DEJ v Council of the New South Wales Bar Association

[2021] NSWCA 72

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

DEJ v Council of the New South Wales Bar Association [2021] NSWCA 72

Hearing dates:

19, 20 August 2020

Date of orders:

28 April 2021

Decision date:

28 April 2021

Before:

Macfarlan JA at [1];
Meagher JA at [6];
White JA at [202].

Decision:

(1)      Dismiss the appeal against order 3 made by the Tribunal on 11 December 2019.

(2)      The appellant to pay 80% of the respondent’s costs of the appeal.

(3) Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) and on the ground specified in s 8(1)(c):

(a)      Order that the appellant and his wife continue for a period of 20 years to be referred to in relation to these proceedings as DEJ and DEK respectively.

(b)      Order that publication of the identity of the appellant as a party to these proceedings and of any information tending to reveal his identity be prohibited in Australia for a period of 20 years.

(c)      Order that publication of [199] of these reasons be prohibited in Australia for a period of 20 years.

(4)      Orders (3)(a) and (3)(b) do not apply to the respondent, or any member of the Bar Council or the New South Wales Bar Association, or any of their officers or employees, from disclosing:

(a)      The appellant’s name;

(b)      The decisions, reasons for decisions and orders of the Court in these proceedings;

(c)      Documents and evidence filed with the Court in these proceedings; and

(d)      Information about the proceedings, decisions, documents and evidence referred to in (4)(b) and (4)(c) above

to any of the persons, bodies or entities listed in Schedule A attached to the Court’s reasons, in connection with the Bar Council’s exercise of its functions under the Legal Profession Act 2004 (NSW), the Legal Profession Uniform Law 2014 (NSW) (as amended or substituted from time to time) and all regulations and rules made under or in connection with those Acts (as amended or substituted).

(5)      Orders (3)(a) and (3)(b) do not preclude the respondent, or any member of the Bar Council or the New South Wales Bar Association, or any of their officers or employees, from disclosing:

(a)      The appellant’s name;

(b)      The decisions, reasons for decisions and orders of the Court in these proceedings;

(c)      Documents and evidence filed with the Court in these proceedings; and

(d)      Information about the proceedings, decisions, documents and evidence referred to in (5)(b) and (5)(c) above

to any of the persons, bodies or entities listed in Schedule B attached to the Court’s reasons, for the purpose of enforcing any costs order made by the Court in these proceedings, assessing those costs, and enforcing any judgment of a court that arises from the filing of a cost assessor’s certificate or review panel’s certificate and any judgment on appeal from a determination of a review panel.

(6)      Orders (3), (4) and (5) be subject to any further orders of this Court and any other court.

Catchwords:

LEGAL PRACTITIONERS – practising certificate subject to conditions relating to financial management and tax affairs – barrister contravened conditions – whether psychiatric disorder provided “reasonable excuse” to justify not treating contraventions as professional misconduct

LEGAL PRACTITIONERS – barrister made representations to Bar Council – Tribunal found that those representations knowingly false – whether open to Tribunal to make those findings – whether Court of Appeal in position to make findings determining issue

LEGAL PRACTITIONERS – barrister made representation as to future conduct namely that would sell property to discharge tax liabilities – where barrister acted contrary to representation – whether that conduct constituted professional misconduct

LEGAL PRACTITIONERS – finding of professional misconduct – whether barrister a fit and proper person to remain on Supreme Court roll of lawyers

Legislation Cited:

Civil and Administrative Tribunal Act2013 (NSW), s 52, sch 5 cl 29

Court Suppression and Non-publication Orders Act 2010 (NSW), ss 7, 8

Evidence Act 1995 (NSW), s 140

Legal Profession Act2004 (NSW), ss 4, 5, 58, 67, 68, 73, 497 504, 537, 551, 555, 562, 660

Legal Profession Uniform General Rules 2015 (NSW) r 16

Legal Profession Uniform Law2014 (NSW) ss 44, 53

Supreme Court Act1970 (NSW), s 48, 75A

Uniform Civil Procedure Rules 2005 (NSW), r 51.53

Cases Cited:

A Solicitor v Council of the Law Society of New South Wales (2003) 216 CLR 253; [2004] HCA

Anderson v Anderson (2017) 94 NSWLR 591; [2017] NSWCA 131

Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226

Berger v Council of the Law Society of New South Wales [2019] NSWCA 119

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Browne v Dunn (1893) 6 R 67

Council of the Law Society of New South Wales v Zhukovska (2020) 102 NSWLR 633; [2020] NSWCA 163

Davison v Council of the New South Wales Bar Association [2007] NSWCA 227

Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11

Laminex (Australia) Pty Ltd v Smeeth [1999] NSWCA 462

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305

Misrachi v Public Guardian [2019] NSWCA 67

Monie v Commonwealth (2005) 63 NSWLR 729; [2005] NSWCA 25

New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284

New South Wales Bar Association v Hamman [1999] NSWCA 404; (1999) 217 ALR 553

New South Wales Bar Association v Murphy (2002) 55 NSWLR 23; [2002] NSWCA 138

Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470

Seymour v Australian Broadcasting Commission (1990) 19 NSWLR 219

Stanoevski v The Council of the Law Society of New South Wales [2008] NSWCA 93

State of New South Wales v Hunt (2014) 86 NSWLR 226; [2014] NSWCA 47

Taikato v The Queen (1996) 186 CLR 454; [1996] HCA 28

Vines v Djordjevitch (1955) 91 CLR 512; [1955] HCA 19

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

Texts Cited:

SM Stoddard and CA Stutsman Jr, “Income Tax Offences by Lawyers: An Ethical Problem” (1972) ABAJ 842

Category:

Principal judgment

Parties:

DEJ (appellant)
Council of the New South Wales Bar Association (respondent)

Representation:

Counsel:
D A Lloyd SC (appellant)
K Richardson SC and C Mitchell (respondent)

Solicitors:
Sparke Helmore Lawyers (appellant)
Hicksons Lawyers (respondent)

File Number(s):

2020/16869

Publication restriction:

Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) and on the ground specified in s 8(1)(c):

(a) Order that the appellant and his wife continue for a period of 20 years to be referred to in relation to these proceedings as DEJ and DEK respectively.
(b) Order that publication of the identity of the appellant as a party to these proceedings and of any information tending to reveal his identity be prohibited in Australia for a period of 20 years.
(c) Order that publication of [199] of these reasons be prohibited in Australia for a period of 20 years.
This publication restriction is subject to Orders (4), (5) and (6) made by the Court.

 Decision under appeal 

Court or tribunal:

New South Wales Civil and Administrative Tribunal

Jurisdiction:

Occupational Division Panel

Citation:

[2019] NSWCATOD 186

Date of Decision:

11 December 2019

Before:

M Craig QC ADCJ, Principal Member
G Blake AM SC, Senior Member
E Hayes, General Member

File Number(s):

2015/00383932

HEADNOTE

[This headnote is not to be read as part of the judgment]

In October 2012, the New South Wales Bar Council imposed 11 financial management and reporting conditions on the appellant barrister’s then current practising certificate. Those conditions required him to: meet ongoing tax reporting and payment obligations as they fell due; set aside sufficient moneys to meet his tax liabilities; and retain a financial expert to control his financial affairs to facilitate compliance with the foregoing conditions. That financial expert was also required to provide quarterly reports to the Bar Council containing evidence of the barrister’s compliance with those conditions.

During the period in which the conditions applied – 16 October 2012 to 30 June 2015 – the appellant rarely satisfied his tax reporting and payment obligations on time; did not set aside adequate funds to meet his tax liabilities; and did not enable his financial expert to control his financial affairs. While his accountants provided some quarterly reports to the Bar Council, only one of those reports contained the information required.

The Bar Council commenced an investigation into the appellant’s failure to comply with those practice conditions. During that investigation the appellant represented to the Bar Council that he owned a half share in a property, and that if he was unable to arrange a loan to pay off his outstanding tax liabilities he would sell that property to discharge that debt.

Following its investigation the Bar Council commenced disciplinary proceedings in the New South Wales Civil and Administrative Tribunal. During the course of those proceedings the appellant swore an affidavit in June 2017 asserting that in 1996, he had transferred his share in the property to his wife, and accordingly, that she was the sole owner of it.

The Tribunal held: that the appellant had contravened the practising conditions and did not have a “reasonable excuse” for doing so due to any psychiatric condition; that the statements in his June 2017 affidavit that his wife was the sole owner of the property were knowingly false at the time they were made; and that by selling the property in December 2016 and not applying the proceeds of the sale to discharge his tax liabilities he acted contrary to the representation he had made to the Bar Council. The Tribunal held that the appellant’s conduct in these three respects justified a finding of professional misconduct and ordered that his name be removed from the roll of lawyers.

The issues in the appeal were:

(i) Whether the Tribunal erred in finding that the appellant’s psychiatric condition did not provide a “reasonable excuse” for the contraventions of his practice conditions under Legal Profession Act 2004 (NSW), s 73(1) (grounds 1 and 2).

(ii) Whether the Tribunal erred in finding that the appellant’s statements in his June 2017 affidavit that his wife was the sole owner of the property were knowingly false (ground 3).

(iii) Whether the appellant’s conduct in not applying or seeking to apply the proceeds of sale of the property to discharge his tax liability constituted professional misconduct (ground 3A).

(iv) Whether the order removing the appellant’s name from the roll of lawyers should be set aside in the event that he succeeds on grounds of appeal 1 and 2 or ground 3 or ground 3A (ground 4).

The Court (Meagher JA, Macfarlan and White JJA agreeing) held, dismissing the appeal:

As to issue (i)

1. Per Meagher JA, Macfarlan and White JJA agreeing: The Bar Council bore the onus of proving that the appellant contravened the conditions imposed on his practising certificate “without reasonable excuse”: at [1], [24], [202].

Vines v Djordjevitch (1955) 91 CLR 512; [1955] HCA 19 applied.

2. Per Meagher JA, Macfarlan and White JJA agreeing: Although the expert medical evidence was that the appellant suffered from a psychiatric condition, it did not establish that condition ultimately caused or contributed to his non-compliance with the practice conditions. That non-compliance arose because the appellant did not manage his financial affairs in such a way that allowed him to meet his tax liabilities: at [1], [89]-[124], [202].

3. Per Macfarlan JA: The Tribunal made factual findings as to the cause of the appellant’s non-compliance. The findings it made were likely based on the Tribunal’s impression as to the credibility of witnesses and were not glaringly improbable. In making those findings it was not bound to accept the opinion evidence of the psychiatric experts: at [2]-[5].

Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305; Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 considered.

