Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Nash v Council of the New South Wales Bar Association [2013] NSWCA 466
• Hearing dates: 13 September 2013
• Decision date: 20 December 2013
• Before: Bathurst CJ at [1]; Leeming JA at [2]; Tobias AJA at [3]

Decision

1.Appeal allowed in part.

2.Set aside Order (2) made by the Tribunal on 29 October 2012, insofar as that Order relates to Ground 1(b) of the Application for Original Decision.

3.Otherwise dismiss the appeal.

4.The appellant to pay two-thirds of the respondent's costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: DISCIPLINARY PROCEEDINGS - barrister - professional misconduct - allegation that barrister knowingly gave false evidence in proceedings in which she was a party - whether Tribunal failed to consider relevant evidence
• Legislation Cited: Administrative Decisions Tribunal Act 1997; Evidence Act 1995, s 140; Legal Profession Act 2004, ss 5, 497, 504, 506, 537, 539, 562, 729A
• Cases Cited: Ferizis v Nash [2007] NSWDC 108; MacKenzie v The Queen [1996] HCA 35; 190 CLR 348
• Category: Principal judgment
• Parties: Christine Nash (Appellant); Council of the New South Wales Bar Association (Respondent)
• Representation: Counsel: P Taylor SC and P Horvath (Appellant); M Johnston (Respondent); Solicitors: Moray & Agnew (Appellant); Hicksons Lawyers (Respondent)
• File Number(s): 2013/125019

Decision under appeal

• Jurisdiction: 9108
• Citation: Council of the New South Wales Bar Association v Nash [2012] NSWADT 220; Council of the New South Wales Bar Association v Nash (No 2) [2013] NSWADT 64
• Before: P Blacket SC, R J Wright SC, J Tingle
• File Number(s): 11/2007

Judgment

1 BATHURST CJ: I agree with Tobias AJA.

2 LEEMING JA: I have had the advantage of reading the judgment of Tobias AJA. I agree with the orders he proposes and his reasons for them. I also record that I too am of the view that not only did the Tribunal make no appellable error in its findings in relation to Grounds 1(c) and (d), but also that those findings were correctly made.

3 TOBIAS AJA: This appeal arises out of the conduct of the appellant, Ms Nash, as a party and witness in proceedings in the District Court of New South Wales: Ferizis v Nash [2007] NSWDC 108 ("the District Court Proceedings"). The District Court Proceedings involved a claim to recover from four guarantors, including the appellant, two refundable option fees of $250,000 relating to a property development at Balmain ("the Project"). At all relevant times, the appellant was an Australian lawyer within the meaning of s 5 of the Legal Profession Act 2004 ("LPA"), having been admitted to the New South Wales Roll of Barristers in 1981.

4 In his judgment of 27 April 2007, Rein DCJ (as he then was) made certain findings adverse to the appellant and directed that a copy of his reasons be forwarded to the Office of the Legal Services Commissioner for consideration as to whether further action or investigation should be undertaken. In response to that reference, on 30 July 2007 the Legal Services Commissioner determined to initiate a complaint against the appellant in accordance with s 504 of the LPA. The matter was ultimately referred to the respondent, the Council of the New South Wales Bar Association, for investigation, which on 23 September 2010 resolved that certain particulars of the complaint be referred to the Administrative Decisions Tribunal ("the Tribunal") pursuant to s 537(2) of the LPA, and that the balance be dismissed pursuant to s 539(1)(a).

5 The matter was heard by the Legal Services Division of the Tribunal constituted by Judicial Members P Blacket SC and R J Wright SC and Non-Judicial Member J Tingle. On 29 October 2012 the Tribunal delivered its decision, finding that the appellant had engaged in professional misconduct in contravention of s 497 of the LPA on three bases: Council of the New South Wales Bar Association v Nash [2012] NSWADT 220 ("Principal Judgment"). On 26 March 2013, following a further hearing on penalty, the Tribunal ordered that the appellant's name be removed from the local roll of lawyers pursuant to s 562(2)(a) of the LPA: Council of the New South Wales Bar Association v Nash (No 2) [2013] NSWADT 64 ("Penalty Judgment").

Background

6 The uncontested facts underlying the Tribunal's decision may briefly be summarised as follows. The developers of the Project were two companies, Property and Equity Developments Pty Ltd ("PED") and LNG Holdings Pty Ltd ("LNG"). The directors of PED were Peter Dixon and Matthew Kelly. The director of LNG was Lyall Gorman, who had ceased to take an active interest in the Project. Mr Gorman and Graham Vaughan were the two shareholders in LNG. Mr Vaughan was the project manager of the development and the appellant's domestic partner. He had resigned as a director of LNG on 23 August 2002. Mr Vaughan was also an undischarged bankrupt. The appellant was supporting Mr Vaughan financially and had loaned about $75,000 to assist in funding the Project.

7 On 20 June 2003, Mr Ferizis, as Trustee of the Kallithea Trust (the plaintiff in the District Court Proceedings), signed two Option Deeds relating to Units 7 and 8 in the Project, the fee for each option being $250,000. Later that day the appellant and Mr Vaughan attended the office of Mr Ferizis' solicitors, George Shad & Partners, where Mr Vaughan signed part of the documents. The solicitor in attendance was Mr James Lahood. Mr Vaughan and the appellant then took the documents away so as to obtain the signatures of the two directors of PED, Mr Kelly and Mr Dixon. Those directors, Mr Vaughan and the appellant all signed what was referred to as the "four signature page" prior to Mr Vaughan's returning the signed documents to Mr Lahood. The latter then gave Mr Vaughan a $500,000 settlement cheque.

8 Pursuant to clause 20 of each of the Option Deeds, the two $250,000 option fees were refundable with interest if Mr Ferizis gave written notice at any time after the expiration of eleven months from the date of the Deed. In December 2004 Mr Ferizis gave notice requiring repayment. PED and LNG did not repay the option fees, and in late 2004 and early 2005 respectively, those companies went into liquidation.

9 In July 2005 Mr Ferizis commenced the District Court Proceedings, claiming under a purported guarantee in the Option Deeds and naming as defendants the appellant, Mr Vaughan, Mr Kelly and Mr Dixon. Mr Kelly and Mr Dixon took no part in those proceedings and judgment was entered against them. The appellant and Mr Vaughan unsuccessfully defended the proceedings on the basis that, notwithstanding the "four signature page", they had not provided guarantees of the obligations of PED and LNG under the Option Deeds. The reasons of Rein DCJ were not before the Tribunal or this Court, and accordingly, in what follows I shall refer only to the evidence given in those proceedings.

The Allegations Before the Tribunal

10 The Application for Original Decision ("the Application"), filed by the respondent on 22 March 2011, contained the following grounds:

Ground 1

The [appellant], during [the] District Court proceedings ... misled the court:

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

(b) The [appellant] asserted 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 Balmain project, when that was false.

(c) The [appellant] asserted in her evidence that [Mr Ferizis] had not asked for guarantees, when she knew that was false.

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

(e) The [appellant] denied in her evidence that she had agreed with [Mr Ferizis] that [the] directors would give guarantees, when that was false.

Ground 2

The [appellant] engaged in misleading conduct:

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

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

Ground 3

The [appellant] was a party to the false attestation of documents.

11 At the commencement of the hearing before the Tribunal, the appellant was given leave to file an Amended Reply to the Application, which raised the issue that the conduct the subject of Grounds 2 and 3 had occurred more than 3 years before a complaint was initiated by the Legal Services Commissioner. Pursuant to s 506(2) of the LPA, a complaint made more than 3 years after the relevant conduct is alleged to have occurred cannot be dealt with, unless a determination is made by (in this case) the Commissioner that it is just and fair to do so having regard to the delay and the reasons for the delay, or that the complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint. In the absence of such a determination, the respondent withdrew Grounds 2 and 3. Accordingly, the Tribunal dismissed the Application in so far as it related to those grounds.

