New South Wales Bar Association v Hamman

[1999] NSWCA 404

CITATION:	NEW SOUTH WALES BAR ASSOCIATION v HAMMAN [1999] NSWCA 404
FILE NUMBER(S):	CA 40539/98
HEARING DATE(S):	9 September 1999
JUDGMENT DATE:	29 October 1999
PARTIES :	NEW SOUTH WALES BAR ASSOCIATION v STIRLING MILBURN HAMMAN
JUDGMENT OF:	Mason P at 1; Priestley JA at 104; Davies AJA at 116

COUNSEL:	A: G C Lindsay SC R: B M J Toomey QC/ G J Bellew
SOLICITORS:	A: Eakin McCaffery Cox R: Ray Finlayson & Associates
CATCHWORDS:	Legal practitioners - professional misconduct - offence of dishonesty - income tax
ACTS CITED:	Crimes Act 1914 (Cth) s29B and s29D
CASES CITED:	Ziems v The Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279; In re Thom; Ex parte the Prothonotary (1962) 80 WN (NSW) 968; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408; Honeychurch v Honeychurch (1943) SASR 31; Oudman v Warren [1963] SR (NSW) 390); Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 90; Law Society of New South Wales v Bannister (1993) 4 LPDR 24; Prothonotary v Pangallo (1993) 67 A Crim R 77; In re Daly (1896) 17 NSWLR 169; In re Hallinan 272 P 2d 768 (1954); Re a Practitioner (1984) 36 SASR 590.
DECISION:	See par 103 of judgment

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40539/98

MASON P
PRIESTLEY JA
DAVIES AJA

Friday 29 October 1999

THE NSW BAR ASSOCIATION
v Stirling Milburn HAMMAN

The opponent is a barrister who, in July 1998, was convicted after having pleaded guilty to five charges under ss29B and 29D of the Crimes Act 1914 (Cth). He was sentenced in the District Court to a term of two years imprisonment to be served by periodic detention. The Court of Criminal Appeal subsequently varied the sentence to 14 months imprisonment by way of periodic detention, but in so doing made it clear that it was giving effect to a technical sentencing principle. The Court of Criminal Appeal indicated that it took a more serious approach to the criminality than had been taken by the sentencing judge.

The offences related to the dishonest understatement of income in income tax returns filed in 1990, 1991 and 1992. The total income understated was $656,636. The offences under s29B involved the barrister in knowingly misrepresenting by understatement his gross income with the object or for the purpose of obtaining a benefit. The offences under s29D involve the defrauding of the Commonwealth.

The New South Wales Bar Association applied to have the barrister struck off. The barrister conceded professional misconduct but argued that suspension from the role of legal practitioners was the appropriate remedy.

Held (by Mason P and Priestley JA; Davies AJA dissenting). The barrister’s name should be removed from the roll of legal practitioners.

Discussion of the impact of dishonesty in relation to tax affairs upon fitness to practise.

Ziems v The Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279; In re Thom; Ex parte the Prothonotary (1962) 80 WN (NSW) 968; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408; Honeychurch v Honeychurch (1943) SASR 31; Oudman v Warren [1963] SR (NSW) 390); Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 90; Law Society of New South Wales v Bannister (1993) 4 LPDR 24; Prothonotary v Pangallo (1993) 67 A Crim R 77; In re Daly (1896) 17 NSWLR 169; In re Hallinan 272 P 2d 768 (1954); Re a Practitioner (1984) 36 SASR 590.

Crimes Act 1914 (Cth) s29B and s29D.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40539/98

MASON P
PRIESTLEY JA
DAVIES AJA

Friday 29 October 1999

THE NSW BAR ASSOCIATION
v Stirling Milburn HAMMAN

JUDGMENT

1    MASON P: The opponent is a barrister who accepts that he has been guilty of professional misconduct in relation to offences of dishonesty for which he has been convicted and sentenced following a guilty plea. At issue is whether he should be struck off or suspended from the roll of legal practitioners.

Primary facts

2    The barrister was born in 1948. He graduated from university and was admitted as a solicitor in 1972. He was admitted as a barrister in 1976 and practised at the Bar until July 1998 when he commenced to serve a sentence of two years periodic detention. 3    From about 1985 he concentrated on common law matters, particularly personal injuries cases in country circuits. The practice became extremely busy and lucrative. Up to 38 weeks per year were spent on country civil circuits, with the barrister accepting many briefs in a particular circuit. 4    In the decade after 1979 the barrister spent much time working in the interests of the members of the Lindfield District Cricket Club. At various times he held the most senior positions in the club, all of them honorary. He committed much of his available time to administration, coaching and playing. 5    The thriving and lucrative practice had limited administrative support. The barrister had a clerk but he did not employ a secretary. He usually dictated his accounts in the solicitor’s office while on circuit, leaving it to the solicitor to send copies to him in due course. He did not check if accounts were paid or unpaid and did not send accounts rendered. 6    This record-keeping was accompanied by erratic banking practices. Cheques were not recorded when received. As time passed an increasing number were not banked. The solicitors were not concerned. Indeed, the major firms briefing the barrister acquiesced in this practice on the basis that it assisted them with their own overdraft facilities. By August 1993 the amount of unpresented cheques had grown to more than $1.2 million. 7    This scanty bookkeeping system contributed to income tax practices which led to the barrister’s downfall. They included substantial failure to bring to account cheques received and available for banking prior to the end of the fiscal year. 8    In the late 1980s the barrister embarked upon a further course of conduct which, though lawful in itself, became the vehicle for dishonest tax evasion. Instead of banking cheques received on account of fees, he endorsed cheques in favour of third party creditors. He paid credit card debts and the vendor of a valuable motor vehicle in this way. This practice meant that the barrister had no banking record of receipt and it became a vehicle for deliberate understatement of income in the barrister’s tax returns. What started as innocent and careless conduct in which money was declared in tax returns even where cheques were endorsed to third parties, became in the barrister’s own words “increasingly reckless and … deliberate …. I did so knowing that I may not declare those cheques for income tax” (affidavit par 19). In cross-examination before us, the barrister accepted that his busy workload at the Bar provided no excuse for misconduct which he knew at the time to be wrong. 9 The barrister’s undoing came about when the Australian Tax Office (“ATO”) discovered that school fees had been paid with cheques that had not been brought to account in earlier tax returns. The ATO wrote to the barrister in August 1993. He immediately set about putting his financial records in order and making full disclosure of all undisclosed income. The task was not an easy one having regard to the chaotic record-keeping system. However, by late September 1993 the barrister lodged amended returns for the relevant financial years. 10 The barrister produced all of his records to the ATO and presented himself to compulsory examination in 1993 and early 1994. Ultimately, on 6 January 1995 he received three notices of reassessment which included primary tax calculations, additional tax by way of penalty and interest. The primary tax was $789,000 and the additional tax by way of penalty was $510,000. 11 He paid promptly in accordance with the assessments. At the same time he appealed against the assessments and, when his objections were disallowed, proceedings were commenced in the Administrative Appeals Tribunal. Those proceedings were stood over generally in December 1996 in the light of the criminal proceedings which were launched. 12 On 24 December 1996 the barrister was served with a summons alleging breaches of s29B of the Crimes Act 1914 (Cth) in relation to failure to declare all of his assessable income for the financial years 1991, 1992 and 1993. Committal proceedings were fixed for September 1997. There were negotiations with the Director of Public Prosecutions (Cth) which culminated in a plea of guilty to five charges in accordance with a statement of facts. The barrister was committed for sentence in the District Court. 13 In proceedings which attracted considerable publicity the barrister was convicted on his plea of guilty by his Honour Judge Viney QC. On 3 July 1998 a sentence of two years imprisonment was imposed, to be served by periodic detention. 14 On 3 July 1998 the barrister was directed to show cause why his practising certificate should not be suspended or cancelled (cf Legal Profession Act 1987, s37(1)(g) ). 15 On 13 July 1998 the barrister informed the claimant Association that he would cease acting as a barrister. He agreed to wind up his practice promptly and undertook that he would not in any way act as a barrister after 16 July 1998, the date on which his sentence of periodic detention commenced. The undertaking was for the period of the sentence, ie (at that stage) until 30 June 1999. 16 The barrister concluded his letter of 13 July 1998 to the Association in the following terms:

When you come to investigate this matter you will find that many members of the Bar, including many Senior Counsel gave me references of good character during the sentence proceedings. Although I am guilty of taxation offences to which I pleaded guilty, I maintain I am still a person of good character and still fit to practice as a barrister save only for the fact that it is inappropriate that I should do so while I am serving a period of periodic detention requiring me to reside in a periodic centre for a portion of the week.

