Secondly, the Respondent's similar non-admission in paragraph 2(d) of the Defence that PED executed the Draft Unit 8 Deed was contrasted with her evidence that she had seen the directors of PED sign that deed as well. Thus, the assertion in paragraph 4 of the verification (read with paragraph 2(d) of the Defence) was also false.

83 In order to determine whether there has been a knowingly false verification of the Defence, it is important first to identify exactly what has been said by the Respondent by way of verification. Paragraph 4 of the verification only refers to "allegations of fact that are stated in this defence to be not admitted" (emphasis added). The non-admission that a corporation such as PED "executed" a certain deed does not appear to the Tribunal to be a non-admission of an allegation of fact as referred to in paragraph 4 for two reasons. Frist, there is no express allegation in the Statement of Liquidated Claim that PED "executed" either deed. Thus there is no relevant "allegation" in the Statement of Liquidated Claim that could in a technical sense be "not admitted" in the Defence. Secondly, whether or not a corporation has executed a deed is a conclusion of mixed fact and law. It is, of course, accepted that a pleading should state only a summary of the material facts on which the party relies (see Uniform Civil Procedure Rules, rule 14.7), and thus it would be expected that what is alleged in a statement of claim and not admitted in a defence would be an allegation of fact. Nonetheless, it is permissible for a party to raise a point of law in its pleading (UCPR, rule 14.19). As the Tribunal understands it, this was at least part of the reason behind the Respondent's submissions which drew attention to the fact that the Respondent had admitted in paragraphs 1(a) and 2(a) of the Statement of Liquidated Claim that Messrs Dixon and Kelly had signed the relevant documents but did not admit the potential legal consequences of those signatures in paragraphs 1(d) and 2(d).

84 The verified Defence makes a distinction between "signing" by directors and "executing" by the company. On behalf of the Respondent it was submitted the different verbs used in the admission "signed" and non-admission "executed" suggested either the non-admission was a mere error, or that the question whether PED had "executed" the Deed was thought to involve some interpretive conclusion about the legal effect of the directors' signatures. In the light of rolled up nature of the pleading of material facts and conclusions of law in paragraphs 1 and 2 of the Statement of Liquidated Claim and the terms of the Defence which attempted to some extent to separate out, and plead to, a number of the factual and legal issues inherent in those paragraphs, the Tribunal believes that paragraphs 1(d) and 2(d) of the Defence were probably an attempt to put in issue the legal consequences flowing from facts elsewhere admitted. They were not properly to be characterised as "allegations of fact that are stated in this defence to be not admitted". Thus, it can be concluded that there has not been any false verification of the Defence.

85 In case we are wrong in that conclusion, we shall also address the question of whether, assuming that paragraph 4 of the Respondent's verification of her Defence was false as it applied in relation to paragraphs 1(d) and 2(d) of the Defence, Ms Nash knew it to be false at the time she made the verification.

86 She gave evidence as follows in her affidavit for these proceedings affirmed on 1 August 2011:

80. After being served with a Statement of Liquidated Claim I began drafting a defence. Subsequently I met with Mr Velik and gave him the draft I had prepared. I no longer have a copy of that document. Neither am I confident that I can recall its actual contents.

81. I recall what I told Mr Velik that I had observed Graham, Dixon and Kelly execute the Option Deeds. I believe I also told him that I was not a party to the Option Deeds and had not provided any guarantee.

82. I also recall when I gave Mr Velik my draft he said words to the following effect:

"That's not how you draft a defence in civil proceedings. I will draft the defence for you."

83. Shortly before 30 September, 2005 Mr Velik drafted a defence for Graham and I. I cannot now recall with any confidence the circumstances in which that draft was provided to me. Neither can I recall the extent to which I read it at the time. I can say, however that I was very inexperienced in civil litigation and procedure. I relied on Mr Velik's advice to prepare a defence that accorded with my instructions to him.

84. Having now re-read and noted the apparently material contents of the Statement of Liquidated Claim and the defence in paragraph 79 above I regard the contents of paragraphs 1(a), 1(b), 1(e), 2(a), 2(b) and 2(e), as consistent with my instructions to Mr Velik as accurate.

85. I am unsure about the meaning and purpose of paragraphs 1(c), 1(d), 2(c) and 2(d). I cannot now recall whether I had any specific discussion with Mr Velik about the content of these particular paragraphs of the defence. This is especially the case in light of the matters that are admitted elsewhere in the defence.

86. If paragraphs 1(c), 1(d), 2(c) and 2(d) are read and understood against the background of my instructions to Mr Velik that I was not a party to the Option Deeds, and the specific content of the allegations in the Statement of Liquidated Claim, it may be appropriate to regard those paragraphs, with the other admissions in the defence, as accurately reflecting my instructions. Because I cannot now recall whether I had any such discussion with him, I cannot confidently recall what my actual understanding of those paragraphs, as distinct from the defence as a whole, was at the time I provided my verified defence.

87. However, as I have already stated, I relied on Mr Velik's advice to prepare a defence that accorded with my instructions to him. When I provided my verifications of the defence I did so in the belief that it properly reflected the instructions I had given Mr Velik. I believed that it was in a form that was proper for me to verify. I believed that my verification was true.

88. At no time did I intend to mislead the Court. At no time did I intend to convey by my defence, or my verification of it, that Graham, Dixon and Kelly had not signed the documents referred to in paragraphs 1(a), 1(b), 2(a) and 2(c) of the defence. I did intend to put in issue that those documents included any guarantee. I did not believe that the Option Deeds had been executed as a guarantee by me, Graham, Kelly or Dixon.

87 The Tribunal, on the bases given elsewhere in these reasons for decision, does not generally accept the Respondent's evidence as to contentious issues. Nonetheless, it does accept that Ms Nash did intend to put in issue that the deeds included a guarantee by her. If it were otherwise, she could have been admitting in effect that she was liable to the plaintiff in the District Court proceedings, and this she did not wish to do. As to her evidence concerning the preparation of the Defence and the involvement of Mr Velik, the Tribunal did not have the benefit of evidence from him. Ms Nash's former solicitor, Mr Velik, was not called in these proceedings.

88 It is true, however, that Ms Nash has practised almost exclusively in criminal law since becoming a barrister and it can be accepted that she was not intimately acquainted with the requirements for pleading in civil proceedings. In the circumstances the Tribunal accepts that Ms Nash relied upon Mr Velik to prepare an appropriate defence based on her instructions. Nonetheless, she knew the significance of swearing or affirming the truth of matters for the purpose of use in Court proceedings and knew that it was her verification and not her solicitor's.

89 Ms Nash put evidence before the Tribunal that she could not recall the extent to which she had read her Defence at the time it was prepared and verified. To the extent that this suggests that she may not have read it before verifying it, the Tribunal would be concerned as to Ms Nash's reckless approach to verifying important Court documents. Further, if she did read it and was uncertain as to the meaning or effect of paragraphs such as 1(d) and 2(d), she should not have verified the Defence or allowed it to be filed on her behalf until she had clarified the position.

90 Notwithstanding the Tribunal's concerns about the Respondent's conduct in verifying her Defence if she was reckless or uncertain as to its meaning and contents, there are 3 considerations which tell against a finding that Ms Nash knowingly made a false verification.

91 First, as Mr Taylor submitted, the non-admissions (in paragraphs 1(d) and 2(d)) even with the verification had no evidentiary significance in the adjudication of the District Court proceedings. It is difficult to discern a motive for the Respondent to make a false verification of the kind alleged, knowing it to be false, when it did not affect her primary position that she had not signed as a guarantor of any obligations.

92 Secondly, paragraphs 1(a) and 2(a) in the Respondent's Defence also suggest that the Defence and its verification were not designed to mislead the Court or contain falsehoods. In those paragraphs Ms Nash admitted Mr Dixon and Mr Kelly signed the two deeds. Thus, the Respondent's pleading contained both the admissions of signing the deeds in subparagraph (a) in each case and the non-admissions that PED executed the deeds in each subparagraph (d). It is also significant in the Tribunal's view that later in the proceedings when the verified Amended Defence was filed on Ms Nash's behalf, the non-admissions were abandoned and execution of the deeds by PED was admitted in paragraphs 4 and 12 of the Amended Defence.

