Legal Profession Conduct Commissioner v Fowler - [2020] SASCFC 65

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
LEGAL PROFESSION CONDUCT COMMISSIONER v FOWLER
[2020] SASCFC 65
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Parker and The Honourable Justice Bleby)
2 July 2020
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW
PROFESSIONS AND TRADES - LAWYERS - PRACTISING CERTIFICATES
Appeal against the order of a Judge of this Court allowing, subject to strict conditions, the respondent, who is a bankrupt, to continue to engage in legal practice as a principal and to hold trust monies.
The respondent provided notification of a show cause event constituted by the presentation of a Creditor’s Petition, pursuant to s 20AH(2)(a) of the Legal Practitioners Act 1981 (SA) (the Legal Practitioners Act). On the Supreme Court being notified of a show cause event it may, pursuant to s 20AI, amend, suspend or cancel a practising certificate if it is not satisfied that the practitioner is a fit and proper person to hold a practising certificate.
The appellant’s grounds of appeal can be summarised as follows:
1. That the Judge erred by failing to impose conditions preventing the respondent from practising as a principal and from operating a trust account, and that the conditions imposed by the Judge were inadequate to protect the public and maintain public confidence (grounds 3.1.1, 3.1.2, 3.1.5 and 3.1.7).
2. That the Judge reversed the onus of proof and erred in not requiring the respondent to discharge the onus of establishing that he was a fit and proper person to hold a practising certificate subject to conditions (ground 3.1.3).
3. That the Judge did not have due regard to the role of the appellant and intervener in relation to the respondent’s notification of a show cause event (ground 3.1.4).
4. That some of the conditions are unenforceable against the respondent and govern the conduct of third parties (ground 3.1.6).
5. That the Judge failed to have due regard to ‘the previously consistent approach of this Court in relation to bankrupt legal practitioners and their access to control of trust accounts and trust money’ (ground 3.1.8).
6. That the Judge gave insufficient weight to a number of considerations (ground 3.1.9).
7. That the Judge erred in concluding that the respondent’s ‘honesty or dishonesty is a paramount consideration when assessing fitness to practise and future risk, thereby affording insufficient weight to other considerations, and in particular the … lack of candour in affidavit evidence presented to the Court’ (ground 3.1.10).
Held per Kourakis CJ (Parker and Bleby JJ agreeing), dismissing the appeal:
1. The power to amend a practising certificate pursuant to s 20AI of the Legal Practitioners Act is, or at least includes, a power to impose conditions if the Court ‘is satisfied that the practitioners would be a fit and proper person to practise in accordance with those conditions’.
2. Grounds 3.1.1, 3.1.2, 3.1.5 and 3.1.7, because the appellant eschewed any complaint that the Judge’s exercise of discretion was manifestly unreasonable, do not identify an error which would otherwise vitiate the Judge’s discretion.
3. Ground 3.1.3 is not arguable.
4. As to ground 3.1.4, the respondent’s submissions fail to identify just what the mistake was and how it may have affected the exercise of the discretion.
5. As to ground 3.1.6, if the third parties, in this case the accountant and the senior legal practitioner who agreed to monitor and supervise the respondent, do not cooperate in the regime constructed by the conditions, the conditions will not be satisfied and the respondent will not be able to continue to practise.
6. Ground 3.1.8, insofar as it alleges an error of law in not following earlier decisions of this Court, or suggests that the Judge did not have regard to all of the considerations weighing against allowing the respondent to operate a trust account, must be dismissed.
7. All of the particulars of ground 3.1.9 fail to allege an error of a kind which would vitiate the Judge’s discretion; it is not an error of law to give less weight to a particular consideration, in the exercise of a discretion, than the weight which would be given to that consideration by another judge or an appeal court.
8. Ground 3.1.10 is based on a non-textual reading of the Judge’s reasons and must be dismissed.
Legal Practitioners Act 1981 (SA) ss 15, 16, 17A, 20AA, 20AH, 20AI, 77J, 82, 89A; LPEAC Rules 2018 (SA) r 10; Bankruptcy Act 1966 (Cth), referred to.
The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64; The Legal Practitioners Act 1981 (SA) Re David Peter Andrew Moen [2018] SASC 136; Re Jenner (2007) 250 LSJS 74, discussed.
House v The King (1936) 55 CLR 499, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"amend"

LEGAL PROFESSION CONDUCT COMMISSIONER v FOWLER
[2020] SASCFC 65
Full Court: Kourakis CJ, Parker and Bleby JJ

KOURAKIS CJ: This is an appeal by the Legal Profession Conduct Commissioner (the Commissioner) against the order of a Judge of this Court allowing, subject to strict conditions, the solicitor, Mr Fowler, who is a bankrupt, to continue to engage in legal practice as a principal and to hold trust monies. The Commissioner contended before the Judge, and on appeal, that Mr Fowler should be limited to practise as an employee. Bankruptcy is a show cause event for the purposes of s 20AH of the Legal Practitioners Act 1981 (SA) (the Legal Practitioners Act). On the Supreme Court being notified of a show cause event it may, pursuant to s 20AI of the Legal Practitioners Act, amend, suspend or cancel a practising certificate if it is not satisfied that the practitioner is a fit and proper person to hold a practising certificate.
On the appeal, it was accepted that Mr Fowler was, subject to the appropriate conditions, a fit and proper person to hold a practising certificate. It was also accepted that the imposition of conditions was a discretionary exercise.[1]
[1] The Law Society of South Australia, the intervener, relied on the submissions of the Commissioner.
Neither the grounds of appeal nor the Commissioner’s submissions disclose, in terms, an error of a kind which would vitiate the Judge’s discretion.[2] On the hearing of the appeal, counsel for the Commissioner eschewed any contention that the conditions imposed by the Judge were so manifestly inadequate to protect the public and to maintain confidence in the legal profession that the Judge’s decision was unreasonable.[3] The focus of the Commissioner’s oral submissions was that the conditions imposed by the Judge failed to maintain the public’s confidence in the legal profession and in its administration of justice. So expressed, the contention is no more than a contention that the Judge should have reached a different conclusion and an appeal to this Court to exercise the discretion differently. Of course, save for the manifestly unreasonable ground, on which the Commissioner does not rely, it is the very point of a discretion that it might reasonably be exercised differently by different people. Counsel for the Commissioner attempted to frame the error as a failure to address the public confidence consideration at all. However, as we shall see, in his reasons the Judge expressly adverted to, and considered, the need to maintain public confidence in the administration of justice by the legal profession.
[2] House v The King (1936) 55 CLR 499.
[3] The Commissioner’s written submissions accepted that the Judge ‘was entitled to exercise discretion’ with which this Court could not interfere in the absence of ‘demonstrable errors’.
The Commissioner, in both the grounds of appeal and his written and oral submissions, also complained that the Judge accorded insufficient weight to a number of other considerations and gave others, again, too much weight. On the face of the Judge’s reasons, it is plain that he gave careful consideration to all relevant considerations, even though the Judge did not ultimately balance those considerations in favour of the greater restrictions on Mr Fowler’s practice for which the Commissioner contended. The Judge allowed Mr Fowler, contrary to the Commissioner’s position, to engage in practice as a principal and to hold a trust account. However, the Commissioner, as I have already observed, does not contend that that conclusion was manifestly unreasonable.