17    On 16 July 1998 the Bar Council resolved to cancel the barrister’s practising certificate and to move the Supreme Court to strike the barrister’s name from the roll of legal practitioners. The fact that the professional body has through its council resolved upon such a course of action does not of course bind this Court in the exercise of its inherent disciplinary jurisdiction (Legal Profession Act 1987, s171M). The formally expressed views of the professional association are nevertheless of relevance (Ziems v The Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279, In re Thom; Ex parte the Prothonotary (1962) 80 WN (NSW) 968 at 971). 18 Both the Director of Public Prosecutions and the barrister appealed against the sentence. On 13 November 1998 the Court of Criminal Appeal (by majority) dismissed the Crown appeal. The barrister’s appeal was allowed and the sentence of imprisonment by way of periodic detention was varied to a sentence of 14 months expiring on 16 September 1999. This variation was based upon what may be described as technical sentencing matters. The judgment of Sheller JA which was the primary judgment of the Court made it plain that the offences for which the barrister stood convicted were of such a level of seriousness that a full time custodial sentence should have been imposed at first instance. 19 The barrister commenced to serve his sentence on 16 July 1998. He spent periods of time in prison. From December 1998 onwards he was permitted to serve his imprisonment by way of work release. He attended Northhaven Nursing Home on Thursday and Friday of each week from 7:30am to 3:30pm each day until the expiry of the sentence on 16 September 1999.

Overview of the claimant’s case

20    The claimant moves to have the barrister struck off having regard to the conviction and sentence and the underlying misconduct. It is submitted that the offences are such as to require removal from the roll. 21    The general principles are not in contest. Disciplinary proceedings against a legal practitioner are concerned with the protection of the public (Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 250-251). Their object is not to punish the practitioner but to protect the public and to maintain proper standards in the legal profession. The fact that the misconduct is not directly involved with practice in the law makes no difference where, as is conceded in the present case, the practitioner’s behaviour would reasonably be regarded as disgraceful and dishonourable by professional brethren of good repute and competency (Allinson v General Council of Medical Education and Registration [1894] 1 QB 750; Prothonotary of the Supreme Court of NSW v Costello [1984] 3 NSWLR 201 at 203). The leading case is Ziems, to which I shall return. 22    Although the claimant is the moving party and although the barrister is entitled to have his conduct as a barrister taken into account in deciding fitness, the Court is entitled and required to ask whether the practitioner whose character and conduct is under review can properly be held out as a fit and proper person to remain a practitioner of the Court (Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 442-444).

Overview of the barrister’s case

23    (a) General: The barrister’s evidence included his own affidavit, which was largely unchallenged and which is dealt with below. There was also significant character evidence, much of it coming from colleagues at the Bar. Most of these witnesses were friends or associates of the barrister, but that in itself does little to diminish its force in the areas with which it deals, because one would expect such evidence to come from persons having a close acquaintance with the barrister. Many of these witnesses had given character evidence in the sentencing proceedings. 24    None of the witnesses in the proceedings in this Court was cross-examined except the barrister. 25    It is unnecessary to deal with the detail of this evidence, although the impressive weight of the number of witnesses prepared to speak favourably of the barrister, despite full awareness of the convictions, must not be overlooked. 26    This evidence established the following to my clear satisfaction:
· The offences occurred during a period when the barrister was preoccupied, indeed over-committed, in an extremely busy practice. · The manner in which the barrister conducted himself in the practice of law was that of a doughty but trusted legal combatant in a busy personal injury practice. · Unsurprisingly, none of the barrister’s colleagues had any inkling of what the barrister himself described as his double life until after the barrister was caught out by the ATO. Most colleagues (like the claimant Association) knew nothing until the guilty plea or even sentencing. · During the relevant period, the barrister spent a good deal of the time when he was not engaged with matters legal in playing, coaching and administering cricket through the Lindfield District Cricket Club. The barrister’s contribution to this community activity was and continues to be substantial and highly appreciated. · The barrister has been fortunate to enjoy a stable, supportive family life. · Discovery, conviction and sentence, with their attendant publicity, have brought shame and disgrace upon the barrister. · The total experience has had a profound and lasting impact upon the barrister. Colleagues and friends attest to a significant change in a previously brash and obsessive personality. To like effect is the evidence of Dr Phillips, a psychiatrist, who speaks of a mellowing of personality, associated with insight into past wrongdoing and acceptance of the necessity of a balanced lifestyle. · The barrister served the second stage of his sentence of periodic detention at a retirement village. The Director of Nursing at that village provides a glowing testimonial of a cheerful, punctual, trustworthy, courteous and genuinely helpful worker, one who did considerably more than was required of him. 27    The testimonials from colleagues at the Bar describe the barrister’s misconduct as being out of character and at variance with the reputation of a dedicated and trustworthy practitioner. I have no difficulty accepting this evidence. But it raises the question of how the discovery through detection and conviction of this “double life” is to be addressed in the decision at hand. It cannot be doubted that some people can conduct themselves with the utmost probity in their professional lives while behaving dishonestly or dishonourably in their so-called private lives. The converse is also true. But it is not possible to ignore the “private” in a context where personal misconduct has been found to represent professional misconduct. This is especially true in a profession vitally dependent upon the reality of trustworthiness, where the shattering of the mirror of transparency reveals that all was not as it once appeared (cf Ziems at 298 per Kitto J, quoted at par 74 below). 28    Most of the professional testimonials stopped at the point of expressing a favourable opinion as to the unlikelihood of re-offending and as to the deponent’s willingness to deal with the barrister in a professional capacity notwithstanding the misconduct. Several witnesses speak highly of the barrister because of his strength of character as demonstrated since his downfall. The fact that the deponents stopped at this point does not lead to any unfavourable inference against the barrister. It simply reflects the genuine and limited response of witnesses trying to give an honest assessment. Only a few of the witnesses (notably Mr Bruce Collins QC) apparently felt qualified to grapple with the difficult issue of the barrister’s fitness to practice in a profession whose very reputation was (as the barrister himself recognised) itself tarnished by the barrister’s own professional misconduct. Once again, this is not stated by way of criticism, but simply to put the subjective evidence in a proper context. 29    (b) The barrister’s own evidence: The barrister filed an affidavit which gave details of his professional career, his contribution to community life through cricket, and his personal background. The affidavit recounted the circumstances leading up to the commission of the offences. Consistent with the pleas of guilty, the barrister recognised that his omissions were deliberate, dishonest and motivated in part by financial gain (pars 22-23). 30    The barrister spoke of “leading two lives”: first, his public life as barrister, community and family man in which he achieved “the highest possible standards that I was capable of”; secondly, the private persona in which he was increasingly becoming “burnt out” as he was “drawn towards deliberate ignorance and recklessness as to the risks and consequences of the situation”. 31    The affidavit deals with the ATO discovery and the steps that led to conviction and sentence. Deep shame and profound regret are expressed with regard to the barrister’s actions and their consequences for himself, his family and his profession. 32    As indicated below, the sentencing judge treated as significant mitigation the fact that the barrister had promptly paid all of the tax, penalties and interest demanded in the notices of reassessment issued following the ATO investigation. Judge Viney was nevertheless aware that the barrister had commenced proceedings in the Administrative Appeals Tribunal challenging the imposition of penalties. 33    In his affidavit sworn on 23 April 1999, the barrister said this about these matters:

24 …On the 6th January, 1995 I received three Notices of Re-Assessment including primary tax calculations, penalties and interest calculations. I paid these within the due date.
25 Thereafter, on the 2nd March, 1995 I lodged an Appeal against the Re-Assessments. After representations, on the 23rd October, 1995, the ATO disallowed the objections and the matter proceeded to the Administrative Appeals Tribunal for hearing. On the 8th December, 1996 the Administrative Appeals Tribunal adjourned the Appeal generally.
…
33 … I have paid all amounts set out in the Notices of Assessment and all Provisional Tax payments have been paid on time and there are no monies owing to the Australian Taxation Office. This has been the situation since the 1992 Tax year. Recently I settled my appeal with the Australian Taxation Office.”

34    Pausing at this stage, three things were clear. The barrister was asserting the relevance of the fact that he had promptly paid all assessments and penalties imposed by the Commissioner. Secondly, the barrister revealed that he had challenged the reassessments. Thirdly, he disclosed that his appeal had been recently settled. 35    The affidavit was silent as to the terms of settlement. Not surprisingly, the claimant’s appetite for further information on the topic was whetted. The barrister was given notice to attend for cross-examination on his affidavit. Coupled with this, the claimant served a notice to produce which called for production of all documents relating to the appeal and its settlement. 36    This led to a curious turn of events. Senior counsel for the barrister announced at the outset of the proceedings that the barrister objected to the production of the documents, although the barrister was prepared to inform the Court of the result of the settlement. Written submissions were tendered, contending inter alia that the documents were irrelevant and that production was prohibited by s16(2) and (3) of the Income Tax Assessment Act 1936. The submissions cited Honeychurch v Honeychurch [1943] SASR 31, a decision (by majority) of the Full Court of the Supreme Court of South Australia. I content myself with saying that it was regrettable that the Court’s attention was not drawn to the decision of the Full Court of the Supreme Court of New South Wales which declined to follow Honeychurch (Oudman v Warren [1963] SR (NSW) 390) and the decision of the Full Court of the Supreme Court of South Australia (Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1989) 90 ALR 49) which overruled Honeychurch. It is difficult to comprehend how proper researches revealed the former case but neither of the two later reported decisions. 37    The barrister was questioned about his role in the decision to take the objection and to advance it on the flimsy basis of Honeychurch. I am prepared to give him the benefit of the doubt on this issue, having regard to his answers and to the fact that his senior counsel offered at the commencement of proceedings in this Court to divulge the result of the settlement of the proceedings in the Administrative Appeals Tribunal while continuing (for a time) to rely upon Honeychurch to draw a blanket of secrecy over the remaining documents. 38    The upshot was that the barrister disclosed, under pressure, that his appeal had been settled on most favourable terms. The entirety of the penalties were repaid by the Commissioner with interest. The settlement of the proceedings was embodied in a written (consent) decision of the Tribunal that the Commissioner annul the amount of additional tax imposed by way of penalty for the relevant years and refund that amount to the barrister; that the Commissioner pay the barrister interest on the aforesaid amount at the statutory rate from 8 February 1995; and that the interest payment be brought to account by the barrister as assessable income for the year of receipt of that payment. 39    But this still leaves an unfortunate shadow over the barrister’s case. Why was the truth about the penalties dragged so begrudgingly from the barrister? He made the issue relevant by asserting (as he had before Judge Viney) that the penalties had been paid in full. Why did he not disclose in the affidavit that they had been repaid in full, with interest? His affidavit told the half truth that his appeal had been recently settled. This was a half truth within the four corners of the affidavit because of the previous assertion that all penalties had been paid on the due date. It was quite disingenuous for the barrister to submit through his counsel that the documents sought in the notice to produce were irrelevant to any issue in the proceedings. It leaves an unpleasant taste in the mouth that the barrister should have been lacking in frankness in his carefully drawn affidavit sworn fourteen days after the settlement of the proceedings in the Administrative Appeals Tribunal, being a settlement on highly favourable terms of which he was well aware. 40    The barrister was challenged in cross-examination with having been less than frank in this matter. He gave, as his explanation for non-disclosure of the settlement terms in an affidavit or supplementary affidavit, his belief that when the agreement was struck with the ATO it was confidential (Tr p26). This in itself lies uneasily with the (limited) disclosure in the affidavit of the settlement of the appeal, and the fact that the proceedings in the Administrative Appeals Tribunal were settled on terms spelt out expressly in the Tribunal’s decision of 9 April 1999. The evidence was contradicted in a later answer (see par 42 below). The barrister then said in cross-examination that at the time he swore the affidavit, he had not yet received the money due to be repaid by the Commissioner. He later disclosed that the money was paid in June/July 1999. (The proceedings in this Court were heard on 9 September 1999.) It is clear that he discussed the terms of the settlement with his counsel and his solicitor, and it is equally clear that no supplementary affidavit was filed. 41    The barrister was tested as to the basis of his belief as to confidentiality. He said that he believed that confidentiality stemmed from “the Tax Act” and he said that he had told the ATO officers on the date that settlement was negotiated that “so far as I’m concerned, this is confidential between us but … I am going to tell my advisers” (Tr p33). In my view, these were very deficient bases upon which to proffer an affidavit which was objectively misleading and to take no steps to correct it until, under pressure from the claimant, the document embodying the terms of the settlement was produced to the Court. There was no document recording any agreement as to confidentiality (Tr p33). 42    Later evidence was that the settlement document was discussed with the barrister’s counsel, with instructions to the effect that the barrister did not care if the document was disclosed to the Court. He told his counsel that he had no objection in relation to disclosure (Tr p37). This evidence prompted the following:

Q: So you weren’t concerned about the confidentiality of the document?
A: No, because I always left it in the hands of my senior counsel. I had told him of the settlement when it had arrived, when it happened, and I told him of the confidentiality - well, not of the confidentiality but I told him of the settlement. And then when it arose again with the notice to produce I then raised it with him again and said it’s up to you, you are my QC, you are my counsel, you are aware of what’s going on, you advise me. I feel that I wasn’t breaching the tax office - well, the understanding or the undertaking that I had given to the tax office because I said to them that I would disclose it to my legal advisers. And that’s the stance I took all the way along, I disclosed it to my legal advisers for them to advise me as to what should happen.

43    This evidence indicates that the issue of disclosure of the settlement terms was considered by the barrister and his legal advisers before the receipt of the claimant’s notice to produce. It suggests that the barrister’s earlier answer that an obligation to preserve the confidentiality of the terms of settlement was a reason for not revealing those terms in an affidavit was less than the whole truth. It certainly shows that any such obligation had ceased to be a factor explaining or justifying the barrister’s failure to correct by affidavit the half truth about fully paying the tax penalties in his affidavit evidence. I consider myself bound to record these matters. However, my decision adverse to the barrister stands independently upon the reasoning set out below.