The Tribunal's Decision

12 After setting out the background to the case, the Tribunal made a number of credit findings. At [35] it found that Mr Ferizis was "a careful witness" whose evidence was consistent with the documentary records and had not been in any significant part effectively challenged in cross-examination. Accordingly, the Tribunal accepted his general account of what had occurred. At [36] it stated that it had "formed the view that [the appellant] was generally striving to avoid giving any evidence that would harm her case ... while accepting what could not be reasonably denied from the documentary records". It considered that some of her evidence was "inherently incredible", whilst "some had changed from outright denials in the District Court to a claimed lack of recollection in the Tribunal". The Tribunal thus formed the view that it could not rely on the appellant's uncorroborated evidence of events. These credit findings were said to be the basis on which the Tribunal made the findings summarised below.

13 At [56] of its reasons, the Tribunal found that Mr Ferizis' recollection and the documentary evidence suggested that either on 19 June or 20 June 2003, the appellant conveyed to Mr Ferizis the agreement of the four defendants in the District Court Proceedings to sign personal guarantees.

14 At [64] it recorded that, contrary to the affidavit evidence of the appellant and Mr Lahood in the District Court Proceedings, it was common ground at the hearing before the Tribunal that Mr Lahood did not witness the appellant's signing of the documents. The appellant's signature was witnessed by a Mr David Haywell, an assistant at Mr Dixon's architectural practice at Darling Harbour. Accordingly, as was accepted by both parties, both Mr Lahood and the appellant had given erroneous evidence on this issue.

15 Turning to Ground 1(a) of the Application, the Tribunal noted (at [79]) that it was alleged that the appellant had falsely verified her Defence in that she was aware that at least two material particulars were not true, namely, her non-admissions that PED had executed the Unit 7 Option Deed and the Unit 8 Option Deed. The Tribunal found (at [83]) that these non-admissions did not constitute non-admissions of allegations of fact. Rather, it considered (at [84]) that they were properly to be characterised as an attempt to put in issue the legal consequences flowing from facts elsewhere admitted. It followed that there had not been any false verification of the Defence. In case it was wrong in this conclusion, the Tribunal further found (at [90]) that the appellant had not knowingly made a false verification, as she had no apparent motive to do so, had admitted Mr Dixon and Mr Kelly's signing of the Deeds, and had given evidence that she could not recall what was her understanding of the relevant paragraphs at the time of verification. Accordingly, the Tribunal concluded (at [98]) that Ground 1(a) had not been made out.

16 In relation to Ground 1(b), the Tribunal noted (at [99]) that the allegation that the appellant had an "interest" in the Project did not concern a legal interest on her part, but related to the $500,000 cheque received from Mr Ferizis and its proceeds. It was contended that the appellant's evidence before the District Court was designed to minimise her role and suggest that she had no financial or personal interest in the outcome of the transaction, when that was not the case.

17 At [107] of its reasons, the Tribunal found that the appellant's statement in her affidavit of 7 June 2006 that she had "no standing in relation to Balmain" appeared to be "an attempt to distance herself from any involvement (whether legal, financial or otherwise) in the Balmain project". This and further statements, both in the appellant's affidavit and in her evidence in cross-examination, to the effect that the proceeds of the settlement had "nothing to do with [the appellant]" were, the Tribunal considered, "consistent only with her having no legal, personal or financial interest in that project".

18 The Tribunal rejected (at [108]) the appellant's submission that her evidence should be understood as conveying that she regarded herself as having subjective freedom of choice in relation to the Project, as opposed to subjectively regarding herself as being obliged to guarantee Mr Ferizis' options. Accordingly, it found (at [109]) that the appellant did seek to convey to the District Court that she had no personal or financial interest in the Project or the transaction of 20 June 2003 which would assist in funding that project.

19 The Tribunal then considered whether the appellant's evidence in the District Court conveyed that she had no reason to give a guarantee. It found (at [110]) that her evidence with respect to her interest in the transaction implicitly asserted that she had no reason to give a guarantee, but also found (at [111]) that the appellant made express assertions to that effect. The Tribunal was satisfied that the appellant knew that Mr Ferizis was seeking personal guarantees in relation to the option deeds and that a guarantee was being sought from her. Thus, her statement to Mr Lahood (as recorded in her affidavit), that she had "no reason to be signing these documents" was, it considered (at [112]), asserting that she had no reason for giving the guarantee included in those documents. Accordingly, the Tribunal found (at [113]) that the appellant asserted both implicitly and explicitly that she had no reason to give a guarantee by signing the Option Deeds.

20 Turning to the question of whether the assertions made by the appellant were false, the Tribunal found (at [115]) that the evidence concerning the appellant's interest in the Project and the transaction of 20 June 2003 was "somewhat diffuse but, in the end, compelling". Although she had no right other than as an unsecured creditor, she was interested in the transaction in a number of respects, which may be summarised as follows:

(a) As conceded in oral evidence in the District Court, she had a motivation to contribute funds for the Project and to secure funds from other sources to help Mr Vaughan and maintain the prospect of the project's ultimate completion (and thereby the recovery of her own funds) (at [116]);

(b) By April/May 2003, she had commenced negotiations with Mr Gorman for the transfer of his interest in LNG to her and believed she was moving towards becoming a director of LNG (at [117]);

(c) She also believed she was only relevant person in a financial position to ensure that the Project did not collapse (at [117] and [119]);

(d) She was an unsecured creditor of LNG and personally lent $75,000 to the Project for stamp duty, as well as paying bills and other expenses. The Tribunal found that she did so to support Mr Vaughan, maintain her investments in the other projects she had undertaken with PED and because she was proposing to acquire LNG, including its interest in the Project (at [118]);

(e) She was directly involved in securing the transaction with Mr Ferizis, including by speaking to him on numerous occasions, instructing the solicitors, arranging for the documentation to be supplied to Mr Ferizis and "generally over[seeing] the transaction" (at [120]).

21 At [121]-[123] of its reasons, the Tribunal concluded as follows:

121 ... [the appellant's] evidence disclaiming an interest in the project and the option transaction was, in the circumstances, disingenuous. The Tribunal does not believe that [the appellant] 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 [the appellant].

122 The Tribunal concludes that [the appellant'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 appellant] 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.

22 At [124] the Tribunal found that the appellant's conduct on 20 June 2003, including her involvement in procuring the PED directors' signatures and her signing of the Option Deeds herself, was also consistent with her having a reason to give the guarantee. Accordingly, the Tribunal found (at [125]) that she did have a reason to give a guarantee and her evidence to the contrary was false.

23 Turning to the question of whether the appellant's evidence was knowingly false, the Tribunal noted (at [126]) that it was required by s 140 of the Evidence Act 1995 to 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 allegations raised. Nonetheless, finding (at [128]) that the evidence was "overwhelming that the appellant was closely involved with the process of having Mr Ferizis enter into the option deeds", the Tribunal considered (at [130]) that it would "unduly strain credibility" for it to conclude that the appellant's evidence was true or that she was honestly mistaken. Accordingly, it found (at [131]) that she knowingly gave false evidence as to her interest in the Project and her reasons for giving a guarantee in relation to it. At [144] of its reasons, the Tribunal found that by doing so, the appellant engaged in professional misconduct.

24 Turning to Ground (1)(c), the Tribunal found (at [147]) that the transcript of the District Court Proceedings established that the appellant had given evidence that Mr Ferizis had not asked for personal guarantees. It set out a number of parts of that transcript, which it described as "the most relevant but not the only passages". The Tribunal then stated (at [149]) that it accepted Mr Ferizis' evidence that he had asked the appellant for personal guarantees in a telephone conversation on or about 18 or 19 June 2003. It rejected (at [150]) the evidence of Mr Lahood with regard to the request for a personal guarantee, noting that his evidence was unreliable in a number of respects. Accordingly, the Tribunal found (at [152]) that the appellant's evidence that she did not have any conversation with Mr Ferizis in which personal guarantees were sought was false. It was also of the view that the appellant's denial of any contact with her solicitors regarding Mr Lahood's letter of 19 June 2003 was false, "especially given the file note recording Ms Nash giving instructions in relation to that letter".