93 Thirdly, Ms Nash's evidence was that she could not now recall what her understanding of those paragraphs was at the time of verification. In the absence of other evidence which indicates her state of mind at the time of verification and in light of the admissions that were made in her Defence and the Amended Defence, the Tribunal believes it cannot be satisfied to the requisite degree, bearing in mind the matters referred to in s 140(2) of the Evidence Act 1995 (NSW), that Ms Nash verified her Defence knowing paragraph 4 to be false in so far as it applied to paragraphs 1(d) and 2(d) of the Defence.

94 The Tribunal finds it is likely that Ms Nash relied upon Mr Velik and upon his advice that it was in order for her to sign the verification of her Defence and her Amended Defence and she did so. To the extent to which the verification of the Defence was false, this was not present to her mind when she verified it.

95 As the Tribunal understood it, the Applicant focused its case under this ground on paragraphs 1(d) and 2(d) of the Defence and did not rely separately upon paragraphs 1(c) and (e) or 2(c) and (e). If we are wrong in this, and reliance was placed upon those additional paragraphs, our reasoning above would be, at least in part, applicable and our conclusion would not be different.

96 The Tribunal should also note here that Ground 1(a) is phrased as "The Respondent falsely verified a Defence knowing a material particular in the Defence was not true". This does not appear to be strictly applicable to what was alleged by way of particulars. Another way of phrasing this ground might have been to say that the Respondent falsely verified a Defence knowing a material particular in the verification (namely paragraph 4 in respect of paragraphs 1(d) and 2(d)) was not true. In the light of our findings, however, nothing turns on whether the ground was framed in one way rather than another.

97 As the Applicant has not established that the Respondent's verification of her Defence dated 30 September 2005 was false nor that she knew it was false when she made it, it is not necessary for the Tribunal to consider whether this amounted to professional misconduct within the meaning of the LPA.

98 Ground 1(a) has not been made out.

Ground 1(b)

99 Under this ground it is alleged that the Respondent misled the Court by asserting in her evidence that she did not have an interest in the building development known as the Balmain project (the subject of the proceedings) or a reason for giving a guarantee in relation to the project, when that was false. During the hearing the Applicant noted that in using the word "interest" it was not referring to a legal interest. Rather, the issues and questions that gave rise to the allegedly misleading answers were concerned with the $500,000 cheque received from Mr Ferizis or the proceeds of that cheque. The Respondent's answers were, it was said, designed to minimise her role and suggest that she had no financial or personal interest in the outcome of the transaction when this was not the case.

100 In addressing this ground, the Tribunal must consider 4 questions:

(a) What evidence did the Respondent give concerning:

(i) not having in interest in the Balmain project; and

(ii) not having a reason for giving a guarantee in relation to the project?

(b) Was that evidence false?

(c) If so, did the Respondent know that evidence was false when she gave it?

(d) If so, did that conduct amount to professional misconduct?

What Evidence was Given by the Respondent?

101 What evidence the Respondent gave before the District Court concerning these issues was essentially uncontested. The evidence alleged to have given rise to the false assertions consisted of part of an affidavit read in the District Court proceedings and evidence given in cross examination in those proceedings.

102 As to the evidence given by way of affidavit, it was not in dispute that in her affidavit of 7 June 2006, Ms Nash in recounting a conversation on 20 June 2003 with Mr Lahood gave the evidence in paragraphs 120 to 125 (which are set out in full earlier in these reasons) including that she said:

"My signature is useless to you as I have no standing in relation to Balmain, as I am not a grantor [LNG or PED] and I am not a director of the grantor. I have no role in these documents [the option deeds]"

and

"Well, it [her signing the documents] will be worthless to you because I have no reason to be signing these documents I have no role in these documents. However, if it means the cheque going to Graham [Vaughan], well then I will sign the documents".

103 This material is, on the surface, a little problematic from the Applicant's perspective. It is not evidence directly on the topic of the Respondent's lack of an interest in the Balmain project or lack of a reason for giving a guarantee. It is evidence of what was said in a conversation which related to those issues. That evidence may be true in the sense that those words were said in a conversation with Mr Lahood, even if the words themselves conveyed a meaning to Mr Lahood which was not true. To the extent, however, that Ms Nash asserted in the District Court that the content of the words spoken to Mr Lahood was also true, those words could support the Applicant's case under this ground. Thus, it should be noted here that in cross examination on 25 October 2006 - T86 ll.47 - 49 Ms Nash said: "I didn't regard it as anything to do with me; which is what I said to Mr Lahood at the time". This appears to the Tribunal to be a statement to the Court that what was said to Mr Lahood in this regard was true.

104 As to the evidence Ms Nash gave in cross examination in the District Court, it was not in dispute that the Respondent's evidence included the following:

(a) "Balmain was not my project. LNG was not my company. I had nothing to do with cheques being made out to either PED or LNG." - Transcript of 25 October 2006 - T75 ll.28-30.

(b) the passage on 25 October 2006 - T76 ll. 25 - 26 and 28 - 32:

"A It wasn't for me to want anything. It had nothing to do with me.

Q Well you were trying to achieve that very end weren't you? You were there at Mr Shad's office, trying to achieve payment of half a million dollars for the development of PNG and PED; that's correct isn't it?

A No"

(c) the passage on 25 October 2006 - T78 l. 54 to T79 l. 10:

"Q And you knew that Mr Vaughan was seeking to get mezzanine finance contributions from various lenders, didn't you?

A I did.

Q And you assisted him in that endeavour during 2003 and 2004, didn't you?

A I answered the phone and I made applications to Capital Finance, Ray White Invest, to borrow money so that we could make sure that people who'd invested money in Balmain didn't lose their money, and I was prepared to take it over, but I was stopped by Mr Gorman, who would not hand over, after taking $528,000 from me, would not hand over the directorship and shares to me. That was my assistance, ..."

(d) the passage on 25 October 2006 - T85 ll.32 - 53:

"A I knew it [the cheque for $500,000] went to Hughes and Taylor to be used for the LNG PED development at Balmain. I didn't have to ask him [Mr Vaughan].

...

A I'm sorry, I don't think I specifically spoke to him about what became of that cheque. I don't think that was of any specific interest to me. I knew it went into Hughes and Taylor Trust Account for the purpose of being used for Balmain. I doubt that I spoke to him specifically saying 'What happened to that cheque?'"

(e) the passage on 25 October 2006 - T86 - 87 including:

"A I remember the cheques being handed to Graham Vaughan by Mr Lahood, or cheque, I can't remember whether there was one cheque or two cheques. I don't know that I paid any attention to what was written on them. I didn't regard it as anything to do with me; which is what I said to Mr Lahood at the time."

(f) the passage on 26 October 2006 - T50 ll. 14 - 34:

"Q You were dead keen to get the money through at the time weren't you?

A Not me personally.

Q You would have gone through any trouble to get that money through at the time wouldn't you?

A That's not right.

Q You wanted to see the half a million dollars come in for Balmain at that time, didn't you?

A At that time the money was going to PED and LNG, not to me, Mr Parsons.

Q You wanted to see that money come in for Balmain at that time, didn't you.

A Not particularly.

Q What, completely immaterial to you, was it? Is that what you say?

A It was of significance to PED and LNG, it wasn't of significance in June 2003 to me.

105 The Tribunal must now determine what is conveyed by this evidence. In doing so, the Tribunal will confine itself to the specific material particularised by the Applicant in its Application under Ground 1(b), salient parts of which are set out above. That is not to say, however, that the Tribunal cannot have regard to other relevant evidence given in the District Court proceedings, evidence before the Tribunal and the pleadings in the Court and the Tribunal and similar documents in order to understand fully and properly what was being said in the evidence which the Applicant has particularised. That additional material can be relied upon to provide context for and clarification, if required, of Ms Nash's words.

106 We shall deal first with whether Ms Nash asserted in her evidence before the District Court that she did not have an interest in the Balmain project, noting that "interest" in this context refers not to a legal interest but rather to a personal or financial interest in the Balmain project and in whether the option transactions proceeded so as to assist in financing that project.

