ROFESSIONAL CONDUCT – LAWYERS – Where first defendant’s solicitors failed to serve a supplementary medical report until day before trial – whether statements made to and correspondence with other parties in relation to report was misleading – solicitors subject to a duty not to make misleading statements to other parties – whether affidavit of defendant’s solicitor providing an explanation for the delay in service was misleading – duty of honesty owed by solicitors extends to avoiding misleading the Court – extends to conduct which is liable to mislead even where no false statement is made – duty breached even if Court is mislead temporarily – instructing solicitor failed to correct representations made by counsel which were likely to mislead the Court – solicitors subject to a duty to correct misleading statements

Kaye v Woods (No 2) [2016] ACTSC 87

Findings 

97. On the balance of probabilities the relevant facts are as follows:

(a) The report of Dr Hudson had been obtained by the solicitors for the first defendant on 25 August 2014.

(b) The report of Dr Hudson had not been provided to the solicitors for the second defendant.

(c) As at 20 October 2014, Mr Alexander knew that his firm had the report and that the solicitors for the second defendant did not have the report.

(d) The conversation that Mr Alexander had with Ms Daley was as described in her affidavit and conveyed (and was intended to convey) the following:

    (i) the first defendant did not intend to serve any more expert reports relating to liability/causation;<li “=””>(ii) the solicitors for the first defendant had spoken to Dr Hudson (since his third report), but decided not to get another report and had not got another report; and<li “=””>(iii) the reason for that decision was that obtaining and serving such a report would adversely affect the first defendant’s case in relation to causation.

98. In relation to my findings as to what was conveyed during the conversation, it will be apparent that I do not accept the submission of Mr Barry that the representation recorded was accurate. It was submitted that the statement that the first defendant was not intending to serve any more liability/causation reports was in fact accurate, because that was in fact the intention of the first defendant at the time. That submission is correct as far as it goes. However, what is either false or misleading about the conversation was that which is necessarily implied from what has been recorded by Ms Daley, namely, that no fourth report existed as at the date of the conversation. The submission that the statements were accurate fails to take account of two things:

(a) First, the conversation took place in the context that the first defendant and second defendant had been cooperating to the extent that the second defendant had reviewed the contents of earlier reports and made suggestions to the first defendant as to what more might be done in relation to Dr Hudson. That is made clear by the terms of the email annexed to Ms Daley’s affidavit.(b) Second, the conversation also communicated that the decision (i.e. serving no further report) occurred in circumstances where the doctor had been spoken to and a decision had been made not to obtain a further report. That necessarily implied that no further report beyond those which had been provided to the second defendant had been obtained. 

99. As a consequence, I find that the statements made were false or misleading and known to be false or misleading at the time they were made.

Standard of conduct

101. In my view, the relevant standard of conduct is that articulated in Mullins. The obligation not to make misleading statements to a lawyer acting for another party is one which applies in the context of an impending court hearing to at least the same extent as it does in the conduct of a mediation. The obligation on a solicitor not to make a false statement to an opponent now clearly applies to litigation generally: Legal Profession (Solicitors) Conduct Rules 2015 (ACT) r 22.1; Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 (NSW) rules 22.1, 

Findings

102. The terms of the brief letter serving the fourth report of Dr Hudson are set out above (at [84]). The provision of some exculpatory explanation in the letter for the late service of the report was not essential for the effective service of the report. To the extent to which an explanation was provided it necessarily involved an attempt to advance the first defendant’s position by providing some explanation or excuse for the late service. The terms of the letter are brief and unhelpful. The reference to “unfortunately overlooked” could be a reference to service being “unfortunately overlooked” or the report itself being “unfortunately overlooked”. Either statement would not be accurate.

103. If the letter was intended to convey that the report itself had been overlooked by the first defendant’s solicitors, then that was plainly not correct. The activities of the first defendant’s solicitors described at [55] and following the above indicate that they and the first defendant were very well aware of the existence of the report.

104. If, on the other hand, the statement was intended to suggest that service of the report had been “unfortunately overlooked”, then that would imply that there was an intention to serve the document, but that intention had not been given effect to. In my view the evidence is inconsistent with that being the fact. The relevant evidence which tends against there having been an intention to serve Dr Hudson’s fourth report which was not given effect to, is as follows:
(a) The evidence of the consideration of the report given prior to the conversation between Mr Alexander and Ms Daley in October 2014 ([61] – [64] above). This evidence indicates a level of rigour in the consideration of Dr Hudson’s report and influences the characterisation of Mr Alexander’s subsequent conduct.