25 With regard to whether the appellant knew that that evidence was false when she gave it, the Tribunal found (at [153]) that her evidence had apparently changed by the time she came before the Tribunal, as she now said that she did not recall having a conversation in which Mr Ferizis requested guarantees. Notwithstanding the inconsistency between her denials before the District Court and her stated lack of recollection before the Tribunal, the Tribunal found (at [156]) that she appeared to be maintaining her denial that some of the events took place. It then found as follows:

There is a degree of illogicality about many of these answers that suggests to the Tribunal that [the appellant] 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.

26 The Tribunal did not accept (at [157]) that on an issue as significant as whether she had been asked for and given personal guarantees, the appellant's denials of the relevant facts and events before the District Court were explicable by her lack of recollection of those facts and events at the time. On the contrary, it considered that the appellant's denials in the District Court were "attempts ... to avoid being held liable under the guarantee", whilst the assertions of lack of recollection before the Tribunal were attempts to avoid being found to have given deliberately false evidence.

27 Accordingly, the Tribunal found (at [158]) that there being no other basis apparent to it for finding that the appellant believed her evidence to be true when she gave it in the District Court, and notwithstanding the nature and gravity of the matter, it was satisfied that the appellant knew that Mr Ferizis had sought personal guarantees when she gave evidence to the contrary in the District Court. Thus it found (at [159]) that she had given false evidence with regard to this matter. At [161] of its reasons it found that the appellant had engaged in professional misconduct for the same reasons as applied to Ground 1(b).

28 Turning to Ground 1(d), the Tribunal recorded (at [164]) that in her affidavit affirmed on 7 June 2006, the appellant stated, "Lahood witnessed my signing of the documents and also Graham's signing of the documents". The witnessing was said to have taken place at Mr Lahood's office on 20 June 2003. On 25 October 2006, the appellant gave evidence that the relevant contents of her affidavit of 7 June 2006 were true and correct.

29 The Tribunal found (at [165]) that on a fair reading of the appellant's affidavit, and her evidence in the Tribunal to the contrary notwithstanding, the phrase "the documents" in this context referred to the Option Deeds as amended, including the 10th and 11th pages (containing clauses 20 and 21) and the "four signature page". Accordingly, it found (at [166]) that it was clear that the appellant had given evidence that Mr Lahood witnessed her signature on the "four signature page". As it was accepted by all parties before the Tribunal that Mr Lahood did not witness the appellant's signature, the Tribunal found (at [167]) that that evidence was false.

30 Turning to the "real issue" of whether the appellant knew that the attestation was false when she gave it, the Tribunal considered (at [169]) that it was significant that the appellant was adamant before the District Court that the account of the events of 20 June 2003 contained in her affidavit "represent[ed] exactly what was said and happened". In cross-examination, having acknowledged that the relevant parts of her affidavit were virtually identical to those in the affidavit of Mr Vaughan, the appellant sought to explain that fact by stating that "obviously we both recalled it exactly as it was said and happened" and that the identical accounts were the product of their "respective independent recollections of events". The Tribunal considered (at [170]) that in the light of the appellant's forceful insistence that her recollection was entirely clear, any mistake was unlikely to be able to be attributed to her poor recollection.

31 At [171] of its reasons, the Tribunal noted that a different explanation for the marked similarity between the appellant's and Mr Vaughan's affidavits was revealed in a letter of complaint to the appellant's solicitor, Mr Velik, dated 11 December 2006 and which the appellant and Mr Vaughan both signed. Relevantly, that letter stated:

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

...

You were not present at any time during [the appellant'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 [Mr Vaughan]'s affidavits. It made her look a fool and a liar who as 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 had been corrected prior to signing.

32 In the light of this letter, the Tribunal concluded (at [172]) that it appeared that the similarity in the evidence was not because of the appellant's and Mr Vaughan's clarity of recollection, but rather because the evidence was a "cut and paste job" and "not necessarily the truth". At [173] it noted that attributing the blame to Mr Velik did not exonerate the appellant, as she had given evidence that the relevant parts of her affidavit represented "exactly what was said and happened", rather than admitting that they contained mistakes and were the result of a "cut and paste job".

33 At [174] the Tribunal noted that when confronted with Mr Lahood's signature and the signature of the witness to her signature on the "four signature page", the appellant gave evidence that 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.

34 At noted at [14] above, the Tribunal found that in fact Mr Haywell, an employee of Mr Dixon's architectural practice at Darling Harbour, witnessed all four signatures at Darling Harbour on 20 June 2003. It recorded (at [176]) that the appellant's only explanation for her second incorrect statement as to who had witnessed her signature was that she had had a "brain snap". The following exchange then occurred:

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.

35 At [177] of its reasons the Tribunal noted the appellant's submission that the identity of the witness to her signature was immaterial and the "implicit submission" that, consequently, she had no reason to give false evidence. Whilst acknowledging that there was some force in that submission, the Tribunal found that "it appear[ed] ... that Ms Nash regarded it as significant ... 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". As such, it did not appear to the Tribunal that the appellant's evidence as to the identity of the witness to her signature was "a mere incidental and immaterial detail".

36 The Tribunal also acknowledged (at [178]) the force of the appellant's submission that the incorrectness of her evidence in this respect was so readily discernable that it was unlikely to have been deliberately false. Nevertheless, in the light of the form and content of the relevant paragraphs of the appellant's affidavit and her subsequent incorrect evidence when her error was pointed out to her, the Tribunal found that it was unable to accept that submission.

37 At [179] of its reasons the Tribunal found that the appellant's evidence before the District Court and before the Tribunal was "most unsatisfactory", and that it was driven to the conclusion that she

perceived it was imperative for her to deny any involvement in the giving a personal guarantee. This caused her to mould her evidence to this end ... 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.

Accordingly, the Tribunal found (at [180]) that the appellant 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. At [182] it concluded that for the same reasons as applied in relation to Ground 1(b), the appellant's giving of that evidence constituted professional misconduct.

38 In relation to Ground 1(e), the Tribunal found (at [190]) that the evidence relied upon by the respondent, whilst containing denials that the appellant and Mr Vaughan had provided guarantees, did not establish that the appellant had denied having agreed that the directors would give guarantees. Accordingly, the Tribunal found (at [196]) that Ground 1(e) had not been made out.

39 Thus the Tribunal found that the appellant had engaged in professional misconduct on the bases set out in Grounds 1(b), 1(c) and 1(d) in the Application and otherwise dismissed it.

Issues on the Appeal

40 On the appeal, the Tribunal's findings in respect of each of Grounds 1(b), 1(c) and 1(d) were challenged. No challenge was made to the Tribunal's determination in the Penalty Judgment that the findings made in the Principal Judgment warranted the removal of the appellant's name from the local roll. An appeal to this Court from a decision of the Tribunal under the Act is by way of rehearing: LPA, s 729A.

41 One matter should be noted at the outset, namely, that it was not clear on the face of the documents that the defendants to the District Court Proceedings had in fact given personal guarantees. The relevant clause of the Option Deeds (cl 21) stated: "the Directors of the Grantor hereby agree to personally guarantee the performance by the Guarantor of the terms of this Agreement". No guarantors were listed in the schedule to the Option Deeds, and the "four signature page" did not indicate that those signing were doing so in the capacity of guarantors.

42 However, the construction of the Option Deeds was not in issue before this Court, except to the extent that the presence of a guarantee on their face could affect the assessment of whether the appellant had given false evidence before the District Court. It was conceded before the Tribunal that Rein DCJ had found that the appellant had given a guarantee, a forensic decision having been made not to seek to reinvestigate the primary facts, but rather to focus on the question of the honesty of the relevant statements. Accordingly, the Tribunal noted (at [62]) the ambiguity of the wording of clause 21, but did not further consider the matter. The appellant did not seek to put her case differently in this Court.