107 Ms Nash's statement, recorded in her affidavit of 7 June 2006 which she subsequently endorsed as true, that she had "no standing in relation to Balmain" appears to us to be an attempt to distance herself from any involvement (whether legal, financial or otherwise) in the Balmain project. Similarly, the assertion in cross examination that "Balmain was not my project. ... I had nothing to do with cheques being made out to either PED or LNG" does more than state a legal proposition as to the person or company which owned or had some other legal interest in the real property at Balmain or the project. They were both stating that the Balmain project was not a project in relation to which Ms Nash had any responsibility or involvement. Ms Nash reinforced this position by emphatically stating that she had "nothing" to do with obtaining funds to finance the project by way of the option fees. Moreover, the statements later in her evidence that "It [the money going to PED and LNG] had nothing to do with me" and "It [the payment of half a million dollars for the developments of PED and LNG] had nothing to do with what I wanted to" also convey with a degree of firmness the point that Ms Nash had no interest (personal or financial) in whether or not those funds were obtained for the Balmain project. Her words in cross examination that "I don't think I specifically spoke to him about what became of that cheque. I don't think that was of any specific interest to me. I knew it went into Hughes and Taylor Trust Account for the purpose of being used for Balmain" suggest quite markedly that it was a matter of some indifference to Ms Nash what the cheque for $500,000 was used for or that it was used to finance the Balmain project. This is, in the context, consistent only with her having no legal, personal or financial interest in that project. To like effect was her evidence in cross examination which included:

Q You wanted to see that money come in for Balmain at that time [June 2003], didn't you.

A Not particularly.

108 The Respondent submitted that her evidence in this regard should be understood as conveying that in June 2003 she regarded herself as having subjective freedom of choice in relation to the Balmain project. This was to be contrasted with what was being put to her, namely that she subjectively regarded herself as obliged to guarantee Mr Ferizis's options. In her evidence, Ms Nash, it was said, was denying this latter proposition. She was not denying the objective facts that might have indicated that she had a motive to provide a guarantee. While the Tribunal can appreciate the distinctions being made in this submission, we do not believe that the evidence and the cross examination in the District Court proceeded at such a high level of discourse. Questions such as: "You wanted to see that money come in for Balmain at that time [June 2003], didn't you" were formulated at a basic but perfectly understandable level. The answer: "Not particularly" was not properly to be understood as making fine distinctions between Ms Nash saying that she felt herself free not to give a guarantee and an acknowledgement that there were objective facts which might suggest she had a motive for doing so. Similarly, the statement "I had nothing to do with cheques being made out to either PED or LNG" was not a particularly nuanced or subtle answer such as might be anticipated if the Respondent's submission were correct.

109 Having regard to the statements made by the Respondent in her evidence and the whole of the material particularised by the Applicant read in its context, the Tribunal is satisfied that the Respondent did seek to convey to the District Court that she had no personal or financial interest in the Balmain project or the transaction of 20 June 2003 which would assist to fund that project.

110 Turning now to the question of whether the material particularised conveyed the assertion that Ms Nash had no reason to give a guarantee, it can be observed that if it were correct that she had no interest in the Balmain project or the option transaction, one could also conclude that Ms Nash had no reason for giving a guarantee. Accordingly, it could be said that Ms Nash's evidence implicitly asserted that she had no reason to give the guarantee in question.

111 Her evidence, however, went further than this. She asserted that it was true when she said:

"... I am not a grantor and I am not a director of the grantor. I have no role in these documents [the option deeds]"

and

"... I have no reason to be signing these documents I have no role in these documents.".

112 Whilst it can be accepted that Ms Nash was not a grantor of either option and was not a formally appointed director of PED or LNG at 20 June 2003, she does explicitly state that "I have no reason to be signing these documents" and those documents included a guarantee (as was conceded was found by Rein DCJ). From the findings made above in relation to how it came about that the documents were signed, the Tribunal is also satisfied that Ms Nash knew that Mr Ferizis was seeking personal guarantees in relation to the option deeds and that a guarantee was sought from her. Her statement "I have no reason to be signing these documents ..." was asserting that Ms Nash had no reason for giving the guarantee included in those documents.

113 Accordingly, we find that both implicitly and explicitly, the Respondent asserted in her evidence that she had no reason for giving a guarantee by signing the documents in question.

Were the Assertions Made by Ms Nash in Evidence False?

114 Having found that Ms Nash's evidence did convey the assertions alleged, the Tribunal will consider in turn whether each of those assertions were false.

115 The evidence concerning Ms Nash's interest or lack of interest in the Balmain project and the transaction of 20 June 2003 which would assist to fund that project was somewhat diffuse but, in the end, compelling. It can be accepted that she had no interest in the sense of some legal right, title or interest in the Balmain project. At the relevant time she was not a shareholder in or on the board of PED or LNG. She had advanced them money and was an unsecured creditor. As far as the Tribunal can determine, she had, however, no right other than as a creditor and therefore probably no interest in a legal sense. No doubt that is why the Applicant's case was that Ms Nash was asserting that she did not have a financial or personal interest, rather than a legal interest, in the Balmain project or its being financed by means of the option transactions.

116 Ms Nash's oral evidence in the District Court proceedings included a number of concessions that she had a motivation to contribute funds for the Balmain project and to secure funds for it from other sources, if possible. She took these steps to help Mr Vaughan and to maintain the prospect of the project's ultimate completion. Underlying that motivation was her belief in the ultimate success of the project and the likelihood of her being repaid funds which she had already contributed.

117 Ms Nash admitted that, by April/May of 2003 and when she was talking to Mr Ferizis for the first time, she had commenced negotiations with Mr Gorman for the transfer of his interest in LNG to her and she believed she was moving towards becoming a director of LNG. During this period in 2003, she also believed she was the only relevant person in a financial position to make sure the projects did not collapse and she gave evidence that while the discussions were on foot with Mr Ferizis and Mr Lahood:

"I knew I was the only person who could raise money to do that [pull LNG out of the quagmire], because I was the only person the institutions were prepared to speak to".

118 The Respondent was an unsecured creditor of LNG and personally lent funds to the Balmain project including $75,000 for stamp duty. She paid bills and other expenses. The Tribunal finds that she did so in order to support Mr Vaughan with whom she was in a personal relationship, to maintain her investments in the other projects she had undertaken with PED and because she was proposing, at that time, to take over or acquire LNG, including its interest in the Balmain project. She was hoping to get back the money she had already put into the Balmain project. Indeed, she was repaid $75,000 within a few days of the Ferizis transaction going ahead on 20 June 2003.

119 On her own understanding of the situation, the continuing viability of the Balmain project at the relevant time depended solely upon her support, as Mr Gorman took no interest in the transaction, Mr Vaughan was an undischarged bankrupt and had no money to contribute and in any event she was supporting him by paying his expenses. Her personal association with Mr Vaughan made it, as a practical matter, difficult for her to say no. If the project failed she would have lost such funds as she had put into it. She, and Mr Ferizis, regarded the Balmain project as viable in June 2003 and it was one in which she had a considerable interest, both personal and financial, and it was one that she did not want to see fail.

120 As recounted above, Ms Nash was also directly involved in securing the deal with Mr Ferizis. She spoke to him in person and on the telephone on numerous occasions. She took an active role in agreeing to accept Mr Ferizis's offer to pay the value in accordance with the 2002 valuation of Todd Herron White and not the list price for units 7 and 8, as recorded in Mr Ferizis's notes. Ms Nash instructed the solicitors, arranged for documentation to be supplied to Ferizis and generally oversaw the transaction.

121 The Tribunal, having reread the transcript and Ms Nash's evidence in the District Court proceedings and before the Tribunal and having regard to the answers given by her, is of the view that her evidence disclaiming an interest in the project and the option transaction was, in the circumstances, disingenuous. The Tribunal does not believe that Ms Nash regarded herself as having any subjective freedom of choice in relation to giving a guarantee if the transaction with Mr Ferizis concerning the Balmain project was to go ahead, as was contended by the Respondent.

122 The Tribunal concludes that Ms Nash's evidence asserting that she had no interest in the Balmain project, in the sense of a personal or financial interest, was false.

123 As to whether the Respondent did have a reason for giving a guarantee in relation to the Balmain project, the Tribunal's finding and conclusions above in relation to her direct personal and financial interest in the project, her involvement in bringing the transaction to fruition and the benefit she might receive from securing external funding of half a million dollars from the option fees support the view that she also had a reason for giving the guarantee. If she did not give it, it was plain that the money from Mr Ferizis would not be forthcoming.

124 We also note that Ms Nash's conduct, even on the day the option deeds were signed, was consistent with direct involvement in the transaction and having a reason to give the guarantee. Not only did she check the amendments with Mr Lahood, she organised for the other guarantors to sign as well as signing the documents (albeit reluctantly) herself. She went from Bankstown to Pyrmont, waited for the documents to be executed and witnessed. Then she went back to Bankstown with Mr Vaughan who took the documents into Mr Lahood's office and exchanged the documents duly executed for the cheque. In the Tribunal's assessment, Ms Nash appreciated that she really had no option but to give a guarantee as sought by Mr Ferizis if the cheque was to be handed over. The immediate injection of $500,000 into the project and the prospect of her retrieving almost immediately the $75,000 paid for stamp duty provided ample reason for her to give the guarantee in circumstances, especially where she considered the project was likely to be a commercial success and any risk of having to pay under the guarantee slight.

