Hutchinson v Legal Services Commissioner
[2011] NSWADT 87
•29 April 2011
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Hutchinson v Legal Services Commissioner [2011] NSWADT 87 Hearing dates: 21 March 2011 Decision date: 29 April 2011 Before: M Chesterman, Deputy President
D Fairlie, Judicial Member
R Fitzgerald, Non-judicial MemberDecision: The application is dismissed
Catchwords: Solicitor - application to remove suspension of practising certificate Legislation Cited: Administrative Decisions Tribunal Act 1997
Bankruptcy Act 1966 (Cth)
Legal Profession Act 1987
Legal Profession Act 2004Cases Cited: 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 138Category: Principal judgment Parties: Nigel Henry Hutchinson (Applicant)
Legal Services Commissioner (Respondent)Representation: C Webster (Respondent)
Nigel Henry Hutchinson (Applicant - in person)
File Number(s): 102030
Judgment
Introduction
This decision relates to an Application by Nigel Henry Hutchinson, a solicitor, under section 70(3) of the Legal Profession Act 2004 ('the LP Act'). This provision forms part of Division 7 of Chapter 2 of this Act. In his Application, which was filed on 22 November 2010, Mr Hutchinson sought an order under section 70(4)(a) removing a suspension of his local practising certificate.
This suspension occurred because he had notified the Council of the Law Society ('the Council') that he had become bankrupt some time earlier and the Council had not completed an investigation and made a determination, within a period stipulated by the LP Act, as to whether he was a fit and proper person to hold a local practising certificate. Section 70(1)(a) of the Act provides that in such circumstances the Legal Services Commissioner ('the Commissioner'), who is the Respondent in these proceedings, must take over the determination of that matter. Section 70(1)(b) provides that at that point of time the certificate of the practitioner concerned 'is suspended'.
The hearing of this application took place before us on 21 March 2011. Mr Hutchinson represented himself and Ms Webster of counsel appeared for the Commissioner. An affidavit sworn by Mr Hutchinson on 19 November 2010 and a file containing copies of relevant documents in the Commissioner's possession were tendered and admitted.
Before outlining the facts of this case, it is convenient to set out the somewhat complex provisions of the LP Act that need to be considered and to indicate briefly the nature of the jurisdiction being exercised by the Tribunal.
Relevant provisions of the LP Act
The following sections and subsections of the LP Act were referred to in the parties' submissions in these proceedings, or are relevant for other reasons. All of them, except for sections 4, 41 and 43, fall within Division 7 of Chapter 2:-
4 Definitions
(1) In this Act...
show cause event , in relation to a person, means:
(a) his or her becoming bankrupt or being served with notice of a creditor's petition presented to the Court under section 43 of the Bankruptcy Act 1966 of the Commonwealth, or
(b) his or her presentation (as a debtor) of a declaration to the Official Receiver under section 54A of the Bankruptcy Act 1966 of the Commonwealth of his or her intention to present a debtor's petition or his or her presentation (as a debtor) of such a petition under section 55 of that Act, or
(c) his or her applying to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounding with his or her creditors or making an assignment of his or her remuneration for their benefit, or
(d) his or her conviction for a serious offence or a tax offence,...
tax offence means any offence under the Taxation Administration Act 1953 of the Commonwealth, whether committed in or outside this jurisdiction.
41 Local practising certificates
(1) Practising certificates may be granted under this Part.
(3) The Law Society Council may, on application, grant a practising certificate to an Australian lawyer authorising the lawyer to practise as a solicitor and barrister.
43 Duration of local practising certificate
(1) A local practising certificate granted under this Act is in force from the date specified in it until the end of the financial year in which it is granted, unless the certificate is sooner suspended or cancelled.
(2) A local practising certificate renewed under this Act is in force until the end of the financial year following its previous period of currency, unless the certificate is sooner suspended or cancelled.
(3) If an application for the renewal of a local practising certificate as a solicitor has been properly made as required by this Act but has not been determined by the Law Society Council by the following 1 July, the certificate:
(a) continues in force on and from that 1 July until the Law Society Council renews or refuses to renew the certificate or the holder withdraws the application for renewal, unless the certificate is sooner cancelled or suspended, and
(b) if renewed, is taken to have been renewed on and from that 1 July.
66 Applicant for local practising certificate-show cause event
(1) This section applies if:
(a) a person (referred to in this Division as the applicant) is applying for the grant of a local practising certificate, and
(b) a show cause event in relation to the person happened, whether before or after the commencement of this section and whether before or after the person was first admitted to the legal profession in this or another jurisdiction.
(2) As part of the application, the applicant must provide to the appropriate Council a written statement:
(a) about the show cause event, and
(b) explaining why, despite the show cause event, the applicant considers himself or herself to be a fit and proper person to hold a local practising certificate.
(3) A contravention of subsection (2) is professional misconduct.
(6) A Council must, within 7 days after receiving a written statement from the applicant under this section about a show cause event, provide a copy of the statement to the Commissioner.
(7) A Council may refuse to grant a local practising certificate if the applicant:
(a) is required by this section to provide a written statement about a show cause event and has failed to provide the statement in accordance with this section, or
(b) has provided a written statement in accordance with this section but, in the opinion of the Council, the applicant has failed to show in the statement that the applicant is a fit and proper person to hold a practising certificate...
(8) If a Council refuses to grant a local practising certificate under subsection (7) to an applicant, the Council is not required to exercise its functions under section 68 in relation to the application.
67 Holder of local practising certificate-show cause event
(1) This section applies to a show cause event that happens in relation to a person (referred to in this Division as the holder) who is the holder of a local practising certificate.
(2) The holder must provide to the appropriate Council both of the following:
(a) within 7 days after the happening of the event-written notice that the event happened,
(b) within 28 days after the happening of the event-a written statement explaining why, despite the show cause event, the person considers himself or herself to be a fit and proper person to hold a local practising certificate.
(3) A contravention of subsection (2) is professional misconduct.
(4) If a written statement is provided after the 28 days mentioned in subsection (2) (b), the appropriate Council may accept the statement and take it into consideration.
(5) A Council must, within 7 days after receiving a notice or statement from a local practitioner under this section, provide a copy of the notice or statement to the Commissioner.
(6) A Council may cancel or suspend a local practising certificate if the holder:
(a) is required by this section to provide notice or a written statement about a show cause event and has failed to provide the notice or statement in accordance with this section, or
(b) has provided a written statement in accordance with this section but, in the opinion of the Council, the holder has failed to show in the statement that the holder is a fit and proper person to hold a practising certificate...
(7) If a Council cancels or suspends a local practising certificate under subsection (6), the Council is not required to exercise its functions under section 68 in relation to the matter.