The gravamen of the professional misconduct

44    It is necessary to examine in some detail the offences which the barrister accepts unreservedly as constituting professional misconduct. 45    The details are set out in the statement of facts provided to Judge Viney and used as the basis of sentencing. His Honour’s assessment of those facts yields to the more serious view of criminality taken by the Court of Criminal Appeal. Whether or not this follows as a matter of legal obligation (cfMinister for Immigration and Ethnic Affairs v Gungor (1982) 42 ALR 209, Lai v Minister for Immigration (1991) 28 FCR 346 and Luu v Minister for Immigration and Multicultural Affairs (1998) 157 ALR 213), I respectfully agree with the views of their Honours in the Court of Criminal Appeal in this matter. 46 The offences to which the barrister pleaded guilty were three charges under s29B of the Crimes Act 1914 (Cth) and two charges under s29D of that Act. The factual and technical reasons that explain the different charges are set out in the reasons of the Court of Criminal Appeal and the case was conducted on the basis that the maximum penalty for each count was two years imprisonment. Nothing turns upon those distinctions in the present case. The summary which follows is taken from the judgment of Sheller JA. 47 Viewed compendiously, the five charges covered income tax returns in 1990, 1991 and 1992 that, in total, understated income by $656,636. The barrister had received 217 cheques from solicitors for fees that were not included as part of his gross income. He had dealt with these cheques by (i) banking them in the year they were received, (ii) endorsing them in the year they were received in favour of third parties for the payment of debts owing to those third parties, (iii) banking them not in the year of receipt but in a later year and (iv) endorsing them in favour of third parties in years after the year in which they were received for the payment of debts to those third parties. 48 The three charges involving s29B were that in each of the income tax returns for 1990, 1991 and 1992 the barrister imposed upon the Commonwealth, namely the Australian Taxation Office, by an untrue representation in writing in that he stated in them that his gross income derived as a barrister for those financial years was $198,056, $90,675 and $232,462 with a view to obtain a benefit, namely a reduction in tax payable by him. As ultimately agreed between the DPP and the barrister, the amounts understated were $149,078 in 1990, $166,924 in 1991 and $196,958 in 1992, a total of $512,960. 49 As Sheller JA pointed out, the plea of guilty to those three charges admitted that the barrister had to his knowledge untruly represented by understatement his gross income by amounts totalling $512,960 with the object or for the purpose of obtaining a benefit. 50 The fourth and fifth charges (under s29D) were that on the dates the barrister lodged his income tax returns for 1991 and 1992 he defrauded the Commonwealth. The amounts understated were $6,500 in 1991 and $137,176 in 1992. 51 Thus, over $656,636 income was involved. The tax evaded or dishonestly deferred was 48.25% of that amount ie $316,826. 52 The charges under s29B carried a maximum term of imprisonment of two years. Those under s29D carried a maximum term of ten years. However, it was common ground in the criminal proceedings that the s29D charges should for sentencing purposes be treated as equivalent to the charges under s29B, because the s29D charges were laid to avoid a perceived technical difficulty in respect of proof under s29B as regards 49 cheques. 53 Having been first detected in August 1993, the barrister cooperated fully with the ATO investigations in 1993 and 1994. There was a delay of two years before charges were laid by the DPP in late 1996. On 8 September 1997 the barrister pleaded guilty to all five offences. He adhered to this plea when he came up for sentence before Judge Viney QC in mid 1998. 54 In the sentencing proceedings the barrister relied upon statements as to good character made by 25 people. He did not himself give evidence. Through his counsel he submitted to Judge Viney that the offences arose from disorganisation, that the endorsement of cheques was motivated by convenience rather than greed, and that his cooperation with the ATO should be taken into account. The sentencing judge properly accepted that there had been frauds on the revenue. But his remarks on sentence did not address the question of motive, save sub silentio in that there was no finding that the conduct was motivated by greed. 55    His Honour made due and significant allowance for the barrister’s cooperation and his plea of guilty with all that that entailed. He was also impressed by the large body of testimonial evidence as to the barrister’s repentance, shame and general good character. 56    Two matters of present relevance were each referred to twice as matters taken into account in the barrister’s favour (remarks on sentence, 5 June 1998, at pp17, 18). Judge Viney sentenced on the basis that the barrister had paid all of the penalties imposed by way of reassessment. And his Honour regarded it as axiomatic that the consequence of conviction would be the termination of the barrister’s professional career. Thus (at p17) he said:

He has repaid all of the taxes as I have said and paid all the penalties, which again is a severe penalty in itself. Furthermore of course the prisoner has had to endure and will have to endure the adverse publicity that arises from a barrister being convicted of offences of this nature and finally he will suffer the crushing consequences professionally of his career being terminated as a professional person. All of those factors create enormous mitigating features so far as penalty is concerned.

57    The leading judgment in the Court of Criminal Appeal was given by Sheller JA. His Honour described the charges and outlined the facts upon which the conviction had been entered. He referred to the circumstances in which the offences had come to light. The evidence as to previous good character was described as “a powerful testament to the [barrister’s] many qualities”. Sheller JA continued (at 21):

However, one gap was left open. While witnesses could speak of the stress under which the respondent’s workload placed him and his disorganisation in running his practice, they could not provide the best evidence to explain why a person with the respondent’s reputation for honesty and integrity failed over a period of three years to include in his income tax returns a very substantial part of the income he was earning. The respondent was the person to give evidence about this but he chose not to. This placed the sentencing Judge in a difficult position particularly when he was asked, as will appear, to draw inferences about the respondent’s motives and about how he would have treated the proceeds of cheques not banked during the 1992 tax year in his income tax return for 1993, if his non-disclosure had not come to light in August 1993 before he submitted that return.

58    Sheller JA was critical in a number of respects with the approach taken by the sentencing judge. It is unnecessary to detail what appears on pp21-28 of his judgment. 59    Addressing the sentencing considerations, Sheller JA observed (at pp30-31):

General deterrence is a predominant consideration when sentencing for offences of defrauding the revenue.
Appeal Courts have discussed and emphasised the seriousness of frauds committed to the detriment of the public revenue. Inevitably, the Australian system of tax collection depends upon the honesty of taxpayers and, in particular, upon their fully declaring in each year of income what their gross income is. In a free society, such as Australia, the tax collector cannot check that every taxpayer has done so. The effect of dishonesty and non-disclosure of income increases the burden on all other taxpayers and particularly those who have truly disclosed their gross income. This demonstrates the serious nature of the offences charged against the respondent and the importance when punishing such offences to put in the forefront of the principles to be applied that of general deterrence.
While undoubtedly it is a matter to be taken into account, it is, in my opinion, of small account, that when caught out the offender pays the tax due and additional tax by way of penalty for which the offender is liable to a greater or lesser extent, according to the Commissioner’s discretion, whatever the reason for non-disclosure. Past integrity and good character, devotion to family and work and contributions to the community, impeccable though they have been, carry little weight against the confession by a plea of guilty that over a period of three years which ended only when the respondent was caught out, the respondent knowingly on three occasions understated his income by very large amounts for his own benefit or advantage.
The respondent argued that what happened was due to stress and overwork and disorganisation and amounted, as Mr Toomey put it, to illogical behaviour. It was illogical in 1990 to declare some cheques which had been endorsed for payment and not others. Mr Toomey claimed that the sentencing Judge found that the cause of the respondent’s defaults was his working too hard and the total disorganisation of his life. I do not read his Honour as going further than saying that overwork and disorganisation should be given considerable weight. Indeed, I have difficulty in fitting this submission with the plea of guilty and even more with the consistent and growing pattern of taking cheques out of the records of income earned by endorsing them in favour of third parties to pay for services or goods bought by the respondent or his wife. As I have said, the respondent chose to speak through his legal representatives from the well of the Court and not to go into the witness box and himself give the explanations that he now relies upon.

60 His Honour then referred to case law dealing with cases of tax and social security fraud. He observed that there was discussion as to the nature of periodic detention and s16G of the Crimes Act. His Honour concluded that

… the gravity of the offences charged required the imposition of a full time custodial sentence part of which the respondent should have been required to serve in prison.