125 Thus the Tribunal accepts that the Respondent did have a reason for giving a guarantee in relation to the Balmain project and her evidence to the contrary, as set out above, was false.

Was the Evidence Knowingly False?

126 The next issue under this Ground 1(b) is whether the Respondent knew that her evidence was false when she gave it. The Tribunal has borne in mind that although these proceedings are civil in nature it must take into account the serious nature of the grounds raised in the Application, the nature of the subject matter of the proceedings and the gravity of the matters alleged, in accordance with s 140 of the Evidence Act, which is the statutory embodiment of the principles enunciated in Briginshaw v Briginshaw (1938) 60 CLR 336. The Evidence Act applies in this case because the Tribunal is dealing with allegations of professional misconduct - see s 558(1) of the LPA.

127 Mr Johnson put to Ms Nash in cross examination that the evidence relied upon in relation to this ground was false in the light of what had actually occurred (see for example - without being exhaustive - the transcript of 6 June 2012 at T72 l.35 to T76 l.31). The Respondent did not, however, acknowledge at any stage that she knew that the evidence was false at the time she gave it.

128 Nonetheless, the Tribunal finds the evidence overwhelming that Ms Nash was closely involved with the process of having Mr Ferizis enter into the option deeds. She was closely involved with the projects in which PED and Ms Nash and Mr Vaughan were joint venturers (which included the Balmain project according to the PED brochure given to Mr Ferizis) to the extent, as she acknowledged in cross examination, of her being as at June 2003 the only person in a financial position to make sure that the projects, including the Balmain project, did not collapse. She had a personal interest in the transaction with Mr Ferizis going ahead because it benefited Mr Vaughan whom she was supporting and with whom she was in a domestic relationship. The obvious reason for her to give a guarantee was in order to obtain an injection of $500,000 into the Balmain project.

129 Accordingly, it is difficult to understand how the Respondent could have given evidence that she was not involved to any significant extent in the transaction with Mr Ferizis, did not have a personal or financial interest in the Balmain project and had no reason to give a guarantee without her being either badly mistaken or deliberately giving false evidence. The Respondent did not seek to convince the Tribunal that when she gave her evidence in the District Court she was operating under some mistake or error or lack of correct recollection. As far as she could consistently with the contemporaneous documents, the Respondent maintained before us that the evidence she gave in the District Court was true and, otherwise, she believed it was true at the time.

130 Ms Nash when she was giving evidence in the District Court (and for that matter before the Tribunal) appeared to have the ability to recall accurately and without significant difficulty aspects of events and matters that were unrelated to whether or not she had given or had a reason to give the guarantees. In the District Court, she had an obvious reason to avoid admitting that she had given a guarantee or had any reason to give one. If she were found to have given a guarantee, the judgment against her would in all probability have been well in excess of half a million dollars. Before the Tribunal the Respondent offered no satisfactory explanation for how she came to give the evidence which we have referred to above and which we have found to be false. It would unduly strain credibility for the Tribunal to conclude that that evidence was true or that it was just honestly mistaken. Ms Nash was involved in all the events and circumstances relevant to obtaining the cheque for $500,000 from Mr Ferizis. The Tribunal does not accept that Ms Nash had suffered a loss of recollection as to those events by the time she came to give evidence in 2006 and 2007 such that she could honestly assert in effect that she had no interest in the Balmain project and no reason to give a guarantee.

131 In all the circumstances, the Tribunal is satisfied that the Respondent knew, when she gave the evidence to the effect that she did not have an interest in the building development known as the Balmain project (the subject of the proceedings) or a reason for giving a guarantee in relation to the project, that such evidence was false.

Did it Amount to Professional Misconduct?

132 Under s 562(1) of the LPA it is provided:

If, after it has completed a hearing under this Part in relation to a complaint against an Australian legal practitioner, the Tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the Tribunal may make such orders as it thinks fit, including any one or more of the orders specified in this section.

133 As noted above, the Respondent was an Australian legal practitioner at the time of the conduct in question and at the time of the hearing before the Tribunal. The Applicant has alleged that her conduct amounted to professional misconduct.

134 The expression "professional misconduct" is defined in s 497 of the LPA in the following terms:

(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.

(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters.

135 As the definition of "professional misconduct" in s 497 is inclusive in nature, it follows that conduct which amounts to professional misconduct under the general law will also fall within professional misconduct to which the LPA applies.

136 The Respondent was, however, involved in the District Court proceedings only as a party not as a barrister. Thus, notwithstanding that the Respondent's relevant conduct occurred in the context of the District Court proceedings, that conduct did not form part of her carrying out or pursuing her professional activities as an Australian legal practitioner.

137 In NSW Bar Association v Cummins (2001) 52 NSWLR 279 at [56] and [59], Spigelman J held:

56 There is authority in favour of extending the terminology "professional misconduct" to acts not occurring directly in the course of professional practice. That is not to say that any form of personal conduct may be regarded as professional misconduct. The authorities appear to me to suggest two kinds of relationships that justify applying the terminology in this broader way. First, acts may be sufficiently closely connected with actual practice, albeit not occurring in the course of such practice. Secondly, conduct outside the course of practice may manifest the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice. In this second case, the terminology of "professional misconduct" overlaps with and, usually it is not necessary to distinguish it from, the terminology of "good fame and character" or "fit and proper person".

...

59 In In re Thom; Ex parte The Prothonotary (1964) 80 WN (NSW) 968 the Full Court of the Supreme Court expressly found that wilful non-disclosure by a solicitor with respect to his own divorce proceedings constituted professional misconduct. The solicitor had knowingly failed to admit to his own adultery in circumstances where a litigant was obliged to do so and, accordingly, deceived the court in the exercise of its matrimonial causes jurisdiction. Fulfilment of a duty of candour to the court is a quality required of legal practitioners and its breach, even in personal litigation, manifested the absence of that quality. See the formulation "grave impropriety affecting his professional character" in Kennedy v Council of the Incorporated Law Institute of New South Wales (1940) 13 ALJ 563.

138 As a result, the question for the Tribunal in the present case can be formulated as whether the Respondent's conduct:

(a) occurring otherwise than in connection with the practice of law, would justify a finding that the practitioner was not a fit and proper person to engage in legal practice, relying upon s 497(1)(b) of the LPA; or

(b) being conduct outside the course of practice, manifests the absence of qualities which are essential for the conduct of practice, relying on the general law.

139 As was noted in Cummins at [59], in this second case, the terminology of "professional misconduct" overlaps with and, usually it is not necessary to distinguish it from, the terminology of "fit and proper person". Thus, whether the general law or the specific provisions of the LPA are relied upon the test will be essentially the same.

140 We have found under this ground that the Respondent gave evidence by way of affidavit and orally which was knowingly false.

141 Swearing an affidavit that is known to be false in a material particular can amount to professional conduct as explained in Coe v NSW Bar Association [2000] NSWCA 13. In that matter the act of professional misconduct was swearing an affidavit in proceedings in the Family Court of Australia in which the barrister was a party, which he knew to be false in material particulars. Mason P held at [10] and [11]:

10 If (which I doubt) there are exceptional cases where a practitioner who knowingly swears a false affidavit that is filed in court could be regarded as fit to practice, this is not one of them.

11. In In re B (1981) 2 NSWLR 372 at 282 Moffitt P said "It is of the utmost importance that this court can order its procedures and give its decision in the confidence that the barristers appearing before it, will not mislead it, will conduct themselves in accordance with the law and discharge their duty even when not subject to any scrutiny."

142 The Tribunal notes here that the Respondent tended a series of references from a number of barristers and solicitors who were colleagues of or had worked extensively with Ms Nash. These were testimonials to their experience of her which were supportive of her skill, knowledge and integrity as a criminal advocate. It is fair to suggest that the authors of those testimonials indicated that if the matters in the various grounds in the Application were established they were out of character. All of the testimonials speak highly of her capacities as a trial advocate and criminal lawyer. We accept the genuineness of those statements and take them into account. The references, however, cannot be of direct assistance in the resolution of conflicts in testimony between Mr Ferizis and Ms Nash taken with the documentary evidence and read against transcript of the various witnesses including Ms Nash, Mr Vaughan, Mr Lahood and Ms Hughes in the District Court proceedings. Furthermore, the Tribunal must take into account what actually occurred to give rise to the District Court proceedings, how the Respondent conducted herself before the District Court and the evidence she gave about those matters before this Tribunal.