As to issue (ii)

4. Per Meagher JA, Macfarlan and White JJA agreeing: It was not open to the Tribunal to conclude that the statements in the appellant’s June 2017 affidavit were knowingly false. The Tribunal’s reasoning relied on a finding as to the purpose of the appellant and his wife for transferring his interest in the property to his wife. That finding was not available on the evidence. That reasoning also involved rejecting evidence of the appellant’s wife in circumstances where it had not been put to her in cross-examination that her evidence in that respect should be disbelieved: at [1], [166]-[178], [202].

Browne v Dunne (1893) 6 LR 67; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11; Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226 applied.

5. Per Meagher JA, Macfarlan and White JJA agreeing: Although the Tribunal erred in its findings with respect to this issue, the Court is not in a position to make and substitute its own findings. The evidence does not point to only one conclusion, and the Court does not know what evidence the appellant’s wife would have given had she been cross-examined about the Tribunal’s findings which were inconsistent with the evidence that she gave: at [1], [179]-[181], [202].

As to issue (iii)

6. Per Meagher JA, Macfarlan and White JJA agreeing: The appellant’s statement about selling the property to satisfy his tax liabilities was made in September 2014 and was not misleading at the time it was made. The property was sold in December 2016. In the intervening period the appellant’s circumstances had changed substantially, mitigating the seriousness of his conduct in not applying the proceeds of sale to discharge his tax liability: at [1], [187]-[192], [202].

As to issue (iv)

7. Per Meagher JA, Macfarlan and White JJA agreeing: The Court’s conclusion on issue (i) meant that the appellant had engaged in professional misconduct. The appellant’s conduct which was the subject of those grounds of complaint showed a flagrant and unacceptable disregard for his tax obligations and compliance with the practice conditions and justified an order that his name be removed from the roll of lawyers. Accordingly even though the appellant demonstrated errors in the Tribunal’s reasoning in its consideration of issues (ii) and (iii), the disciplinary application should not be remitted for further hearing: at [1], [129]-[141], [202].

New South Wales Bar Association v Hamman [1999] NSWCA 404; (1999) 217 ALR 553; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284; New South Wales Bar Association v Murphy (2002) 55 NSWLR 23; [2002] NSWCA 138; Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279; [1957] HCA 46 considered.

Judgment

1. MACFARLAN JA: I agree with Meagher JA’s judgment and with the orders that his Honour proposes. I add the following further observations.

Whether the appellant’s psychiatric condition caused or materially contributed to his conduct in relation to his financial and taxation affairs of which complaint was made

2. There was expert psychiatric evidence before the Tribunal that, if accepted, indicated that the appellant’s conduct was capable of being explained by his psychiatric condition. As the experts who gave that evidence acknowledged, in giving that evidence they were to a significant degree reliant on histories that the Barrister gave them, albeit that to some extent those histories were supplemented by documentary materials.

3. It was not for the expert psychiatrists to go further and make factual findings about the circumstances of or reasons for the appellant’s conduct. Those were matters for the Tribunal to determine. In performing that function the Tribunal was not bound to accept any relevant views expressed by the psychiatrists, particularly to the extent that they related to ultimate issues in the proceedings (see Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 at [89]).

4. Having reviewed the extensive documentary and testimonial evidence that was adduced before it, the Tribunal made important findings, relating to different parts of the period under consideration, including that it was not, as the appellant asserted, “inertia” that prevented him from meeting his tax obligations, that “his conduct was simply a product of his poor practice and financial management and inability to find a solution to the difficulties he faced” and that the appellant “made a choice to meet his mortgage payments in priority to his tax debts” (Decision at [115]).

5. In his judgment Meagher JA addresses specific challenges made to the Tribunal’s reasoning. These apart, the appellant’s case on appeal fails because the identification of the causes of the appellant’s conduct was a factual issue for the Tribunal’s determination, the determination was “likely to have been affected by impressions about the credibility and reliability of witnesses formed by the [Tribunal] as a result of seeing and hearing them give their evidence” (Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55]) and the determination was not “glaringly improbable” or “contrary to compelling inferences” (ibid).

6. MEAGHER JA: The appellant (DEJ) was admitted to the Supreme Court roll of barristers in 1984. He appeals from a decision of a (three member) Occupational Division Panel of the NSW Civil and Administrative Tribunal (Tribunal). Following a hearing on 17, 18 and 20 August 2017, which included oral evidence directed to contested questions of fact to which the Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 standard or its statutory equivalent applied, the Tribunal delivered its decision over two years and three months later on 11 December 2019. Order 3 was that the appellant’s name be removed from the roll of lawyers (Council of the New South Wales Bar Association v DEJ [2019] NSWCATOD 186 (Decision)). DEJ’s appeal to this Court from the Tribunal’s orders is brought under Sch 5 cll 29(1)(e) and (2)(b) of the Civil and Administrative Tribunal Act2013 (NSW) and ss 48(1)(viii) and (2) of the Supreme Court Act1970 (NSW). By Sch 5 cl 29(4)(a) of the former Act, that appeal is one to which s 75A of the latter Act applies, and accordingly is by way of rehearing.

The subject matter of the disciplinary proceedings

7. The appellant held an unrestricted certificate entitling him to practise as a barrister continuously from 1988 (when the certificate was first introduced) until 15 October 2012. On 11 October 2012, the respondent Bar Council resolved to attach 11 financial management and reporting conditions to his practising certificate issued for the period 16 October 2012 to 30 June 2013. They were also attached to his annual practising certificates for the years ended 30 June 2014 and 30 June 2015. In each case the conditions were imposed pursuant to Legal Profession Act2004 (NSW), ss 50(3) and 68(3)(c). Those 11 conditions are summarised below at [45] and set out in the Tribunal’s Decision at [44].

8. They were directed to ensuring the appellant’s compliance with his statutory obligations to lodge quarterly business activity statement(s) (BAS) and annual tax returns with the Australian Taxation Office (ATO) and to discharge his ongoing tax liabilities. From 20 July 2015 to 30 June 2016, the appellant’s annual practising certificate included conditions to the same effect, as well as additional conditions requiring that on a quarterly basis he receive specialised medical treatment for his by then diagnosed depressive disorder, and act in accordance with that specialist’s medical advice: see Legal Profession Uniform Law2014 (NSW), ss 44, 53 and Legal Profession Uniform General Rules 2015 (NSW), r 16.

9. The Bar Association refused to renew the appellant’s practising certificate from 1 July 2016, it not being satisfied that he was a fit and proper person by reason of his contravention of condition 6 of his practising certificate issued on 20 July 2015. That condition required his adherence to arrangements made with the ATO in July 2015 for the payment by January 2016 of his then outstanding tax liability.

7. Earlier, on 10 July 2014 the Bar Council resolved to make, and thereby made, a complaint about the appellant’s failure to comply with his practice conditions. That complaint was made under Legal Profession Act, s 504. On 11 June 2015 following the completion of its investigation of that complaint the Bar Council resolved to commence proceedings in the Tribunal, as provided by s 537. Notwithstanding the commencement of the remaining parts of the Legal Profession Uniform Law, including Ch 4, on 1 July 2015, the 2004 Act continued to apply to the complaint. See cl 26(2) of Sch 4 to that Law; Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 at [224]; and Council of the Law Society of New South Wales v Zhukovska (2020) 102 NSWLR 633; [2020] NSWCA 163 at [55]-[57].

8. The present disciplinary application was commenced under Legal Profession Act, s 551 for breaches of the conditions attached to the three practising certificates current between 16 October 2012 and 30 June 2015. Those breaches were pleaded and particularised as grounds A (condition 1), B (condition 2), C (conditions 3 and 4) and D (conditions 5 to 11). In his reply to that application the appellant admitted the alleged breaches of the conditions but did not admit that they, together or separately, constituted unsatisfactory professional conduct or professional misconduct as claimed.

9. In July 2017 a substantive amendment was made to the disciplinary application. That amendment alleged that the appellant had made a knowingly false affidavit or alternatively knowingly false statements and representations to the Bar Council, in each case with respect to the ownership of the appellant’s Sydney home and its being the source of funds which would enable him to repay his liabilities to the ATO. Those amendments were permitted by and made in accordance with Legal Profession Act, s 555.

10. As at January 2016 the appellant and his wife were the registered proprietors of their family home in Sydney, and his wife was the registered proprietor of a property in country New South Wales. The sale of the latter was completed in September 2016. At that time, a decision was also made to sell the family home. That sale was completed on 19 December 2016. The net proceeds of sale ($1,726,363) were paid into an account of the appellant’s wife. At that time the ATO was owed in excess of $550,000, including outstanding tax in excess of $425,000.

11. In mid-2017 the Bar Council asked the appellant for an explanation as to why the net proceeds of sale had been paid to his wife, rather than first applied to discharge the ATO liability. That request was responded to promptly by the appellant’s affidavit of 6 June 2017. He disclosed, for the first time from the Bar Council’s perspective, that by September 2016 the family home “was owned solely by my wife. I transferred my one half interest in the house to my wife in 1996”. A copy of a transfer was attached. Accordingly the net proceeds were paid to his wife “as proprietor of the property”. In a later affidavit sworn 9 August 2017 the appellant explained that in his earlier affidavit he had “referred to my wife as sole proprietor because by the time I swore that affidavit I had seen the transfer and believed it was effective”. Thus, on the appellant’s version of events, the transfer had been signed in 1996, not registered and forgotten, then found and remembered in mid-2017 after the home had been sold.

12. That disclosure caused the Bar Council to amend its disciplinary application to add new grounds E, F and G. The application was first amended on 27 July 2017. It was further amended on 18 August 2017. Those grounds were that the affidavit of 6 June 2017 was knowingly false in asserting that his wife was the owner and sole proprietor of their home (ground E); that if she was the beneficial owner of his half share by reason of the 1996 transfer, the appellant had made statements and representations between 2012 and 2015 which were knowingly false as to he and his wife being joint owners and him having equity in the property (ground F); and that by his conduct in allowing the net proceeds of sale to be paid to his wife, the appellant had acted contrary to a statement made to the Bar Council in September 2014 that, if he was unable to borrow money to discharge his tax liabilities, he would arrange to sell the family home to do so (ground G).

13. In further responding to grounds A, B, C and D of the amended application the appellant alleged that he suffered from a psychiatric condition which caused or materially contributed to his breaches of the practice conditions. That was said to provide a reasonable excuse for those contraventions with the result that his conduct was only capable of sustaining a finding of unsatisfactory professional conduct, as provided by Legal Profession Act, s 73(1).

14. In responding to grounds E, F and G the appellant denied that paras 18 and 19(g) of the June 2017 affidavit were knowingly false (ground E); denied that the statements or representations made to the Bar Council were knowingly false (ground F); and denied that his conduct in not causing his tax liability to be paid from the proceeds of sale was unsatisfactory professional conduct or professional misconduct (ground G).