Finally, the Commissioner contends that the Judge erred in law by imposing a persuasive onus on the Commissioner to justify the greater restrictions it sought on Mr Fowler’s entitlement to practise. The Commissioner contends, correctly, that Mr Fowler carried the onus of persuading the Judge that he was a fit and proper person to hold a practising certificate, that the conditions he sought sufficiently protected those members of the public who were, or might become, his clients, and that permitting him to practise on those conditions did not undermine public confidence in the profession. However, as we shall see, on the face of the Judge’s reasons it is plain that his Honour proceeded on the basis that Mr Fowler carried the onus and that the Judge was satisfied that he had discharged it.
Accordingly, I would dismiss the appeal. I elaborate on my reasons below.
The orders
It is immediately apparent on the face of the Judge’s orders that the conditions imposed on Mr Fowler’s entitlement to practise establish a regime to closely monitor the financial affairs of his practice. It is useful, therefore, to commence by setting out (with some immaterial ellipses) the Judge’s orders:
That from the date of this order until further order the following conditions are to be endorsed upon the Practitioner’s current practising certificate, and on any subsequent certificate that may issue to the Practitioner:
1. The Practitioner shall not employ any staff.
2. The Practitioner shall not change the structure of his business (whether by going into partnership or establishing an incorporated legal practice, or otherwise).
3. The Practitioner shall advise any barristers he proposes to instruct of his bankrupt status.
4. The Practitioner shall meet the following criteria to the satisfaction of the supervisor:
4.1     That all Business Activity Statements (BASs) and income tax returns are lodged on time;
4.2     That all tax liabilities are paid on time;
4.3     That the Practitioner retain in his office account sufficient funds to pay his accrued and unpaid tax liabilities at any given point in time; and
4.4     That all other business liabilities of the Practitioner are paid on time.
5. The Practitioner shall be subject to general supervision and monitoring by Mr Franco Camatta, legal practitioner (the supervisor), and for that purpose, the Practitioner shall provide him with unfettered access to the Practitioner’s [client, business and trust account records].
…
8.The Practitioner shall retain [an accountant] to monitor his financial affairs and assist him in ensuring compliance with his financial and tax obligations, in accordance with the scope of work detailed [in a filed affidavit].
9.The Practitioner shall co-operate with the accountant and provide him with all documentation sufficient to enable the timely filing within prescribed periods of all future BAS and income tax returns with the Australian Taxation Office (ATO).
10. Subject to the operation of the Bankruptcy Act 1966, the Practitioner shall pay all amounts self-assessed or assessed by the ATO as payable as and when such payments fall due.
11. The Practitioner shall co-operate with the accountant to ensure that payment for future applications for practising certificates and professional indemnity insurance are made within the prescribed time frame.
12. The accountant shall assist the supervisor, and report fortnightly to the supervisor on the Practitioner’s compliance with his obligations under these Conditions.
13. The Practitioner shall retain [an auditor] to monitor his Trust Account, and to assist him in ensuring compliance with Schedule 2 of the Legal Practitioners Act 1981.
14. Subject to the supervision and direction of the auditor, the Practitioner shall operate the Trust Account (TA) in the following manner:
[Prescriptive requirements that the Practitioner fully inform the auditor of TA transactions]
15. The auditor shall provide the supervisor with the following trust account reports for the previous month within 7 days from the end of each month:
…
16. The supervisor is to satisfy himself that the Practitioner is meeting his professional and business obligations in a timely manner and shall provide a written report to the Law Society of South Australia and the Legal Profession Conduct Commissioner on a 6-monthly basis during the period of the order.
17. The accountant shall provide a written report to the Law Society of South Australia on a quarterly basis …
18. The Practitioner is to notify all existing and new clients of his status as an undischarged bankrupt and of the fact that, notwithstanding this status, the Supreme Court has given its permission for him to continue to practise as a sole Practitioner subject to conditions.
19. The Practitioner shall forthwith advise the Law Society of South Australia should he cease to practise in the manner provided in this order.
…
Condition 1 prohibits Mr Fowler from employing any staff. That condition simplifies the management of his practice and removes an element of financial risk, particularly for the employed solicitors. I acknowledge that it also limits the scope for growth of the practice, but it is not unreasonable to think that the financial risk from increased turnover and expenses is greater than the risk in limiting, at least initially, future growth.
Conditions 5 to 12 ensure that the accountant and Mr Camatta, a senior, competent and well regarded legal practitioner, have unrestricted access to the records of Mr Fowler’s practice. If Mr Fowler were to fail to cooperate in the supervisory regime imposed by those conditions, or if his records showed that his management of the practice was unsound, a report to that effect would be received by the Law Society of South Australia (the Law Society) within a matter of weeks, even if Mr Fowler himself were to fail to comply with condition 19.
I also draw attention to the requirement in conditions 3 and 18, that Mr Fowler advise any barristers he proposes to instruct, and all of his clients, that he is a bankrupt. Condition 18 also obliges Mr Fowler to inform all of his clients that his entitlement to practise is subject to conditions imposed by the Supreme Court. Those conditions, on their face, address the question of public confidence in the administration of justice by the profession.
The statutory scheme
Section 15 of the Legal Practitioners Act provides that an applicant for admission as a legal practitioner must be a fit and proper person to practise the profession of the law. That test, for admission to practise, is expressed, for obvious reasons, prospectively, but is no different to the fundamental condition on which the entitlement to continue to practise depends, that is, that a person who, having been admitted to practise, is a fit and proper person to hold a practising certificate.
Section 16 of the Legal Practitioners Act provides:
16—Issue of practising certificate
(1) Where a legal practitioner who has been admitted and enrolled as a barrister and solicitor of the Supreme Court (not being a legal practitioner who has been suspended from practice) applies to the Supreme Court for a practising certificate, the Court will, subject to this Act, issue a practising certificate in the practitioner’s name.
(2) If LPEAC has made rules prescribing different categories of practising certificate and a legal practitioner has applied for a particular category of certificate under subsection (1), the practising certificate issued by the Supreme Court in the practitioner’s name may be of that category.
(5) An application for a practising certificate must be accompanied by the prescribed fee and levy.
(6) If LPEAC has made rules prescribing different categories of practising certificate, the regulations may prescribe different fees and levies for different categories of certificate.
The Legal Practitioners Education and Admission Council (LPEAC) has prescribed four categories of practising certificates:[4]
·Category A – a practising certificate enabling the practitioner to practise as the principal of a law practice entitled to receive and manage trust monies.
·Category B – a practising certificate enabling the practitioner to practise as a principal but does not entitle the practitioner to receive and manage trust monies.
·Category C – a practising certificate enabling the practitioner to undertake the work of an employed practitioner on a supervised or unsupervised basis.
·Category D – a practising certificate for volunteers.
[4] LPEAC Rules 2018 (SA) r 10.
It is convenient here to observe that, in effect, the position of the Commissioner and the Law Society, before the Judge, was that Mr Fowler was not fit to hold a category A practising certificate, and that he should be limited to a category C practising certificate hedged with conditions much the same as those eventually imposed by the Judge, whereas Mr Fowler sought a category A practising certificate, but with conditions which subjected him to the financial and practice supervision set out above. Even though category B is most obviously designed for barristers, it might also be appropriate for principals of legal practices which are contracted to provide services to another legal practice, or which act for clients in matters for which a trust account is not necessary, and therefore do not need to operate a trust account for clients’ money. However, the parties before the Judge did not frame the issue by reference to the question of whether Mr Fowler was a fit and proper person to hold a category A practising certificate. The controversy was only as to what conditions should be imposed on Mr Fowler’s current practising certificate, and on any subsequent certificate that may be issued to him. The framing of the question in that way necessarily affected the nature of the decision which the Judge was called upon to make and, therefore, the nature of this appeal.