143 Although it is not a conclusion at which the Tribunal arrives lightly, we are satisfied that the Respondent by giving the evidence that she had no interest in the Balmain project and no reason to give a guarantee knowing that to be false, demonstrated that she lacked qualities that are essential for the practice of the law. These qualities include, most particularly, candour and honesty especially when dealing with the Court, opponents and parties. The Courts and the public must be able to rely upon legal practitioners being scrupulous in their performance of their duties of candour and honesty. Failure to tell the truth or deceitfulness for the purpose of deriving an advantage or avoiding a liability is not only improper conduct for a legal practitioner it also suggests that there is a serious character flaw involving the inability to put duty ahead of personal interest. When this occurs in relation to evidence formally affirmed to be the truth it is of even greater concern. This is because a legal practitioner could not fail to be aware of the solemn and grave nature of the obligation undertaken by a witness in those circumstances. Accordingly, any failure by a legal practitioner to comply with his or her obligations in that context can generally only be viewed as demonstrating that the practitioner was not a fit and proper person to engage in, and lacked the qualities necessary for, legal practice, notwithstanding that the conduct in question occurred otherwise than in connection with the practice of law.

144 For these reasons, the Tribunal finds that the Respondent engaged in professional misconduct on the basis set out in Ground 1(b).

Ground 1(c)

145 Under this ground it is alleged that the Respondent misled the District Court by asserting in her evidence that Mr Ferizis had not asked for guarantees, when she knew that was false.

146 Once again, in addressing this ground, the Tribunal must consider 4 questions:

(a) Did the Respondent give evidence before the District Court that Mr Ferizis had not asked for guarantees?

(b) Was that evidence false?

(c) If so, did the Respondent know that evidence was false when she gave it?

(d) If so, did it amount to professional misconduct?

What Evidence was Given by the Respondent?

147 The transcript from the District Court hearing established that Ms Nash gave the evidence that Mr Ferizis had not asked for personal guarantees. The following were the most relevant but not the only passages:

(a) the passage on 12 March 2007 - T46 ll. 34 - 52:

"Q Mr Ferizis said to you the money is ready however the funds are provided by a trust and I would need more security?

A I didn't have any conversation like that with him.

Q And he said to you 'I would need personal guarantees by all four directors?'

A I didn't have any conversation with him like that with him.

Q After that time it was no part of what you and Mr Vaughan and Mr Dixon and Mr Kelly were doing to provide personal guarantees for investment funds from private investors was it?

A No.

Q You said to him in that conversation 'We've never given personal guarantees, it isn't the done thing'?

A Well I didn't have that conversation with him, but it isn't the done thing."

(b) the passage on 12 March 2007 - T47 ll.11 - 20:

"Q Mr Ferizis said to you 'I spoke to the solicitor and he advised me against it unless there are personal guarantees'?

A I - I had no such conversation whatever he might have said to his solicitor, I'm not privy to.

Q He said to you 'I spoke to the solicitor and he advised me against it unless there are personal guarantees'. He said that to you didn't he?

A I didn't have any such conversation with him."

(c) the passage on 12 March 2007 at T47 ll. 41 - 43:

"Q Didn't you have any conversations with your solicitors at about this time about this deal going ahead?

A Not about this deal, no."

(d) the passages on 12 March 2007 at T48 ll. 4 - 8 and 17 - 23:

"Q So you're absolutely certain that you had no contact with the solicitors acting in relation to the acquisition of funds for the Balmain project for Mr Ferizis, is that what you're saying?

A That's what I'm saying."

and

"Q You knew did you not, that Hughes & Taylor had received a letter from the solicitor acting for Mr Ferizis in which that solicitor sought an indication of whether the director's guarantee would be provided in relation to the proposed transaction?

A The first time I heard about that and saw that was in these proceedings, I wasn't aware of that."

148 Accordingly, the Tribunal is satisfied that Ms Nash gave evidence that Mr Ferizis did not ask for personal guarantees, whether in the alleged conversations with her or through his solicitors' letter of 19 June 2003.

Was that Evidence False?

149 The Tribunal accepts Mr Ferizis' evidence both in the District Court and in this Tribunal that he asked Ms Nash for personal guarantees in a telephone conversation with the Respondent on about 18 or 19 June 2003. The terms of the conversation are set out above. The letter from George Shad & Partners of 19 June 2003, Ms Hughes' file notes of conversations with Ms Nash concerning the request for guarantees and the provision of the 4 names of the guarantors and the fact that personal guarantees were included in the option deed all provide objective confirmation that the issue of providing personal guarantees was a matter of importance for Mr Ferizis in relation to the transaction and that he sought and obtained them. Given that Ms Nash was the principal person with whom Mr Ferizis and Ms Hughes both dealt in relation to the transaction, the objective documentary evidence of contact and discussion and the inherent unlikelihood of Ms Nash not being involved, the Tribunal finds it is unable in the circumstances to accept that the personal guarantees were sought and given without it being raised and discussed with Ms Nash by Mr Ferizis and Ms Hughes.

150 The Respondent in her submissions sought to rely on the evidence of Mr Lahood in the District Court. Mr Lahood was not called to give evidence before the Tribunal. In addition, there were difficulties with the reliability of his evidence in a number of respects, including for example his assertion that he witnessed Ms Nash's signature on the four signature page which was clearly wrong. The Tribunal is not satisfied that it should rely on his evidence to any significant extent in this matter.

151 Further, the substance of this ground was that Ms Nash had denied that Mr Ferizis had ever asked for guarantees in respect of the option deeds. It was not, as the Respondent effectively stated at one point in her submissions, that she had denied that she ever agreed to provide any guarantee. There were difficulties with the dating by Mr Ferizis of his conversations with Ms Nash. Those difficulties, however, did not mean that guarantees were never sought. The District Court found they were given and it defies logic and reality to suggest that they were not asked for. Ms Nash was intimately involved in organising the transaction. Mr Ferizis and the documents provide evidence that Ms Nash was asked about the provision of guarantees and gave instructions in relation to them, even if initially the instructions were to respond "No" to the request in Mr Lahood's letter of 19 June 2003. There is no firm basis identified by the Respondent for concluding that Ms Nash's evidence was correct.

152 In all the circumstances, the Tribunal concludes that Ms Nash's evidence that she did not have any conversation with Mr Ferizis in which personal guarantees were sought was false. Similarly, the Tribunal is of the view that the Respondent's denial of any contact with Hughes and Taylor concerning the letter from George Shad & Partners of 19 June 2003 was also false, especially given the file note recording Ms Nash giving instructions in relation to that letter.

Did the Respondent know that evidence was false when she gave it?

153 At the District Court hearing, Ms Nash denied that she had any conversation with Mr Ferizis in which he sought personal guarantees in relation to the transaction. Before the Tribunal the Respondent's evidence had apparently changed in that she now said that she did not recall having such a conversation with Mr Ferizis. For example, in the transcript of 6 June 2012, the following passage occurs at T22 - 23:

"Q. Either on that day or the following day, the 18th or the 19th, did Mr Ferizis say to you the money is ready, however the funds are provided by a trust and I'll need more security, I will need a personal guarantee by all four directors?

A. I don't recall having that conversation with him.

Q. I put to you that you said to him we never give personal guarantees, it's not the done thing?

A. I don't recall having a conversation with him about it at all.

Q. Did Mr Ferizis say to you I spoke to the solicitor and he advised me against it unless there are personal guarantees?

A. I don't recall the conversation.

Q. And did you say who is your solicitor, I'll ring him and talk to him?

A. I don't recall that conversation.

Q. And again, I'll put it to you that Mr Ferizis said irrespective of that, I will still need the guarantees, the money cannot be advanced without them?

A. I have no recollection of that conversation at all."

But, a couple of questions later the following occurs:

Q. So you didn't recall the conversation?

A. No, I don't recall it because I don't believe it took place.

154 As to the George Shad & Partners letter of 19 June 2003, the evidence in the Tribunal was (6 June 2012 T24):

Q. And you understand that amongst other things, at point 3, the letter says would the directors of the vendor companies provide personal guarantees for the investment that our client proposes. You say you had no knowledge of this letter prior to the district court proceedings in 2006?