68 Investigation and consideration of show cause event
(1) On becoming aware of the happening of a show cause event in relation to an applicant or holder, the appropriate Council must investigate and determine within the required period whether the applicant or holder is a fit and proper person to hold a local practising certificate.
(2) The appropriate Council must within 28 days of becoming aware of the happening of the show cause event give notice in writing to the applicant or holder:
(a) if the Council has not received a statement under section 66 or 67 in relation to the show cause event, requiring the applicant or holder to provide the required statement, and
(b) informing the applicant or holder that a determination in relation to the matter is required to be made under this Division, and
(c) informing the applicant or holder of the required period under this section in relation to the determination of the matter and that the applicant or holder will be notified of any extension of that period, and
(d) informing the applicant or holder of the effect of the automatic suspension provisions in section 70 in the event of the matter not being determined by the Council or the Commissioner within the required period.
(3) The appropriate Council must determine the matter by:
(a) deciding that the applicant or holder is a fit and proper person to hold a local practising certificate, or
(b) deciding that the applicant or holder is not a fit and proper person to hold a local practising certificate, or
(c) deciding that the applicant or holder is a fit and proper person to hold a local practising certificate but that it is appropriate to impose conditions on the applicant's or holder's local practising certificate for a specified period.
(4) In investigating and determining a matter under this section the appropriate Council:
(a) is not limited to investigating and making its determination on the basis of just the show cause event concerned, and
(b) must have regard to the facts and circumstances that surround, arise in connection with, relate to or give rise to the show cause event concerned.
(5) For the purposes of this section, the required period within which the matter must be determined is the period of 3 months (or 4 months if the Commissioner decides in a particular case to extend the period) commencing on:
(a) the date on which the appropriate Council receives a written statement under section 66 or 67 in relation to the show cause event, or
(b) if the appropriate Council has not received a written statement as referred to in paragraph (a) when it gives a notice under subsection (2) to the applicant or holder, the date specified in the notice as the date of issue of the notice.
(6) If the Commissioner extends a period under subsection (5), the Commissioner must give notice in writing to the applicant or holder concerned of the extension of the period.
(8) The appropriate Council must give the applicant or holder an information notice about a decision under subsection (3) (b) or (c). The Commissioner must give that notice if the Commissioner makes the decision in the exercise of the functions of the Council under section 71 (Commissioner taking over determination of matter).
69 Power to renew practising certificate or defer action in special circumstances
(1) Despite any other provision of this Division, a Council may renew a holder's local practising certificate if the end of the financial year for which the holder's current practising certificate is in force is imminent and the Council has not made a determination under section 68 in relation to the holder.
(2) The renewal of a practising certificate in the circumstances referred to in subsection (1) does not prevent a determination from subsequently being made and action taken under this Division to cancel or suspend the holder's local practising certificate.
(3) Despite any other provision of this Act, a Council required to determine a matter under section 68 in relation to a holder may, for the purpose of enabling the proper arrangement of the affairs of the holder:
(a) renew the holder's local practising certificate for such period, specified in the local practising certificate, as the Council considers necessary to achieve that purpose, or
(b) defer cancelling or suspending the holder's local practising certificate for such period as the Council considers necessary to achieve that purpose.
70 No decision in required period-suspension of practising certificate and referral to Commissioner
(1) If the appropriate Council has not determined a matter under section 68 (Investigation and consideration of show cause event) within the required period under that section:
(a) the Commissioner must take over the determination of the matter under that section from the Council, and
(b) if the matter concerns the holder of a local practising certificate, the local practising certificate of the holder concerned is suspended.
Note. Subsection (1) extends to an applicant for a local practising certificate but the rest of this section applies only to the holder of a local practising certificate that is suspended under subsection (1).
(2) A suspension imposed by this section remains in force (unless the Tribunal orders its removal sooner) until:
(a) the Commissioner decides that the holder is a fit and proper person to hold a local practising certificate, or
(b) the appropriate Council has given effect to any other decision of the Commissioner as required by section 72 (Council to implement decisions under this Division).
(3) The holder whose local practising certificate is suspended by this section may make an application to the Tribunal to remove the suspension. The decision of the Tribunal on the application is an original decision for the purposes of the Administrative Decisions Tribunal Act 1997 .
(4) When dealing with such an application, the Tribunal may make any one or more of the following orders:
(a) an order removing the suspension on the grounds that the holder is a fit and proper person to hold a local practising certificate,
(b) an order continuing the suspension for a specified period,
(c) an order that specified conditions be imposed on the holder's local practising certificate for a specified period,
(d) an order that the appropriate Council cancel the holder's local practising certificate on the ground that the holder is not a fit and proper person to hold a local practising certificate,
(e) an order that the Commissioner suspend any investigation or determination of the matter pending the Tribunal's decision on the application.
(5) The Commissioner may investigate and determine a matter under this Division and exercise powers under this Division in relation to the matter despite a suspension under this section of the local practising certificate concerned unless the Tribunal otherwise orders under this section.
(6) The Commissioner and a Council are to give effect to any order of the Tribunal under this section.
71 Commissioner taking over determination of matter
When the Commissioner takes over the determination of a matter under section 68 (Investigation and consideration of show cause event) from a Council:
(a) the Council is not required to determine the matter and is to cease to deal with the matter, and
(b) the Commissioner has and may exercise the functions of the Council to investigate and determine the matter under section 68 (Investigation and consideration of show cause event)...
75 Review of decisions by Tribunal
(1) An applicant or holder who is dissatisfied with a decision of a Council or the Commissioner under this Division with respect to the applicant or holder may apply to the Tribunal for a review of the decision.
(4) The Tribunal may make any order it considers appropriate on a review under this section, including any of the following orders:...
(b) an order directing the appropriate Council to cancel or suspend for a specified period a local practising certificate, or to reinstate a local practising certificate that has been cancelled or suspended,
The Tribunal's jurisdiction
As indicated above, section 70(3) of the LP Act states that the Tribunal's decision on an application under this subsection for removal of a suspension is an original decision for the purposes of the Administrative Decisions Tribunal Act 1997 ('the ADT Act').
In addition to making an application under section 70(3), Mr Hutchinson also sought orders under three other provisions of the LP Act: namely, sections 70(4)(e), 60(2) and 75(4)(b). But before the hearing, he indicated that he no longer sought orders under the first two of these provisions.
The order that Mr Hutchinson sought under section 75(4)(b) was in substance the same that he sought under section 70(3), namely, an order reinstating his practising certificate. As indicated above, the making of such an order falls within a broad jurisdiction conferred on the Tribunal by section 75(1) to review decisions made under Division 7 of Chapter 2 of the Act.
Although it is not strictly necessary for the purposes of our decision, we think it appropriate to indicate that in our opinion an application such as Mr Hutchinson has made is properly brought under section 70(3) - this being a provision specifically linked to suspensions of local practising certificates through the operation of section 70(2) - rather than under section 75(4)(b). The decision that we make on this application is therefore a decision in the Tribunal's original jurisdiction (as provided for in section 37 of the ADT Act), not its review jurisdiction (the scope of which is defined in section 38).