The findings of the Tribunal and issues in the appeal

18. As to grounds of complaint A, B, C and D the Tribunal held that the appellant’s psychiatric condition did not cause or materially contribute to his breaching the conditions of practice in the respects particularised and accepted (Decision [117]). It followed that those contraventions constituted professional misconduct, s 73(1) providing:

(1)  If the holder of a local practising certificate contravenes without reasonable excuse a condition of the practising certificate imposed under this Division:

(a)  the contravention is professional misconduct, and

(b)  the appropriate Council may, by written notice given to the holder, cancel or suspend the local practising certificate.

19. Grounds 1 and 2 of the amended notice of appeal considered together challenge that holding, alleging error in the Tribunal’s failure to find that the appellant had a reasonable excuse by reason of his psychiatric condition.

20. As to grounds of complaint E, F and G, the Tribunal held that grounds of complaint E and G were made out. As to the former, the Tribunal found that the appellant and his wife had signed the transfer in 1996 and they had then changed their minds about the appellant transferring his half share in the family home to her. It followed that the statements in his 6 June 2017 affidavit (being paras 18 and 19(g)) were knowingly false (Decision [166], [170]). Ground F did not then arise (Decision [171]). As to ground G, the Tribunal found that the appellant had represented in September 2014 and intended until June 2016 (when the Bar Council “refused” to renew his practising certificate) that if he could not borrow to pay his tax liability using the family home as security he would arrange to sell it to do so. The Tribunal found that he changed his mind following that refusal to “avoid paying his tax liability” and to secure his financial security in circumstances “where he was no longer able to practise as a barrister with no real prospect of being able to do so in the future”. That conduct was held to constitute professional misconduct (Decision [174]).

21. Grounds of appeal 3 and 3A challenge those findings and conclusions, and maintain that although never registered, the 1996 transfer was intended to be effective as a transfer of the appellant’s interest to his wife, and that the transfer was then forgotten by each of them until it was rediscovered in mid-2017.

22. Ground of appeal 4 contends that the Tribunal erred in finding that the appellant’s conduct warranted a finding that his name be removed from the roll of lawyers. This ground is pressed in the event that grounds of appeal 1 and 2 or ground 3 or ground 3A are or is upheld.

23. Finally, by its notice of contention the Bar Council supports the Tribunal’s conclusions – as to grounds of complaint A to D, E and G respectively by its grounds of contention 1, 2 and 4, and as to its conclusion that the correct protective order was removal from the roll of lawyers, by ground of contention 5. By ground of contention 3 the Bar Council argues that if the appellant’s challenge with respect to ground of complaint E is successful, this Court should uphold the conduct charged by ground of complaint F. If that ground is made out the appellant does not press ground of appeal 4 in the face of a finding of dishonesty in his dealings with the Bar Council, accepting that would justify an order removing his name from the roll of lawyers.

Overview – whether appellant had a “reasonable excuse” by reason of psychiatric condition (grounds of appeal 1 and 2)

24. Before the Tribunal the Bar Council accepted, correctly in my view, that it bore the onus of establishing that the appellant did not have a reasonable excuse for the contravening conduct (Decision [56]). Section 73(1)(a) is a provision which relies on an exception in defining when a failure to comply with conditions constitutes “professional misconduct”. Accordingly the Bar Council had to prove that the exception did not apply: see Vines v Djordjevitch (1955) 91 CLR 512 at 519; [1955] HCA 19. A “reasonable excuse” is one which in the circumstances justifies the contravening conduct not being treated as professional misconduct and as sufficiently serious to enliven the power to cancel or suspend the practising certificate: see Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470; citing Taikato v The Queen (1996) 186 CLR 454 at 464; [1996] HCA 28.

25. The Bar Council accepted that if the appellant “was suffering from a psychiatric condition and the symptoms of his psychiatric condition caused or materially contributed to his conduct” he would have a reasonable excuse (Decision [56]). The critical question then became whether the appellant’s depressive disorder caused or materially contributed to his breaches of conditions 1 to 11 (Decision [60]). However as the matter was conducted before the Tribunal the parties focused on the conditions which in terms required timely compliance with the appellant’s reporting and payment obligations. Although not contended by either party in this Court, or dispositive of the appeal on grounds 1 and 2, it is my view that pursuing this narrower inquiry in answering the question as to reasonable excuse involved error. I return to this subject briefly, having considered grounds 1 and 2.

26. Three psychiatrists gave written and oral evidence as to the appellant’s depressive disorder and the extent to which it caused or contributed to limited aspects of his contravening conduct – Dr Williamson who first saw him in late October 2016 and continued to see him as his treating psychiatrist at the time of the oral evidence in August 2017; Dr Phillips who assessed the appellant in February 2016; and Dr Brown who assessed him in June 2017.

27. With respect to whether the appellant’s disorder began to interfere with the conduct of his everyday life and in particular his capacity to discharge his tax obligations during the period in question, Drs Phillips and Williamson responded in their written reports as follows. What is of particular significance are the assumptions made by each of them (and Dr Brown) as to the level of the appellant’s functioning during the relevant period:

Dr Phillips:

In the course of protracted persistent depressive disorder, the person is likely to develop a general inertia and lack of initiative which interferes in all areas of life. In the [appellant’s] case, he had become demoralised and grossly inefficient in his various activities, this including ATO obligations. Not uncommonly there will be blunting and slowing of cognition in the context of a persistent depressive disorder. This has probably been an issue with the [appellant], but it is likely that this has played a lesser role in his failures. ...

Absent the persistent depressive disorder, it is highly probable that [the appellant] would have continued to meet ATO obligations.

Dr Williamson:

He told me that progressive loss of income through the cancellation of work by a number of clients caused him significant financial disturbance and increased the level of his stress. At this time, he appears to have been meeting all the criteria for the severe major depressive disorder. Hence, the nature of “committing the conduct” is more a failure to meet impeccable standards than it is of any active dismissal of professional financial obligations. With severe depression, the loss of energy, motivation and capacity to concentrate in themselves greatly reduce a person’s ability to perform to stringent requirements.

28. In her response to the same question, Dr Brown said:

… it has not been possible to confirm that [the appellant] suffered from a mental illness during the designated time period that either caused or contributed to his non-compliance in either or both arenas. Rather, it has been considered more likely that [the appellant] suffered from mild severity depressive symptoms which arose, at least in part, from him becoming progressively more distressed about his failure to meet financial commitments. [The appellant’s] mood disorder has worsened in severity since 2015 to 2016, partly on the basis of the financial and professional implications of having failed to meet practising conditions. There is no documentary support for the contention that [the appellant’s] mild depression, which was documented from August 2014 onwards, was of sufficient severity to restrict his earning capacity and ergo, to have limited his ability to comply with both conditions attached to his practising certificate and his tax obligations.

29. The expert oral evidence was given in a joint session where each of the psychiatrists was able to ask questions of the others, as well as comment on their answers. It was common ground between them that by mid-2016 the appellant suffered from a mood disorder. Dr Williamson described it as a persistent major depressive disorder, Dr Phillips as a persistent depressive disorder, and Dr Brown as a chronic moderate severity condition of major depression.

30. The difference between them was as to the severity of the appellant’s condition in the earlier period from late 2012 to mid-2015, and whether in that period it was likely to have materially impaired his effective functioning in complying with the conditions. The primary condition was that requiring that he meet his ongoing reporting and payment obligations (condition 2). The remaining conditions were directed to ensuring that those obligations were complied with. Those conditions required that on an ongoing basis moneys were set aside to make provision for tax liabilities (conditions 3 and 4), and that the “financial expert” to be retained by the appellant provide to the Bar Council every quarter evidence as to his compliance in fact with the payment and reporting obligations and obligations to set funds aside (conditions 5-11). As will become apparent, timely compliance with the reporting and payment obligations was rare, if it happened at all; and whilst two accountants were retained at different times, apart from a period in early 2015, there was little compliance with the management and reporting obligations. The former required that the appellant put the financial expert in the position where he or she could “control” his financial affairs. That does not appear ever to have happened.

31. Before the Tribunal (and in this Court), the Bar Council emphasised two matters as indicating that symptoms of the appellant’s mood disorder did not emerge until mid-2014. The first was his medical history which showed he did not seek or receive psychiatric assistance until September of that year. The Bar Council contended that prior to this time he had a mild to moderate depressive disorder which did not materially affect his functioning. The second was that up until at least late 2014, the appellant had maintained his functionality and capacity to earn substantial income as a barrister and was managing his personal and family financial affairs (though not in a way that enabled him to satisfy his tax liabilities as they arose).

32. Supporting that position, Dr Brown’s opinion was that:

… most individuals, in my experience, with mild to moderate depression can and do work up to full time but as depression becomes severe, most individuals will not be able to generate that level of income or to pass themselves in their normal professional role.

33. In the joint session it was suggested to Dr Phillips that, having regard to the appellant’s functioning at work and in many aspects of his personal life, through the relevant period he remained physically capable of dealing with his tax obligations if that was his priority. Dr Phillips responded:

You’re quite [right] that he was functional over [a] broad spectrum of activities. I think I can’t take it much further than that other than to say that obviously things like paying school fees was a matter of immense importance to all members of the family and probably notwithstanding his depressive experience at the time, he held that as particularly important, and the same probably applied to the mortgage because otherwise you’re out of the house. I think there obviously is some sort of hierarchy and in his rather disorganised mind, at that stage, in the non professional area, put his tax obligations lower down. I doubt that that was at a conscious level, probably just the way he [was] thinking at the time … but I broadly agree with your comments. [emphasis added]

34. Dr Williamson’s view on that subject was similar:

I do agree with you inasmuch as it's clear that he was able to function and earn the amount of money that's been cited, but - and it's clear that he was able to meet the requirements of the family in terms of mortgage, school, payments, et cetera but again, as Dr Phillips has said, there's a hierarchy of value in all of this and when it comes to doing other things - and we don't know exactly what he means there when he says, "I just couldn't do it" but I, let's say, make the assumption that it mightn't be to do with dealing with taxation for example; I don't see it as inconsistent he could do the things that were very well programmed into him over many, many years and that he could be motivated to look after the family but still didn't have enough energy, drive motivation to do the other things, to do whatever he says here, "I knew what I had to do but just couldn't do it". [emphasis added]

35. Dr Williamson accepted that a reliable assessment of the severity or otherwise of the appellant’s depression and its impact on his functioning in the period from 2012 to 2015 could only be given with the benefit of a detailed history of his “attitudes and feelings” in that period. To the same effect Dr Phillips acknowledged that the three experts had to rely on the material put to them and described as an “absolute truth” that each was limited in their ability to assess the level of the appellant’s depression in that period. He also accepted that the “functional capacity of a person suffering depression of any type will vary enormously”. All of this uncontroversially emphasised the need for close attention to the history of the appellant’s functioning with respect to his taxation and other financial affairs – whether professional or private – during the period in question, especially as revealed by the contemporaneous material.