Ground 1(b): The Appellant's Alleged Interest in the Project and Reasons for Giving a Guarantee

The Appellant's Submissions

43 The appellant ultimately challenged the Tribunal's findings as to her interest in the Project in four essential respects. First, the Tribunal's finding of dishonesty was said to be inconsistent with the appellant's disclosure of her personal involvement and financial interest in the Project and her intention to take over Mr Gorman's interest as a director and shareholder in LNG. As such, so it was argued, there was no persuasive evidentiary basis for the finding that the appellant had falsely asserted that she had no interest in the Project.

44 Secondly, the appellant submitted that the Tribunal's findings (at [107], [121] and [122]) were undermined by the absence of clear findings as to what personal and financial "interest" she had in the Project; what personal and financial "interest" she had actually disclaimed; and whether that disclaimer was subjectively dishonest. Thirdly, it was submitted that the Tribunal misinterpreted the evidence and failed to have regard to the appellant's affidavit of 1 August 2011, thereby proceeding on the basis of its own inferences as to what the appellant had objectively conveyed, rather than by careful analysis of what she had said. Finally, the appellant submitted that the Tribunal reversed the onus of proof in its credit finding at [36] of its reasons and in its finding of dishonesty.

45 With regard to the appellant's reasons for giving a guarantee, the Tribunal's finding (at [110]) that the appellant had implicitly asserted that she had no reason to give a guarantee was, so it was submitted, merely an "interpretive characterisation" of the Tribunal's "no interest" finding, and thus incorrect for the same reasons. The finding that the appellant had explicitly asserted that she had no such reasons was challenged on several bases. First, it was said that the Tribunal's finding was based upon the appellant's account of what she had said to Mr Lahood at the meeting of 20 June 2003, but the Tribunal did not make clear whether it found that that conversation had not occurred or that the appellant did not honestly believe that it had occurred. The appellant also submitted that in its consideration of that conversation, the Tribunal wrongly disregarded Mr Lahood's evidence in the District Court Proceedings, although that evidence corroborated the appellant's evidence in crucial respects. In particular, the appellant submitted that if, consistently with her evidence and that of Mr Lahood, she made a spontaneous protest at being asked to sign the documents on 20 June 2003, that protest was inconsistent with the Tribunal's finding (at [124]) that she fully appreciated that she had no option but to comply with Mr Ferizis' request for a guarantee.

46 Secondly, to the extent that the Tribunal had relied upon Mr Ferizis' evidence of his conversations with the appellant, it was contended that the complaint was not particularised as relying upon that evidence. Thirdly, the appellant argued that the Tribunal had asked itself the wrong question, as it appeared to have relied on its views as to the appellant's state of mind on 20 June 2003, whereas the critical matter was the appellant's honesty when she gave evidence in 2006. As in relation to the "no interest" finding, the Tribunal's finding was also said to be flawed by reason of its disregard of the appellant's 1 August 2011 affidavit and its reversal of the onus of proof.

Did the Appellant Give Knowingly False Evidence that she had No Interest in the Project and No Reason to Give a Guarantee?

47 The particulars on which the respondent relied in the Tribunal in relation to this ground were as follows:

Ground 1(b)

24. The [appellant] asserted 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 Balmain project, when that was false.

...

26. The [appellant] had an interest in the building development and a reason for giving a guarantee.

(i) By April or May 2003 the [appellant] had commenced negotiations with Lyall Gorman for the transfer of his interest in LNG to her. The [appellant] was moving towards becoming a director.

(ii) The [appellant] admitted that she was 'the only person at that time in a financial position to make sure the projects didn't collapse'.

(iii) The [appellant] was an unsecured creditor to LNG and personally lent funds to the Balmain project. She was hoping to get this money back.

(iv) The [appellant] had direct contact with the plaintiff George Ferizis in relation to the transaction.

(v) The [appellant] had extensive contact with Lynne Hughes from Hughes & Taylor [her solicitor] providing instructions for the transaction.

(vi) The [appellant] personally received part of the $500,000 paid by [Mr Ferizis] almost immediately.

As is apparent from these particulars, the appellant's alleged interest encompassed a number of disparate respects in which she was involved in the Project or had reason to be concerned with its success.

48 To the extent that the appellant's alleged interest related to her involvement in the negotiations with Mr Ferizis leading up to the subject transaction (particular (iv)), there was no dispute. In her affidavit of 7 June 2006, the appellant deposed that she had spoken on the telephone to Mr Ferizis on at least three occasions and had attended his office on or about 9 May 2003.

49 The appellant's negotiations with Mr Gorman with a view to his transferring his interest in LNG to her (particular (i)) also do not appear to have been the subject of denials by her. Before the District Court, the appellant gave the following evidence in cross-examination:

Q. You also thought as you've said yesterday that from April or May 2003 you were moving towards taking the reins of LNG over from Mr Gorman, correct?

A. That's right because PED wanted to get rid of him because he was useless.

Q. So the answer is yes?

A. Yes.

Q. You saw that handing over of the reins taking the form of you becoming a director of LNG, correct?

A. Yes.

Q. Mr Gorman, giving up all of his interests that might impact upon LNG?

A. Yes.

Q. Including shareholding, yes?

A. Yes.

Later in her cross-examination, the appellant stated that she had believed at that time that Mr Gorman's transfer of his interest in the development to her was "imminent". In my view, this evidence establishes that the appellant acknowledged her interest in the development, insofar as that interest consisted of the matters specified in particular (i).

50 There was no mention in the appellant's affidavit of 7 June 2006 of any communication which she had with Hughes & Taylor in which she provided instructions for the transaction (particular (v)). In cross-examination, the appellant initially asserted that she had never spoken to Hughes & Taylor in relation to Mr Ferizis' option. She later appeared to accept that she might have done so at the request of Mr Vaughan, but continued to maintain that she had no recollection of those conversations. However, even if this evidence was inconsistent, it is not self-evident that that inconsistency would establish the falsehood of the appellant's denial of an interest in the Project.

51 The high point of the respondent's case on this aspect of the claim concerned the appellant's interest as a creditor (particulars (ii), (iii) and (vi)). In cross-examination in the Tribunal, the appellant accepted that she received a payment of $75,000 from "Tafia", a bank account controlled by Mr Vaughan, three days after the settlement funds relating to the Option Deeds were deposited into that account on 24 June. The following exchange then occurred:

Q. And I want to put to you that that was because from the outset, you were keen to be repaid that sum of money, isn't that the case?

A. I was keen to be repaid any moneys I'd invested in anything or had lent to anybody.

Q. You had a financial interest in the settlement of the Balmain transaction didn't you?

A. Not the way I understood an interest, no.

Q. Well you had a financial interest in that you had money you had put into Balmain, a substantial sum of money, $75,000 that you wanted to get back and did get back on 27 June 2003, isn't that correct?

A. I accept that.

Q. And in that regard, you had a financial interest in ensuring that the Balmain transaction was completed when it was on 20 June 2003, isn't that the case?

A. No there were other people investing as well, not just Mr Ferizis, I could've got that money from any of the other investors.

Q. The fact is though you didn't, you got it from the result of the Ferizis transaction didn't you?

A. Well it would appear so, but it's hard to know how, just looking at this, where the various moneys came from.

Q. Well we've gone through it, but you don't deny within seven days of the Ferizis transaction you were paid --

A. No, I accept that.

Q. -- the $75,000?

A. I accept that.

Q. And that was a matter that was operating in your mind, the fact that you could get this $75,000 back during the lead up to 20 June 2003, isn't that correct?

A. No that's not correct.

Q. That was a matter that was operating in your mind in terms of why you were speaking to Mr Ferizis about the transaction, isn't that the case?

A. No.

52 This evidence was not wholly consistent with that which the appellant gave in the District Court Proceedings. Relevantly, she stated in cross-examination:

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.

Q. You didn't want to see LNG or the Balmain development go down, did you, at that time?

A. No, I didn't want anyone to lose any money, that's true.

Q. You didn't want to see them go down and you knew that there was a risk that LNG and the Balmain development would go down, didn't you?