Outline of facts
According to a letter written by Mr Hutchinson to the Council on 19 October 2009, he was admitted to practice in July 1984. The Commissioner did not contest this.
On 8 February 2006, the Deputy Commissioner of Taxation ('the Tax Commissioner') obtained a default judgment for $580,430.59 against Mr Hutchinson. The Tax Commissioner served a bankruptcy notice on him on 19 November 2006 and filed a creditor's petition against him on 21 February 2007.
On 5 April 2007, having lodged a Statement of Affairs with the Insolvency and Trustee Service Australia on the previous day, Mr Hutchinson was made bankrupt on his own petition. Five days later, the Federal Magistrates Court dismissed the Deputy Commissioner's petition, ordering in addition that the Deputy Commissioner's costs be paid from Mr Hutchinson's bankrupt estate.
Having held a practising certificate as a solicitor until 30 June 2006, Mr Hutchinson did not renew it as from 1 July 2006. He applied unsuccessfully for renewal on 7 July 2006. But on 16 January 2007, he applied for and was granted a practising certificate. He then held successive practising certificates up to 30 June 2009, but did not apply for renewal of his certificate as from 1 July 2009.
On 22 September 2009, the Council received from him an application for a practising certificate. He disclosed in this application that he had become bankrupt in 2007.
On 24 September 2009, Mr Ray Collins, who was employed by the Law Society of New South Wales in the capacity of Manager, Professional Standards, sent a copy of the application to the Commissioner, noting in a covering letter that the bankruptcy disclosed by him was a 'show cause event' under section 4 of the LP Act. The Commissioner's file that was admitted into evidence contains a copy of this letter, but not of the application itself.
Also on 24 September 2009, Mr Collins sent a notice under section 68(2) of the LP Act to Mr Hutchinson. As stipulated in section 68(2)(a), it required him to provide a statement under section 66 in relation to his bankruptcy, pointing out that this was a 'show cause event' under section 4. It also conveyed the information stipulated in paragraphs (b) to (d) of section 68(2) and indicated that pursuant to section 68(5)(b) the 'required period' commenced on the date (22 September 2009) on which the Council received notice of the show cause event from him.
On 25 September 2009, Mr Collins sent to Mr Hutchinson a further notice under section 68 of the LP Act. It required him, within 21 days, to obtain from the Australian Taxation Office ('the ATO') and forward to the Council information on the following matters relating to himself or any associated company: (a) any tax offences; (b) the lodgement of tax returns since 2004; (c) statements of account since 2004; (d) the lodgement of business activity statements and instalment activity statements and any payment made; (e) any pending proceedings for tax offences; and (f) any debt collection action for debts owed. The letter described what was being sought as 'a standard summary statement from the ATO'.
On 30 September 2009, Mr Collins sent a reminder letter to Mr Hutchinson.
In a letter dated 19 October 2009 to Mr Collins, Mr Hutchinson sought to show cause why, despite being an undischarged bankrupt, he was a fit and proper person to practise in New South Wales. He claimed that in his last two applications for a practising certificate he had disclosed his bankruptcy but had not been asked for further particulars of it. He pointed out that on one of these occasions he had provided, at the Council's request, an undertaking that he would not operate a trust account. He claimed that his bankruptcy did not affect his ability to practise and that it would shortly come to an end: i.e., on 5 April 2010, three years after its commencement.
In this letter of 19 October 2009, Mr Hutchinson also set out reasons why he had presented a voluntary debtor's petition early in 2007. In summary, these were as follows: (a) in the late 1990s, along with about 300 other people, he became a member of a number of partnerships to build retirement villages; (b) subsequently, the ATO reversed a ruling on which many investors relied, leading to litigation against it that had only been settled within the last couple of months; (c) about five years ago the Australian Securities and Investments Commission instituted proceedings, in which it succeeded, to have such partnerships with more than 25 members declared to be unregistered managed investment schemes; (d) in consequence, his partnership interests in approximately $90 million worth of developments were 'effectively voided' and he, along with other partners, ceased to have any entitlement to income from them or any assets with which to back refinancing proposals; and (e) having lost everything that he had 'spent the previous twenty years building up', he filed his debtor's petition during the following week.
In a letter dated 20 October 2009 to Mr Hutchinson, Mr Collins acknowledged receipt of his letter of 19 October, then asked him to provide (a) a copy of his Statement of Affairs, (b) a copy of any report to creditors by his trustee in bankruptcy and (c) evidence from his trustee that he had complied with all his obligations as a bankrupt. Mr Collins also noted that he was awaiting information requested from the ATO in the Notice under section 68 and asked for an explanation as to why Mr Hutchinson had not previously complied with section 68.
In a letter dated 4 November 2009, Mr Collins asked Mr Hutchinson to provide 'urgently' the information required in his previous letter and noted that the 'required period' would expire on 22 December 2009.
In a further letter dated 7 December 2009, Mr Collins noted that Mr Hutchinson had failed to provide the information required in his previous letters and notices and indicated that he intended to ask the Commissioner to extend the 'required period' until 22 January 2010.
In a letter also dated 7 December 2009 to the Commissioner, Mr Collins observed that Mr Hutchinson had been 'most frugal' with the information that he had supplied and asked the Commissioner to give consideration to extending the 'required period'.
On 8 December 2009, in response to a request by Mr Hutchinson, his trustee in bankruptcy sent a copy of his Statement of Affairs, dated 4 April 2007, to Mr Collins. The information disclosed in it included the following: (a) he described the nature of his business as 'legal consulting'; (b) he identified the main cause of his insolvency as his 'inability to collect debts due to disputes, faulty work or bad debts'; (c) a company called Saudi Biofuels Pty Ltd (which was in fact deregistered on 16 November 2008) owed him $132,389.31 and was unlikely to pay him any of this amount; (d) he owned a 'license' of an unspecified nature, located in Malaysia, which might be resold at 'market value; (e) in addition to his liability of $580,430.59 to the Tax Commissioner, he had debts as guarantor on four credit cards totalling about $105,000, a debt of $26,249.16 to a company called Servcorp (Miller Street) Pty Ltd and a debt of $5 million, being a 'license fee', to a creditor in Malaysia called Minerva Energy Project; and (f) during the preceding five years he had transferred assets to a discretionary trust called 'Trust No. 7', of which the trustee, whose name was 'D Hutchinson', had an address in Malaysia.
Also on 8 December 2009, according to advice provided by Ms Webster in response to a question from the Bench, the Council granted Mr Hutchinson's application for a practising certificate, purportedly under section 69 of the LP Act. This section deals with renewals, but in our view nothing in section 66 precluded the issue of a certificate under section 41(3). A copy of the certificate was not included in the Commissioner's file.