61 Notwithstanding the powerful subjective matters raised on the barrister’s behalf, including the unwarranted delay in prosecution, Sheller JA remained of the view that the overall gravity of the offences called for a full time custodial sentence. The sentence imposed by Judge Viney was manifestly inadequate. Notwithstanding this view, his Honour was not persuaded that the Court of Criminal Appeal should impose a full time custodial sentence. In addition to the principle of double jeopardy, an important factor was the hardship that such a sentence would cause the barrister who had adjusted himself to, and in part served, a sentence of imprisonment by way of periodic detention. The sentence imposed by Judge Viney was in fact reduced because his Honour was held to have erred in applying the requirement in s16G of the Crimes Act to adjust for absence of a system of remission in a State such as New South Wales. It was for this reason and this reason alone that the ultimate order proposed by Sheller JA was one which reduced the sentence of periodic detention from two years to 14 months. 62    Levine J agreed with Sheller JA. 63    Barr J would have upheld the Crown appeal. He described the barrister’s culpability as high, observing that the offences were committed out of greed. His point of disagreement with the majority was that he was not persuaded that the Court should decline to interfere because of double jeopardy and other factors consequent upon the delay during the pendency of the appeal itself. 64    I fully and respectfully agree with the views expressed by each member of the Court of Criminal Appeal as to the objective seriousness of the conduct for which the barrister stood convicted. In doing so, I nevertheless treat the barrister as having received the sentence that was in fact imposed by the Court of Criminal Appeal.

Considerations relevant to the present proceedings

(a) The conviction and sentence

65    The barrister’s conviction and sentence are matters of public record in every sense of the word. They represent formal denunciation of conduct representing a high level of dishonesty. Whatever the origins of the barrister’s conduct, it is impossible not to conclude that (despite his counsel’s submissions before Judge Viney) the predominant motivation was greed. To his credit the barrister now recognises this. Having read and heard his evidence, I am satisfied that he feels regret and shame not just that he has been caught and punished but in relation to the intrinsic wrongness of his conduct. These factors are relevant to the present proceedings. 66    The claimant Bar Association relies principally upon Ziems; Law Society of New South Wales v Bannister (1993) 4 LPDR 24 (Bannister) and Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 (Foreman). 67    Ziems involved a barrister who was convicted of manslaughter. He had driven while intoxicated and collided with an oncoming motor cycle, killing the rider. He was sentenced to two years imprisonment with hard labour. The Full Court of the Supreme Court of New South Wales directed that his name be removed from the Roll of Barristers. The High Court (by majority) set aside that order and substituted suspension from practice for the duration of the imprisonment. In doing so, it accepted the submission as to sanction advanced on behalf of the Council of the Bar Association. 68    Ziems establishes the relevance of the fact of conviction and sentence of imprisonment. But each member of the High Court stated that a practitioner’s conviction and sentence to imprisonment are not determinative of unfitness to practice. The High Court looked at all the circumstances lying behind the conviction in considering whether Ziems should remain a member of the Bar. 69    Thus far the High Court was unanimous. But the Court divided as to the outcome of the particular case. For Dixon CJ and McTiernan J the facts behind the conviction meant, in McTiernan J’s words (at 287) that “the removal of [Ziems’] name from the roll of barristers [was] not further punishment of him, but merely an inevitable consequence of his conviction”. 70    Fullagar and Taylor JJ took a different view. Their analyses removed much of the sting of opprobrium associated with such a conviction. Their Honours were gravely concerned about the way in which the criminal trial had been conducted. More importantly, they considered that Ziems’ conduct was significantly mitigated by the fact that he had been bashed in the head by a drunken sailor shortly before he set out in his car. Their view of the true extent of his responsibility for the offence of which he stood convicted was determinative. This is the context in which Fullagar J made the following remarks (at 290) upon which the barrister placed great emphasis:

There is another point (though I attach much less importance to it) on which I find myself unable to agree without qualification with the view of the Supreme Court. It is said that: ‘The personal and the professional sides of his life cannot be disassociated.’ If this is read literally, it goes, in my opinion, much too far. Personal misconduct, as distinct from professional misconduct, may no doubt be a ground for disbarring, because it may show that the person guilty of it is not a fit and proper person to practise as a barrister: see, eg In re Davis [(1947) 75 CLR 409]. But the whole approach of a court to a case of personal misconduct must surely be very different from its approach to a case of professional misconduct. Generally speaking, the latter must have a much more direct bearing on the question of a man’s fitness to practise than the former.

71    Kitto J approached the matter somewhat differently. He held that the case had to be considered solely on the basis of the impact of the conviction upon fitness to practice, drawing a sharp (but enigmatic) distinction between the conviction and the underlying conduct. Since the conviction did not involve a premeditated crime or indicate a tendency to vice or violence, or any lack of probity, it (the conviction) did not create any impediment to fellow barristers and judges cooperating with Ziems in the life and work of the Bar. 72    Ziems demonstrates (a) the relevance of the attitude of the professional Association, (b) the relevance, but absence of conclusive effect, of the conviction and sentence of imprisonment, and (c) the duty of the Court to look behind the conviction at the conduct which it represents and the impact of such conduct upon fitness to remain a member of a privileged group of persons with high responsibilities based, in part, upon a reputation and character of probity.

(b) The underlying purpose of the Court’s jurisdiction over practitioners

73    The facts of Ziems are totally removed from the present case. Ziems undoubtedly establishes that conviction and sentence are not necessarily determinative. The Court must look at the true facts. But nothing in the judgments cast doubt upon the earlier decision of In re Davis (1947) 75 CLR 409, in which Dixon J, with whose reasons Williams J agreed, said (at 420):

The Bar is no ordinary profession or occupation. The duties and privileges of advocacy are such that, for their proper exercise and effective performance, counsel must command the personal confidence, not only of lay and professional clients, but of other members of the Bar and of judges. It would almost seem to go without saying that conviction of a crime of dishonesty of so grave a kind as housebreaking and stealing is incompatible with the existence in a candidate for admission to the Bar of the reputation and the more enduring moral qualities denoted by the expression ‘good fame and character’, which describe the test of his ethical fitness for the profession.

74    In Ziems, Dixon CJ (at 286), Fullagar J (at 287), Kitto J (at 298) and Taylor J (at 302) emphasised that the Bar’s standards were necessarily high because of the Bar’s unique and indispensable function in the administration of justice. Thus Kitto J said (at 298) that:

… the Bar is no ordinary profession or occupation. These are not empty words, nor is it their purpose to express or encourage professional pretensions. They should be understood as a reminder that a barrister is more than his client’s confidant, adviser and advocate, and must therefore possess more than honesty, learning and forensic ability. He is, by virtue of a long tradition, in a relationship of intimate collaboration with the judges, as well as with his fellow-members of the Bar, in the high task of endeavouring to make successful the service of the law to the community. That is a delicate relationship, and it carries exceptional privileges and exceptional obligations. If a barrister is found to be, for any reason, an unsuitable person to share in the enjoyment of those privileges and in the effective discharge of those responsibilities, he is not a fit and proper person to remain at the Bar.

75    Referring to Ziems’ conviction, Kitto J said (at 299):

It is not a conviction of a premeditated crime. It does not indicate … any lack of probity. It has neither connection with nor significance for any professional function.

See also Prothonotary v Pangallo (1993) 67 A Crim R 77 at 85-6.