36. However the written reports of the three experts (as well as the much briefer reports or letters of his other treating psychiatrists) do not directly engage with much of the detail of that history. Nor was it pursued in any detail in the oral testimony of the three experts. As explained by the appellant’s counsel in argument in this Court, the experts focused on the Bar Council’s case “that it was unlikely that there was a severe psychiatric condition impeding [the appellant’s] ability to comply because of the fact that he was able to generate revenue of the kind he did and also [its] case squarely put below that he preferred or prioritised other expenses”.

35. It is convenient at this point to refer to the reports and correspondence of the other treating psychiatrists – Drs Jurek, Roberts and Melidonis. None of them saw the appellant before September 2014. The first to do so, Dr Jurek, prepared a report in June 2015 in support of the appellant’s application at that time for a further practising certificate: see [8] above. She recorded his reporting that he had not been able to comply (to that time) with the conditions placed on his earlier practising certificates “because of financial hardship and his depressed state”. It is not said which came first. Dr Jurek added “in my opinion, his disorder has contributed to avoidance, procrastination and lack of motivation in managing his affairs”.

36. Dr Roberts first saw the appellant in February 2016. In April 2016 he wrote that the appellant’s depression “significantly affects his mood, his ability to concentrate, remember and think. He finds it emotionally difficult to face up to his problems at present”. Dr Melidonis saw the appellant following an incident in June 2016 (which is placed in context in the detailed factual summary that follows). In a letter addressed to “whom it may concern” and dated 14 October 2016, she recorded his history as including that “work scheduled for him did not eventuate due to cases being settled prior to the court date. He has not been able to face the task of completing his tax returns”.

37. None of these opinions grapples with the detail of the appellant’s non-compliance with his taxation reporting and payment obligations in the years before 2015. Nor do they explain how his depressive disorder prevented or hindered his discharge of those obligations, or his obligations imposed by the financial management and reporting conditions.

38. As will become apparent, from at least 2007 he was not meeting his tax obligations from the income he was generating because his business and household expenditure exceeded his income, after allowing for tax. That position had not changed by the time the practising certificate conditions were imposed in October 2012. It followed that unless there was some change to the way in which the appellant managed and controlled his financial affairs, he would continue to be unable to meet his lodgment and payment obligations. There was no such change, either at the instigation of the appellant or as a result of his retainer of a “financial expert”. In that state of affairs the appellant, as he had done before 2012, delayed the lodging of BAS and income tax returns because he was unable to make the payments required to accompany them, or which would fall due upon their lodgment.

39. At this point two further matters should be noted with respect to the psychiatric evidence. First, it was not that the appellant’s depressive disorder was the or a cause of any reduction over time in his gross income or of his continuing to spend more than his disposable income permitted. Nor did that evidence suggest that the appellant’s depressive condition affected his ability in and after 2012 to understand and put in place the financial management structure that the conditions required.

40. As the foregoing discussion makes plain, the Tribunal’s reasoning and grounds 1 and 2 cannot properly be addressed without an understanding of the history of the appellant’s dealings with the ATO, his accountants and the Bar Council, as well as the early treatment of his psychiatric condition. That history is taken from the appellant’s tax records, his communications with the Bar Council, records of the Bar Council and reports of his first treating psychiatrists.

The appellant’s tax dealings and psychiatric condition between 2008 and 2016

Reporting and payment obligations: BAS and income tax returns

43. The appellant’s reporting obligations were fairly straight forward, although they required his spending time to gather and present business records to his accountant. He was required to lodge quarterly BAS in respect of his practice as a barrister. Those statements were generally due between six and eight weeks after the end of each quarter. Depending on the option chosen by the taxpayer for calculating and paying “pay as you go” (PAYG) instalments, the BAS included a self-assessment of the quarterly PAYG instalment amount as well as of the GST payment due for that quarter. If the taxpayer elected to pay PAYG instalments calculated by reference to information taken from his most recent tax return it was not necessary for the BAS to calculate and self-assess the quarterly income tax instalment due. In either case the BAS was to be accompanied by payment of the quarterly tax instalment, as well as the GST amount assessed as due.

44. The appellant was also required to prepare and lodge annual income tax returns. The period for lodging those returns varied, in the appellant’s case between 2 and 11 months after the end of the financial year, depending on whether a tax agent was involved and that agent’s arrangements with the ATO.

The financial management conditions

45. The conditions imposed from 16 October 2012 were the result of action taken by the ATO against the appellant in 2011 and 2012. They were described as financial management conditions and broadly speaking imposed four obligations. Condition 1 required the appellant to lodge then outstanding BAS and income tax returns, and condition 2 to meet all ongoing reporting and payment obligations to the ATO as they fell due, including lodging BAS and income tax returns. Conditions 3 and 4 required the appellant to set aside sufficient funds in a dedicated account to provide for his ongoing tax liabilities. The remaining conditions 5 to 11 required him to retain and properly instruct a financial expert to “control satisfactorily his financial affairs to facilitate compliance with” the foregoing conditions. That expert was required in his or her quarterly report to provide evidence of compliance with the obligations imposed by conditions 2, 3 and 4 as well as confirm that the appellant had “done all things necessary to facilitate and enable the financial expert to satisfactorily control his financial affairs”.

Period 2008-2010

46. In this period the appellant was regularly late in lodging his BAS and income tax returns and paying his tax. As a result he incurred general interest charges, in addition to penalties for failing to lodge BAS on time. As at 30 June 2006, the balance owing to the ATO was $144,833. By 30 June 2007 that amount had reduced to $65,604. His income tax return for that financial year was lodged 8 months late in December 2008, and his return for the year ended 30 June 2008 was lodged 10 months late and in August 2009.

47. In June 2008 the ATO threatened legal action. As a result on 16 October 2008 the appellant made a payment of $115,000 to satisfy wholly or in part his outstanding tax liabilities. That payment was funded from one or both of two overdraft facilities arranged at that time with the Bendigo Bank and secured by mortgage over his wife’s country property. The first was an overdraft facility in the appellant’s name with a limit of $150,000. The second was an overdraft facility in the joint names of the appellant and his wife. In his oral evidence the appellant agreed that he had to borrow at this time to meet his tax obligations, describing the position as follows:

I had enormous trouble getting money to come in and at times there would be up to $150,000 or $200,000 owing and I would then – it would come in but by the time it had come I’d be behind on payments and I [was] always catching up so that I would certainly say that I had trouble sort of managing things and getting moneys in and doing things on time so that I would get behind with the tax obligations and then moneys would come in and then I would put it into the overdraft or to the bank and then work would come in …

48. It is informative at this point to set out the appellant’s gross and taxable income for the years ended 30 June 2007 to 30 June 2015, that income reported on a received and not accrued basis:

Financial Year	Gross Income $	Taxable Income $
Y/E 30 June 2007	491,154	361,656
Y/E 30 June 2008	462,462	318,222
Y/E 30 June 2009	490,174	359,757
Y/E 30 June 2010	360,456	227,560
Y/E 30 June 2011	303,654	166,102
Y/E 30 June 2012	372,296	214,121
Y/E 30 June 2013	328,525	191,548
Y/E 30 June 2014	381,021	235,328
Y/E 30 June 2015	318,056	157,315

49. The appellant’s tax return for the year ended 30 June 2009 and his BAS for the quarter ended 30 June 2009 were lodged on 22 December 2010, the former 9 months and the latter about 16 months late. Those were the last returns and activity statements lodged by the appellant’s then longstanding accountant (Mr Cooney) who retired at about this time. In February 2011 the appellant retained the corporate accounting firm, Fresh Numbers.

Period 2011-2012

50. At the time the appellant approached Fresh Numbers, his BAS for the quarters ended 30 September 2009, 31 December 2009, 31 March 2010, 30 June 2010 and 30 September 2010 were outstanding.

51. The ATO’s running balance account covering this period indicates that the BAS lodged by Fresh Numbers included a self-assessed amount for GST but did not include a self-assessed PAYG instalment amount. That involved a change from the position in relation to the BAS lodged by Mr Cooney for the periods ended 31 March 2009 and 30 June 2009 which included self-assessed amounts for GST and income tax. In his oral evidence the appellant maintained that he did not appreciate that the amounts he was paying at the time these BAS were lodged were only for the GST component of his liability. As a result he said that in 2011 or 2012 he received “bills from the Commissioner” which he did not expect to get, he not realising that the amounts he was paying were “inadequate”. This subject was not explored in any more detail in the evidence or submissions of the parties. The evidence does not suggest that the BAS lodged by Fresh Numbers did not satisfy the ATO’s requirements, although they were late.

ATO prosecution and recovery proceedings (2011, 2012)

52. The business records of Fresh Numbers show that in October 2011, the ATO advised that it proposed to transfer the appellant’s tax file to its “prosecution department” if the BAS and tax returns then outstanding were not lodged “within two weeks”. That threat resulted in the filing on 11 October 2011 of the BAS for the periods ended 30 September 2009, 31 December 2009, 31 March 2010 and 30 June 2010. However it did not stop recovery proceedings being commenced and on 12 October 2011 judgment was entered for unpaid tax of $293,915. That judgment was followed by a bankruptcy notice issued on 6 December 2011. Subsequently a creditor’s petition was filed. A prosecution was also commenced in relation to the non-lodgment of BAS for the five quarters ended between 30 September 2010 to 30 September 2011, and on 30 May 2012 the appellant was convicted and fined $16,000. Those five returns were lodged on 29 May 2012.

53. These matters were notified to the Bar Council by letter dated 9 June 2012. The appellant retained solicitors to act on his behalf to resolve the position with the ATO, which maintained that as at February 2012 the outstanding debt was $433,130. On 17 July 2012 the appellant swore an affidavit stating that he and his wife proposed to refinance the two mortgages to Westpac bank over their “jointly owned property”, pay the amount owing to that bank of about $19,000 and mortgage the property to the new lender. That affidavit attached a copy of the certificate of title confirming the appellant and his wife to be the registered proprietors of the Sydney home.

54. In that letter the appellant advised:

I have received a fine for late [lodgment] of my BAS returns. The circumstances are that my practice significantly diminished in the current climate and my income was also dramatically reduced. I was having enormous difficulties coping and I thought I could catch up, but I did not. My accountant of 15 years retired and I became quite despondent as to what to do, so I thought if I caught up on the tax debt that had built up, it would work out. I failed to lodge my BAS returns hoping [events] would turn around, but they did not.

I have now lodged all returns and will keep up to date, I have new accountants and they are looking after my affairs, and will ensure I file on time.