Section 17A of the Legal Practitioners Act provides for the imposition of conditions, in accordance with the rules that may be made by LPEAC, for the holder of a practising certificate to undertake further education and training. It is convenient at this point to observe that s 17A uses the terminology of ‘conditions’. It is the Supreme Court that imposes those conditions on the practising certificates it issues, if the rules made by LPEAC so require.
Section 17A(3) provides that, if the conditions as to continuing professional development are not met, LPEAC may determine to impose further conditions or to cancel, or not renew, the practising certificate. The imposition of further conditions takes effect on the date fixed by LPEAC.
Section 20AA of the Legal Practitioners Act provides for the endorsement of conditions on practising certificates:
(1) If, in accordance with this Act, a regulatory authority of this or any participating State makes a determination or order—
(a) imposing conditions on, or requiring the endorsement of conditions on, a legal practitioner’s practising certificate; or
(b) varying or revoking conditions on, or requiring the variation or revocation of conditions on, a legal practitioner’s practising certificate,
the Supreme Court may record or give effect to the determination or order by revoking the practising certificate currently held by the legal practitioner and issuing the legal practitioner with a new practising certificate in the appropriate form.
(2) A regulatory authority must notify the Supreme Court of the making of a determination or order referred to in subsection (1).
(3) If a determination or order is made imposing, varying or revoking conditions on a practising certificate, the determination or order will be taken to have effect from the date it is made, or from a subsequent date specified in the determination or order, and not from the date of issue of a new practising certificate under this section.

I observe that the imposition of conditions to which s 20AA of the Legal Practitioners Act refers must necessarily include those conditions endorsed on a practising certificate to establish a category of practising certificate, and those conditions as to training to which I have referred. It also includes the conditions which might:
·be imposed by the Commissioner, pursuant to s 77J of the Legal Practitioners Act, on being satisfied that a practitioner has engaged in unsatisfactory professional conduct;
·be imposed by the Supreme Court, pursuant to s 89A, on an interim basis pending an inquiry; and
·be imposed by the Legal Practitioners Disciplinary Tribunal on being satisfied that a legal practitioner has engaged in unsatisfactory professional conduct or professional misconduct, pursuant to s 82(6).
As shall be seen, it might also include conditions imposed in the inherent jurisdiction of the Court or pursuant to s 20AI of the Legal Practitioners Act, to which I turn below.
The relevant provisions of the Legal Practitioners Act directly applicable to this case are ss 20AH and 20AI, which govern the consequences of Mr Fowler’s bankruptcy, which constituted a ‘show cause event’:
20AH—Holder of practising certificate—show cause event
(1) This section applies to a show cause event that happens in relation to the holder of a practising certificate.
(2) The holder must provide to the Supreme Court both of the following:
(a)     within 7 days after the happening of the event—notice, in the form approved by the Court, 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 practising certificate.
…
(4) A notice and written statement provided to the Supreme Court under this section must be served by the holder on the Commissioner and the Society, each of whom may make written representations to the Court in relation to the holder of the practising certificate within the time, and in accordance with the procedure, prescribed by rules of the Court.
20AI—Refusal, amendment, suspension or cancellation of practising certificate—failure to show cause
(1) The Supreme Court may refuse to issue or renew, or may amend, suspend or cancel, a practising certificate if the applicant or holder—
(a)     is required by section 20AG or 20AH to provide a written statement relating to a matter and has failed to provide a written statement in accordance with that requirement; or
(b)     has provided a written statement in accordance with section 20AG or 20AH but the Court does not consider that the applicant or holder has shown in the statement that, despite the show cause event concerned, he or she is a fit and proper person to hold a practising certificate.
…
(3) If the Supreme Court makes a determination under this section, the Court must, as soon as practicable, give the applicant or holder written notice of the determination.
It is to be observed that, relevantly to the issue on this appeal, s 20AI(1) of the Legal Practitioners Act does not refer to the imposition of conditions but simply to the power of the Court to ‘amend, suspend or cancel’ a practising certificate.
In The Legal Practitioners Act 1981 (SA) Re David Peter Andrew Moen, Nicholson J considered the scope of s 20AI and held that the amendment of a practising certificate extended to the imposition of conditions:[5]
[5] [2018] SASC 136 at [24]-[31].
[24]Prior to 1 July 2014, section 49 of the Act provided, inter alia, that an undischarged bankrupt could not, without the authority of the Supreme Court, practise the profession of law. Section 49 expressly conferred power on the Supreme Court to grant an authority to practise on such conditions as thought fit. Following amendments which took effect on 1 July 2014, section 49 now only deals with the situation of a legal practitioner who is a director of an incorporated legal practice during its winding up for the benefit of creditors. The Act no longer expressly provides that a practitioner who is an undischarged bankrupt is not, without authority, entitled to practise. Rather, this situation is now regulated by the show cause regime in Part 3, Division 2B (sections 20AG to 20AI) of the Act. Within that regime there is no express conferral of power to impose conditions on the practising certificate of a practitioner who is required to show cause.
[25]Section 20AH has been set out earlier. Section 20AI is in these terms.
20AI—Refusal, amendment, suspension or cancellation of practising certificate—failure to show cause
(1)The Supreme Court may refuse to issue or renew, or may amend, suspend or cancel, a practising certificate if the applicant or holder—
(a)is required by section 20AG or 20AH to provide a written statement relating to a matter and has failed to provide a written statement in accordance with that requirement; or
(b)has provided a written statement in accordance with section 20AG or 20AH but the Court does not consider that the applicant or holder has shown in the statement that, despite the show cause event concerned, he or she is a fit and proper person to hold a practising certificate.
(2)For the purposes of this section only, a written statement accepted by the Supreme Court under section 20AH(3) is taken to have been provided in accordance with section 20AH.
(3)If the Supreme Court makes a determination under this section, the Court must, as soon as practicable, give the applicant or holder written notice of the determination.
[26]Section 20AI empowers the Supreme Court to, inter alia, ‘amend … a practising certificate …’ but only in the circumstances there outlined, that is, where the practitioner fails to provide a required show cause statement or, having provided such a statement, the court nevertheless is not persuaded that the practitioner is a fit and proper person to hold a practising certificate. For reasons to be explained, I am satisfied that the practitioner in this case is a fit and proper person to hold a practising certificate provided it is subject to certain conditions. A question arises whether, in such a case, section 20AI confers power to impose conditions on the practitioner’s certificate or whether any such power is to be found elsewhere and, if so, where.
[27]I am satisfied that there is power in the Supreme Court to impose conditions on the right of a practitioner, who has been required to show cause, to continue to practise. The situation does not appear to be expressly provided for. However, this conclusion is supported on a number of bases.