A. I had no memory of that letter. As I said, the first time I believe I saw it was in court.

155 As to the Hughes & Taylor file note recording a conversation with Ms Nash in which the 4 names of those who gave the personal guarantees was recorded along with other information, the Respondent gave the following evidence (6 June 2012 T29):

Q. Do you have any recollection of the basis on which those four names were recorded or provided by you to Ms Hughes?

A. No.

Q. Do you deny that you provided those four names to Ms Hughes?

A. I've no idea, it says telephone attendance on Christine but I've no idea why those names are recorded there.

Q. Accepting, as you ..(not transcribable).. today in court that you did have a telephone conversation with Ms Hughes on 19 June about the provision of personal guarantees by directors, do you accept that it's possible that you provided those names in response to that request?

A. No.

Q. You say that you have no recollection speaking to any of the other directors or the directors of PED about the request for a personal guarantee?

A. I don't recall any conversation about personal guarantees, as I said, until I saw the telephone attendance on me.

Q. That's just not the truth, is it Ms Nash?

A. It is.

Q. You were, as at 19 June, very aware of the fact that there'd been a request for a personal guarantee by directors, weren't you?

A. I have no memory of that.

Q. And it was a matter that caused you to have contact with Ms Hughes about that issue, isn't that correct?

A. I didn't contact her about that issue.

Q. And it should have been a matter which caused you to have contact with Mr Dixon and Kelly in relation to the provision of those guarantees, isn't that correct?

A. I - I can't tell you, I have no memory of this.

Q. And it should have been a matter that you would have discussed or would have been a matter that you discussed with Mr Vaughan, isn't that correct?

A. If it had been raised, yes but I have no memory of it.

156 What this amounts to in most cases is evidence that as at June 2012 Ms Nash has no memory or recollection of events that we have found to have occurred in relation to the requests for personal guarantees. At one point, the Respondent made the comment: "I don't recall it because I don't believe it took place." Having no recollection of whether something occurred or not and denying that it occurred are to some extent inconsistent. Ignoring this difficulty, the evidence appears to mean that Ms Nash was still denying that some of the events took place. We find it unconvincing that although Ms Nash gave the 4 names of the eventual guarantors to Ms Hughes and these were incorporated into the four signature page, Ms Nash still maintained before us what she had no idea why the names were recorded in the file note. She unequivocally refused to accept that they might have been provided in response to a request for personal guarantees but her explanation to support this was that she had no recollection of a request for guarantees. There is a degree of illogicality about many of these answers that suggests to the Tribunal that the Respondent was seeking by her answers to avoid a finding that her earlier evidence in the District Court, which had been shown by objective evidence to have been wrong or false, was knowingly false rather than seeking to give truthful answers to the questions. She sought to avoid the finding by a mixture of lack of recollection and maintenance of previous denials which overall made little sense. For a truthful witness, a denial generally implies not a lack of recollection but rather a positive recollection that something did not occur or was not the case.

157 We do not accept that, for an issue as significant as whether Ms Nash had been asked for and given personal guarantees, Ms Nash's denials of facts and events contained in her evidence before the District Court were explicable by her lack of recollection of those facts and events at that time. If she truly had no recollection when giving evidence in the District Court, the truthful answer would not have been a denial but a simple statement that she did not remember. Of course, this would not materially have assisted her case in the District Court when Mr Ferizis and the documents provided evidence to the contrary. Furthermore, the Tribunal does not accept that, when she gave evidence in 2006 and 2007, Ms Nash had no recollection of the circumstances in which Mr Ferizis sought guarantees from her and Messrs Vaughan, Dixon and Kelly. In our view, it is more likely that the Respondent appreciated that if she admitted that Mr Ferizis had asked for guarantees and she had agreed to give one, it was very likely that she would be held liable by the District Court. The initial denials in the District Court were attempts by the Respondent to avoid being held liable under the guarantee. The subsequent assertions in the Tribunal of lack of recollection were attempts to avoid being found to have given deliberately false evidence.

158 No other basis for finding that Ms Nash believed her evidence to be true when she gave it in the District Court was apparent to the Tribunal. Notwithstanding the serious nature of this ground, the disciplinary nature of the proceedings and the gravity of the matters in issue, the Tribunal is satisfied that the Respondent knew that Mr Ferizis had sought personal guarantees (in conversation with her and through a letter from his solicitors) when she gave evidence to the contrary in the District Court.

159 Accordingly, the Tribunal finds that the Respondent asserted in her evidence before the District Court that Mr Ferizis had not asked for guarantees, when she knew that was false.

Did it Amount to Professional Misconduct?

160 The reasoning in relation to Ground 1(b) above concerning whether giving knowing false evidence amounts to professional misconduct is equally applicable here and is not required to be repeated.

161 On this basis, it is concluded that the Respondent engaged in professional misconduct on the basis set out in Ground 1(c).

Ground 1(d)

162 Under this ground it is alleged that the Respondent misled the District Court by attesting to the fact that Mr Lahood, a solicitor, witnessed her signature on the "four signature page" knowing that it had not occurred and was false. In this context, we understood that the use of the word "attested" in the Amended Application for Original Decision simply meant "gave evidence" and the parties before the Tribunal proceeded on that basis.

163 Once again, in addressing this ground, the Tribunal must consider 4 questions:

(a) Did the Respondent attest to the fact that Mr Lahood, a solicitor, witnessed her signature on the "four signature page"?

(b) Was that attestation false?

(c) If so, did the Respondent know that the attestation was false when she gave it?

(d) If so, did that conduct amount to professional misconduct?

The Respondent's Evidence of Mr Lahood's Witnessing her Signature

164 In her affidavit affirmed on 7 June 2006 the Respondent stated at paragraph 125: "I then signed the documents. Lahood witnessed my signing of the documents and also Graham's signing of the documents". The witnessing was said to have occurred at Mr Lahood's office when Mr Vaughan and Ms Nash both went there on 20 June 2003. Furthermore, on 25 October 2006 (T74 ll. 4 - 44), Ms Nash gave evidence that the relevant contents of that affidavit were true and correct.

165 On a fair reading of the Respondent's affidavit, the phrase "the documents" in this context apparently referred to the option deeds, as amended, which (as we have found above) were the option deeds including the 10th page (containing clauses 20 ("Repayment of Option Fee") and 21 ("Personal Guarantee of Directors of Grantor") and the 11th page, the four signature page. This, however, was later not accepted by the Respondent in her oral evidence in the District Court and in the Tribunal where she maintained that the four signature page was signed not as part of the option deeds but as an acknowledgement of receipt of the cheque or cheques (she said she could not remember whether there were two or one) received by Mr Vaughan from Mr Lahood.

166 Notwithstanding the challenge to what was meant by "the documents", it is clear that Ms Nash in that affidavit and her confirmatory evidence attested to the fact or gave evidence that Mr Lahood, a solicitor, witnessed her signature on the "four signature page".

Was the Attestation False?

167 It was accepted at the Tribunal hearing by all parties that Mr Lahood did not in fact witness Ms Nash's signature on the four signature page. It was actually witnessed by Mr Haywell, as explained above. Thus, the evidence that Mr Lahood witnessed her signature was false.

Did the Respondent know that the attestation was false when she gave it?

168 The real issue in relation to this ground is whether or not the false attestation was simply an innocent failure of recollection or whether it was something more sinister.

169 It is significant in our view that Ms Nash was adamant before the District Court that her evidence of what occurred at Mr Lahood's office on 20 June 2003 including what was in paragraph 125 of her affidavit of 7 June 2006 "represents exactly what was said and happened" (Transcript of 26 October 2006 T24 ll.24-25). This was in the context of questions relating to the fact, acknowledged by Ms Nash, that her version of events in paragraphs 122 to 126 of her affidavit and Mr Vaughan's version of events in paragraphs 202 to 206 of his affidavit were virtually identical, apart from interchanging the names and adjustments of that nature. She went on to try to explain virtual identity by saying: "obviously we both recalled it exactly as it was said and happened" (Transcript of 26 October 2006 T24 ll.25 - 26). She even went so far as to claim these two almost identical versions were the product of their "respective independent recollections of events" (Transcript of 26 October 2006 T25 ll.15 - 21).

170 The Respondent was making the point forcefully that her recollection of what occurred in Mr Lahood's office was not faulty and was entirely clear. If this were true, any mistake is unlikely to be able to be attributed in her case to poor recollection or faulty memory.