The second matter is, I was sued by the ATO for unpaid taxes, I was not able to catch up when my practice diminished so much. I sought time to pay after seeking advice from the ATO and the application was rejected, I then sought an internal review, this was rejected. I then again rang the ATO and they said I should lodge a review with the AAT. I did so, and while I was waiting for the hearing date for my [instalment] application I was served with a bankruptcy notice. [emphasis added]

55. In his oral evidence before the Tribunal, the appellant responded to the suggestion that at this time his taxation obligations “seemed to come last in priority after your household spending” as follows:

No, I – the gap in the reality was the … future planning by me was really based on a false assumption and that was the work that I thought I’d get and the budget that I thought I’d work out as being appropriate was wholly inappropriate because the work just didn’t come in and we’re talking large figures and if you miss out on a two week case or a three week case, it makes a heck of a difference to the budget that you make.

56. A little later the appellant described himself as “somewhat self-delusional” because he “should have known my budgets, that they are made based on my diary were continually falling short because of the work not going through”.

Further borrowing to pay ATO (2012)

57. In mid-July the appellant and his wife applied to RedZed for a loan, the lender and mortgagee being Perpetual Trustee Company Limited. The amount originally sought was $385,000. The amount advanced was $522,725 for a term of 30 years with interest only repayments for the first five years. From those funds, $451,806 was paid to the ATO on 21 September 2012 in satisfaction of its liability. Part of the remaining funds was applied to pay outstanding credit card debts. For the interest only period, the rate was variable and the monthly interest charges and fees were between $3,900 and $4,000.

Imposition of conditions (2012)

58. In his letter of 19 July 2012 to the Bar Council, the appellant requested it consider imposing financial management conditions on his practising certificate. In his letter of 10 September 2012, he gave the following explanation for his taxation difficulties:

… until a few years ago [I] have been managing my affairs as I should have. I started to suffer a downturn in my income and as a result started to get behind. My commitments financially were quite heavy, both in running the practice and for my family, they did not stop.

I got behind and the income that was coming in was going to pay the debt that had built up, and I was in a catch up position and not getting on top of the financial situation. I believed the position would turn around, but it did not, I had a full diary of work and made plans based on anticipated income, but then the crisis hit and work did not come in as planned, clients were delaying payment, and my plans were not fulfilled. I thought the best way forward was to try and keep paying as best I could and there would be a turn around. I got further behind and did not manage the situation well, and also fell behind in my BAS responsibilities.

I was trying to balance the responsibilities I had, I did not want to let my family down by not looking after them and I wanted to stay up to date with practice commitments, and, stupidly, I didn't pay my Tax as the community expected of me, I desperately wanted to get on top of the debt, but, my plans to pay the outstanding monies were not successful. I should have borrowed at that time but firmly believed the income situation would reverse and instead of catching up paying off old debt that had been incurred I could pay as it was incurred. [emphasis added]

59. As at September 2012 the appellant had not lodged BAS for the quarters ended 31 December 2011, 31 March 2012 and 30 June 2012 or his income tax returns for the years ended 30 June 2010 and 30 June 2011. In his letter of 10 September 2012, the appellant responded to an inquiry from the Bar Council as to when these documents would be filed and whether his accountant had sufficient information:

I thought the Dec/12 BAS was lodged, I rang my accountant and they said they were awaiting confirmation of the deposits list. The return has been done, I will check the deposits against the bank statements and that can be lodged as soon as I have done that. There was a communication error which I will attend to asap. I believe the others should be lodged very quickly once I get the material to my accountant …

I have the cheque butts to cross reference with the draft returns my accountant has done, I have almost finished the reconciliation of those. The accountant has also asked for the BAS material and I will get that to them in the next 14 days.

60. On 3 October 2012 the appellant advised that he proposed to meet in the following weeks with his new accountant, Ms Rena Ren of Fresh Numbers.

61. On 11 October 2012 the Bar Council resolved to issue a practising certificate subject to the financial management conditions. Those conditions as pleaded are set out by the Tribunal at Decision [44] and summarised at [45] above. The appellant wrote to the Bar Council on 15 November 2012 advising that he had now met Ms Ren and provided her with the documents to prepare his outstanding BAS and income tax returns. As a result his income tax returns for the years ended 30 June 2010 and 30 June 2011 were lodged on 4 December 2012. The outstanding BAS for the quarters ended 31 December 2011, 31 March 2012 and 30 June 2012 were lodged earlier on 30 November 2012.

Continuing inability to pay tax liabilities (2013)

62. The assessments in relation to the 2010 and 2011 tax returns were issued on 18 February 2013, and totalled $136,454. The appellant did not have funds to discharge that liability or his estimated liability for income tax for the year ended 30 June 2012 of $60,000, as well as meet his ongoing family and other practice commitments. The latter included interest due to Bendigo Bank on the two overdraft facilities, as well as the interest only payments now due to RedZed. There was also not insignificant private expenditure, including on schooling. In his oral evidence the appellant described the position looking forward at the end of 2012:

I was trying to keep everything the same as it always was … I had a pretty busy February and March and I thought that the preparation work that I’d have to do in January to run the cases that I’m still – I turned the corner.

63. His accountant, Ms Ren, later produced to the Bar Council records of Fresh Numbers’ interactions with him in 2013 and 2014. Those records showed that during 2013 she was continually pressing the appellant to produce information to enable her to prepare and lodge his income tax return for the year ended 30 June 2012 and his outstanding BAS. At the same time it is apparent that she was advised that the appellant could not pay his outstanding tax liability, which with the estimate for the financial year ended June 2012 was now in excess of $200,000. Ms Ren sought to negotiate a payment arrangement with the ATO and applied for the remission of general interest charges. The ATO insisted that the 30 June 2012 tax return be lodged. The deadline for that occurring was initially 30 April 2013, and then 17 May 2013. The return was finally lodged on 23 October 2013, over four months late. In the intervening period information was provided to Ms Ren to enable the lodging of BAS for the quarters ended 30 September 2012 and 31 December 2012 on 25 March 2013; the BAS for the quarter ended 31 March 2013 on 20 May 2013; and the BAS for the quarter ended 30 June 2013 on 15 October 2013, some two months late.

63. In May 2013 Ms Ren made a payment arrangement with the ATO requiring three monthly instalments of $5,000 each with the balance of $190,439 to be paid in late August. In this period the appellant made three payments of $2,500 to the ATO – on 17 June, 17 July and 20 August 2013. Ms Ren sent reminders and requests for information in relation to the provision of information to enable preparation of the 2012 tax return, the first on 26 April 2013 and thereafter on 3 May 2013, 7 May 2013, 10 May 2013, 15 May 2013, 22 May 2013, 24 May 2013, 28 May 2013, 4 June 2013, 31 July 2013, 19 August 2013, 11 October 2013, 17 October 2013 and 22 October 2013. In October Ms Ren received a “collection action” letter from the ATO requiring payment by 15 October 2013.

64. On 9 October 2013 the appellant had a telephone conversation with the director of professional conduct of the Bar Association. Her note of that conversation records him saying that his “arrangement with ATO to pay $5,000 per month has ended but he has continued to pay” and that the amount “he owes [the] ATO is reducing”. In email exchanges with Fresh Numbers during October 2013 concerning the completion of his 2012 tax return, the appellant queried the deductible expenses claimed:

The only query I have is in relation to the bank charges and bank interest payments. I borrowed in the past to pay outstanding tax and except for the NAB Visa, and Bendigo Mastercard accounts, all bank charges and fees are a deduction as the loans were set up to pay tax. The interest is less in 2012, could you please check the bank charges in all the other accounts and if different total is found please alter return, and I will sign and have delivered to you for lodgment.

66. Ms Ren responded advising that bank charges and interest charges for financial years 2011 and 2012 had been included as to 100% for his Bendigo overdraft account, 50% for the joint Bendigo overdraft account and 50% for the Westpac account. The appellant replied:

There has been a mistake, it should be 100% of all three accounts, not 50% only of two. I received 100% of the loan and I paid 100% of the repayments of each loan, and the money for the loan was paid to the ATO for tax. Could you please alter and I will sign and return to you.

67. The accountant responded again pointing out that the two 50% accounts were in the names of the appellant and his wife. The appellant replied, saying that the “name on the account is historical only, they have been my accounts only for many years please claim the full charges”.

68. In her email to the Bar Association dated 25 October 2013 (two days after the 2012 tax return was lodged), Ms Ren advised following a meeting with the appellant that the amount currently owing to the ATO was $228,882, all of which was covered by a “remission application and payment arrangement that we applied [for to the] ATO on 24 October 2013” (emphasis added). No doubt that application could not have been made before the already overdue 2012 tax return was lodged on the day before. Looking forward, the income tax return for the year ended 30 June 2013 was due to be lodged on 31 March 2014.

Continuing inability to pay tax liabilities (2014)

69. By early 2014 the appellant had not paid Fresh Numbers’ monthly fees since 1 January 2013. He nevertheless continued to provide his business records to that firm which completed and lodged his BAS for the quarter ended 30 September 2013 on 20 March 2014. The firm did not undertake any work after March 2014 because it had not been paid in accordance with an instalment arrangement requiring the appellant pay $3,000 by early April 2014. According to Ms Ren, at this time the appellant was “in correspondence with a specialist broker to refinance his home” to obtain enough funding to pay off his current tax debt in full. At the end of March 2014 that debt was $172,061.

70. In response to a Bar Association letter dated 22 May 2014 referring to breaches of his practising certificate conditions 2, 4 and 8, the appellant advised by email dated 26 May 2014:

I just wanted to explain my delay and current position.

Since my last report I have a series of cases adjourn or settle in circumstances where I could not render a fee and did not have replacement cases. My eldest daughter was retrenched and is now dependant on me. Both of these events, mainly the former, have caused great difficulty. To overcome this I have downsized Chambers, my wife has got a job and we are working to a strict budget.

The Accountants who do my work have required $9,000 before they do any further work and I have not paid this yet due to the lack of cases, I believe I can have this done within 7 to 10 days.

The ATO records indicate that in late May 2014 the appellant’s file was again referred for legal action.

Bar Council complaint of professional misconduct (2014)

71. On 10 July 2014 the Bar Council resolved to make a complaint of professional misconduct. The appellant was advised by letter dated 29 July 2014. He responded on 4 September 2014. He confirmed that his financial difficulties had resulted in him not being in a position to pay for Ms Ren’s services since approximately April 2013. He described his relationship with that accountant as “dysfunctional”, acknowledging that a review of his “financial affairs” (including interest charges levied by the ATO) was urgently required. On 3 September 2014 the appellant advised Ms Ren that he would be “taking over” the preparation of his accounts and returns.