76    Bannister involved a solicitor who defrauded his client of $3,000. Professional misconduct was conceded. An award of $43,000 was made on a redemption application in the Compensation Court. The solicitor asked the client to pay $3,000 by way of costs, knowing that he was not so entitled. The solicitor caused the redemption cheque to be endorsed by the client and paid to his firm’s trust account. He then drew cheques for $40,000 and $3,000 in favour of the client. The $3,000 cheque was cashed and the proceeds appropriated by the solicitor, who failed to make a record of the taking in the firm’s accounts, thereby cheating his partners as well. The solicitor later claimed costs from the client’s employer, something not revealed to the client. The Court of Appeal struck off the solicitor, overturning the Statutory Tribunal’s imposition of a $10,000 fine. 77    Sheller JA delivered the leading judgment with which Gleeson CJ and Handley JA agreed. It is unnecessary to set out the lengthy passage at 27-28. However, the following propositions emerge clearly:

(a) An order for removal from the roll is not punitive but protective. Accordingly, it is no answer for the practitioner who has been convicted and punished by the criminal law to say that he or she has already been punished for conduct which shows unfitness.

(b) The Court’s supervisory jurisdiction goes beyond protecting the public by incapacitation of the recalcitrant practitioner. The jurisdiction aims generally to maintain and encourage appropriate standards of professional behaviour. “ The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend . ” [emphasis added]

(c) “ The normal consequences of the misappropriation by a solicitor of a client’s money is that his name be removed from the roll. In Ex parte Macaulay (1930) 30 SR(NSW) 193 at 194 Street CJ said that where a solicitor has been proved guilty of theft he should not, unless in very exceptional circumstances, ever be allowed again to be held out to the public as a solicitor in whom confidence might be reposed; compare Ex parte Lenehan (1948) 77 CLR 403 at 422: This is not only to protect the public in need of assistance in managing their affairs from reposing confidence in the person concerned on the basis that he is a solicitor but also to deter others from behaving in the same way in the future. ”

78    In Foreman, the solicitor’s professional misconduct related to reconstruction of time sheets which involved deception of other legal practitioners and the Court. Confession only followed confrontation with damning evidence. The Court of Appeal (by majority) ordered the solicitor’s name to be removed from the roll. The decision on its facts provides little guidance. However, each member of the Court emphasised that high standards are expected of legal practitioners, especially in their dealings with clients and the courts. Mahoney JA (at 441-446) spelt out the reasons for the Court’s solicitude about the fitness of those whom it holds out to practitioners and litigants as fit to practise. I respectfully adopt those reasons. They include the following (at 444):

It is also, I think, relevant for the Court to take into account the effect which its order will have upon the understanding in the profession and amongst the public, of the standard of behaviour required of solicitors. The Court will no doubt, where appropriate, articulate the standards required and … they are high. However, the Court must, I think, also take into account the effect upon what it has said of, for example, a decision to allow a solicitor guilty of a serious infringement of those standards, to continue to practise.

79    Giles AJA described the basis of the Court’s jurisdiction (at 470-1). Citing Bannister and other cases, he referred to the protective function of general deterrence in the following terms (at 471):

But the object of protection of the public also includes deterring the legal practitioner in question from repeating the misconduct, and deterring others who might be tempted to fall short of the high standards required of them. And the public, and professional colleagues who practise in the public interest, must be able to repose confidence in legal practitioners, so an element in deterrence is an assurance to the public that serious lapses in the conduct of legal practitioners will not be passed over or lightly put aside, but will be appropriately dealt with.


These references to the public’s perception of the Court’s reaction to the professional misconduct do not make the Court hostage to the public’s assumed sense of anger at the misconduct uncovered. The Court must be satisfied that its enunciated views give proper weight to widely and reasonably held public attitudes to practitioners in the context of the administration of justice generally and in the particular case ( cf Kirby P in Foreman at 419E).

(c) Tax fraud generally and its effects on fitness to practise

80    In Bannister, a solicitor was struck off for effectively defrauding his client of $3,000 (see par 76 above). The claimant submitted that the case was directly in point. The opponent sought to distinguish it, principally on the ground that Bannister’s dishonesty occurred directly in the course of the solicitor’s professional dealings. The misconduct included failure to make a proper record in the firm’s accounts with the result that Bannister’s partners were cheated as well as his client. The claimant retorted by reminding us that the dishonesty in the present case related to fees and that some of the fee cheques not included in the tax returns had been endorsed to third parties with the intent thereby of suppressing receipt even before the failure to bring the receipt to account in the relevant tax return. 81    The debate about whether the dishonesty occurred in or outside the sphere of professional dealings is sterile in a case of admitted professional misconduct. It would have made no difference in Bannister if Mr Bannister had stolen $3,000 by picking his client’s pocket (see In re Daly (1896) 17 NSWLR 169). Nor would it have mattered if the victim of the theft was not a client. An offence of clear dishonesty would demonstrate unfitness to practise, a fortiori if conviction and sentence followed. (See the passages from Ziems quoted above and Pangallo at 83-4 per Clarke JA (Kirby P and Priestley JA agreeing).) 82 Does it matter if the dishonesty relates to tax dealings? I cannot see how that changes things, at least in the practitioner’s favour. I leave aside for the moment the question of how “the public” would view a profession that did not regard such dishonesty as incompatible with fitness to practise. 83    One thing is crystal clear. The barrister’s dishonesty involved offences effectively (cf par 46 above) carrying a maximum penalty of two years imprisonment. The Crimes Act and the reasoning of the Court of Criminal Appeal attest to the seriousness of the offences. 84    Lack of cooperation with taxation authorities can take many forms, with the range of any moral and legal turpitude covering a broad spectrum. Ziems reminds that the particular offender’s particular offence must be examined. In the present case, the gravamen was the making of untrue representations in writing with a view to obtaining a financial benefit. That benefit was in fact obtained, to the sum of over $300,000 tax evaded or dishonestly deferred. 85    I emphatically dispute the proposition that defrauding “the Revenue” for personal gain is of lesser seriousness than defrauding a client , a member of the public or a corporation. The demonstrated unfitness to be trusted in serious matters is identical. Each category of “victim” is a juristic person whose rights to receive property are protected by law, including the criminal law in the case of dishonest interception. “The Revenue” may not have a human face, but neither does a corporation. But behind each (in the final analysis) are human faces who are ultimately worse off in consequence of fraud. Dishonest non-disclosure of income also increases the burden on taxpayers generally because rates of tax inevitably reflect effective collection levels. That explains why there is no legal or moral distinction between defrauding an individual and defrauding “the Revenue”. Indeed, the latter involves an additional element indicative of unfitness to practise. As Sheller JA pointed out in the Court of Criminal Appeal (par 59 above):

… the Australian system of tax collection depends upon the honesty of taxpayers and, in particular, upon their fully declaring in each year of income what their gross income is. In a free society, such as Australia, the tax collector cannot check that every taxpayer has done so.

86    I agree with the following opinion of Justice Traynor, speaking for the Supreme Court of California in In re Hallinan 272 P 2d 768, 771 (1954):

The fraudulent acquisition of another’s property is but another form of theft in this state. We see no moral distinction between defrauding an individual and defrauding the government, and an attorney, whose standard of conduct should be one of complete honesty, who is convicted of either offence is not worthy of the trust and confidence of his clients, the courts, or the public, and must be disbarred, since his conviction of such a crime would necessarily involve moral turpitude.
(d) The reputation of the legal profession

87    This leads to the issue of the reputation of the legal profession. The barrister properly acknowledges that his actions have jeopardised the reputation and standing of the legal profession. These mean little in themselves, but they are an important element in the effectiveness of legal practitioners in their role as ministers of justice. Certain practices send out messages (intended and unintended) about what is acceptable to lawyers and acceptable generally. The response to proven violations also sends out messages. In their article Income Tax Offences by Lawyers: An Ethical Problem (1972) ABAJ 842 at 845, Sanford M Stoddard and Carl A Stutsman Jr conclude as follows:

In its own interest, the organized Bar simply cannot permit the public to gain the impression that its members flout the revenue laws or that it condones or tolerates or belittles the seriousness of crimes against the revenue. “Obedience to law exemplifies respect for law”, states EC 1-5. “To lawyers especially, respect for the law should be more than a platitude.”
[EC 1-5 is a reference to part of the American Bar Association’s Code of Professional Responsibility .]