In a letter dated 10 December 2009 to Mr Hutchinson, Mr Collins advised that he had received the Statement of Affairs and listed 16 matters, arising from this Statement, on which he required further information. In summary, these were: (a) the purposes for which each of the debts over $2,500 to unsecured creditors were incurred; (b) details of any transfer of property by Mr Hutchinson occurring within the last four years which were either at less than market value, or in favour of his wife, his daughter or 'Trust No. 7'; (c) particulars of the 'initiating processes' for two legal actions, brought against him by Servcorp and the ATO respectively; (d) information regarding any requests for payments or contributions towards his pre-bankruptcy debts that his trustee had put to him, and of any payments actually made; (e) the nature of his business of 'legal consulting' and copies of any invoices rendered by it; (f) the financial statements of 'Trust No. 7' over the last four years; (g) whether the money owed to him by Saudi Biofuels had been recovered and, if not, how the debt arose and why it was not paid; (h) whether the 'licensee right' in Malaysia had been sold or dealt with by his trustee; and (i) copies of all reports to creditors distributed by his trustee. Mr Collins also asked for written authorities addressed to 'D. Hutchinson' and to Mr Michael Griffin, Accountant and Trustee, authorising them to provide information and relevant documents relating respectively to 'Trust No. 7' and to Mr Hutchinson's bankruptcy.
In a letter dated 10 December 2009 to Mr Collins, the Commissioner advised that he had extended the 'relevant period' under section 68(5) of the LP Act for one month and had advised Mr Hutchinson accordingly.
In a letter dated 11 December 2009 to Mr Hutchinson, Mr Collins passed on a copy of this letter, noting that the 'required period' would now expire on 22 January 2010 and that no further extension could be granted.
In an email message to Mr Collins on 21 December 2009, Mr Hutchinson advised that he had referred the questions about his 'private tax affairs' to his trustee in bankruptcy. He stated also that his trustee was not aware of any 'offences, debts, proceedings or allegations' against him, whether or not relating to tax matters, and that he himself had no knowledge of past tax offences or Commonwealth Crimes Act offences, or of charges, allegations or investigations in respect of such matters, or of any debt recovery proceedings by any public authority.
In a letter dated 15 January 2010 to Mr Hutchinson and in an email message on 19 January, Mr Collins stated that he awaited 'full responses' to his letter of 10 December 2009 and to the Section 68 Notice dated 25 September 2009, and also that the investigation could not proceed without the 'outstanding information'. In the email message, he added that the extended 'required period' would expire on 22 January 2010 and that Mr Hutchinson's practising certificate would thereupon be automatically suspended.
In an email message on 25 January 2010 to Ms Lidija Franic, an employee in the Professional Standards Department of the Law Society, Mr Hutchinson said that he had 'passed the questions' about his 'private tax affairs' to the appropriate authorities, that his trustee had provided the information previously sought and that he had received 'no notice or allegation' and no complaint from 'the Law Society or anyone else' of 'any illegal or unethical conduct on my behalf'.
In a letter dated 25 January 2010 to the Commissioner, Mr Collins advised that the extended 'required period' had expired on 22 January and that Mr Hutchinson's practising certificate had been suspended under section 70 of the LP Act. He also forwarded the Law Society's file on the matter so that the Commissioner could take over the investigation and determination.
In an Information Notice dated 25 January 2010, Mr Collins, in the capacity of a delegate of the Council, advised Mr Hutchinson in the following terms:-
TAKE NOTE that as a result of the Council of the Law Society of New South Wales not having made a determination in respect of your disclosure of a show cause event, received 22 September 2009, your Practising Certificate for the year ending 30 June 2010 had been suspended by operation of Section 70(1)(b) of the Legal Profession Act 2004 ["the Act"]. That suspension came into effect as from midnight, 22 January 2010.
Mr Collins also stated in the Notice that the Commissioner would now take over the Law Society's file and make a determination, that the practising certificate would remain suspended until a determination was made and that Mr Hutchinson could apply to the Tribunal under section 70(3) of the LP Act for an order removing the suspension.
In a letter dated 29 January 2010 to Mr Hutchinson, Ms Lynda Muston, an Assistant Commissioner (Legal) in the Office of the Legal Services Commissioner, confirmed that the Commissioner had taken the matter over from the Council. She observed that Mr Hutchinson had provided a 'section 66(2) statement' on 19 October 2009, that his Statement of Affairs had been emailed to the Law Society on 8 December 2009 and that he had referred some questions about his private tax affairs to his trustee. She also observed that both the section 68 notice and the questions put to him in Mr Collins' letter of 10 December 2009 remained unanswered. She asked that the information sought in these two documents be provided at his earliest convenience.
In an email to Ms Muston on 16 March 2010, Mr Hutchinson commented that this suspension had 'completely destroyed' his professional reputation 'after 25 years of distinguished practice', adding 'for what purpose?' He said that he had 'no tax offences, no convictions, no disputes' and asked: 'What ones are you aware of that I am not?'
On 5 April 2010, Mr Hutchinson was 'automatically' discharged from his bankruptcy through the operation of section 149(1) of the Bankruptcy Act 1966 (Cth).
In a letter dated 8 April 2010 to Mr Hutchinson, Ms Muston reiterated some of the matters stated in her letter of 29 January 2010 and gave him the contact details, including the telephone number, of an officer at the ATO who might assist with his approach to that office.
In an email message on 31 May 2010 to Ms Muston, Mr Hutchinson conveyed his apologies for not replying earlier to her letter of 29 January 2010, which he claimed to have 'just retrieved... today'. He maintained that the ground on which his practising certificate had been suspended was his 'then status as a bankrupt' and asserted that he was no longer bankrupt as his bankruptcy had been discharged on 5 April 2010, i.e., in 'the minimum time of three years'. He added: 'I think the fact that the Trustee elected to discharge me in the minimum statutory period of three years speaks for itself.'
In this email message of 31 May 2010, Mr Hutchinson also provided answers to the sixteen questions put to him in Mr Collins' letter of 10 December 2009 (see [27] above). His answers to the bulk of these questions comprised or included a statement to the effect that he was not in a position to furnish information, because his trustee in bankruptcy would have had any relevant documents and would have destroyed them following his discharge from bankruptcy. To a question asking how and when the debt of $5 million disclosed in his Statement of Affairs was incurred, his answer was that it had been 'incurred by contract' and that the contract, having been provided to the trustee, was one of the documents thus destroyed. To the questions regarding property transfers during the preceding four years and requests by trustee for payments or contributions towards his pre-bankruptcy debts, he answered that he had made no such transfers and had received no such requests. Although in answering one of the questions relating to 'Trust No.7', he said that his trustee would have obtained and later destroyed all relevant documents, his answer to another question about this entity included a statement that he had 'no connection with any such trust'. He alleged also that his trustee had not distributed any reports to creditors. Finally, his answer to Mr Collins' question about the nature of his business of 'legal consulting' was as follows:-
I do not have records, anything relevant was provided to the Trustee. I developed a charitable fundraising system, involving the integration of tax, marketing, software, fundraising legislation, and contract, for use by charities across Australia. I'm now unemployed and receiving Centrelink payments.