A. Not in June 2003.

...

Q. And what, didn't have any expenses?

A. Yes, it did.

Q. Right?

A. And they were being met.

Q. And they were being met partly by you, weren't they?

A. Partly by me but not only me.

...

Q. Do you know what happened to the $500,000?

A. Yes.

Q. That Mr Ferizis provided?

A. Yes, it went to pay all sorts of things that were required, like engineers, architects, Leichhardt Council, a whole range of things.

In that exchange the Appellant did not make any reference to the repayment to her of the $75,000 that she had invested in the Project shortly after the receipt of Mr Ferizis' funds.

53 However, the appellant's repeated statements in the District Court to the effect that the transaction had "nothing to do with [her]" must be read in the light of her acknowledgment, both in her affidavit of 7 June 2006 and in cross-examination, that she was a creditor of the Project. Having initially stated that she could not recall having being repaid the $75,000 around the time of the transaction, the appellant, when shown a schedule of payments made from the Project's accounts, acknowledged that she had received it on 27 June 2003 as a repayment of stamp duty she had paid in connection with the Project. She later acknowledged that from 5 June 2003 she had considered that her assistance in relation to the Project was for her own benefit as well as that of PED and Mr Vaughan. Whilst denying that "things had reached the point of desperation with having money to proceed with the Balmain project", she did not deny that she had put a lot of money into the Project as an unsecured investor.

54 In this regard, the respondent submitted that it was never contended that the appellant had expressly denied having a particularised personal or financial interest in the Project. Rather, so it was said, the particularised complaints referred to denials of involvement and interest in the outcome of the project. With respect, the distinction, as it relates to the transaction, is by no means clear.

55 As I have noted, the Tribunal acknowledged (at [99] and [106]) that "interest" in this context did not refer to a legal interest, but rather to a personal or financial interest in the Project. It also recognised (at [115]) that the evidence of the appellant's interest was "somewhat diffuse". However, the difficulty with the Tribunal's findings is that it took into account (at [116]-[121]) matters which do not appear to have been disputed in the District Court, including the appellant's payment of some of the expenses of the Project and her negotiations with Mr Gorman regarding his transfer of his interest in LNG to her. The Tribunal also took into account the appellant's role in "generally [overseeing] the transaction", which was apparent from her affidavit evidence and evidence-in-chief.

56 Partial inconsistencies of the kind to which I have referred notwithstanding, a number of the exchanges which the Tribunal considered to contain assertions of the appellant's lack of an interest in the Project indicated on their face that the appellant was a creditor thereof. For example, in the passage set out at [50] above (cited in part by the Tribunal at [104(f)]), the appellant, whilst stating that the transaction was not of significance to her, acknowledged that she was meeting some of the expenses of the Project.

57 In the light of the imprecision of the appellant's "interest" as particularised, and her acknowledgement in the District Court of the matters to which I have referred, I am not satisfied that her evidence in the District Court amounted to a disingenuous denial of an interest in the Project (at [121]). I accept the appellant's submission that the Tribunal's finding of dishonesty was inconsistent with her disclosure of her personal involvement and financial interest in the Project. In my view, there is also force in the submission that the Tribunal did not clearly define what was the personal and financial "interest" which the appellant had in the Project and which she had dishonestly disclaimed. As the Tribunal relied upon the same evidence in concluding that the appellant had implicitly denied having any reason to give a guarantee (at [110]), I consider that that finding was also erroneous.

58 The Tribunal's finding that the appellant had explicitly asserted that she had no reason to give a guarantee was based on her evidence in her affidavit affirmed on 7 June 2006. In that affidavit, the appellant recounted a conversation with Mr Lahood on 20 June 2003 in which she had stated that she had "no role in these documents" and "no reason to be signing these documents". The Tribunal acknowledged (at [103]) the difficulty with this evidence, namely, that it might be true in the sense that the conversation occurred, even if the words conveyed a meaning to Mr Lahood that was not true. Nevertheless, the Tribunal considered (at [103]) that "to the extent ... 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 [respondent]'s case under this ground". It noted that in cross-examination, the appellant had stated: "I didn't regard [the transaction] as anything to do with me; which is what I said to Mr Lahood at the time".

59 Whilst the Tribunal acknowledged the distinction between the appellant's giving evidence of the content of her conversation with Mr Lahood and her asserting the truth of what she said in that conversation, in my view it did not give sufficient weight to that distinction in finding that the appellant had falsely stated that she had no reason to give a guarantee. I do not consider that the statement in cross-examination referred to by the Tribunal at [103] amounted to evidence in the District Court that the appellant had no reason to give a guarantee. Furthermore, I am not satisfied that that meaning was necessarily conveyed by the appellant's statements to Mr Lahood.

60 The appellant did have reasons to give a guarantee in relation to the transaction. Most obviously, she had a financial interest as a creditor of the Project in ensuring that it could proceed to completion. However, I am not satisfied that she gave evidence in the District Court that she had no such reason. Had she done so, it would be still necessary to consider that evidence in the light of the same qualifications which I have noted above in relation to her "interest" in the Project, including her acknowledgment of her interest as a creditor, her intention of acquiring an interest in LNG, and her personal involvement in the events leading up to the transaction.

61 Accordingly, in my view the Tribunal erred in finding that the appellant had given deliberately false evidence as particularised in Ground 1(b). That finding should, therefore, be set aside.

Ground 1(c): The Appellant's Awareness of the Request for Guarantees

The Appellant's Submissions

62 The appellant made three principal submissions in relation to Ground 1(c). First, she submitted that the Tribunal's reasoning proceeded on the basis that there was indisputable evidence that she was both aware of Mr Ferizis' requests for a guarantee and had agreed to provide such a guarantee. However, so she submitted, the only evidence that was indisputable was Mr Lahood's letter of 19 June 2003, in which the guarantees were requested, and a file note made by the appellant's solicitors recording the answer "no" to that request. It was contended that it was inherently unlikely that if the appellant had agreed with Mr Ferizis to provide a guarantee, she would either have protested to Mr Lahood on 20 June 2003 about signing the documents or have been successful in inducing him to confirm that she was not required to sign as a guarantor. However, this was the effect of the appellant's and Mr Lahood's evidence.

63 Secondly, it was submitted that it was necessary for the Tribunal to take into account Mr Lahood's evidence as to the content of his conversation with the appellant on 20 June 2003, a matter in relation to which there was no meaningful objective evidence. It was said that the Tribunal failed to undertake a proper evaluation of Mr Lahood's evidence, which was to the same effect as that of the appellant: namely, that the appellant had protested about signing the documents, that Mr Lahood confirmed to her that she was not being asked to sign as a guarantor and that the "four signature page" was a separate document from the Option Deeds. The appellant submitted that the degree of corroboration provided by Mr Lahood precluded any positive satisfaction as to her dishonesty.

64 The submission did not appear to be that it should be inferred that the appellant did not know in 2003 that guarantees were being requested, but rather that her recollection of that request was confounded by two things in 2006: first, her recollection that she had on 20 June 2003 refused to sign any documents, and had only signed an acknowledgment; and secondly, the fact that her recollection of her conversation with Mr Lahood was corroborated in critical respects by his evidence. In contrast, it was said to be a matter of no significance to the appellant (and therefore easily forgotten) that she had been asked to give a guarantee, as she believed that she had not agreed to any such request.

65 The third error in the Tribunal's approach, according to the appellant, was that it reversed the onus of proof. This was said to be evident from its observation (at [158]) that "no other basis [aside from lack of recollection, which it rejected] for finding that [the appellant] believed her evidence to be true when she gave it in the District Court was apparent to the Tribunal". The appellant submitted that the Tribunal's finding involved the proposition that the dogmatic or emphatic assertion of facts that are objectively incorrect is necessarily, or at least probably, dishonest and not merely mistaken. This proposition, so she contended, was unsound and was explicitly rejected by the High Court in MacKenzie v The Queen [1996] HCA 35; 190 CLR 348.