171 A further reason why we do not accept Ms Nash as a reliable witness arose here. A different explanation for the marked similarity between Mr Vaughan's and Ms Nash's evidence in their affidavits was revealed in a letter of complaint to Mr Velik dated 11 December 2006 which Ms Nash and Mr Vaughan both signed. In that letter they stated:

"The affidavits prepared and served on the plaintiffs contained inconsistencies and inaccuracies.

...

You were not present at any time during Christine's cross-examination. Had you been you would have witnessed the disaster occasioned to her by your disastrous cut and past job between her and Graham's affidavits. It made her look a fool and a liar who was a barrister was prepared to swear an affidavit that was in part hers and in part Graham's. This was despite Christine having alerted you twice by email that you had made the error and your assurance that it was correct."

172 It thus appears that the similarity in the evidence was not because of clarity of recollection on Ms Nash's and Mr Vaughan's parts but rather because the evidence was a "cut and paste job", not necessarily the truth.

173 The Tribunal notes that attributing the blame to Mr Velik, as the letter seeks to do, does not exonerate Ms Nash. Approximately 4 months after she affirmed the affidavit and after she had had 4 months in which to check the affidavit for inconsistencies and inaccuracies, on 25 October 2006 (T74 ll. 4 - 44), Ms Nash gave evidence that the relevant contents of that affidavit were true and correct. Further, instead of admitting that the affidavit contained mistakes and was a "cut and past job" she gave evidence that paragraph 125 of her affidavit of 7 June 2006 "represents exactly what was said and happened" (Transcript of 26 October 2006 T24 ll.24-25) and attributed the similarity to both having the same but independent recollection of events.

174 Further, when confronted with Mr Lahood's signature and the signature of the witness to her signature on the four signature page, Ms Nash did not give evidence that Mr Haywell witnessed her signature at Darling Harbour. Rather, she gave evidence to the District Court that (Transcript of 26 October 2006 T47 l. 48 to T48 l.10):

"A I think what happened was that he [Mr Lahood] had somebody in his office witness my signature and Graham's signature, then he got us to go over there and see Peter and Matthew and get them to sign the documents, and because I was prepared to say that I did see them sign the documents, he got the same person in that office to witness them. That's just going back on memory. I can't even remember whether it was a male or female. I can't remember who was in that office.

Q So you're saying that somebody in Mr Lahood's office witnessed your signature? Is that right?

A That's right.

Q And witnessed Mr Vaughan's signature?

A That's right.

Q Witnessed in the sense of endorsing it as -

A And then took my word for it that that was Peter and Matthew's signature, because I had just witnessed in the sense of having seen them sign it."

175 What actually occurred, as recounted above in our findings, is that Mr Haywell an employee of Mr Dixon's architectural practice at Darling Harbour signed as witnessing all the signatures on the four signature page, at Darling Harbour on 20 June 2003.

176 Ms Nash's only explanation for this second incorrect statement as to who had witnessed her signature was that she had had a "brain snap". At T68 ll.8 - 29 (6 June 2012) the following passage occurred:

Q The bottom of page 201 [26 October 2006 T47], so you're saying that somebody in Mr Lahood's office witnessed your signature, is that right, answer, that's right?

A I think I had a brain snap there because obviously that wasn't right either.

Q What do you mean by a brain snap?

A Well once I saw that it hadn't been Lahood's document I just was trying to work out - not Lahood's signature, whose signature it could possibly be and I shouldn't have been trying to do that, I should have just left it alone because I really didn't know.

Q But rather than saying I don't know, at that point of time you offered--

A That's what I'm saying, I had a brain snap and said something very stupid.

Q But you knew you were on oath at that time?

A I know.

Q An affirmation to tell the truth?

A I know.

Q Wasn't the better course to say having seen that signature I really don't know?

A Couldn't agree with you more.

177 The Respondent submitted that the identity of the witness to her signature on the four signature page was immaterial. The implicit submission was that, consequently, Ms Nash had no reason to give false evidence about that matter. The Tribunal acknowledges that there was some force in that submission. Nonetheless, a reading of paragraphs 120 to 125 of Ms Nash's affidavit of 7 June 2006 (set out in full above) indicates that she was careful to record that it had been explained to Mr Lahood that her signature was "useless" as she had nothing to do with the Balmain project and that she had no role in the documents. He then told her, according to her version: "Well, sign them anyway so I can give you the cheque". Ms Nash gave a further explanation that her signing was "worthless". It appears to the Tribunal that Ms Nash regarded it as significant in giving this evidence that Mr Lahood, who was acting for Mr Ferizis, witnessed her signature after being told her signing was "useless" and "worthless" and given only so that Mr Vaughan could obtain the cheque. It does not appear to the Tribunal that Ms Nash's statement that Mr Lahood witnessed her signature was a mere incidental and immaterial detail in the Respondent's version of events.

178 The Respondent also submitted that the incorrectness of the evidence was so readily discernable that it is unlikely to have been deliberately false. Once again, the Tribunal can appreciate the force of this submission. Nonetheless, the form and content of paragraphs 120 to 125 of Ms Nash's affidavit and her subsequent incorrect evidence when the problem was pointed out to her in cross examination in the District Court leaves the Tribunal unable to accept this submission.

179 The Respondent's evidence before the District Court and before the Tribunal was most unsatisfactory. The conclusion that the Tribunal is driven to on all the material before it is that Ms Nash perceived it was imperative for her to deny any involvement in the giving of a personal guarantee. This caused her to mould her evidence to this end. This was observable not only in relation to the question of whether or not she was involved in the Balmain project, whether or not she ever agreed to give a personal guarantee and whether or not she knew she was executing a guarantee at the time that she signed the Option Deeds but also as to her signature on the four signature page being witnessed by someone who was made aware that her signature was "useless" or of no significance. Substantially all of her original evidence on these topics was consistent with an attempt to evade responsibility under the guarantee. Viewed in that light the Tribunal is unable to accept that her attestation, her evidence, that Mr Lahood witnessed her signature on the four signature page was anything but part of a deliberate attempt to evade liability by giving evidence that was false.

180 The Tribunal concludes that Ms Nash knew that Mr Lahood had not witnessed her signature on the four signature page when she gave that evidence in her affidavit of 7 June 2006.

Did it Amount to Professional Misconduct?

181 Once again, the reasoning in relation to Ground 1(b) above concerning whether giving knowing false evidence amounts to professional misconduct is equally applicable here and is not required to be repeated.

182 On this basis, it is concluded that the Respondent engaged in professional misconduct on the basis set out in Ground 1(d).

Ground 1(e)

183 Under this ground it was alleged that the Respondent misled the Court by denying in her evidence that she had agreed with the Plaintiff that directors would give guarantees, when that was false.

184 Here it can be noted that Ms Nash in her Amended Reply to an Application, has admitted, among other things, that:

(a) she gave the evidence relied upon by the Applicant in paragraph 34(ii), (iii) and (iv) of the Application;

(b) that evidence was given as alleged in paragraph 35(i), (ii), and (iii) and the admission was made as alleged in paragraph 35(iv) of the Application.

185 That left essentially four issues. First, did Ms Hughes's file note of 1 December 2004 contain an admission by the Respondent that she had given a personal guarantee to Mr Ferizis. Secondly, did Ms Nash in her evidence deny what is alleged under this ground. Thirdly, if so, was this false and, lastly, did Ms Nash gave her evidence without belief in its truth when she gave it.

186 As to the first issue, the effect of the file note of 1 December 2004, Ms Hughes was not called to give evidence before the Tribunal. Before the District Court Ms Hughes gave evidence that the reference in that file note to taking a personal guarantee from Ms Nash related to an existing partner and not Mr Ferizis - (Transcript 15 March 2007 T360 ll. 5 - 40). Ms Nash's evidence was consistent with this. In the light of Ms Hughes's statement which could not be challenged or tested before us, we are not prepared to conclude that the file note of 1 December 2004 contains a record of an admission by the Respondent that she agreed to give a personal guarantee to Mr Ferizis.

187 As to the second issue, it is necessary to examine Ms Nash's evidence relied upon to determine whether she did deny that she had agreed with the Plaintiff that the directors would give guarantees. Only if that is made out would it then be necessary for the Tribunal consider any remaining issues.

Did the Respondent Deny that she had Agreed with the Plaintiff that Directors would give guarantees.

188 The evidence from Ms Nash upon which the Applicant relies and which Ms Nash admits giving includes the following:

(a) the passage during cross examination on 27 October 2006 (T37 ll1 - 26) in the District Court:

"Q ... From the time that you had signed the documents on 20 June 2003 in respect of the advance from Mr Ferizis, you knew that you had given him a guarantee in relation to that transaction?