72. His letter to the Bar Council of 4 September advised that he had retained a new accountant, Mr Pengilly, and already spoken to him “at length”. He continued:

… [Mr] Pengilly has confirmed with me that on delivery and consideration of my financial records, an immediate meeting will be held for review, provision of a costs estimate, provision of authorities to access my bank records, and to inform you of proposed financial arrangements, and allocation of finances to professional and domestic commitments. He will prepare reports to the Bar Council and attend to my outstanding ATO remission of interest claim.

To date I have been unable to arrange finance with my bank nor [Perpetual] Trustee, with whom I have an existing loan facility, as I have had no access to my financial records held by Fresh Numbers, a requisite for any loan approval.

After consultation, and with the assistance of my new accountant, I anticipate seeking a further loan from Perpetual Trustee. I propose to take advice about precisely how much finance I need to raise to clear my tax liability. I estimate the facility I will require to be $200,000 and note that I have sufficient equity in the family residence ... to support the application.

In the unlikely event that the loan facility is not granted, I will arrange for the sale of the family residence, which is conservatively valued at $1,500,000.

This last statement is the subject of complaint ground G, it being alleged that although the family home was sold in December 2016, the then existing tax liability was not paid from the proceeds of sale.

Appellant’s first psychiatric treatment (2014)

73. In mid-June 2014 the Bar Association received a letter from a member of the appellant’s chambers referring to his “emotional and financial concerns”, observing at the same time that the “conduct of his practice is unaffected by his financial concerns, confirmed by the diary entries for the rest of the year. He has plenty of work in progress”. In late August the appellant was encouraged to seek medical assistance and also raised that subject in his letter to the Bar Association of 4 September:

I appreciate the significant inactivity on my part regarding my financial affairs, however in addition to severe cash flow problems, I simply have been unable to address the issues outlined in your letter, overwhelmed by inertia.

I have been persuaded to seek treatment from Dr. Irwin Light, who on 31 August 2014 diagnosed reactive depression. Dr. Light has prescribed … and counselling sessions with a [psychiatrist] (commencing 4 September 2014).

74. That psychiatrist was Dr Jurek, whom the appellant first consulted on 4 September 2014. Dr Jurek later wrote in June 2015 (and in support of his then current application to further renew his practising certificate, as to which see [85] below) that the appellant had informed her that he had not sought psychiatric treatment until recently because of shame and embarrassment. She continued:

… [he] informed me that he has financial problems due to a down turn in his legal practice. Problems with the Australian Taxation Office over late lodgment of his BAS and Income Tax liability resulted in fines and conditions being placed on his practising certificate. He has not been able to comply with these conditions because of financial hardship and his depressed state. His general health is also starting to suffer.

75. The appellant had further consultations with Dr Jurek on 15 and 29 September 2014 and then on 15 June 2015. In October 2014 the appellant had two emergency admissions to hospital. The first was to the Sydney Eye Hospital on 9 October for “throat and right jaw pressure”. The second was to the Hornsby Ku-ring-gai Hospital on 10 October for chest pains “in the context of recent stress”. The opinion of the hospital’s consultant cardiologist was that he clearly had “high stress levels, which are likely driving his hypertension and symptoms of chest discomfort”.

Involvement of Mr Pengilly and continuing inability to pay tax liabilities (2015)

76. As at 20 October 2014, the appellant was liable to the ATO for $207,527 in unpaid tax and $32,100 on account of legal action. On 3 November 2014 the appellant notified the Bar Council that Mr Pengilly was his nominated financial expert for the purpose of conditions 5 to 11.

77. The appellant also gave an explanation for his not having complied with the financial management conditions. He referred to the reduction in his earnings due to the “large number of hearing days and preparation days lost”; the difficulties in paying Fresh Numbers; his unsuccessful attempts to obtain a temporary overdraft facility from the bank; and his unsuccessful approach to the lender who “helped me get the original debt paid”. Reference was also made to other factors contributing to his financial circumstances and steps taken to address them by moving chambers to reduce costs, selling personal effects and his wife obtaining employment. In his letter of 3 November 2014 he summarised the position as follows:

I tried to deal with the situation by changing the way my family live, approaching lenders and selling assets, I have at no time ignored or tried to forget my duties as [a] member of the community or as a member of the Bar Association. In relation to the filing of returns in the last year or so, I have answered the enquiries the accountants have made of, provided missing documents and done all that has been requested to ensure the filed documents are accurate. The delays have not been caused by any deliberate action by me, rather, answering the enquiries made of me. I have not been able to put aside monies to save for obligations. The monies I received in the last year have come in infrequently and this meant loan repayments would build and I was in always in a catch up position.

78. Having referred to his retainer of Mr Pengilly, he continued in relation to his emotional state:

Additionally I have seen my GP to discuss matters generally, and have been diagnosed with longstanding depression and advised how it affects me and how to overcome its effects. She has put me on a course of treatment that will help as well. Unfortunately, I have had two recent emergency admissions in hospital. The attacks I have been having for about a year recently worsened and as a result of the admissions I am on a new & extensive medication regime. I have been delayed by these admissions and condition from moving as fast as I planned with the new accountants, but now have that process proceeding correctly.

79. Mr Pengilly completed and lodged the income tax return for the year ended 30 June 2013 on 4 February 2015. He also completed the BAS for the periods ended 31 December 2013, 31 March 2014, 30 June 2014, 30 September 2014 and 31 December 2014, and income tax return for the year ended 30 June 2014, in the period between 10 March and 28 April 2015. By March 2015 his liabilities to the ATO were $272,234 for tax and $32,100 for legal action. In his report to the Bar Association dated 6 March 2015 Mr Pengilly estimated that after the lodgment of all of those returns the amount of income tax and GST owing would be approximately $445,000. Mr Pengilly provided four further quarterly reports to the Bar Council between August 2015 and May 2016, each outside the period to which complaint grounds A to D relate.

80. On 30 April 2015 Mr Pengilly wrote to the Bar Association advising that the appellant did not then have any outstanding tax lodgment obligations. His next BAS was due for lodgment and payment on 26 May 2015. On the same day the appellant made a statutory declaration in response to a Bar Council request under Legal Profession Act, s 660(1) for information as to how he expected to meet his tax obligations:

I am now up to date with all lodgments, a prerequisite to put in an application to pay by instalments. I will now ask the ATO to consider an application to pay by instalments and remission of interest with help from Mr Pengilly. Depending on what is an acceptable arrangement to the ATO, I will make application to the lender to increase the loan. I anticipate based on the last application this will take some time as they have internal procedures which I must follow. I also believe the measures I am taking to change my practice will assist with greater income which will assist with the financial analysis the lender will make. I therefore believe I will be able to borrow to pay the outstanding liability.

81. In an earlier statutory declaration made on 13 April 2015 the appellant explained why he had not been able to set aside moneys to pay his ongoing tax liabilities:

… I have not been able to save monies, the increased repayments, and reduced work left with me with no monies. I thought when the work I had booked would proceed I could put aside bigger cheques into Westpac to cover GST, and I could manage accordingly. I reduced costs as much as I could and sold assets to try and save, but I simply did not get enough work to save. Further the ability to save was made harder by the infrequency of payment of my invoices, although I still had monthly commitments, which automatically were taken from my account. I tried as much as I could to tum around the problems caused by loss of work, but was not successful, so I did not manage to put aside monies and save as I had planned.

82. A Bar Association Conduct Committee draft report of 4 May 2015 proposed that the current complaint against the appellant be referred to the Tribunal under Legal Profession Act, s 537(2) because there was a reasonable likelihood that he would be found to have engaged in professional misconduct. That report noted that there was no current indication that the appellant proposed to sell the family home to meet his tax liabilities although “it appears that he is using his income to meet his loan repayments”.

83. In his letter of 19 May 2015 responding to that draft report the appellant wrote:

… the committee has commented I continued to pay mortgages. I believed the situation I was in would sooner or later change for the better, but, I thought if it didn't I had to show I could payback monies I had borrowed so I could borrow further to pay outstanding debts if income didn't improve; I thought this would help in an eventual solution, not be the wrong thing to do. In relation to the putting aside of monies required by the conditions, I have not been able to save monies, so I sold assets to try and get on top of the situation, my wife started working, and I changed my entire home life to try to get a solution to put aside monies. I moved chambers … I have not used the income I did receive to go on holidays or engage in extravagant lifestyle, it has been applied to preserve the status quo only, so I could have the ability to borrow if I needed, which I now intend to do as I needed to be up to date with [lodgments] so the ATO could consider my payment proposal.

84. The appellant also described his “worsening depression and panic attacks” and their effects on his compliance with the practising conditions:

I have also been reluctant to face up to the worsening depression and panic attacks I was and am affected by. It has been long standing, and it was after a number of my friends and fellow members of the Bar spoke to me that I sought treatment in September last year. I cannot understate the debilitating effects of it both personally and professionally over particularly the last two years. It has been the cause in the past of panic attacks and recently two admissions to hospital, and has caused at times an almost total inertia to do anything, with resulting attacks because of the anxiety that occurred. I was my own worst enemy not seeking treatment earlier. I mention this because I am now understanding how it affects decisions and day to day living, and has affected how I conducted myself and is [a] factor relevant to how my conduct is judged. There has been delays in [lodgments] with the former accountants, this was in part due to their questions and also my inertia. When I retained new accountants I did so because it was recommended I should and in Mr Pengilly's letter he does explain some of the delay in late 2014. I have done all he has advised to get up to date, and have been greatly helped by his [advice]. After I had retained Mr Pengilly there was also delay occasioned due to two hospital admissions I had in October, and, time to get over the physical effects that caused the admissions.

Further conditions of practising certificate issued from 20 July 2015

85. On 11 June 2015 the Bar Council resolved that the complaint be referred to the Tribunal. That resolution was advised to the appellant on 12 June 2015. The remaining matter was whether the appellant should be granted a practising certificate from 1 July 2015. In support of that application, Dr Jurek’s report of 22 June 2015 was attached and provided to the Bar Association. It included the following:

[The appellant] has a twenty year history of chronic, relapsing depression and anxiety. His depressive episodes worsened in intensity and duration about ten years ago. Five years ago, he became more depressed when he learned that he was adopted … Despite contacting crisis lines including Bar Care anonymously, he did not seek psychiatric treatment until recently because of shame and embarrassment. He has not told his family or his colleagues, about his mental anguish because he did not wish to burden them.

[The appellant] informed me that he has financial problems due to a downturn in his legal practice. Problems with the Australian Taxation Office over late lodgment of his BAS and Income Tax liability resulted in fines and conditions being placed on his practising certificate. He has not been able to comply with these conditions because of financial hardship and his depressed state. His general health is also starting to suffer.