[28]First, it makes little sense for section 20AI to give a power to amend where a show cause written statement has not been provided at all or, where provided, it discloses that the practitioner is not a fit and proper person to practise. As a practical matter, the occasion to exercise a power to amend could only arise where the practitioner has complied with his or her show cause obligations and the Court is satisfied of fitness but subject to outstanding concerns that can be satisfactorily addressed by the imposition of appropriate conditions. In other words, paragraph (b) of subsection 20AI(1) should be construed as permitting the Court to amend, that is, impose conditions on, a certificate in the circumstances embraced by paragraph (b) where it is satisfied that the practitioner would be a fit and proper person to practice in accordance with those conditions.
[29]Second, the existence of a power in the Court to make orders endorsing conditions on a practitioner’s practising certificate is to be inferred from section 20AA(1) of the Act. Section 20AA is in the following terms. …
[30]In the Legal Practitioners Act 1981 (SA) Re Roderic Jason Lindquist, I made the following remarks as to the operation of s 20AA of the Act.
Section 20AA contains machinery provisions. It empowers the Supreme Court to record or give effect in certain ways to the making of a determination or order by a regulatory authority of South Australia or of any participating state which serves, inter alia, to impose conditions on or to vary or revoke conditions on a legal practitioner’s practising certificate. The assumption underlying the powers conferred on the Supreme Court by section 20AA is that a regulatory authority has made, ‘in accordance with this Act’, a determination or an order imposing, varying or revoking practising certificate conditions. It does not, itself, confer power on a regulatory authority to impose conditions or to vary or revoke them.
It is to be observed that the definition of regulatory authority in section 5 of the LP Act includes, in relation to the State of South Australia, the Supreme Court. It follows that the machinery provisions in section 20AA apply where the Supreme Court has made a determination or order imposing, varying or revoking conditions. It is to be inferred from the existence and terms of section 20AA that there is a power, to be found elsewhere, conferred on the Supreme Court, as a regulatory authority, to impose, vary or revoke conditions.
[31]Finally, a power in the Supreme Court to impose conditions on a practising certificate in the circumstances under consideration will fall within the Court’s inherent jurisdiction, essentially for reasons analogous to those I gave with respect to a related issue in Lindquist.
(Footnotes omitted; emphasis in original)
Parliament’s choice of the word ‘amend’ instead of expressly empowering the Court to impose conditions is curious, given the other references in the Legal Practitioners Act to the imposition of conditions to which I have referred. I have considered whether or not the word ‘amend’ is a reference to a change in the category of practising certificates. I doubt that to be so limited is what was intended. One would have expected an express reference to an alteration of the category of practising certificate if that was what Parliament had in mind.
For the first and third reasons given by Nicholson J, I too would hold that the power to amend is, or at least includes, a power to impose conditions if the Court ‘is satisfied that the practitioner would be a fit and proper person to practise in accordance with those conditions’.[6]
[6] The Legal Practitioners Act 1981 (SA) Re David Peter Andrew Moen [2018] SASC 136 at [28].
As the Judge observed, neither the Commissioner nor the Law Society had sought an order suspending or cancelling Mr Fowler’s practising certificate. Mr Fowler’s fitness to practise, subject to conditions, was accepted. The question before the Judge was which conditions were necessary to satisfy the Court that Mr Fowler would, within the confines of those conditions, be a fit and proper person to practise.
The bankruptcy
Mr Fowler was served with a Creditor’s Petition by the Australian Taxation Office (the ATO) under the Bankruptcy Act 1966 (Cth) on 11 May 2018.
On 16 May 2018, Mr Fowler provided notification of the show cause event constituted by the presentation of the Petition pursuant to s 20AH(2)(a) of the Legal Practitioners Act. On 31 May 2018, Mr Fowler filed an affidavit in accordance with section 20AH(2)(b) of the Legal Practitioners Act indicating, amongst other things, a desire to retain an unrestricted practising certificate and to continue dealing with trust money.
A sequestration order was made on 5 June 2018.
Background
Mr Fowler was admitted to practise in 2001. He established his own practice in Port Lincoln on 1 July 2007, but closed that practice in March 2009.
In May 2009, Mr Fowler admitted to an officer at the Law Society that he often failed to answer his telephone to avoid creditors, that his bank had frozen all of his accounts, and that he had lost his trust account cheque book. Following an exchange of emails between Mr Fowler and the Law Society on 15 May 2009, Mr Fowler consented to the appointment of a supervisor to the trust account of his practice.
On 22 June 2009, the Council of the Law Society appointed a supervisor to Mr Fowler’s trust account. The information on which the Law Society acted is set out in a memorandum from an officer employed in its Professional Standards section dated 18 June 2009. From that memorandum, it appears that Mr Fowler notified Professional Standards on 16 March 2009 that he was closing his practice due to debts, and transferring his files to another firm. On 1 May 2009, Mr Fowler advised Professional Standards that his bank had frozen his accounts, and he mistakenly informed Professional Standards that they had also closed the trust account. However, he explained that he had continued to produce, electronically, trust cheques for payments to clients when required. In May and June 2009, some of Mr Fowler’s clients contacted the Law Society with queries about refunds of trust money. It was not known precisely what those queries were, and whether or not they were in the nature of complaints. The memorandum noted that it had not been possible to reconcile the trust account bank statement but, importantly, noted that ‘[i]t appeared that there was more money held in trust than had been accounted for – not a deficit’.
The memorandum identified the following irregularities:
·The latest trial balance on the trust account was dated 19 March 2009 but few trust account records had been maintained since that date even though the bank statements showed a number of transactions.
·No reconciliation had been done since February.
·There was an amount standing to the credit of the practice in the Legal Practitioners Combined Trust Account, but Mr Fowler was not aware of that.
·Mr Fowler had mislaid the trust account cheque book and could therefore only generate cheques using an accounting program to which he had limited access (it later transpired that the cheque book had been packed into a packing box).
·There had been an incomplete provision of trust account records to the solicitor who had taken over files.
·It was not possible on the available records to reconcile the trust account.
The memorandum noted that a manager of the practice was not required because the Professional Standards section of the Law Society was satisfied that the practitioner who had taken over the files was competent to do so.
In the period of time in which Mr Fowler was closing down his office, some firm account cheques were dishonoured. However, it transpired that a reason for their dishonour was, as the memorandum of the Professional Standards section noticed, there was a surplus in the trust account because payments into Mr Fowler’s firm account, for work done, had not been made.
Between March 2009 and June 2010, Mr Fowler was not engaged in private practice but was employed by a former client. On 1 July 2010, Mr Fowler resumed practise in Adelaide as Duncan Fowler. He deposed in an affidavit received by the Judge that he had thereafter operated a trust account, ‘without blemish’. That is not strictly correct, but there was no irregularity which warranted any disciplinary or other action.
From shortly after his return to private practice in 2010, Mr Fowler began to default on payments due to the ATO.
In August 2011, Mr Fowler leased new premises in Carrington Street Adelaide, where he continues to reside and practise.
By July 2016, Mr Fowler’s debt to the ATO stood at over $190,000.00. Nonetheless, Mr Fowler formed an incorporated practice with one of his employees, a junior lawyer, N, and purchased a practice in Port Augusta for $30,000.00.
Mr Fowler explained in an affidavit received by the Judge that he purchased the practice to increase his income, to better manage his cash flow, and to address his outstanding tax liabilities. However, he acknowledged that the practice generated only a modest income. The incorporated practice employed additional staff.