66 In oral submissions, it was also contended that the Tribunal erred in placing weight upon the inconsistency between the appellant's denial of any request before the District Court and her stated lack of recollection of any such conversation before the Tribunal. The latter statement was to be interpreted in the light of the possibility that the appellant was expressing greater circumspection due to the District Court's findings. In any event, it was submitted that the appellant's evidence in the District Court, read in its totality, was not emphatic; on the contrary, it was relatively clear that she did not have and was not asserting that she had a good recollection of which conversations she had had with Mr Ferizis.

The Respondent's Submissions

67 The respondent submitted that the Tribunal's observation at [158] to which I have referred above represented a positive finding that it was satisfied to the requisite standard that the appellant's evidence was not the product of an absence of recollection at the time of her giving evidence in the District Court. This finding, so it was submitted, was open to the Tribunal, given that the language of the appellant's answers was clear and unambiguous, and did not suggest a lack of recollection as opposed to outright denial. Furthermore, in the light of the appellant's inconsistent evidence before the Tribunal, it was open for it to find that the initial denials were attempts to avoid liability under the guarantee and the subsequent assertions of lack of recollection attempts to avoid being found to have given deliberately false evidence.

68 The respondent further submitted that Mr Lahood's evidence did not undermine the evidence which indicated that Mr Ferizis had requested guarantees. In any event, it was open for the Tribunal to reject Mr Lahood's evidence as unreliable, given that he was clearly wrong about having witnessed the appellant's signature.

Did the Appellant Falsely Assert that Mr Ferizis Had Not Requested Guarantees?

69 There was no dispute that Mr Ferizis had in fact requested guarantees. So much was evident from the letter from Mr Lahood to the appellant's solicitor, dated 19 June 2003, in which guarantees were requested, and which was in evidence before the Tribunal. In the Tribunal, the parties proceeded on the basis that the primary judge had found that a guarantee had been given. Consequently, the only matters in dispute were the appellant's awareness of Mr Ferizis' request and the honesty of her asserted lack of recollection of that request.

70 In my view, the evidence was compelling that the appellant was asked about the request for guarantees prior to the meeting with Mr Lahood on 20 June 2003. His uncertainty with respect to the precise date notwithstanding, the evidence of Mr Ferizis in this regard was unequivocal. Relevantly, he stated in his affidavit of 24 January 2006:

29. [The appellant] telephoned me on 18th June 2003 or 19th June 2003 and 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". I was travelling overseas on about 20th June 2003.

I said to her: "The money is ready, however the funds are provided 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."

I 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."

I 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."

30. She rang me the next day and said: "We will provide you with personal guarantees on this deal, but it is not the done thing".

71 This evidence was clearly inconsistent with that of the appellant, which contained numerous denials that any such conversation had taken place. In the light of the credit findings which it had made at [35]-[36] of its reasons, and which were not directly challenged in this Court, it was clearly open to the Tribunal to prefer the evidence of Mr Ferizis to that of the appellant on this issue.

72 Furthermore, as the appellant conceded, the Hughes & Taylor file note recording the answer "no" to Mr Lahood's request was indisputable. Ms Hughes' evidence as to that file note was that it was correctly dated 19 June 2003 and recorded Ms Nash's responses to the seven requests set out in Mr Lahood's letter of 19 June 2003. Nevertheless, the appellant gave evidence that she had never heard of Mr Lahood's letter prior to the commencement of the proceedings in the District Court.

73 As I have noted, one of the appellant's principal challenges to the Tribunal's findings was that it failed to take into account the evidence of Mr Lahood, which was said to corroborate that of the appellant in regard to the question of guarantees. In her affidavit of 7 June 2006, the appellant gave the following account of her meeting with Mr Lahood on 20 June 2003:

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. Lahood and I then said words to each other 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."

74 Mr Lahood's evidence of his conversation with the appellant on 20 June 2003, as stated his affidavit sworn 19 October 2006, was as follows:

8. I placed a piece of paper in front of [the appellant and Mr Vaughan] with the names Christine Nash, Graham Vaughan, Peter Dixon and Matthew Kelly printed on it.

9. I recall [the appellant] immediately saying: -

"My name should not be there."

"I am not a director of either PED Pty Ltd or LNG Holdings Pty Ltd so my signature therefore is irrelevant and useless to you."

I said: -

"I am only asking you to sign as an acknowledgment that I have handed over the cheques as I have been instructed to do. I am not asking you to sign as a director or as a personal guarantor. It is only for the purposes of tracking whom I have handed the cheques to."

75 Mr Lahood adhered to that evidence in cross-examination, finally stating:

Well, I said words to the effect - sorry, if I can put it in context. After the objection was raised by Ms Nash I said words to the effect that "I'm asking you to sign this as an acknowledgment of receiving cheques. It's in no way a guarantee or an acknowledgement of you being directors of the companies".

76 However, I do not consider that Mr Lahood's evidence assists the appellant on this issue. His assurance to the appellant that she was not being asked to sign as a guarantor strongly suggests that the question of guarantees had been raised. Indeed, his evidence was clearly premised on his having been instructed to obtain personal guarantees from the directors. That evidence contradicts the appellant's account, according to which Mr Ferizis had made no request for guarantees of which she was aware. It must be emphasised that, as the Tribunal observed (at [151] of its reasons), the substance of Ground 1(c) was merely that the appellant had falsely denied that guarantees had been requested. Whilst there may have been force in the appellant's submissions had the question been whether she had agreed to give a guarantee (the subject of Ground 1(e), which the Tribunal found was not made out), Mr Lahood's evidence undermined rather than supported her account in regard to Mr Ferizis' requests. Accordingly, I cannot accept that Mr Lahood's evidence, by corroborating the appellant's account, "confounded" her recollection in 2006 of Mr Ferizis' request for guarantees.

77 It is clear that the Tribunal's conclusion was influenced by the perceived inconsistency between the appellant's evidence in the District Court and that which she gave in the Tribunal. The Tribunal observed (at [153]) that at the District Court hearing, the appellant had denied having had any conversation with Mr Ferizis in which he sought personal guarantees, whereas before the Tribunal she gave evidence that she did not recall having such a conversation with Mr Ferizis. At [156] it stated that "having no recollection of whether something occurred or not and denying that it occurred are to some extent inconsistent". It considered (at [157]) that "if [the appellant] 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".

78 Two matters should be noted in this regard. First, when the appellant gave evidence in the Tribunal, findings had already been made that she had given a guarantee. Those findings may have provoked greater circumspection on her part before the Tribunal regarding Mr Ferizis' requests for a guarantee. Secondly, I have some difficulty with the Tribunal's implied criticism (at [156]) of the appellant's statement, "I don't recall it because I don't believe it took place". The Tribunal observed that "[h]aving no recollection of whether something occurred or not and denying that it occurred are to some extent inconsistent", before proceeding to "ignor[e] this difficulty". However, in my view, this statement was indicative that there was some common ground between the position the appellant adopted in the Tribunal and that which she had maintained in the District Court.

79 Nonetheless, I am not persuaded that the Tribunal erred in finding that the appellant's evidence in the District Court and in the Tribunal was inconsistent. In the District Court, the appellant unequivocally rejected the suggestion that she had had any conversation with Mr Ferizis in which guarantees had been requested. She also stated that she had not had any conversations with her solicitors about the transaction. She responded in the affirmative to the proposition that she was "absolutely certain that [she] had no contact with solicitors acting in relation to the acquisition of funds for the Balmain project". Given the Hughes & Taylor file note of 19 June 2003, that evidence must be incorrect.

80 In the Tribunal, the appellant's evidence (recorded at [153] of the Tribunal's reasons) was clearly premised on a lack of recollection. The following exchange occurred:

Q. Would that [a conversation in which Mr Ferizis requested guarantees] have been important for you at the time?

A. Not for me.

Q. What, that you were being asked to provide personal guarantees?

A. Well what I'm saying is I don't believe I was ever asked and it would've been of no significance because I obviously wouldn't -

Q. So you didn't recall the conversation?

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

The appellant maintained that she had no recollection of any conversation, either with Mr Ferizis, with Ms Hughes or with the directors of PED and LNG in regard to the request. However, she accepted that she would have been aware of the request for personal guarantees in June 2003, as the Hughes & Taylor file note indicated that Ms Hughes had discussed the matter with her and recorded her instructions to refuse the request.