88    I agree. A similar attitude should inform the Court’s response to a proven infraction, not overlooking the need for due proportionality. To do less would be to abandon the underlying functions of the Court’s disciplinary jurisdiction. 89    The legal profession enjoys a monopoly of the right to practise on the theory that those possessed of the requisite learning, skill and character can be trusted to perform legal services involving high levels of trustworthiness. Removal from the rolls for unfitness is an extreme remedy, but it is necessary in order to maintain public respect for the legal process.

(e) Case law

90    Other courts have considered the appropriate response to tax fraud found to constitute professional misconduct. In Re Milte & Ors, Legal Practitioners (1991) 22 ATR 740, the Full Court of the Supreme Court of South Australia ordered the names of eight practitioners in a firm of solicitors to be struck off the roll. They had been convicted of offences against s29A(1) of the Crimes Act 1914 (Cth) in respect of benefits obtained from the Commonwealth by false pretences with intention to defraud. The firm had engaged in a scheme whereby the partners received some payments for their professional fees in cash. Over three financial years, fees paid in cash and cash cheques had not been brought to account in the firm’s books of account. Some cheques payable to the firm had been cashed and not brought to account. Each of the practitioners had been fined $6,000 and sentenced to imprisonment for twelve months, but released on a good behaviour bond for two years. They were found guilty of unprofessional conduct. The Law Society’s application for their removal from the roll was resisted, the practitioners seeking an order suspending them from the roll. There were aggravating features, in that the practitioners had in some instances encouraged their clients not to cooperate with the police investigating the matter. There had also been failure to make full and proper disclosure to the Complaints Committee. 91 It is clear that the Court had felt significant compassion for the practitioners, and the door was left open to them to apply for readmission. However, the Court held that this was not a proper case for suspension, notwithstanding acceptance of the evidence of genuine contrition and repentance. Matheson J (with whose reasons Mohr J agreed) cited with approval the remarks of King CJ in Re a Practitioner (1984) 36 SASR 590 at 593 to which reference will be made below (par 100). 92 The Court in Re Milte left open the possibility that at some later stage the practitioners would be able to persuade the Court that they were fit persons to be readmitted. Six of them were subsequently readmitted in 1997 (in the matter of Terence Joseph Reilly & Ors, 10 April 1997, Supreme Court of South Australia, unreported). 93    In the matter of Mahoney was a decision of the Full Court of the Supreme Court of South Australia (11 December 1996, unreported). Over a period of three years, cheques totalling about $300,000 payable to the practitioner’s law firm were paid into private accounts with intent to understate tax. Income tax returns were filed which deliberately understated the practitioner’s income. There was no criminal charge or conviction. The Legal Practitioners Disciplinary Tribunal of South Australia made a finding of professional misconduct and the matter was referred to the Supreme Court. 94    The Full Court divided as to the appropriate disciplinary response. The majority (Matheson and Duggan JJ) indicated that the matter was very close to the line. However, they concluded that an order striking off the practitioner would be too draconian in all the circumstances. The practitioner was suspended from practice for three years. 95    There are points of distinction between that case and the present. There, the practitioner went to the ATO and disclosed his tax evasion, albeit after a falling out with his partner. And the practitioner was not prosecuted. The Law Society of South Australia indicated that it did not press for removal from the roll. There was a time lapse problem. 96    Cox J would have struck off the practitioner’s name from the roll, noting that:

… he was guilty of serious crimes. There was nothing to mitigate their commission, and the impact of the practitioner’s abundant character evidence is necessarily lessened by the long period over which his systematic acts of dishonesty took place. It is very regrettable that the practitioner should have brought himself to this situation, but one’s sympathy for him cannot stand in the way of the Court’s maintenance of proper professional standards, not the least of which is acting with elementary honesty. While everything suggests that this is unlikely to be a case of permanent exclusion, I do not think it appropriate to make an order of suspension from practice for professional misconduct of this type and magnitude.

97    It will be apparent from what I have already written that I respectfully agree with Cox J. His remarks have direct application, albeit that the present case is stronger than Mahoney because of the circumstances in which the offences came to light, the conviction and sentence, and the other factors summarised in the judgment of Sheller JA in the Court of Criminal Appeal. 98    See also In the matter of an application by the Law Society of the Australian Capital Territory in relation to the conduct of Grosse (22 February 1996, Supreme Court of the Australian Capital Territory, unreported); and In the matter of Brendon Lee Grosse (1997) 5 LPDR 12 (where the tax frauds were associated with systematic misappropriations). 99 There is a vast body of conflicting case law in the United States (see 63 ALR 3d 824).

(f) Strike off or suspension?

100    In one sense, this is the ultimate issue in the summons. Most points have been covered. I would indicate my concurrence with the following remarks of King CJ (Zelling and Jacobs JJ agreeing) in Re a Practitioner (1984) 36 SASR 590 at 593:

The proper use of suspension is, in my opinion, for those cases in which a legal practitioner has fallen below the high standards to be expected of such a practitioner, but not in such way as to indicate that he lacks the qualities of character and trustworthiness which are the necessary attributes of a person entrusted with the responsibilities of a legal practitioner. Whilst it is true that the practitioner succumbed to temptations produced by his difficult personal and financial position at a time when his judgment might have been somewhat impaired by the emotional stress to which he was subject, there is no escape from the fact that he engaged in a course of fraudulent conduct extending over three and a half years and involving trust moneys. He has shown himself to be unfit to be a legal practitioner and, in my opinion, the only appropriate order is for him to be struck off the Roll of Practitioners.
Conclusion

101    In my view the proven misconduct and conviction establish unfitness to practise. There was significant and prolonged dishonesty for personal gain. The barrister’s response to detection, conviction and sentence has been creditable. And it demonstrates genuine contrition. The door to readmission is never closed. But the professional misconduct is of such a nature that it demonstrates unfitness to practise which must be marked by disbarment. To do less would depart from the principles established in Ziems, Bannister and Foreman. 102    The barrister accepted that costs should be awarded against him, regardless of the outcome. 103    I propose orders that:

(1) It be declared that the opponent has been guilty of professional misconduct as a barrister in that he engaged in conduct for which he was convicted by the District Court of New South Wales of offences under s29B and s29D of the Crimes Act 1914 (Cth).

(2) The name of the opponent be removed from the Roll of Legal Practitioners.

(3) The opponent pay the claimant’s costs.