In June 2017, Mr Fowler and N parted ways. N resigned as a director of the new practice over her concern about Mr Fowler’s difficult financial situation. N transferred her interest in the incorporated practice to Mr Fowler for no consideration other than that she took her files with her.
Mr Fowler deposed that the new practice ‘struggled along’. The practice was often behind in paying its bills. Mr Fowler acknowledged in his affidavit that the wages expense was high and changes needed to be made. In October 2017, Mr Fowler gave notice to his two remaining employees. Mr Fowler did not pay their superannuation entitlements until 30 July 2018 after the issue had been raised with him by the Law Society.
Mr Fowler’s overarching explanation for failing to pay the ATO debt was that he was not sufficiently focused on his finances generally, and he ‘probably let [his] tax debt get out of control because [he] felt too optimistic about being able to get it under control at some later time’. In an affidavit received by the Judge, Mr Fowler deposed that he was confused or unclear about the extent of the ATO debt and stated that he believed his tax debt was manageable.
The accumulating tax debt
It is necessary to set out a little more detail of how Mr Fowler accumulated the tax debt which led to his bankruptcy.
In August 2010, shortly after resuming practice, he received a taxation assessment in the sum of $3,910.25, which he could not pay because his gross income for the two-month period from 14 July 2010 to 14 September 2010 was $4,786.83. He hoped to re‑establish his practice and to return to greater profitability. The following summary of subsequent events is derived from the Judge’s reasons:[7]
[7] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [29]-[36].
·Mr Fowler entered into a repayment arrangement with the ATO in the sum of $200.00 per week from 26 August 2011 to 8 June 2012. The total due, including interest, was $8,526.64.
·Only a small number of weekly payments were made, even though Mr Fowler had, in an affidavit, incorrectly deposed that he was ‘sticking to the payment arrangement’.
·On 10 May 2012, the ATO warned Mr Fowler that it intended to take recovery action for an amount due which was then $13,202.97.
·On 12 May 2012, the ATO issued a new repayment schedule listing 72 weekly repayments, each of $200.00, save for the last one which was in a lesser amount. The total to be paid by 27 September 2013 was $14,274.28.
·On 13 June 2012, the ATO sent Mr Fowler a notice of assessment for the financial year ending 30 June 2011 for $13,545.25. It was a liability in addition to the repayment schedule. Mr Fowler made a payment of $110.00 on 30 April 2012 and $200.00 on each of 18 May 2012 and 8 June 2012. In an affidavit, Mr Fowler described these as regular payments when plainly they were not.
·On 21 July 2012, the ATO issued a statement showing that Mr Fowler’s debt had increased to $18,578.61.
·On 16 August 2012, the ATO issued a payment demand for $13,664.10.
·On 7 November 2012, the ATO sent a notice of its intention to collect the debt in the sum of $38,781.20.
·Thereafter, Mr Fowler made some lump sum repayments, one as much as $2,000, but the debt continued to climb.
·On 4 March 2015, the ATO gave notice of its intention to collect the debt in the sum of $83,414.35.
·By 5 September 2016, the total debt due to the ATO was $190,000.00, which formed the basis of the judgment that led to the bankruptcy notice in the sum of $226,081.37. The balance was interest and costs.
·Mr Fowler notified the Law Society of his tax debt on 5 September 2016.
·From November 2017, the Law Society required Mr Fowler to provide monthly trust account reports, which he did. Nothing adverse arose from them.

The Judge concluded:[8]
[8]    Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [37]‑[38].
[37]The practitioner has attempted to explain how or why the rapid and substantial increases in the tax debt came about. However, the information available to the Court is not adequate to permit a complete understanding of this. For the purposes of this matter it is not necessary for the Court to have such a complete understanding. Nevertheless, and of significance is my clear impression that, at no time, has the practitioner, himself, had any such clear understanding.
[38]The practitioner’s own account of his behaviour and thinking with respect to his taxation problems that persisted over the many years prior to the issue of the bankruptcy notice illustrate the following.
(i)    The practitioner at no time sought to evade his taxation obligations; there was no dishonesty in this sense.
(ii)     Nevertheless, the practitioner displayed a serious level of incompetence in managing his taxation affairs and managing his income in a way that would permit him to meet his debts as they fell due.[9]
(iii)    The taxation debt appears to have arisen from incompetence at assessing, and making provision in advance for, taxation liabilities incurred but to be finally assessed and to fall payable at a future time.
(iv)    The practitioner lacked insight into the seriousness of his predicament.
(v)     The practitioner, throughout, demonstrated a failure to attend to the obvious, that is, that his position would only worsen over time, unless he obtained professional assistance.
(Footnote in original)
[9]    To the extent he was able to meet his general debts in a timely manner (about which there is limited evidence) he was only able to do so at the expense of not meeting his taxation liabilities.
Before the Judge, the Commissioner and the Law Society submitted that the Judge should find that Mr Fowler had not honestly disclosed in his explanatory affidavits the extent of his mismanagement of his practice finances and his trust account. However, neither chose to put those criticisms directly to Mr Fowler by cross‑examining him. The Judge, not surprisingly, therefore, declined to make the adverse finding they sought:[10]
[40]The practitioner was not cross-examined on his affidavits. To a substantial degree, the factual matters deposed to by the practitioner have not been challenged. Nevertheless, a number of criticisms of the practitioner’s evidence were advanced by the interveners directed at asserted: inconsistencies; unsupported propositions; and lack of appropriate detail. Submissions were put as to adverse inferences that might be drawn. A number of the interveners’ criticisms have been adequately answered by the practitioner by way of reference to aspects of the affidavit evidence not referred to by the Commissioner or the LSSA when making the criticism. Other criticisms, on their face, would appear to carry some force. However, the fact that the practitioner has pointed to other evidence which serves to put in context or explain a number of the criticised or impugned statements elsewhere made by the practitioner in his affidavit evidence and the fact that the practitioner has not been cross-examined, render it unsafe for the Court to draw adverse inferences from the practitioner’s affidavit evidence bearing on his intentions and motivations. In general, I accept the practitioner’s evidence of factual matters to which he has deposed.
[10] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [40].
The Judge then summarised the position of Mr Fowler’s practice leading up to, and after, his bankruptcy:[11]
·Mr Fowler terminated the employment of his two remaining staff in October 2017.
·Mr Fowler paid out his residual practice debts by late 2018.
·Mr Fowler continues to work from a home office in the central business district of Adelaide, but visits Port Lincoln on one day every two or three weeks and Port Augusta on one day during the weeks he is not visiting Port Lincoln.
·Mr Fowler has paid close attention to the correct trust accounting procedures to be followed. The same auditor or external examiner has conducted trust account audits and examinations from and including the financial year ending 30 June 2011 and no irregularities of significance concerning the operation of and recording requirements relating to the trust account have been identified.
·Operating a trust account is of central importance to the viability of Mr Fowler’s practice which has embraced, since 1 July 2018, property law and conveyancing files (38 per cent), wills and estate planning files (22 per cent), family law files (11 per cent), general commercial files (11 per cent), deceased estates files (9 per cent) and civil disputes files (9 per cent).