(b) The making of the misleading statement by Mr Alexander ([65] above), which is consistent with there having been a deliberate decision not to serve the report which was in the possession of the solicitors.

(c) The preparation for, and participation in, the telephone conference by Ms Meadows on 10 April 2015 ([70] above), which involved consideration of service of Dr Hudson’s fourth report, is consistent with there being ongoing consideration of whether or not to serve that report, rather than its service having been overlooked.

(d) The review of material by Ms Meadows the day before the mediation ([72] above), in the context of the recent telephone conference on 10 April 2015, makes it unlikely that the issue of service was not a matter of which she was reminded at that point.

(e) Notwithstanding the departure of Mr Alexander in July 2015, on 22 December 2015 there was a discussion between Ms Meadows and the first defendant’s insurer which included consideration of conferring with Dr Hudson and service of his report ([75] above). That indicates that at the end of 2015 the status of and service of the report remained a matter which was under active consideration by Ms Meadows. 

105. Having regard to this evidence, on the balance of probabilities there was, at least up until the end of 2015, active consideration of whether or not to serve Dr Hudson’s fourth report and no decision made or intention formed to serve the report that was not given effect to.

106. I am therefore satisfied on the balance of probabilities that the statement that the failure to serve was an oversight was at the least knowingly misleading, in that it is clear that consideration was given to the service of the report at different points and a decision was made not to serve it at least up until December 2015. So far as the period between December 2015 and 6 April 2016, there is no evidence of an intention being formed to serve the report and, having regard to the previous history and the conduct of the solicitors, it is unlikely that an intention to serve was formed. From 6 to 14 April, I consider that it is more likely than not that an unfulfilled intention to serve the report was not formed. Therefore, in my view, on the balance of probabilities it was inaccurate to say that service of the report was “unfortunately overlooked”. 

107. Further, identifying that the failure to serve the document was due to an oversight and only identifying that factor carried with it the implication that it was not due to some other factor. Having regard to my finding above that the statement that it was due to an oversight was misleading, I am satisfied that to identify the only cause as being an oversight was also misleading.

Documents “in furtherance of”

108. In relation to the statement of Ms Meadows in her letter of 14 April 2016, while there are documents relevant to the decision to serve Dr Hudson’s fourth report, the only document which can be characterised as a document in furtherance of Ms Meadows making the statement that she did is Document 3.9, a file note of a telephone conference she had with Mr Gregg and Mr Cummings. That records discussion of the service of Dr Hudson’s report. It describes aspects of the history of dealings by the solicitor and insurer in relation to Dr Hudson’s report and includes a statement “You can’t say that in the explanation”. In contrast to the balance of the file note, this statement is underlined. The description of the history of dealings is inconsistent with the inferences that would be drawn from the letter sent on 15 April 2016 or Ms Meadows’ affidavit. It is not clear whether the quoted words above reflect a statement or conclusion, but it is clear that there was discussion of an approach to the explanation for late service which involved the exclusion of relevant facts.

109. In my view, Document 3.9 can be considered to be evidence of a communication or document prepared in furtherance of the act of providing a misleading explanation for the late service in the letter because it documents, immediately prior to the sending of the letter on 15 April 2016 and the preparation of the affidavit on 17 April 2016, an approach to the explanation of late service which excludes relevant facts which was then implemented by the letter and the affidavit. In that sense, it is part of the scheme which is implemented by the letter. 

Affidavit of 17 April 2016

Standard of conduct

110. By the making and reliance upon the affidavit, Ms Meadows was making statements to the Court and the other parties as to the circumstances surrounding and reasons for the failure to serve Dr Hudson’s fourth report prior to 15 April 2016.

111. The scope of a lawyer’s duty in relation to representations made to the court is described in Dal Pont’s Lawyers Professional Responsibility (Thomson Reuters, 5th ed, 2013) at [17.95] as follows: 

As an “assistant in the administration of justice”, a lawyer must be able to command the confidence and respect of the court. Central to this is an unyielding commitment not to knowingly mislead the court on any matter. (Footnote omitted)

112. Riley’s Solicitors Manual, vol 1 (at Service 58) [22,050.5] states (under the heading “Duty to avoid creating a misleading impression”):

Being a party to the presentation of evidence, or the making of statements, to the court that is partly true, but by omitting the whole truth creates a misleading impression to the court, represents a breach of the lawyer’s duty to the court.