A. I didn't sign any other documents other than one piece of paper--

Q. Yes and from, well you signed two pieces of paper didn't you, one in respect of each option deed?

A. Of the same kind.

Q One in respect of each option deed?

A Of the same kind, you won't find my initials or signature on any of the options or contracts.

...

HIS HONOUR: The question I have a note of which you haven't answered was this. 'from the time that you signed the documents on 20 June 2003 in respect of the advance to [sic] Mr Ferizis, you knew that you were giving him a guarantee in relation to that transaction' that was the question.

A. Thank you your Honour. The answer is no I did not know that."

(b) the passage relied upon by the Applicant in respect of Ground 1(c) parts of which are quoted above but which is also set out for ease of reference below (12 March 2007 - T46 l. 34 - T48 l. 24):

"Q Mr Ferizis said to you the money is ready however the funds are provided by a trust and I would need more security?

A I didn't have any conversation like that with him.

Q And he said to you 'I would need personal guarantees by all four directors?'

A I didn't have any conversation with him like that with him.

Q After that time it was no part of what you and Mr Vaughan and Mr Dixon and Mr Kelly were doing to provide personal guarantees for investment funds from private investors was it?

A No.

Q You said to him in that conversation 'We've never given personal guarantees, it isn't the done thing'?

A Well I didn't have that conversation with him, but it isn't the done thing."

Q However, those words that I've put to you state exactly what your position or attitude was on personal guarantees on 18 or 19 June 2003, correct?

A Well, when somebody's investing at 20 per cent, that's risk money and you don't get personal guarantees.

Q So your position, as at 19 or 19 June, in relation to personal guarantees was, first, that those involved, Mr Dickson, Mr Kelly, Mr Vaughan and yourself had never given them, yes?

A Yes.

Q Secondly, it is not the done thing, correct?

A Yes.

Q Mr Ferizis said to you 'I spoke to the solicitor and he advised me against it unless there are personal guarantees'?

A I - I had no such conversation whatever he might have said to his solicitor, I'm not privy to.

Q He said to you 'I spoke to the solicitor and he advised me against it unless there are personal guarantees'. He said that to you didn't he?

A I didn't have any such conversation with him.

Q You said to him: 'Who is your solicitor, I'll ring him and talk to him'?

A I didn't.

Q He said to you, 'Irrespective of that, I'll still need the guarantees, the money cannot be advanced without them'?

A I didn't have that conversation with him.

Q You said to him, 'I'll talk to the other and get back to you' correct?

A No.

Q Apart from the conversation that I've just put to you, I understand you deny that conversation, you were aware, were you not, as at 19 June and 20 June 2003, that Mr Ferizis wished to have guarantees from directors of PED and LNG, you knew that, didn't you?

A I did not.

Q Didn't you have any conversations with your solicitors at about this time about this deal going ahead?

A Not about this deal, no."

...

Q So you're absolutely certain that you had no contact with the solicitors acting in relation to the acquisition of funds for the Balmain project for Mr Ferizis, is that what you're saying?

A That's what I'm saying."

and

"Q You knew did you not, that Hughes & Taylor had received a letter from the solicitor acting for Mr Ferizis in which that solicitor sought an indication of whether the director's guarantee would be provided in relation to the proposed transaction?

A The first time I heard about that and saw that was in these proceedings, I wasn't aware of that."

(c) A passage from 12 March 2007 (T54 ll. 8 - 46). This passage, however, relates to the file note of 1 December 2004 and, for the reasons given above, we have rejected the submission that this file note related to any guarantee given to Mr Ferizis. Accordingly, it is not relevant to this ground and we shall not consider it further.

189 As the Tribunal understands it, this Ground 1(e) differs from Ground 1(c) in that Ground 1(c) concerned Ms Nash's denial that Mr Ferizis had asked for guarantees whereas Ground 1(e) concerned Ms Nash's denial that she had agreed that directors would give guarantees.

190 We have found that Ground 1(c) has been made out. As to Ground 1(e), the relevant evidence relied upon is said to establish that the Respondent denied that she had agreed that the directors would give guarantees. The Tribunal does not regard this as a correct characterisation of that evidence.

191 As to passage (a) quoted above which occurred during cross examination on 27 October 2006 (T37 ll1 - 26) in the District Court, the issue under discussion was whether Ms Nash, from the time that she had signed the documents on 20 June 2003, knew that she had given Mr Ferizis a guarantee in relation to the transaction. She said that she did not know that. Her answers to that effect do not constitute a denial that she had agreed that the directors would give guarantees. At about May and June 2003 the directors of PED and LNG were Mr Kelly, Mr Dixon and Mr Gorman. It might possibly be argued that Mr Vaughan was acting as a shadow director of LNG. Nowhere in that passage (a) did Ms Nash deny that she had agreed that those directors would give guarantees. The questions and answers did not go to that issue.

192 Similarly, in passage (b) quoted above (12 March 2007 - T46 l. 34 - T48 l. 24), there is considerable discussion of whether Mr Ferizis or his solicitors asked for personal guarantees from the directors but there is no denial by Ms Nash that she agreed that Mr Kelly, Mr Dixon, Mr Gorman and possibly Mr Vaughan (as directors of LNG and PED) would give guarantees. Ms Nash does agree with a statement that Mr Dixon, Mr Kelly, Mr Vaughan and Ms Nash had never given personal guarantees as at 18 or 19 June 2003. This, however, appears to the Tribunal to be a statement of historical fact and not a denial that she agreed that Mr Kelly, Mr Dixon and possibly Mr Vaughan (as directors of LNG and PED) would give guarantees for the transaction with Mr Ferizis. Moreover, the Respondent's denial that she said: "I'll talk to the other and get back to you" is also not a denial as alleged under this ground.

193 The only other material that the Applicant seeks to rely upon are certain denials and admissions made in paragraphs 7(a), 7(b) and 8C of the Amended Defence. Those paragraphs plead as follows:

7 As to paragraph 7 of the Statement of Liquidated Claim, the First Defendant and the Second Defendant:

(a) deny that the Frist Defendant and the Second defendant are parties to the Draft Unit 7 Option Deed or the Draft Unit 8 Option Deed and that either the Draft Unit 7 Option Deed or the Draft Unit 8 Option Deed requires the Frist or the Second Defendant to guarantee the obligations of LNG or PED; and

(b)q otherwise deny that the First Defendant and the Second Defendant guaranteed the obligations of LNG or PED under the Draft Unit 7 Option Deed or the Draft Unit 8 Option Deed.

...

8C The First Defendant and the Second Defendant deny that they guaranteed the obligations of LNG or PED.

194 There is no doubt that these paragraphs contain denials that Ms Nash and Mr Vaughan provided guarantees. Nonetheless, it seems to us that they do not amount to denials that Ms Nash had agreed with the Plaintiff that directors would give guarantees. As noted above, the directors were Mr Dixon and Mr Kelly for PED and Mr Gorman for LNG. At most, Mr Vaughan may have been acting improperly as the director of LNG. Ms Nash's denials in those paragraphs that she had given a guarantee do not, in the Tribunal's view, constitute a denial that she had agreed with Mr Ferizis that "directors would give guarantees".

195 It follows that the Tribunal considers that the Respondent did not make the denial alleged by the Applicant under this ground. Accordingly, it is unnecessary to consider whether any such denials were false or whether Ms Nash knew them to be false when she made them.

196 For these reasons, the Tribunal finds that Ground 1(e) has not been made out.

Conclusion

197 In summary, the Tribunal is satisfied that the Respondent engaged in professional misconduct on the bases set out in Grounds 1(b), 1(c) and 1(d) in the Amended Application for Original Decision. Otherwise, the remaining grounds should be dismissed for the reasons given above in relation to each other ground.

198 In the light of these findings, it will now be necessary to have a further hearing on what if any protective orders would be appropriate in the circumstances. The Tribunal proposes to have the matter relisted so that appropriate directions for the further hearing of the matter can be given.

Order

199 Accordingly, the Tribunal:

1. Finds that the Respondent has engaged in professional misconduct on the bases set out in Grounds 1(b), 1(c) and 1(d) in the Amended Application for Original Decision.

2. Otherwise dismisses the Amended Application for Original Decision.

3. Stands the matter over to 7 November 2012 at 9.30am for directions for the preparation of the matter for hearing as to the appropriate relief.

**********

Decision last updated: 29 October 2012