In my opinion, his mood disorder has contributed to avoidance, procrastination and lack of motivation in managing his affairs. I respectfully submit that these factors be taken into account when deciding whether he is a fit and proper person to hold a practising certificate.

86. On 16 July 2015 the Bar Council resolved to grant the appellant a practising certificate from 20 July 2015 subject to varied discretionary conditions. Conditions 1 to 5 required that he attend on Dr Jurek or some other specialist medical practitioner for treatment and act in accordance with any advice received, and that the medical specialist report to the Bar Council regarding his attendance and compliance with treatment recommendations. Condition 6 required that he adhere to a payment plan agreed with the ATO. That plan required five monthly repayments of $4,000 with the balance of his tax liability to be discharged by January 2016. The remaining conditions 7 to 15 required the retainer of a financial expert, compliance with reporting and payment obligations to the ATO, and the regular provision of reports of the financial expert to the Bar Council.

166. The respondent Bar Council submits that it was open to the Tribunal to find that the appellant and his wife started the process of transferring his interest and then changed their minds, that being the reasonable inference to be drawn from the matters referred to by the Tribunal at Decision [166]. In addition it is said that the Tribunal’s finding was consistent with the respondent’s primary case that the appellant never intended to transfer the property in 1996 and therefore could not thereafter have forgotten that he had done so.

167. The immediate difficulty for this last submission is that the Bar Council’s primary case did not contemplate that at some point the appellant and his wife intended that there be a transfer and later changed their minds. The Bar Council’s so called “alternative case” was in substance to the same effect as its primary case but more specific, namely that the transfer was signed, but there was no intention to register or stamp it at that time, the intention being that it be kept it in the “bottom drawer”.

168. The Tribunal implicitly rejected both of the respondent’s cases. Having accepted the appellant’s wife’s evidence as to the payments she had made (see Decision [164], [167]), the Tribunal proceeded to find, notwithstanding her evidence that there was an agreement and that the foregoing steps had been taken, that the appellant and his wife had changed their minds and decided not to proceed with the transfer. That was a finding of a conscious and deliberate decision on the part of each of them (the finding in terms being that they “changed their minds”).

169. One of the Tribunal’s reasons for inferring that they had decided not to proceed with the transfer and registration, rather than overlooked checking or ensuring that registration had occurred, was that the latter was unlikely in view of the importance of the “protection” against claims which registration of the transfer was intended to provide. That reasoning was also based on a finding that was not open to the Tribunal. That being a purpose of the transfer was not established by the appellant’s evidence, and not suggested as being a relevant consideration to him or his wife.

170. The rule in Browne v Dunn (1893) 6 R 67 requires that where it is intended to submit that a witness is “not speaking the truth” on a particular matter, the witness must be given the opportunity to deal with that matter. As Lord Herschell expressed it (at 71):

… I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses.

172. If the rule is breached in relation to the making of a particular allegation (being one the acceptance of which necessarily involves the rejection of a particular witness’s evidence as not to be believed), it is not open to counsel to seek a finding in the terms of that allegation. Nor is it open to the Court, without having given notice to the parties, to make such a finding: per Heydon, Crennan and Bell JJ in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [71], [72]. Their Honours continued at [75]:

In the absence of any challenge from the cross-examiner to the frankness and completeness of the plaintiff’s evidence, it was incumbent on the trial judge, if his conclusion that the plaintiff had not been frank and complete was to play a role in his decision adverse to the plaintiff, to make the challenge himself.

173. This rule of practice applies to any witness, whether a party or not: Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226 at [66]-[67]; and State of New South Wales v Hunt (2014) 86 NSWLR 226; [2014] NSWCA 47 at [39]. It does not apply where the witness has “full notice beforehand that there is an intention to impeach the credibility of the story which he [or she] is telling”, in which event it may not be necessary to “waste time in putting questions” upon it (Lord Herschell at 71). See also Seymour v Australian Broadcasting Commission (1990) 19 NSWLR 219 at 224-225 (Glass JA).

174. The appellant’s evidence was that he gave instructions to have the transfer registered, “believed that [the solicitor] did all that was necessary” and that, having believed for a period “that [the solicitor] had taken all steps necessary”, he “just totally forgot about it”. The respondent was justified in being at least sceptical about the veracity of that evidence. It put to the appellant in cross-examination that his evidence in this respect “cannot be accepted to be true”, it earlier having been put to him that his evidence that he had forgotten what occurred in September 1996 was “not believable” and “false”. Whilst it was not put that the appellant had changed his mind about having the transfer registered, it was fairly plain that his evidence that he believed the solicitor was in a position to have the transfer stamped and registered was challenged as false.

175. The same cannot be said about his wife’s evidence, which included that she had paid an amount to the solicitor for stamp duty and legal fees, her understanding being that the solicitor would “file the documents and register the transfer, as necessary”. Her evidence did not suggest that there was any change of mind. To find that there had been a change of mind to which she was party was plainly to suggest that she was not speaking the truth by suppressing a material fact, thereby giving a materially false version of the relevant events. In this respect, the position in relation to her evidence was not significantly different from that of the plaintiff in Kuhl (at [71]).

176. There is another respect in which the Tribunal’s findings also necessarily involved the rejection of the appellant’s wife’s evidence. The Tribunal did not expressly reject her evidence that she had forgotten the fact of the transfer. However it is implicit in its finding that she and her husband had changed their minds that the appellant’s wife also could not have “genuinely” forgotten something that she had joined in deciding would not proceed.

177. The appellant’s wife’s evidence cannot be dismissed as irrelevant, or as having no weight, in the resolution of the question on which the determination of ground of complaint E turned. Although she did not have anything to do with returning the transfer to the solicitor, the appellant’s wife gave evidence of an agreement for which consideration was paid, and as to her belief that agreement would be given effect by the solicitor stamping and registering the transfer. The Tribunal accepted the first part of this evidence. It was not open to it to reject the second without her being given the opportunity to address the allegation, not made by the respondent, that thereafter they had changed their minds.

178. Because the finding that they had done so was not open, the Tribunal’s conclusion that this ground was made out cannot stand. I have already adverted to a further reason why this conclusion involved error. It depended on the finding as to the importance to the appellant and his wife of registration of the transfer. That finding was not reasonably available on the evidence.

179. The appeal to this Court is by way of rehearing under Supreme Court Act, s 75A. In the face of these errors the immediate question is whether the Court should proceed to make its own findings as to the issues raised by ground of complaint E. The parties urge the Court to do so, it having the power to make any finding or assessment that ought to have been given or made on the evidence before the Tribunal (s 75A(10)). The appellant accepts however that the Court may not be in a position to do so.

180. In my view the Court is not in a position to decide the central question which must be reconsidered; namely whether in 1996 there was a binding agreement for transfer which resulted in the appellant’s wife having a beneficial half interest in the Sydney home. First, the Court does not have the benefit of the appellant’s wife’s evidentiary response to the suggestion that there was a change of mind in relation to the implementation of the transfer. The correction of the Tribunal’s error requires that she be given the opportunity to respond to that allegation. Secondly, this is not a case where the evidence otherwise points clearly to only one conclusion. The resolution of this issue is likely to be influenced by an assessment of the reliability and credibility of the evidence of the appellant and his wife. This Court has not seen or heard those witnesses and is not in a position to form a view about their demeanour. Thirdly, the factual issue to be reconsidered arises in disciplinary proceedings where findings as to a legal practitioner’s honesty and candour assume particular significance. Those findings must be made on the balance of probabilities, taking into account the serious nature of the allegations made. See Evidence Act 1995 (NSW), s 140 and Briginshaw v Briginshaw.

181. Finally, in Anderson v Anderson (2017) 94 NSWLR 591; [2017] NSWCA 131 at [35], Leeming JA observed that “it is no small thing for this Court to be invited to make a finding of fraud or other serious misconduct on appeal where one has not been made at first instance”. Whilst the Tribunal did make such a finding, that finding falls to be reconsidered in circumstances where there is a real question as to whether the Tribunal took advantage of its opportunity in seeing the witnesses to assess their demeanour. The Tribunal delivered its decision over 2 years and 3 months after the conclusion of the hearing. In addition on 9 August 2019, less than two months before that decision was delivered, the Tribunal was reconstituted and Senior Member Robberds was replaced by Senior Member Blake, all of this happening in accordance with Civil and Administrative Tribunal Act, s 52(1) and (2). Accordingly one member of the Tribunal did not see the witnesses give evidence. The others presumably brought their judgment to bear in relation to credibility questions over two years after the evidence was given. Any advantage that existed was by then significantly weakened: see Laminex (Australia) Pty Ltd v Smeeth [1999] NSWCA 462 at [8]; and Monie v Commonwealth (2005) 63 NSWLR 729; [2005] NSWCA 25 at [43].

182. Ground of complaint G is in a different position. Because the disposition of the net proceeds of sale occurred at a time when the appellant and his wife had “forgotten” the fact of the transfer, whether the appellant’s wife acquired a beneficial interest by reason of the transfer is not relevant to the disposition of that ground of complaint. Accordingly ground of appeal 3A can and should be dealt with by this Court.

183. There remains the question whether, having upheld appeal ground 3, the Court should remit grounds of complaint E and F to the Tribunal for determination, the latter only if necessary. The Court’s power to make such an order must not be exercised unless it appears that a “substantial wrong or miscarriage” has been occasioned by the errors resulting in the success of the upholding of that ground (Uniform Civil Procedure Rules 2005 (NSW), r 51.53(1)).

184. The appellant contends that if this Court is not in a position to address grounds of complaint E and F it should not remit those complaints to the Tribunal for a “retrial”. The appellant’s psychiatric condition tells against exposing him to a further hearing, particularly where it is over three years since the first hearing which proceeded over three days. The appellant’s practising certificate has been suspended since that time and it is most unlikely that he will again apply for admission as a lawyer. In reply the respondent submits that serious allegations such as those made by grounds of complaint E and F should not be left undetermined particularly in circumstances where there remains a possibility that the appellant may apply for readmission and a practising certificate in the future.

185. The Tribunal’s error in determining ground of complaint E affected the outcome of a ground which in turn provided a freestanding basis for the Tribunal’s order that the appellant’s name be removed from the roll. However because the Tribunal’s findings on grounds of complaint A to D should be upheld and those findings separately justify the Tribunal’s order removing his name from the roll, the appeal from that order will be dismissed irrespective of whether the Tribunal is required to reconsider ground of complaint E and, if necessary, decides ground of complaint F.

186. It follows that no miscarriage of justice or substantial wrong has been occasioned by the Tribunal’s errors in dealing with ground of complaint E. The appeal from the Tribunal’s order 3 should be dismissed, notwithstanding that this Court has not determined complaint E. It is not necessary for that complaint to be resolved, and doing so would almost certainly subject the appellant to further and avoidable anxiety and distress.