At the conclusion of this email message, Mr Hutchinson repeated that he had not been convicted of any offences - which would, he said, have been a matter of public record anyway - that he knew of 'no civil or criminal allegation or cause of action involving the ATO' and that 'by the way', the ATO was a 'minority creditor' of his before his bankruptcy.
On 4 June 2010, Ms Muston caused to be served on Mr Hutchinson's trustee in bankruptcy a notice under section 660 of the LP Act. This notice required the trustee to produce all documents in the trustee's possession relating to the various entities and transactions referred to in Mr Collins' letter of 10 December 2009 to Mr Hutchinson, and also copies of all correspondence between the trustee and Mr Hutchinson. In a covering letter, she stated that, contrary to Mr Hutchinson's claim that the trustee had destroyed these documents, an employee of the trustee had recently informed her that 'documents had not been destroyed'.
In a letter also dated 4 June 2010 to Mr Hutchinson, Ms Muston advised him of this information that she had received from an employee of the trustee and of the service of a section 660 notice on the trustee. She reminded him that in her letter of 8 April 2010 she had given him the contact details of an officer in the ATO from whom he could enquire about the taxation documents that had been requested. She also indicated that the Commissioner disputed his characterisation of the ATO as a 'minority creditor', on the ground that the amount of the debt owed by him to the ATO had been $580,430.55.
In an email directed to Ms Muston on 23 June 2010, Mr Hutchinson said that there was no answer to the telephone number at the ATO that she had given him in her letter of 8 April 2010. He also contested her observations about the ATO's status as a creditor, claiming that she must have 'had a conversation' with the ATO about his views on this matter and that she should 'reflect on the wisdom of' her involvement with his affairs because he wanted 'the investigation to be impartial, and to be seen to be'.
In a letter dated 28 June 2010 to Mr Hutchinson, Ms Muston denied his assertion that she had had 'conversations' with the ATO about his views on the ATO's status as a creditor and rejected his claim regarding her involvement in the Commissioner's investigation of his affairs.
Between 6 July and 12 August 2010, there was correspondence between Mr Hutchinson and Mr Steve Mark, the Legal Services Commissioner, in which Mr Hutchinson again alleged that he had concerns about Ms Muston's impartiality. Mr Mark stated that there were no grounds at all for such concerns.
It is not necessary here to provide details of this correspondence, other than to mention that in a letter dated 12 August 2010 Mr Mark stated that the payment of income tax was 'an important part of a legal practitioner's civic obligations' and referred in this connection to the decision of the Court of Appeal in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284.
On 30 August 2010, Mr Hutchinson's trustee in bankruptcy delivered to the Commissioner all the books and records that Mr Hutchinson had provided and requested that on completion of the Commissioner's investigation they should be returned to him.
In a letter dated 31 August 2010 to Mr Hutchinson, the Tax Commissioner referred to a letter from him dated 23 August 2010 and gave answers to six questions contained in that letter. The gist of these answers was: (i) there was no record of any offence by Mr Hutchinson under tax legislation; (ii) income tax returns for the tax years 2004 to 2007 had been lodged out of time, necessitating the issuing of demands, but returns for the years 2008 to 2010 had not been necessary; (iii) the current amount outstanding on income tax account was nil; (iv) between 1 April 2004 and 30 June 2007, all quarterly business activity statements due had been lodged out of time, but the current amount outstanding on BAS account was $8.45 credit; (v) there were no pending proceedings against Mr Hutchinson for alleged offences under tax legislation; and (vi) while there was no current debt collection action against him, the 'historical debt collection action' included a number of steps taken between 9 March 2005 and 12 April 2007, culminating in the dismissal of the creditor's petition filed by the Tax Commissioner because Mr Hutchinson had been made bankrupt on his own petition.
In a letter to Mr Hutchinson dated 15 September 2010, Mr Mark stated that he had received documents from the trustee in bankruptcy and requested Mr Hutchinson to collect them in order to provide answers to the questions in Mr Collins' letter of 10 December 2009. The letter reminded Mr Hutchinson of his earlier assertion that the trustee had destroyed all relevant documents following discharge from bankruptcy.
On 8 October 2010, Mr Hutchinson hand-delivered to the Commissioner the letter dated 31 August 2010 that he had received from the Tax Commissioner.
On the same day, Mr Hutchinson took delivery from the Commissioner of the documents that his trustee in bankruptcy had sent to the Commissioner. They comprised 5 Manila folders and one A4 size white envelope. A short summary of their contents, included in the evidence before us, suggests that among the matters raised in Mr Collins' letter of 10 December 2009, the only ones to which any of these documents related were Mr Hutchinson's business of 'legal consulting' and his dealings with Servcorp.
In an email message to Mr Mark on 15 October 2010, Mr Hutchinson pointed out that the information supplied by the ATO showed that he had committed no offences, that there were no pending proceedings for offences against him, that there was no current debt collection activity and that he did not owe any money. He then asserted (a) that among the questions in Mr Collins' letter of 10 December 2009 he had answered all those not requiring any reference to a document that would have been held by his trustee and (b) that none of the documents produced by the trustee and recently returned to him related to any of the remaining questions. He also made further critical comments about the Commissioner's stance in its dispute with him about the status of the ATO as a creditor in his bankruptcy. In this connection, he maintained that the conduct of the respondent barrister in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284, to which the Commissioner had referred in an earlier letter, amounted to fraudulent tax evasion, but that there were no grounds whatsoever for believing that he himself had evaded tax.
In a reply dated 29 October 2010, Mr Mark claimed that despite numerous requests Mr Hutchinson had not yet provided a statement under section 67(2)(b) of the LP Act explaining why, despite the show cause event that he had disclosed, he considered himself to be a fit and proper person to hold a local practising certificate. With reference to the questions in Mr Collins' letter of 10 December 2009, Mr Mark claimed that 'no information of substance' had been forthcoming. He stated that while he understood Mr Hutchinson's claim to have no documents on which to base his responses, it was nonetheless 'incredulous' that Mr Hutchinson should have 'no recall whatsoever'. By way of example, Mr Mark referred to the answer given by Mr Hutchinson regarding the debt of $5 million said to have arisen in January 2006. This answer was as follows:-
It was incurred by contract. The trustee was provided with the contract, but it was destroyed by the trustee on discharge of bankruptcy.