·Mr Fowler’s forecast earnings for the 2018/2019 financial year are $48,575 based on an actual net profit to 2 February 2019 of $27,724. After taking into account significant one-off expenses, Mr Fowler’s estimate of net profit for that financial year is in the order of $75,000. Mr Fowler estimates his unpaid tax liability for the 2017/2018 financial year at zero and has deposed to being up to date with his Business Activity Statements payments.
·Mr Fowler’s estimated client income for the next 12 months is $158,709, non‑supervision practice expenses of $73,040 and supervision expenses of $28,344, leaving a net profit anticipated for the ensuing 12-month period of $57,325. This projection does not appear to have allowed for a taxation expense. If the net profit of $57,325 were to represent his taxable income for the next 12 months he would be left with an after-tax income of approximately $46,500.[12]
·The total estimated cost of the additional supervision is between $25,944 and $28,344 for the first year of operation and between $24,844 and $27,244 for the second year of operation.
[11] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [43]-[50].
[12] The Judge at [48] noted ‘This is to be compared with his current drawings of approximately $25,000 per annum which, as the intervenors submit, are extremely modest. It is questionable that the practitioner will be able to maintain such a level of austerity over the longer term’.
Relevant considerations
In Re Jenner, Debelle J explained the nature and purpose of the Court’s review of a bankrupt’s entitlement to practise:[13]
[2]The jurisdiction of the court to permit a bankrupt to practise must be exercised with considerable circumspection. The overriding consideration must be the public interest, that is to say, the protection of the public. The public confidence in the administration of justice must be maintained. The court must have regard to the interests of those members of the public whose clients will consult the legal practitioner. The court must ensure so far as lies within its power that the practitioner is a fit and proper person to practise notwithstanding the bankruptcy or intended bankruptcy. There is another aspect of the public interest to consider. It is to do what is reasonably possible for the purpose of enabling the practitioner to earn an income so that the practitioner may be in a better financial position to discharge the debts due to creditors. …
[3]… It is necessary, therefore, to examine the circumstances in which the person has become bankrupt for the purpose of determining whether those circumstances disclose conduct which is inconsistent with fitness to practise. The purpose of an inquiry under s 49 is not to discipline the practitioner. The Legal Practitioners Act makes separate provision for discipline of a legal practitioner. The purpose of an inquiry under s 49 is to determine whether, notwithstanding the bankruptcy or intended bankruptcy, the legal practitioner is a fit and proper person to practise.
[4]… the court must take care not to rely unduly on conditions. It must first decide whether the applicant is, notwithstanding the bankruptcy, a fit and proper person. The primary consideration should be whether the legal practitioner has the qualities which equip the practitioner to provide sound legal advice and proper legal representation to members of the public. The conditions may relate to such issues as assistance or supervision of the legal practitioner in relation to his financial affairs or the management of his practice.
[13] (2007) 250 LSJS 74 at [2]-[4].
The Judge summarised the relevant principles as follows:[14]
[14] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [56].
…
(i)    The Court must decide whether the practitioner, notwithstanding the show cause event, is a fit and proper person to practise law. However, this is to be determined within the context of the power to impose conditions that may limit the manner by which the practitioner is to practise.
(ii)     The purpose of the exercise is not to discipline the practitioner; the LPA makes separate provision for this.
(iii)   The jurisdiction to permit a bankrupt to practise must be exercised with considerable circumspection with the overriding consideration being the protection of the public and public confidence in the administration of justice being maintained.
(iv)    The fact that a legal practitioner has become bankrupt, prima facie, raises a concern as to whether the practitioner is a fit and proper person to practise at all.
(v)     It is necessary to examine the circumstances in which the person has become bankrupt for the purposes of determining whether those circumstances disclose matters inconsistent with fitness to practise.
(vi)   It may be that an indebtedness of an applicant is so substantial that it raises a serious question as to competence to practise. It may point to either serious financial incompetence or an inability to keep a proper oversight of financial affairs or both. It may suggest a lack of financial judgment as well as a lack of legal judgment. In this respect, a question might arise as to the practitioner’s ability to exercise sound judgment in advising others on financial or legal matters.
(vii)   An assessment of the practitioner’s honesty or dishonesty is a paramount consideration; not only as to whether or not the practitioner is a fit and proper person to practise, but also when assessing the risk that the practitioner might misappropriate trust account funds or might be tempted to overcharge clients or overwork files.
(viii) Even where a practitioner has not acted dishonestly, the financial circumstances of the practitioner both leading up to and contributing to the bankruptcy and as they may stand thereafter will be a material consideration when assessing the risk of the practitioner bowing to the temptations referred to in (vii) above in order to alleviate an ongoing difficult financial position.
The Commissioner does not contend that that summary is affected by any error of law.
The Judge’s reasons
The Judge referred to the three primary issues on which Mr Fowler’s entitlement to continue to practise turned. The Judge commenced by identifying as an ‘overarching requirement’ that the Court must ‘be satisfied that the public (particularly clients) will be adequately protected and public confidence in the administration of justice adequately maintained’.[15]
[15] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [91] (emphasis added).
The Judge then dealt with the first of the three primary issues – Mr Fowler’s honesty:[16]
[16] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [92]-[94], [96]-[99].
[92]… The practitioner has to date practised as a principal and deployed a trust account for the whole of the period since 2010, including almost one year as an undischarged bankrupt, without any suggestion let alone allegation that he has acted dishonestly. During this lengthy period he has been subjected to significant financial pressures. It cannot be said, categorically, that the practitioner has not acted dishonestly at any time during this period. The evidence does not go so far. However, it is difficult, if not impossible, for the practitioner to prove the negative. There is no evidence of any dishonesty. In particular, there is no evidence of any dishonest dealings with the trust account or in handling client files.
[93]Furthermore, and notwithstanding the criticisms properly directed to the practitioner’s conduct and attitude throughout the period of his dealings with the ATO, the practitioner has endeavoured to be fulsome and frank in the information and explanations provided to the interveners and the Court.
[94]It is readily apparent that the practitioner was ill equipped to properly comply with his trust accounting obligations in and probably prior to 2009. However, that was almost ten years ago now. The LSSA became involved and the problems, such as they were, were resolved without loss to any person. After 2009, the LSSA did not need to involve itself again until the practitioner voluntarily disclosed to the LSSA in late 2016 that he was experiencing taxation difficulties. As a consequence, the LSSA in late 2017 instituted a regime of regular trust account reporting. Nothing arising from this regime or from the unqualified or qualified, but in only very minor respects, audit reports for the financial years from 2011 to date has caused the LSSA to take any action with respect to the practitioner’s trust account.
…
[96]The matters raised to this point are such as to engender the belief, with some confidence, that honesty is an enduring feature of the practitioner’s character.
[97]A resolution of the practitioner’s major financial problem to date – his substantial ATO debt – has, to a substantial degree, been assisted by his entering into bankruptcy. Further, the practitioner’s ongoing taxation obligations are, on the evidence, being managed appropriately. As such, there is now less incentive for the practitioner to behave dishonestly than there may have been for the whole of the eight years or so between 2010 and the issue of the sequestration order in 2018.
[98]The practitioner’s long history during which no dishonesty has been identified, the current state of there being less incentive to behave dishonestly than before and the imposition of appropriate conditions requiring supervision of, auditing of and reporting on the practitioner’s financial and trust account affairs, in combination, would support a conclusion that the risk of trust account defalcation or other financial dishonesty by the practitioner in the future is low.