Disposition of ground 3A (ground G of complaint)

187. The Tribunal found that this ground of complaint was made out and that it constituted professional misconduct (Decision [173], [174]). No reasons are given for the conclusion that the appellant’s conduct in respect of this complaint justified a finding that he was not a fit and proper person, and accordingly was professional misconduct within Legal Profession Act, s 497(1)(b). That absence of reasons is not a ground of appeal.

188. The appellant’s statement about arranging for the sale of the property was made in September 2014 around the time he first sought psychiatric assistance and retained Mr Pengilly. The Tribunal found that the statement reflected his intention at the time it was made and that he continued to have that intention until late June 2016.

189. In the intervening period the Bar Council resolved to commence proceedings in the Tribunal (11 June 2015); on 16 July 2015 the appellant was granted a further practising certificate to 30 June 2016; the appellant was diagnosed by Dr Roberts as suffering from a major depressive disorder (February 2016); the appellant was advised that the Bar Council had resolved not to renew his current practising certificate (23 June 2016); and following an incident involving the police which resulted in his being “scheduled”, the appellant was admitted to Hornsby Hospital (28 June 2016) where he remained as an inpatient until 14 October 2016. During this period the appellant underwent electroconvulsive therapy which affected his short term memory. Contracts for the sale of the family home were exchanged on 13 October 2016.

190. The gravamen of the Tribunal’s finding is that in circumstances where the appellant had no real prospect of again practising as a barrister he decided not to insist that his tax liability be discharged from proceeds of sale to which he was entitled. That conduct was also found to “secure his financial future”, in the sense that an amount of $1.7 million remained available to his wife and family in circumstances where he may never be able to work again. There was no allegation that his conduct in relation to the net proceeds of sale was dishonest and no finding that it was misleading or unlawful. Nor was it in breach of any practice condition or undertaking given to the Bar Council. Nevertheless it had the consequence that he would not discharge his significant taxation liability.

191. The question is whether that conduct in the circumstances in which it occurred was of such gravity as to constitute professional misconduct. The appellant’s work and financial circumstances, his depressive disorder and his wife’s opposition to the use of the funds to pay his tax liability, whilst not excusing his conduct, certainly mitigate the seriousness with which it might otherwise be regarded. It was not sufficiently serious to constitute professional misconduct.

192. For these reasons ground of appeal 3A should be allowed in part. The Tribunal should have held that his conduct was unsatisfactory professional conduct which did not by itself justify a finding that he was not a fit and proper person.

Conclusion

193. In the result the appellant has failed on grounds 1 and 2 and partially succeeded on grounds 3 and 3A. The finding that grounds of complaint A to D were made out justifies the order for removal of the appellant’s name from the roll. It follows that the appellant’s partial success on grounds 3 and 3A could not justify the setting aside of that order. In the circumstances no substantial wrong or miscarriage has been occasioned by the errors leading to the upholding of ground 3 which would permit this Court to remit complaints E and F to the Tribunal for further hearing.

194. Some allowance should be made with respect to the costs of the appeal to take account of the appellant’s partial success on grounds 3 and 3A.

195. Doing so, the orders I propose are:

1. Dismiss the appeal against order 3 made by the Tribunal on 11 December 2019.

2. The appellant pay 80% of the respondent’s costs of the appeal.

Suppression and Non-publication orders

196. By a notice of motion filed 8 September 2020 the appellant seeks orders under the Court Suppression and Non-publication Orders Act 2010 (NSW) requiring the use of pseudonyms for him and his wife in the proceedings in this Court, as well as orders prohibiting the disclosure of their identities or any information tending to reveal their identities in connection with these proceedings, by publication or otherwise in Australia for a period of 20 years. The Bar Council does not oppose the making of the orders sought.

197. With respect to the proceedings before it, the Tribunal ordered pursuant to Civil and Administrative Tribunal Act, s 64 that the appellant and his wife be referred to by the pseudonyms DEJ and DEK respectively and prohibited, subject to exceptions similar to those proposed in this Court, the disclosure of their names, without any temporal limitation (Decision [6]-[14]). It follows that the context in which the present application is made includes that the Tribunal’s reasons for its decision are available electronically and accordingly able to be freely searched and read. It does not however follow that the circumstances which justified the making of such orders in the Tribunal will justify the making of orders to the same effect by this Court pursuant to s 8 of the Court Suppression Act: see Misrachi v Public Guardian [2019] NSWCA 67 at [17].

198. The pseudonym and prohibition orders are sought on the ground that they are necessary “to protect the safety of any person”, the appellant being that person (s 8(1)(c)). In support of his application the appellant relies on two reports of a senior consultant psychiatrist, Dr Llewellyn-Jones, the first dated 25 April 2019 and the second dated 4 September 2020. Those reports describe his psychiatric condition and provide an explanation for why the existing use of pseudonyms and application of non-publication orders should be continued with respect to the proceedings in this Court. In the following paragraph Dr Llewellyn-Jones’ evidence is described in more detail. That paragraph will be redacted in the version of these reasons which is published.

199. [Redacted]

200. In these exceptional circumstances I am satisfied that there is a sufficiently realistic prospect of harm to the appellant to justify the making of orders under s 8(1)(c) in the terms summarised above, notwithstanding the public interest in open justice and the nature of these disciplinary proceedings, which ordinarily would require that the Court’s orders and reasons be published in full. Apart from [199] above, the orders proposed do not contemplate that any parts of the Court’s reasons will be redacted (and accordingly not published generally). Unlike the Tribunal’s orders, this Court’s orders must specify the period during which they are to operate. That period is 20 years which takes account of DEJ’s age.

196. Accordingly the suppression orders that I propose be made are:

1. Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) and on the ground specified in s 8(1)(c):

1. Order that the appellant and his wife continue for a period of 20 years to be referred to in relation to these proceedings as DEJ and DEK respectively.

2. Order that publication of the identity of the appellant as a party to these proceedings and of any information tending to reveal his identity be prohibited in Australia for a period of 20 years.

3. Order that publication of [199] of these reasons be prohibited in Australia for a period of 20 years.

2. Orders (1)(a) and (1)(b) do not apply to the respondent, or any member of the Bar Council or the New South Wales Bar Association, or any of their officers or employees, from disclosing:

1. The appellant’s name;

2. The decisions, reasons for decisions and orders of the Court in these proceedings;

3. Documents and evidence filed with the Court in these proceedings; and

4. Information about the proceedings, decisions, documents and evidence referred to in (2)(b) and (2)(c) above

to any of the persons, bodies or entities listed in Schedule A attached to these reasons, in connection with the Bar Council’s exercise of its functions under the Legal Profession Act 2004 (NSW), the Legal Profession Uniform Law 2014 (NSW) (as amended or substituted from time to time) and all regulations and rules made under or in connection with those Acts (as amended or substituted).

3. Orders (1)(a) and (1)(b) do not preclude the respondent, or any member of the Bar Council or the New South Wales Bar Association, or any of their officers or employees, from disclosing:

1. The appellant’s name;

2. The decisions, reasons for decisions and orders of the Court in these proceedings;

3. Documents and evidence filed with the Court in these proceedings; and

4. Information about the proceedings, decisions, documents and evidence referred to in (3)(b) and (3)(c) above

to any of the persons, bodies or entities listed in Schedule B attached to these reasons, for the purpose of enforcing any costs order made by the Court in these proceedings, assessing those costs, and enforcing any judgment of a court that arises from the filing of a cost assessor’s certificate or review panel’s certificate and any judgment on appeal from a determination of a review panel.

4. Orders (1), (2) and (3) be subject to any further orders of this Court and any other court.

202. WHITE JA: I agree with Meagher JA.

**********

Schedule A (see Order (4) of the Court)

1. The Supreme Court of New South Wales;

2. The Supreme Court of the Australian Capital Territory;

3. The Legal Services Council, and any member, committee, or delegate of the Legal Services Council;

4. The Commissioner for Uniform Legal Services Regulation, and any delegate of the Commissioner;

5. A local regulatory authority or corresponding authority within the meaning of the Legal Profession Uniform Law 2014 (NSW), and any member, committee, or delegate of any such authority;

6. A person who is a member of the staff of, or acting at the direction of, any of the entities or persons referred to in (1) to (3) above;

7. Any Australian or foreign authorities or courts as referred to in ss 436 and 437 of the Legal Profession Uniform Law (NSW);

8. Any Australian government authorities, professional associations or educational bodies as referred to in s 441 of the Legal Profession Uniform Law (NSW);

9. Any medical practitioner and/or health professional nominated by the Bar Council, a local regulatory authority or corresponding authority within the meaning of the Legal Profession Uniform Law (NSW) for the purposes of s 95 of the Legal Profession Uniform Law (NSW) or any equivalent legislative provision, regulation or rule in any other State or Territory;

10. Any person who, for the purpose of s 95(1) of the Legal Profession Uniform Law (NSW) or any equivalent legislative provision, regulation or rule in any other State or Territory, is identified as being in a position to provide documents or information to a local regulatory authority or corresponding authority within the meaning of the Legal Profession Uniform Law (NSW);

11. Any person, body or entity to the extent that disclosure is permitted by ss 462(2) and (3) of the Legal Profession Uniform Law (NSW); and

12. The appellant’s trustee in bankruptcy.

Schedule B (see Order (5) of the Court)

1. Any costs consultant, solicitor, counsel or process server engaged by or on behalf of the Bar Council, the New South Wales Bar Association or the appellant;

2. The Manager, Costs Assessment within the meaning of the Legal Profession Act 2004 (NSW) and/or the Legal Profession Uniform Law Application Act 2014 (NSW);

3. Any costs assessor (whether acting alone, or as a member of a review panel);

4. Any court in which any appeal from a determination of a review panel is instituted (including, for the avoidance of doubt, judges, officers and employees of such courts);

5. Any court in which a certificate issued by a costs assessor or review panel is filed (including, for the avoidance of doubt, judges, officers and employees of such courts);

6. The Office of the Sheriff of New South Wales, and any officer or employee of that Office, and the equivalent Office in each State or Territory of Australia;

7. The Official Receiver and any court with jurisdiction under the Bankruptcy Act 1966 (Cth) (including, for the avoidance of doubt, judges, officers and employees of such courts); and

8. Any other person, body or entity to whom it is necessary to disclose the information, decisions, documents, or evidence referred to in Orders (5)(a) to (d) of the Court for the purpose of the legislation, regulation and rules that apply from time to time to the assessment of costs and enforcement of judgments.

Amendments

29 April 2021 - [118], third sentence, "These observations are " changed to "This observation is"

Decision last updated: 29 April 2021