In an internal document dated 29 October 2010 in the Commissioner's file, headed 'Reasons for inability to make a determination pursuant to Part 2.4 of the Legal Profession Act', Ms Muston outlined the steps that had been taken in this matter since the Commissioner took it over from the Council and summarised the documentary material and information that had been received from the trustee in bankruptcy and the ATO. She observed that neither this documentary material nor Mr Hutchinson's answers to questions had provided any clarity regarding the creditors disclosed in his Statement of Affairs or his claim in the Statement that the main cause of his insolvency was his 'inability to collect debts due to disputes, faulty work or bad debts'. She also observed that according to the ATO a number of tax returns and business activity statements had been overdue for significant periods. A further statement in this document was that Mr Hutchinson had not lodged a section 67 statement setting out all the facts and events relating to the show cause event.
Having further commented that the only submission by the practitioner was that the suspension of his practising certificate had destroyed his professional reputation after 25 years of distinguished practice and that he appeared to think that because he had been discharged from his bankruptcy it could 'no longer be considered', Ms Muston recorded a recommendation that due to the 'paucity of information provided', the Commissioner was 'unable to make a determination at this time'. At the foot of the document is an annotation indicating that Mr Mark approved this recommendation on 29 October 2010.
In a letter dated 3 November 2010 to Mr Mark, Mr Hutchinson denied that he had failed to provide any 'information of substance' in response to Mr Collins' letter of 10 December 2009, maintaining instead that he had answered the questions in full and to the best of his recollection in his email on 31 May 2010. He argued that the question about the debt of $5 million and his answer, quoted in the preceding paragraph, were 'a straightforward question and a straightforward answer', adding that his response was 'what happened' and that 'what happened' was 'completely consistent with normal commercial activity'. Mr Hutchinson also pointed out that the Commissioner had not responded to his request to identify documents among those produced by the trustee in bankruptcy that might have helped him to 'amplify' the answers given by him on 31 May 2010.
In concluding this letter of 3 November 2010, Mr Hutchinson denied having been 'tardy' in providing a section 67 statement relating to the show cause event and set out a statement of this nature. This was in the following terms:-
I am a fit and proper person to hold a practising certificate, notwithstanding my former bankruptcy, because:
(a) I am not a bankrupt.
(b) I was discharged from my bankruptcy by my trustee within the minimum period of time, being three years. I have committed no offences in relation to my former bankruptcy, nor are any alleged.
(c) The notice under section 68 of the Legal Profession Act 2004 was answered by the Australian Taxation Office on 31 August 2010. It confirmed
I have never committed any offences.
There are no pending proceedings in relation to any alleged offences.
There is no debt collection activity current
I do not owe the ATO any money
(d) I have been a solicitor in good standing and on the roll since 1984.
(e) I have no criminal record; I face no criminal charges, nor are any pending.
(f) All questions asked of me by the Law Society in their 10 December 2010 ( sic ) letter have been answered by me, and all answers are consistent with normal commercial activity, giving rise to no offence or conduct which brings the profession into disrepute.
In a letter to Mr Hutchinson dated 12 November 2010, Mr Mark quoted the terms of section 68(4) of the LP Act and noted that this subsection provided that he must have regard to 'the facts and circumstances that surround, arise in connection with, relate to or give rise to the show cause event concerned'. He then stated that in his view Mr Hutchinson had provided insufficient facts and circumstances surrounding his bankruptcy on which to make a determination and that he awaited that further information as previously requested. The letter concluded by referring to Mr Hutchinson's right to apply to the Tribunal under section 70(3) and quoting the terms of section 70(3) and (4).
On 22 November 2010, as previously mentioned, Mr Hutchinson filed his Application in the Tribunal. The Commissioner filed a Reply on 18 March 2011.
The parties' submissions
Mr Hutchinson. At the hearing, Mr Hutchinson put to us in summary form the principal arguments that he had made to the Commissioner during 2010: namely, that he had, in effect, a 'clean record' with the ATO and that he had been discharged from his bankruptcy. He also made a number of criticisms of the document headed 'Reasons for inability to make a determination pursuant to Part 2.4 of the Legal Profession Act' that Ms Muston had submitted to Mr Mark for his approval on 29 October 2010.
These criticisms were as follows. First, this document did not mention his 'clean record' with the ATO, even though it was made manifest in the statement sent by the ATO to the Commissioner. Secondly, the document's claim that he had not provided a 'section 67 statement' was contradicted by Ms Muston's letter to him dated 29 January 2010, in which she stated that he had provided a 'section 66(2) statement' (being his letter of 19 October 2009 to Mr Collins). Thirdly, the document's claim that he did not provide sufficient information was to be explained by the fact that the Commissioner did not ask for any information, and indeed did not know what questions to ask. Had he been asked specifically, he would, for instance, have disclosed that the debt for $5 million arose from some dealings in biofuels that he had conducted and had been irrecoverable because of the global financial crisis. But the Commissioner, he contended, simply repeated demands for answers to questions that Mr Collins had asked and he (Mr Hutchinson) had answered satisfactorily. By way of example, the reason why he had not 'clarified' his attribution of his insolvency, in his Statement of Affairs, to an 'inability to collect debts due to disputes, faulty work or bad debts' was that the Commissioner had never asked for clarification. Fifthly, the document stated incorrectly that he had made no submissions other than that the suspension of his practising certificate had destroyed his professional reputation after 25 years of distinguished practice. In fact, he had made a number of submissions: for example, in his email dated 15 October 2010 to Mr Mark. These had included his observations regarding the Cummins decision.
For these reasons, Mr Hutchinson submitted that the Commissioner was not acting properly in refusing or failing to make a determination under section 71 of the LP Act, and that taking account of the material that he had received, he should find him to be a fit and proper person to hold a local practising certificate.
The Commissioner. In her primary submissions on behalf of the Commissioner, Ms Webster placed significant emphasis on the provision in section 68(4) of the LP Act that in conducting the required investigation the 'appropriate Council' (and subsequently the Commissioner in some cases, under section 71) was 'not limited to investigating and making its determination on the basis of just the show cause event concerned', but 'must have regard to the facts and circumstances that surround, arise in connection with, relate to or give rise to the show cause event concerned'.
As an authoritative explanation of what were or might be the surrounding 'facts and circumstances' when the 'show cause event' was, as in this case, the bankruptcy of the relevant practitioner, Ms Webster cited three passages from the judgment of Giles JA (with whom Spigelman CJ and Ipp A-JA agreed) in New South Wales Bar Association v Murphy (2002) 55 NSWLR 23; [2002] NSWCA 138. This case was decided in relation to provisions within the now-repealed Legal Profession Act 1987 that now appear, in amended form, in Division 7 of Chapter 2 of the LP Act 2004. The passages on which Ms Webster relied were at pp 50 - 52 (paragraphs [107], [112] and [113]). We consider that a passage at p 61 (paragraph [161]) should also be quoted:-
107 The test of a fit and proper person to hold a practising certificate is stated as to each of act of bankruptcy, indictable offence and tax offence. But the fact of commission of an act of bankruptcy, an indictable offence or a tax offence is not what matters. The Council, and the Court, must look to the circumstances in which the act of bankruptcy, indictable offence or tax offence was committed. If no more than the fact of commission of an act of bankruptcy, an indictable offence or a tax offence is known, an opinion as to what the circumstances of the commission show can not be held. What matters is the circumstances in which the act of bankruptcy, indictable offence or tax offence was committed.