[99]It follows from the foregoing that, on the facts of this case, the practitioner does not, by reason of his long term failure to meet his taxation obligations and his bankruptcy per se, present an appreciable risk that he would act dishonestly if permitted to continue to practise as a principal subject to appropriate conditions. …
The Judge then turned to the second issue – Mr Fowler’s competence to manage a legal practice:[17]
[101]A number of factors relevant to this consideration have been addressed during the earlier discussion concerning the risk of future dishonest conduct. I am satisfied, notwithstanding problems in the past, that the practitioner has now acquired the requisite understanding and ability to operate and to record the operation of his trust account in accordance with statutory requirements. He has an unbroken history over many years of his trust account having been satisfactorily audited. Apart from the problems of 2009, there have been no concerns raised from any quarter, including clients, since the practitioner commenced practising on his own account in 2002. The fact that the practitioner was unable to comply with his taxation obligations and the conduct engaged in by the practitioner which resulted in the accrual of the taxation debt was quite unrelated to his management of his trust account obligations over that period.
[102]Finally with respect to this consideration, to the extent that there were to be any residual concerns about the practitioner’s capacity to operate a complying trust account, such would carry little weight in the event that the added protections afforded by the practitioner’s proposed conditions 13 to 15 were to be in place.
[17] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [101]-[102].
Finally, the Judge considered Mr Fowler’s capacity to properly manage his clients’ legal affairs:[18]
[107]I am satisfied, that the practitioner remains capable of properly managing his client’s legal affairs in the areas of practice he has identified notwithstanding his bankruptcy. To the extent that his bankruptcy and its underlying causes may have exposed a lack of legal as well as financial judgment, this risk would be substantially ameliorated by the practitioner’s proposed condition 5. Proposed condition 5 provides for a level of supervision by a very experienced legal practitioner that is likely to replicate, if not exceed, that which might ordinarily be expected in the case of an employee. Further, it is not as if the practitioner, were he to obtain employment, would likely be employed as a junior practitioner subject to intensive training and supervision. Much more likely is that he would be employed in a senior role with significant autonomy and expected to take responsibility for (or to supervise others with respect to) clients and client files.
(Emphasis in original)
[18] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [107].
The Judge also addressed the Commissioner’s submission that Mr Fowler’s practice was not sustainable because of the high cost of the supervision which he had proposed:[19]
[109]The interveners are concerned about the extent of supervision and consequent cost to the practitioner. For a practice that already might be considered financially marginal, an additional expense in the order of $25,000 per annum must be seen as significant and as imposing further financial pressure on the practitioner which he may be ill-equipped to manage. There is force in this concern. However, the question before the Court is whether the practitioner is a fit and proper person to practice under appropriate conditions. It is not for the Court to form a concluded view as to the future financial success or otherwise of the practice. On the financial information presently available and provided the practitioner’s assumption as to future earnings is made good, the practice as presently structured would appear capable of absorbing the estimated costs of supervision. Beyond that observation, I cannot go.
[19] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [109].
The Judge concluded:[20]
[110]I accept the submission of the practitioner that the conditions proposed by the interveners do not properly identify or address the nature of the risk to the public presented by this practitioner. On balance, I am satisfied that the practitioner is a fit and proper person to practise law on the conditions as proposed by the practitioner. To the extent that the practitioner poses a risk to the public, in particular, to his clients or to the maintaining of public confidence in the administration of justice, I am satisfied that the proposed conditions adequately address those risks. The conditions should operate until further order. It is important that the conditions should only end when it is apparent that they are no longer necessary in order to protect the public. This may or may not be so once the bankruptcy comes to an end. However, it is important that the Court, in exercise of its supervisory jurisdiction, has oversight of any variation to or removal of the conditions. Each of the practitioner and the interveners will have liberty to apply in this respect.
(Emphasis added)
[20] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [110].
Disposition of the grounds of appeal

Grounds 3.1.1, 3.1.2, 3.1.5 and 3.1.7 of the Commissioner’s Notice of Appeal contend that the Judge erred by failing to impose conditions preventing Mr Fowler from practising as a principal and from operating a trust account, and that the conditions imposed by the Judge were inadequate to protect the public and maintain public confidence. Those grounds impeach the Judge’s final conclusion but, because the Commissioner eschewed any complaint that the Judge’s exercise of discretion was manifestly unreasonable, do not identify an error which would otherwise vitiate the Judge’s discretion. They must be dismissed.
Ground 3.1.3 complains that the Judge reversed the onus of proof and erred in not requiring Mr Fowler to discharge the onus of establishing that he was a fit and proper person to hold a practising certificate subject to conditions. That contention is not arguable. The Judge identified as an overarching requirement that the Court ‘be satisfied’ that the public will be adequately protected and that public confidence will be maintained.[21] After then identifying and considering the three critical issues, the Judge concluded, ‘On balance, I am satisfied that the practitioner is a fit and proper person to practise law on the conditions as proposed by the practitioner.’[22] Ground 3.1.3 must be dismissed.
[21] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [91].
[22] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [110].
Ground 3.1.4 complains that the Judge did not have due regard to the role of the Commissioner and the Law Society in relation to Mr Fowler’s notification of a show cause event. It is difficult to understand the nature of the error there alleged. The ‘role’ of a party or an intervener is not ordinarily, in itself, a relevant consideration in the exercise of a discretion in the controversy in which they are involved. In any event, the submissions of the Commissioner fail to identify just what the mistake was and how it may have affected the exercise of the discretion. Ground 3.1.4 must be dismissed.
Ground 3.1.6 complains that some of the conditions on Mr Fowler’s practising certificate are unenforceable as against Mr Fowler, and govern the conduct of third parties. Conditions on a practising certificate providing a supervisory regime over a practitioner will generally require the cooperation of third parties. I acknowledge the obvious, that a practitioner cannot supervise himself or herself and has no power to compel third party supervisors to cooperate, and that in that sense the conditions are also unenforceable against the practitioner. However, if the third parties, in this case the accountant and the senior legal practitioner who agreed to monitor and supervise Mr Fowler, do not cooperate in the regime constructed by the conditions, the conditions will not be satisfied and Mr Fowler will not be able to continue to practise. Moreover, it is the supervising legal practitioner who is at the centre of the regime. That practitioner, having consented to supervise Mr Fowler, is, himself, subject to professional obligations. This ground must be dismissed.
Ground 3.1.8 contends that the Judge failed to have due regard to ‘the previously consistent approach of this Court in relation to bankrupt legal practitioners and their access to control of trust accounts and trust money’. In the course of written and oral submissions, the point of this ground was revealed to be that there is no decision of this Court which has allowed a bankrupt practitioner to manage a trust account, but that was because there is no known decision in which a bankrupt practitioner sought to manage and have access to a trust account. There is, therefore, no inconsistent decision of this Court in a case in which whether or not a bankrupt practitioner should hold a trust account fell to be determined by a court. I acknowledge that the absence of such a case shows that cases in which there is a good prospect that a bankrupt practitioner would be permitted to operate a trust account are, at least, not common. It may also be that bankrupt practitioners often have alternative practising positions as an employee available to them. Be that as it may, it is difficult to see how this Court could ever declare an immutable principle that a bankrupt practitioner should never be allowed to operate a trust account. There must be, for obvious reasons, a strong indisposition to allowing a bankrupt practitioner to manage a trust account, but in some, admittedly rare, cases, there may be reasons to allow it. All of the reasons not to allow Mr Fowler to hold a trust account were carefully considered by the Judge. Ground 3.1.8, insofar as it alleges an error of law in not following earlier decisions of this Court, or suggests that the Judge did not have regard to all of the considerations weighing against allowing Mr Fowler to operate a trust account, must be dismissed.