113. In Kyle v Legal Practitioners’ Complaints Committee [1999] WASCA 115;  (1999) 21 WAR 56, 60 [12] (Kyle), Ipp J said:

…It is the general duty of lawyers not to mislead the court by stating facts which are untrue, or mislead the judge as to the true facts, or conceal from the court facts which ought to be drawn to the judge’s attention, or knowingly permit a client to deceive the court.

114. Parker J made similar remarks at 73 [66]-[67].

115. Re Thom [1918] NSWStRp 4;  (1918) 18 SR (NSW) 70 was a case in which a solicitor had settled an affidavit involving a general non-admission of certain allegations about the client’s character. In some respects the non-admission was correct, but in others the facts alleged against the client were true and known to be so. The solicitor had proceeded on the basis (and advised the client) that the court would recognise that she would have denied the allegations if she could, that the non-admission would be recognised by the court as not being a denial and therefore the court would regard it as, effectively, an admission. The trial judge saw things differently, reading the non-admission as a denial of the facts. The true situation was quickly resolved by cross-examination. However, of this course of conduct Cullen CJ said (at 74-75):

It is perhaps easy by casuistical reasoning to reconcile one’s mind to a statement that is in fact misleading by considering that the deponent is not under any obligation to make a complete disclosure. By this means a practitioner may be led into presenting a statement of fact which, although it may not be capable of being pronounced directly untrue in one particular or another, still presents a body of information that is misleading, and conceals from the mind of the tribunal the true state of facts which the deponent is professing to place before it. For that reason it is proper on such an occasion as this to express condemnation of any such casuistical paltering with the exact truth of the case. (Emphasis added)

116. The obligations of solicitors are reflected in the content of the formal conduct rules under Australian Capital Territory and New South Wales legislation. The relevant solicitors rules provide that a solicitor must not “knowingly or recklessly mislead the court”: Legal Profession (Solicitors) Conduct Rules 2015 (ACT) r 19.1; Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) r 19.1. Further r 19.2 of both sets of rules requires solicitors to take all reasonable steps to correct any misleading statement they have unknowingly made to the Court upon becoming aware of it.

117. The balance between the duty of honesty and the absence, except where there is a particular obligation to do so, of an obligation to put forward facts which will damage the client’s case is well summarised in the judgment of Kyrou AJA (with whom Weingberg and Harper JJA agreed) in Forster v Legal Services Board  (2013) 40 VR 587 at [161], where his Honour said:

161 In Meek v Fleming [[1961] 2 QB 366], Holroyd Pearce LJ agreed with the proposition that while a lawyer must not knowingly mislead the court as to the facts or the law, he or she may put such matters as he or she believes will best advance the client’s case. A party need not reveal something to the discredit of that party. However, this does not mean that the party can by implication falsely pretend that a particular state of affairs exists, and knowing that the court has been misled with respect to a material matter, foster and confirm the misrepresentation through answers given by the party. A lawyer who is a party to the presentation of evidence or the making of a statement to the court that is partly true, but which does not amount to the whole truth, can create a misleading impression to the Court and thereby breach his or her duty to the Court. Once a misleading impression has been created, even if innocently, the lawyer has an obligation to correct that impression as soon as he or she becomes aware of the true position. That obligation continues until judgment is given. (Footnotes omitted)

118. Therefore in civil proceedings where the other party is present there may not, in the absence of some additional obligation, be a duty of full disclosure of the relevant facts contrary to the interests or instructions of the client. However, the authorities referred to above make it absolutely clear that there is a duty of honesty which extends to avoiding misleading the Court. (The distinction between honesty and candour, in the sense of full disclosure, is discussed in B Wolski, “The truth about honesty and candour in mediation: what the Tribunal left unsaid in Mullins case” [2012] MelbULawRw 18;  (2012) 36(2) Melbourne University Law Review 706, 714). 

119. That duty to be honest extends to not putting forward facts which are liable to, or which in fact, mislead the Court or the opponent. That is illustrated by the decision in Mullins(see above at [24]-[25]). It extends to conduct which is liable to mislead even where no false statement is made expressly or impliedly. Meek v Fleming [1961] 2 QB 366 provides an example of such conduct. Further, it is a breach of duty to mislead the court temporarily. Therefore the fact that the true position is likely to emerge during the course of evidence is not sufficient to excuse a practitioner for misleading the court. Kyle is an example of such a case: see in particular [67].