112 It is necessary to find the circumstances in which the legal practitioner committed the act of bankruptcy, in order to ask whether the circumstances show that the legal practitioner is not a fit and proper person to hold a practising certificate. The answer will turn on the facts of each case, and it would be wrong to paraphrase or embroider the words of the Act by other expressions...
113... Refusal, cancellation or suspension of a practising certificate upon determination of unfitness to hold a practising certificate is not punitive of the legal practitioner. It is protective of the public in the same manner as removal from the roll. Fitness to hold a practising certificate is to be assessed having in mind the high standards required of legal practitioners in the practice of their profession. The standards are required because the relationship between legal practitioner and client, between legal practitioners, and between legal practitioner and court is one of trust in the performance of professional functions, and because there must be confidence in the public and in those engaged in the administration of justice that legal practitioners will properly perform those functions.
161 The appellant submitted that over a period of many years the respondent had "failed to address in any significant way" his taxation obligations. It submitted that the taxation obligations were of a special kind, in that as a self-employed person the respondent received income out of which he had to pay tax and so was particularly required to ensure timely payment of tax. Taxation obligations are effectively imposed, not voluntarily undertaken. Many other financial obligations, though not all, are in reality imposed, as a necessity of modern life. Although the payment of tax in obedience to the taxation laws involves both legal and civic duties, see New South Wales Bar Association v Cummins , so also a good citizen meets other financial obligations, those voluntarily undertaken as well as those in reality imposed. I do not see why taxation obligations should be given special significance, and to do so would be likely to lead to an uncertain hierarchy (are rates on a par with tax, is a gambling debt less significant than the rent?). A legal practitioner who spends all his or her money on self-indulgent high living, in disregard of ordinary commercial obligations, may be just as much (or as little) deserving of criticism as a legal practitioner who prefers ordinary commercial obligations over taxation obligations. But criticism is really not the point. The point is what the conduct shows of the legal practitioner's fitness to hold a practising certificate.
Ms Webster also referred to two passages in the judgment of Spigelman CJ (at 26 [5] and 29 [21]). In these passages, the Chief Justice pointed to the distinction between removal of a legal practitioner from the Roll following a finding of probable permanent unfitness and cancellation of a practising certificate and contrasted the detailed procedures governing removal with the more summary procedures for cancellation.
Against this background, Ms Webster argued that the Commissioner was correct in concluding that the material provided to him was insufficient to enable him to determine whether or not Mr Hutchinson was a fit and proper person to hold a local practising certificate. The principal reason for this was that Mr Hutchinson had refused or failed to provide details regarding the debts disclosed in his Statement of Affairs, which included a substantial debt to the ATO for unpaid income tax and a debt of $5 million. In his letter of 19 October 2009 to Mr Collins, he had given an account of the circumstances leading to his bankruptcy, and this letter had indeed been treated by Mr Collins and by the Commissioner as a statement satisfying the requirements of section 66(2) of the LP Act. But the debts disclosed in his Statement of Affairs bore no relation to any liabilities that might have been arisen by virtue of the events described in the letter. Furthermore, the information that he furnished about these debts in later letters to the Commissioner - for example, that the debt of $5 million was 'incurred by contract' - was of virtually no value in the investigation. His statement at the hearing that this debt arose from some dealings in biofuels that he had conducted and had been irrecoverable because of the global financial crisis was in fact more informative on this topic than any previous communication from him had been. In addition, Ms Webster maintained, nothing emanating from the ATO or from Mr Hutchinson himself served to explain how and why his liability for unpaid income tax rose to an amount exceeding $500,000 between 2004 and 2007.
For these reasons, Ms Webster argued, the material made available to the Council and the Commissioner fell well short of providing an adequate explanation of the 'circumstances' in which he committed an act of bankruptcy. Neither the Council nor the Commissioner had been able, as required by Giles JA in Murphy at [112], to 'find the circumstances in which [he] committed the act of bankruptcy, in order to ask whether the circumstances show that [he was] not a fit and proper person to hold a practising certificate'.
In Ms Webster's submission, Mr Hutchinson had to bear primary responsibility for this state of affairs. Because the time allowed for the investigation under section 68 was normally only three months, and at most four months, it was not envisaged as a 'huge' investigation, and the obligation to provide relevant material lay chiefly on the legal practitioner to whom it related.
Some further aspects of the submissions made by Mr Hutchinson and by Ms Webster at the hearing are noted below.
Conclusions and reasons
In our opinion, this Application by Mr Hutchinson must be dismissed, for two independent reasons.
The first of these reasons was not mentioned in the parties' primary submissions, but emerged as a possible ground of dismissal from answers given to some questions that we asked at the hearing.
Somewhat to our surprise, neither Mr Hutchinson's application dated 22 September 2009 for the local practising certificate to which these proceedings relate nor the certificate issued in response to that application formed part of the evidence (see [15] and [26] above). On requesting particulars of this certificate, we were told by Ms Webster that it was issued on 8 December 2009. She then suggested that by virtue of section 43 of the LP Act it would have expired on 30 June 2010. She also drew our attention to relevant passages in the judgments of Spigelman CJ and Giles JA in New South Wales Bar Association v Murphy (2002) 55 NSWLR 23; [2002] NSWCA 138.
At 29 [22], the Chief Justice said:-
It is of significance to note that, pursuant to s36 of the Act [the Legal Profession Act 1987; see now section 43 of the LP Act 2004], practising certificates are issued for a period of twelve months. The cancellation of a certificate has force for such remaining part of that period as has not expired at the time of the cancellation.
The relevant passage in the judgment of Giles JA forms part of a discussion of the differences between a finding, with respect to a legal practitioner, that he/she is not a fit and proper person to remain on the Roll of legal practitioners and a finding that he/she is not a fit and proper person to hold a practising certificate. At [109 - 110], his Honour, referring to the effect of a decision by an 'appropriate Council' to cancel, suspend or refuse to renew a practising certificate, said:-
109... Even if not entitled to practise because without a practising certificate, the legal practitioner remains on the roll. The legal practitioner still has the status of a fit and proper person to be a legal practitioner but is not a fit and proper person to hold a practising certificate.