Ground 3.1.9 contends that the Judge gave insufficient weight to a number of considerations. I observe again that it is not an error of law to give less weight to a particular consideration, in the exercise of a discretion, than the weight which would be given to that consideration by another judge or an appeal court. It follows that all of the particulars of ground 3.1.9 simply fail to allege an error of a kind which would vitiate the Judge’s discretion. Nonetheless, it is as well to deal with each of the sub-grounds of 3.1.9 in turn.
Ground 3.1.9.1 complains that the Judge gave insufficient weight to the public interest in ensuring that Mr Fowler is able to earn a sufficient income to enable him to contribute to his bankrupt estate. The Judge, as we have seen, expressly adverted to this consideration. It can, therefore, not be said that the discretion miscarried by reason of a failure to consider it. However, the circumstance that a practitioner’s practice will not generate much of a surplus to repay the estate is not, generally, a strong reason to refuse to allow a bankrupt practitioner permission to practise. This consideration has its genesis in the judgment of Debelle J in Re Jenner in which his Honour observed that there was a public interest in allowing a practitioner to practise so that, if the practice is profitable, he or she might contribute to the practitioner’s bankrupt estate.[23] However, in its proper context, Debelle J was making the point that, even though there is a risk to the public in allowing a bankrupt practitioner to practise, the prospect of payments being made into the estate is a competing consideration in favour of allowing it, if the risk to the public can be adequately managed and confidence in the profession maintained. I doubt that Debelle J intended to hold that the fact that Mr Fowler’s practice may not generate much of a surplus to contribute to his bankrupt estate, is, in itself, a strong reason not to allow Mr Fowler to practise. Far from it. Even if the prospect of payment into the estate is small in the short term, it is more likely that by remaining in practice a practitioner will contribute more to the community generally, if not his bankrupt estate, than finding employment elsewhere. Mr Fowler’s practice will serve South Australia’s regional community, which does not have the same access to legal services as the residents of its capital. The critical issue is whether the risk to the public can be minimised and confidence in the legal profession maintained.
[23] Re Jenner (2007) 250 LSJS 74 at [2].
Ground 3.1.9.2 complains that the Judge failed to give sufficient weight to Mr Fowler’s lengthy history of financial mismanagement. Again, the Judge gave this matter much careful consideration. It is not arguable that the Judge failed to have regard to this very relevant consideration. Moreover, the strict supervisory regime constructed by the conditions imposed by the Judge addressed that very concern.
Ground 3.1.9.3 complains that the Judge gave insufficient weight to the consideration that public confidence in the profession must be maintained. As has been seen, the Judge identified as part of the overarching consideration public confidence in the profession. The Judge then expressly concluded that the proposed conditions adequately addressed both the risk posed by Mr Fowler to the public, and his clients, and the need to maintain public confidence in the administration of justice.[24]
[24] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [110].
Ground 3.1.9.4 complains that the Judge failed to give sufficient weight to the identified inconsistencies in Mr Fowler’s evidence. However, the inconsistencies in themselves are of little weight unless they reveal a lack of candour or other matter which poses a risk to the public. Importantly, as the Judge observed, the Commissioner and the Law Society declined to cross‑examine Mr Fowler. They chose not to put to Mr Fowler that the inconsistencies in his evidence manifested dishonesty or any other characteristic which made him unfit to practise on his own account. The Judge identified, and referred to, the inconsistencies but declined to draw the inferences contended for by the Commissioner because they were not put to Mr Fowler. No vitiating error has been established on this ground, and it must be dismissed.
Ground 3.1.9.5 complains that the Judge gave insufficient weight to Mr Fowler’s failure to adequately explain the reasons for the show cause event. Again, the Judge considered carefully the reasons for Mr Fowler’s bankruptcy. The Judge identified the reasons to be the incompetence in Mr Fowler’s financial management and failure to make adequate provision for his tax liabilities. There is, therefore, no vitiating error by reason of a failure to have regard to a relevant consideration. The Judge nonetheless allowed Mr Fowler to hold a trust account because of the improvement in Mr Fowler’s financial management after the bankruptcy and because his Honour was satisfied that the monitoring by the accountant would address that risk.
Ground 3.1.9.6 complains that the Judge failed to give sufficient weight to the cost and impracticality of the conditions. Again, the Judge carefully considered this matter. The accountant and the senior practitioner who was the supervisor were prepared to monitor and supervise Mr Fowler. If they were to prove impracticable, then the Law Society would be notified and become aware of that fact reasonably quickly. No manifest unreasonableness has been established in the Judge deciding, in the exercise of his discretion, to give the conditions an opportunity to work.
Ground 3.1.9.7 complains that the Judge gave insufficient weight to Mr Fowler’s erroneous statements in his affidavits that he had complied with the payment arrangements with the ATO. The Judge expressly found that Mr Fowler’s assertions were incorrect in that respect. The Judge did not ignore this matter. No vitiating error has been shown and this ground must be dismissed.
Ground 3.1.9.8 complains that the Judge failed to have sufficient regard to his own finding that Mr Fowler had ‘fail[ed] to attend to the obvious’.[25] The very terms in which this ground is expressed show that there was no vitiating error. The Judge cannot have ignored his own finding.
[25] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [38].
Ground 3.1.10 contends that the Judge erred in concluding that Mr Fowler’s ‘honesty or dishonesty is a paramount consideration when assessing fitness to practise and future risk, thereby affording insufficient weight to other considerations, and in particular the … lack of candour in affidavit evidence presented to the Court’. The ground refers to subparagraph (vii) of the Judge’s summary of the relevant principles,[26] which I have reproduced above in [49] of these reasons. The ground of appeal is based on a non-textual reading of subparagraph (vii). First, the Judge was referring to practitioners generally, and not Mr Fowler in particular. Secondly, the point made by the Judge was that a practitioner found to be dishonest was unlikely to be permitted to practise because it told against his or her fitness to practise but also because there would be a risk of a trust defalcation or that clients would be overcharged.
[26] The Legal Practitioners Act 1981 (SA) Re Duncan James Fowler, A Practitioner [2019] SASC 64 at [56].
If Mr Fowler had been shown to be dishonest, then it was almost inevitable that he would not be allowed to continue to practise with a trust account. The Judge was not suggesting the converse – that because Mr Fowler was not dishonest other considerations weighing against allowing him a trust account should be relegated to secondary considerations. The contention that the Judge gave insufficient weight to other considerations is, as I have explained on many occasions already, not a vitiating error. As to Mr Fowler’s alleged lack of candour, the Judge did not draw the inferences contended for by the Commissioner. I repeat my reasons in [66] above. This ground must be dismissed.
Conclusion
Insofar as permission is necessary, I would grant permission but I would dismiss the appeal.
PARKER J: I would grant permission to appeal but would dismiss the appeal. I agree with the reasons of the Chief Justice.
BLEBY J: For the reasons given by the Chief Justice, I would grant permission to appeal but dismiss the appeal.