81 In my view, the crucial consideration in the Tribunal's reasoning is expressed in the following passage (at [156] of its reasons):

There is a degree of illogicality about many of these answers that suggests to the Tribunal that the [appellant] 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.

82 The Tribunal's conclusion was also influenced by what it considered to be the improbability of the appellant's having no recollection of so significant a matter as whether Mr Ferizis had requested guarantees, and the weight of the evidence indicating that he had done so (at [157]).

83 Contrary to the appellant's submissions, I do not consider this approach to be inconsistent with MacKenzie v The Queen. In that case, Gaudron, Gummow and Kirby JJ stated (at 373-4):

With respect to the Court of Criminal Appeal, the appellant's repetition, in Mr Barbaro's trial and in his own trial, of his conviction of certainty as to the evidence he was giving was equally consistent with the giving of false evidence innocently and mistakenly as distinct from the giving of such evidence dishonestly and with criminal intent. Neither the repetition nor the expressed certainty nor the belated suggestion that the lease as originally seen was a photocopy, are inconsistent with the hypothesis of innocent mistake. Sometimes repeated assertion of false evidence can tend to establish the criminal intention of the witness, especially where the falsity is "inescapable and self-evident" or where it leaves no reasonable cause for a belief that it is true. But honest mistake, inadvertence, carelessness or misunderstanding leading to evidence shown to be false will not constitute perjury for which a criminal intention must always be proved. In R v Dickson [[1983] 1 VR 227 at 231] it was rightly said

"[I]t is essential to distinguish between honesty and accuracy and not assume the latter because of belief in the former."

The converse is also true.

84 The question in MacKenzie was whether the trial judge ought to have given directions in a perjury trial which drew the jury's attention to the difference between holding an honest but mistaken belief and giving deliberately false evidence. The High Court held (at 354, 374) that such a direction should have been given, as the possibility of mistake was a relevant consideration for the jury. In the present case, it is clear that the Tribunal had regard to the possibility of mistake (at [157]), but considered that that possibility was excluded on the evidence.

85 Furthermore, the statement of Gaudron, Gummow and Kirby JJ cited above indicates that whether the repeated assertion of false evidence tends to establish deliberate falsehood depends on the circumstances of the case. As their Honours observed (at 373), the possibility of dogmatic, but mistaken, insistence on a particular fact is especially relevant where the events in question "were brief and seemingly unremarkable at the time they occurred". By contrast, in this case, the Tribunal considered that the request for guarantees was of great significance, as it clearly was. It was also not an isolated event, but rather was closely connected to the signing of the documents and the acquisition of the funds for the Project.

86 In any event, the facts of this case were quite different to those in MacKenzie. As the Tribunal's statement at [156] (referred to above) indicates, it was not merely the appellant's persistent denial of some of the events which it found to have occurred which persuaded the Tribunal that her evidence was deliberately false. That was merely one factor which the Tribunal considered in conjunction with the perceived illogicality and opportunism of the appellant's evidence on this issue. In my view, that approach was correct and thus discloses no error.

87 I also do not accept the appellant's submission that the Tribunal reversed the onus of proof in finding that her assertion that Mr Ferizis had not requested guarantees was dishonest. The Tribunal's statement (at [158]) that no other basis was apparent for finding that the appellant believed her evidence to be true when she gave it in the District Court must be read in light of [157] of the Tribunal's reasons. In that paragraph, the Tribunal made a positive finding that the appellant's assertions in the Tribunal of a lack of recollection were "attempts to avoid being found to have given deliberately false evidence". In my view, the Tribunal's statement at [158], although somewhat obscurely expressed, merely reiterated its conclusion that the clear inference was that the appellant's evidence was deliberately false, a conclusion with which I agree.

88 Thus I do not consider that the Tribunal's findings in relation to Ground 1(c) were affected by error. On the contrary, in my view those findings were not only clearly open on the evidence, but also were correctly made given the improbability of the appellant's having no recollection of the relevant conversations and the inconsistencies in her evidence. Accordingly, I would reject the challenge to the Tribunal's findings with respect to Ground 1(c).

Ground 1(d): The Witnessing of the Appellant's Signature

The Appellant's Submissions

89 The appellant submitted that the Tribunal's reasoning on Ground 1(d) was unsound in four respects. First, it had merely speculated about and never identified the significance the appellant supposedly attached to Mr Lahood's attestation. There was, so it was contended, no logically persuasive basis for concluding that Mr Lahood's status as attesting witness at all enhanced, or that the appellant at the time she swore her affidavit believed that it enhanced, the credibility of her evidence that he had told her that she was not required to sign the documents as a guarantor.

90 Secondly, it was not readily to be accepted that a person would seek to include in a contentious affidavit a knowingly false assertion of the attestation of a document where that attestation was objectively immaterial and would, as the Tribunal recognised, readily be shown to be factually wrong. Thirdly, to the extent that the Tribunal relied upon the fact that the appellant gave a second incorrect explanation in cross-examination of the circumstances of the attestation, that explanation was avowedly not based on actual recollection, and thus was in no sense probative of the knowing falsity of the original affidavit. Fourthly, as in relation to Grounds 1(b) and 1(c), the Tribunal reversed the onus of proof as its reasoning process proceeded on the basis of its being unable to accept an explanation of mistaken recollection.

The Respondent's Submissions

91 The respondent submitted that the identity of the attesting witness was, contrary to these submissions, highly significant in the context of the appellant's affidavit. The fact that Mr Lahood did not witness her signature called into question all of her evidence as to the immediately preceding events, namely, her alleged protests and reluctant signing of the documents. Accordingly, it was open to the Tribunal to find that the appellant's evidence in this respect was material, and not incidental, to the evaluation of her evidence as to how she came to sign the guarantee.

92 The respondent further submitted that the reasoning of the Tribunal did not proceed simply on the basis that it was unable to accept an explanation of mistaken recollection or inadvertent error. On the contrary, the Tribunal's exclusion of those possibilities was well-founded. In particular, the appellant's assertions during cross-examination in the District Court that her and Mr Vaughan's affidavit evidence represented "exactly what happened" immediately contradicted the possibility of mistaken recollection or inadvertent error. Moreover, the Tribunal's findings with respect to the appellant's letter of complaint to Mr Velik dated 11 December 2006 were in themselves a sufficient basis for the finding that she knowingly gave false evidence in relation to the contents of her affidavit. The Tribunal's conclusion was also said to be supported by the fact of the appellant's second incorrect account of the circumstances of the attestation, which, so it was contended, was indicative of her preparedness to advance her interests over her duty of honesty to the Court, and thus was probative of her credibility before both the District Court and the Tribunal.

Did the Appellant Give Knowingly False Evidence as to the Attestation of her Signature?

93 There is no doubt, and it was not disputed, that the appellant's evidence in her affidavit of 7 June 2006 that Mr Lahood witnessed her and Mr Vaughan's signing of the documents was incorrect. As I have noted (at [14] above), the Tribunal found that the appellant's signature was in fact witnessed in the office of Mr Dixon, one of the directors of PED, by a Mr Haywell. Thus the only question is whether the Tribunal erred in finding that the appellant's evidence on this issue was knowingly false.

94 The appellant's evidence in the District Court was unsatisfactory in a number of respects. Among these was the fact, noted by the Tribunal at [169] of its reasons, that paragraphs 122 to 126 of the appellant's affidavit of 7 June 2006 were virtually identical to paragraphs 202 to 206 of the affidavit of Mr Vaughan, save for the interchanging of names and similar adjustments. In those paragraphs the appellant set out her conversation with Mr Lahood at the meeting of 20 June 2003 and deposed to his having witnessed her and Mr Vaughan's signatures.