110 Thus the effect on the legal practitioner is to an extent confined, although separate action may result in removal from the roll or a restriction on entitlement to practise through the exercise of the inherent jurisdiction or pursuant to the disciplinary provisions of the Act. The confined effect on a legal practitioner appears in another way. Practising certificates are annual. A refusal, cancellation or suspension affects only the one application for a practising certificate or the one existing practising certificate. If the legal practitioner applies for a practising certificate for the next or any later certificate year, must there be a fresh determination? ... Whether there must a fresh determination was not the subject of argument, and my view is therefore not a concluded view, but as presently advised I consider that a fresh determination would be necessary.
In the course of examining, after the hearing, the Commissioner's file that was admitted into evidence, we have located one document indicating that, in accordance with section 43(1), the date of expiry of the local practising certificate issued on 8 December 2009 to Mr Hutchinson was 30 June 2010. This was the Information Notice sent to Mr Hutchinson on 25 January 2010 by Mr Collins on behalf of the Council of the Law Society. The Notice advised Mr Hutchinson of the suspension of the practising certificate which he seeks in these proceedings to have removed. In the passage quoted above at [34], the Notice described this certificate as 'your Practising Certificate for the year ending 30 June 2010'.
We put it to the parties that if, as appeared to be the case, the date of expiry of the practising certificate with which these proceedings are concerned preceded the date (22 November 2010) on which the proceedings were instituted under section 70(3) of the LP Act, there was no longer at that date a operative practising certificate or indeed a 'suspension' to which an order by the Tribunal under section 70(4) could relate. Not surprisingly, Ms Webster supported this reasoning.
In his submissions in reply, Mr Hutchinson argued that even if the date of expiry shown on his practising certificate had passed, the intention of the legislation was that the certificate should remain operative until the Tribunal had made its determination regarding the suspension. If this were not the case, he argued, the provisions of the Act regarding the right to challenge the suspension in Tribunal proceedings would be 'pointless'.
We have given careful consideration to this argument. Our conclusion is, however, that nothing in the relevant sections of the LP Act provides support for them. Subsections (1) and (2) of section 43, for instance, indicate that the effect of a suspension is to reduce the period of operation of a practising certificate. They contain nothing to suggest that when the suspension of a certificate is removed the certificate may subsist beyond its normal date of expiry (i.e. the end of the financial year in which it was granted or following its previous period of currency, as the case may be). Subsection (3) does provide for a certificate to subsist beyond its normal date of expiry, but only in the circumstances stated in the subsection: i.e., where an application for renewal of the certificate, 'properly made', has not been determined by that date. In subsections (2), (3) and (4) of section 70, which are the three provisions dealing specifically with the Tribunal's jurisdiction to remove a suspension, it is neither stated nor implied that the a certificate suspended under subsection (1) should have a longer lifespan following removal of the suspension by the Tribunal than it would have had if no suspension had occurred.
A further problem with Mr Hutchinson's submissions on this point is that they leave unanswered the question of what should be the duration of a certificate that had first been suspended then 'freed' from its suspension by Tribunal order. Would the certificate remain operative, for instance, until the 30 June following the date when the suspension was lifted? If this was the case, the total of the periods during which it was operative could exceed the normal maximum period of one year.
Taking all these factors into account, our conclusions on what we have identified as the first ground of dismissal are as follows. Although the evidence regarding the contents of the practising certificate issued to Mr Hutchinson following his application made on 22 September 2009 is surprisingly limited, we are satisfied that the period for which it was expressed to operate came to an end on 30 June 2010. It follows that ever since a date before these proceedings were instituted, there has been no certificate and no suspension to which the Application filed by Mr Hutchinson under section 70(3) of the LP Act could relate. This means that the factual basis for the exercise of the Tribunal's jurisdiction under section 70(3) is lacking and the Application must be dismissed.
In case we have reached the wrong conclusion on these matters - which have not, as far as we know, been considered in any other decision on the LP Act 2004 or its predecessor - we put forward as our second ground of dismissal the line of argument advanced by Ms Webster.
We agree with her that in the rather unusual circumstances of this case neither the Council nor the Commissioner has been able to complete the investigation of the circumstances of the 'show cause event' required by section 68 of the LP Act. We say this having regard particularly to the dicta of Giles JA in New South Wales Bar Association v Murphy explaining what are the relevant 'circumstances' when the show cause event is an act of bankruptcy. Because Mr Hutchinson, in his correspondence with the Commissioner, placed significant emphasis on the statements by the ATO that he had no current tax liabilities and that he had not committed, and was not the subject of proceedings for, any tax offences, we point out here that Giles JA at [161] (see [66 above) emphasised the potential importance of matters other than unpaid tax liabilities when discussing what might be relevant 'circumstances'.
We agree also with the following arguments put by Ms Webster: (a) because both the 'normal' period and indeed the 'extended' period contemplated for the investigation under section 68 are distinctly short, the legislation implicitly requires or assumes that the legal practitioner being investigated will furnish relevant material promptly when required; and (b) a factor contributing substantially to the Commissioner's decision on 29 October 2010 that the investigation was incomplete was the refusal or failure of Mr Hutchinson to provide important information about the debts disclosed in his Statement of Affairs. In particular, our opinion, like that of the Commissioner, regarding the answers given by him in his email of 30 May 2010 to the Commissioner (see [41] above), is that they were distinctly unsatisfactory and fell well short of what was required of him.
We agree also with Mr Hutchinson's contention that the Commissioner, in some of the correspondence late in 2010, failed to give credit to Mr Hutchinson for sending to the Council a statement under section 66(2) of the LP Act (this being his letter of 19 October 2009, summarised above at [20]). But as Ms Webster argued, the explanation there given for his bankruptcy did not correlate with what he disclosed in his Statement of Affairs. This disjuncture gave further grounds for the Council and the Commissioner to believe that further investigation of the circumstances of his bankruptcy was required.
On this second ground also, therefore, we consider that Mr Hutchinson's Application should fail. If this were the only ground, it would not be entirely clear to us what order we should make. Outright dismissal is not a form of order permitted to the Tribunal under section 70(4). But because our first ground is, in essence, that jurisdiction is lacking, an order of dismissal is appropriate.
We think it appropriate finally to point out that on our understanding of the legislation, the conclusions that we have reached and the order that we make do not in any way debar Mr Hutchinson from seeking to return to legal practice. The way remains open for him to apply for a new practising certificate. No doubt the Council, when considering any such application, would be obliged to take full account of the matters raised by the Commissioner in these proceedings. But equally Mr Hutchinson could maintain that factors in his favour which only became clear after the Commissioner had taken over the investigation - we are referring here to all but the last of the six matters listed in his 'section 67 statement' forming part of his letter of 3 November 2010 (see [59]) - should carry weight with the Council when considering his application.
**********
Decision last updated: 29 April 2011
0
2
4