95 In my view, it weighs heavily against the appellant's argument on the appeal that when confronted in cross-examination in the District Court with the fact that those passages were virtually identical in the two affidavits, the appellant sought to reinforce the veracity of her evidence from that fact. The following exchange occurred:

Q. Apart from the interchanging of your name and his, and adjustments of that nature, you'd agree with me that the contents of 122 to 126 of yours and 202 to 206 of Mr Vaughan is virtually identical?

A. Yes.

Q. Will you go so far [as] to say, apart from those qualifications, which I said at the beginning, that they are identical?

A. Yes.

Q. So you say that that represents your words or Mr Vaughan's words or some synthesis of yours and his in relation to the subject matter of those paragraphs?

A. I say it represents exactly what was said and happened, so we were both there, obviously we both recalled it exactly as it was said and happened.

Q. Right, and this recollection you say took place in your case during what, May or June of this year, would that be right?

A. No, I would have remembered that throughout, because it's not something that you forget. The fact that it was reduced to writing in this period doesn't mean that's when I first recall it. (Emphasis added.)

96 The appellant further maintained that it was plausible, "given the input of the solicitor", that she and Mr Vaughan would be able to give accounts in such identical terms on the basis of their respective independent recollections of events. When asked to clarify that statement, she asserted that the exact quotes in italics were "exactly how I remembered everything that was said and done and obviously how Mr Vaughan remembered how it was said and done", although the paragraphs other than those in italics might have been added by the solicitor.

97 The appellant then supported that assertion as follows:

Q. You say that those words in the italics were words that were present to your recollection right up until the time you affirmed your affidavit on 7 June 2006?

A. That's right.

Q. They'd been continuously part of your accurate and precise recollection, is that right?

A. That had been continuously in my mind since Mr Ferizis started his action and I had to remember what happened, yes.

Q. As an accurate - you say as an accurate -

A. What I believe was accurate.

Q. Yes, and that that's all, your recollection hasn't varied over time, it's always been the same, is that what you say?

A. Well it's certainly varied a little after I saw Mr Lahood's affidavit.

Q. Apart from the input from Mr Lahood's affidavit, do you say that your recollection remains consistent up to the present moment?

A. I believe -

Q. Of those events?

A. I believe so.

However, when asked to recall those events in the witness box before the Tribunal, the appellant was unable to produce anything approaching a verbatim version of the account set out in her affidavit.

98 As I have noted (at [31] above), the Tribunal referred at [171] of its reasons to a letter of 11 December 2006 in which the appellant complained to her solicitor, Mr Velik, that he had performed a "disastrous cut and past job between her and [Mr Vaughan]'s affidavits". That letter included the following statement:

On one occasion you actually took conversations which Graham had and pasted them into [the appellant's] affidavit. The net result being that it appeared from the affidavits that [the appellant] had had conversations which she had not, in reality, been a party to.

It was not suggested by Mr Taylor SC, who appeared with Ms Horvath for the appellant, that that statement was anything other than a reference to paragraphs 122-126 of the appellant's affidavit.

99 In the Tribunal, the appellant, having been taken to her letter of 11 December 2006, stated that she had "noticed that there were still portions in [her affidavit] which were obviously a cut and past job which is what led [her] to write the letter" and that she had informed the District Court of that fact. However, she was unable to identify when she did so. The respondent submitted that she gave no such evidence, even though the letter was written in the period between her giving evidence on 25 and 26 October 2006 and her further cross-examination on 12 March 2007. Mr Taylor did not suggest that she did.

100 The transcript shows that the appellant did state in her cross-examination, both before and after the exchange regarding paragraphs 122 to 126 of her affidavit which I have recorded above, that she had realised that her affidavit contained parts which had been cut and pasted, and that she had asked her solicitor to rectify the error. However, as is evident from the passage set out above, she did not seek to explain the identical terms of her and Mr Vaughan's evidence with regard to the meeting with Mr Lahood on that basis. Nor did she seek to draw the District Court's attention to her error upon resuming her evidence on 12 March 2007.

101 In my view, the appellant's attempts to explain what was clearly a deficiency in her affidavit, and the unequivocal terms in which those explanations were phrased, provided a strong basis for the Tribunal's finding that her evidence on the issue of the witnessing of the signatures was deliberately false. It remains only to consider whether there is any force in the balance of the appellant's submissions on this issue.

102 The appellant's submission that Mr Lahood's witnessing of her signature was immaterial, and therefore unlikely to be the subject of deliberately false evidence, initially appears compelling. Ordinarily, the identity of an attesting witness is irrelevant. However, the Tribunal had regard to the force of this argument (at [177]). More importantly, as the respondent submitted, on the case that the appellant was seeking to advance in the District Court, Mr Lahood's witnessing her signature was clearly significant. It supported her claim that she signed and witnessed a single page acknowledging the receipt of the cheque, having been informed that she was not being asked to sign as a guarantor. Thus I would reject the appellant's submission that the Tribunal erred in finding (at [177]) that the appellant attached significance to Mr Lahood's attestation.

103 The Tribunal also acknowledged (at [178]) the force of the appellant's submission as to the improbability of the inclusion in a contentious affidavit of a knowingly false assertion which would readily be shown to be factually wrong. However, in the light of the form and content of that evidence and the appellant's "subsequent incorrect evidence when the problem was pointed out to her in cross examination in the District Court", the Tribunal found that it was unable to accept that submission. I do not consider that that approach discloses any error.

104 I also cannot accept the appellant's submission that her second incorrect account in cross-examination of the circumstances of the attestation (namely, that her signature was witnessed by an employee in Mr Lahood's office) was avowedly not based on actual recollection. The appellant did state that that account was

just going back on memory. I can't even remember whether it was a male or female. I can't even remember who was in that office.

Despite that acknowledgment of the imprecision of her recollection, the appellant continued to provide explanations in response to subsequent questions as to why a person in Mr Lahood's office witnessed her and Mr Vaughan's signatures. At no point did she state that she was unable to recall that event, which clearly did not occur.

105 In my view, even if the identity of the attesting witness was objectively irrelevant, the appellant displayed seemingly reckless indifference in giving her evidence that her account reflected precisely what had occurred and in maintaining that evidence when, as her letter to Mr Velik disclosed, she was aware that that was not the case. The appellant's explanation before the Tribunal of the second account she gave of the witnessing of the signature was "I think I had a brain snap there because obviously that wasn't right either ... I had a brain snap and said something very stupid". That statement in no way explains the appellant's failure to bring to the attention of the Court the errors in her affidavit which she described in her letter of 11 December 2006 to Mr Velik. She was clearly aware of those errors by March 2007 when her cross-examination resumed. Nevertheless, she said nothing of them.

106 In the light of these matters, in my view the Tribunal's finding that the appellant's evidence in regard to the attestation of her signature was knowingly false was clearly open to it and was one which I would endorse. Thus I would reject the challenge to the Tribunal's findings with respect to Ground 1(d).

Conclusion

107 The appellant has succeeded in her appeal against the findings of the Tribunal in respect of only one of the three grounds in the Application which were upheld. The ground on which she has succeeded, Ground 1(b), concerned the least serious of the allegations from which she has appealed. As I have noted, no submission was made that, should the appellant succeed on some, but not all, grounds, the order made by the Tribunal for the removal of her name from the Local Roll should be varied. In my view, given the seriousness of the findings of professional misconduct under Grounds 1(c) and 1(d), which still stand, it would be inappropriate to do so.

108 Nevertheless, the appellant's partial success should be reflected in the orders as to costs. Accordingly, the orders which I propose are as follows:

(1) Appeal allowed in part.

(2) Set aside Order (2) made by the Tribunal on 29 October 2012, insofar as that Order relates to Ground 1(b) of the Application for Original Decision.

(3) Otherwise dismiss the appeal.

(4) The appellant to pay two-thirds of the respondent's costs of the appeal.

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Decision last updated: 08 January 2014