104    PRIESTLEY JA: The details of this unfortunate case are set out in the reasons of Mason P. 105    The bedrock facts are that the barrister, in each of his tax returns for the financial years ending 30 June 1990, 1991 and 1992, stated that his gross income in the financial year was less than in fact it was, knowing each time that his statement of gross income was untrue. These facts led to the five charges to which he pleaded guilty as described in Mason P’s reasons. For the purpose of my opinion in the present case I will use only the figures referable to the first three charges. I take these from the reasons of Sheller JA in the barrister’s appeal against sentence in the Court of Criminal Appeal. 106    It was accepted that the amounts referable to those first three charges by which the barrister had understated his gross income for the financial years ending 30 June 1990, 30 June 1991 and 30 June 1992 were $149,078, $166,924 and $196,988, a total of $512,960. Of this figure $178,801 was declared in years subsequent to its derivation and before August 1993, when an Australian Tax Office investigation prompted the barrister to make full disclosure of his position. The facts relevant to the first three charges show that by the three offences the barrister as at August 1993 had deferred payment of tax on $178,801 and paid no tax on $334,159. 107    In the barrister’s evidence in this court he said that “part of the reason for this calamitous state of affairs was financial gain”. 108    After the barrister’s disclosure of his position to the Australian Tax Office all previously unpaid tax was paid. 109    The barrister’s case in this court, in opposing the New South Wales Bar Association’s proceedings, was that he should be suspended from practice, but that his name should not be removed from the roll of legal practitioners. 110    In deciding which outcome is the appropriate one, the court is faced with a stark contrast between the barrister’s character as demonstrated by what I have called the bedrock facts, which show three occasions of dishonesty by which the barrister gained significant sums, and his character at all other times, which, on the evidence before the court, has been exemplary. 111    I am impressed by the abundant evidence of the barrister’s personal worthiness. I also regard the evidence of the occasions of his dishonest acts as equally real indications of his character. Put shortly, the evidence shows that his own weakness, and the pressures upon him, led to serious dishonesty. 112    Mason P has discussed in his reasons the leading Australian cases dealing with situations of the present kind. They show a general (but not invariable) consensus that dishonesty of the order of that in the present case indicates unfitness to practice. I agree with that general consensus, at the same time recognising that it will not invariably lead to removal of the practitioner’s name from the roll. There may be truly exceptional cases. However, I do not think the present case is one of those. 113    The dishonesty of the barrister here was in my opinion of a kind that shows unfitness to practice, notwithstanding the matters that stand in his favour. I think that it is in the best interests of the public and the legal profession that his name should be removed from the roll of legal practitioners, rather than that he should be suspended. 114    As to future prospects upon any application for readmission, I do not wish to say anything that might either raise or depress the barrister’s hopes or expectations. Any such application will have to be decided by the court upon the evidence presented to it. It does not seem to me to be sensible to attempt to forecast what that evidence, or the court’s reaction to it, might be. 115    I agree with the orders proposed by Mason P. 116    DAVIES AJA: The facts and issues are set out in the reasons for judgment of the President. I need not repeat them. 117    The objective of disciplinary proceedings is the protection of the public and the maintenance of proper standards in the legal profession. In The Southern Law Society v Westbrook (1910) 10 CLR 609 at 619, O’Connor J said that:

“… the Court in maintaining a solicitor on the roll is holding out to the public that he is a fit and proper person to be entrusted by the public with those difficult and delicate duties and that absolute confidence which the public must repose in persons who fulfil the duties of solicitors.”

In Incorporated Law Institute of NSW v Meagher (1909) 9 CLR 655 at 681, Isaacs J said:
“There is therefore a serious responsibility on the Court - a duty to itself, to the rest of the profession, to its suitors, and to the whole of the community to be careful not to accredit any person as worthy of public confidence who cannot satisfactorily establish his right to that credential. It is not a question of what he has suffered in the past, it is a question of his worthiness and reliability for the future.”

At least in cases where the practitioner has undergone punishment under the criminal law, the function of the Court is not to punish the practitioner but to protect the public by maintaining standards in the profession. In The New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183-4, the Court said:
“The power of the Court to discipline a barrister is, however, entirely protective, and, notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved.”

118    In Ziems v The Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279 at 297-8, Kitto J summarised the approach in this way:

“The issue is whether the appellant is shown not to be a fit and proper person to be a member of the Bar of New South Wales. It is not capable of more precise statement. The answer must depend upon one’s conception of the minimum standards demanded by a due recognition of the peculiar position and functions of a barrister in a system which treats the Bar as in fact, whether or not it is also in law, a separate and distinct branch of the legal profession. It has been said before, and in this case the Chief Justice of the Supreme Court has said again, that the Bar is no ordinary profession or occupation. These are not empty words, nor is it their purpose to express or encourage professional pretensions. They should be understood as a reminder that a barrister is more than his client’s confidant, adviser and advocate, and must therefore possess more than honesty, learning and forensic ability. He is, by virtue of a long tradition, in a relationship of intimate collaboration with the judges, as well as with his fellow-members of the Bar, in the high task of endeavouring to make successful the service of the law to the community. That is a delicate relationship, and it carries exceptional privileges and exceptional obligations. If a barrister is found to be, for any reason, an unsuitable person to share in the enjoyment of those privileges and in the effective discharge of those responsibilities, he is not a fit and proper person to remain at the Bar.
Yet it cannot be that every proof which he may give of human frailty so disqualifies him. The ends which he has to serve are lofty indeed, but it is with men and not with paragons that he is required to pursue them. It is not difficult to see in some forms of conduct, or in convictions of some kinds of offences, instant demonstration of unfitness for the Bar. Conduct may show a defect of character incompatible with membership of a self-respecting profession; or, short of that, it may show unfitness to be joined with the Bench and the Bar in the daily co-operation which the satisfactory working of the courts demands. A conviction may of its own force carry such a stigma that judges and members of the profession may be expected to find it too much for their self-respect to share with the person convicted the kind and degree of association which membership of the Bar entails. But it will be generally agreed that there are many kinds of conduct deserving of disapproval, and many kinds of convictions of breaches of the law, which did not spell unfitness for the Bar; and to draw the dividing line is by no means always an easy task.”

See also the comments of Lord Esher MR in Re Weare; Re The Solicitors Act, 1888 [1893] 2 QB 439 at 445.

119 Mr Hamman has committed a disciplinary offence. It is not in dispute that a disciplinary order, reflecting the seriousness of his offence, must be made. The crucial question, however, is whether Mr Hamman is a fit and proper person to remain a member of the Bar of New South Wales. If not, his name should be removed from the Roll. I therefore turn to see what was the nature of the crime of which Mr Hamman was convicted and what were the circumstances in which it occurred. 120 There were five offences which related to the understatement in Mr Hamman’s income tax returns of his gross income in the years ended 30 June 1990, 1991 and 1992. In each case, the offences were of misrepresenting gross income in the year in question with the intention of obtaining a benefit. Three of the charges were brought under s 29B of the Crimes Act 1919 (Cth) with respect to imposition upon the Commonwealth and two charges were brought under s 29D of that Act in respect of defrauding the Commonwealth. For reasons which I need not mention, the sentencing Judge, his Honour Judge Viney, was informed that the defrauding charges should be regarded as the equivalent of, rather than more serious to, the conduct involved in the imposition offences. In the result, after an appeal, Mr Hamman was sentenced to serve fourteen months imprisonment for each offence to be served concurrently and by way of periodic detention. 121 The offences were serious offences, but they appear to have arisen not out of an innate tendency to dishonesty, but rather from a lack of attention on the part of Mr Hamman to the management of his own affairs. During the years in question, Mr Hamman became a much sought after barrister on country circuits. He was away from his chambers in Sydney for long periods. He did not have a proper secretary. He took too much work. He was inclined to leave cheques in a drawer in his chambers rather than go down to the bank. He was also asked by two firms of solicitors to delay banking their cheques until he was authorised to do so. He foolishly agreed to this course of action. Because Mr Hamman was not attending to his own affairs in a businesslike way, he personally and his affairs got into a muddle. He took to endorsing some of the cheques by way of payment of accounts due, rather than banking them and paying the accounts with his own cheque. Sometimes, he put cheques into bank accounts other than his own business bank account. He attended to his income tax returns between the end of term in each year and Christmas Day. As his returns were rushed and as he had, in any event, inadequate information to hand, it came about that his returns were untrue and knowingly so. 122 In his affidavit, Mr Hamman described the offences as follows:

“19. … I started to instruct my wife whilst I was on Circuit, to use some of these cheques which were signed by me and destined for the Credit Union, to pay some accounts by using the endorsed cheques directly. As time went on I became increasingly reckless and then deliberate about this practice, i.e. I did so knowing that I may not declare those cheques for income tax

20. Up to December, 1992 I was in the habit of preparing my own Income Tax Returns between the end of term and Christmas Eve due to the Taxation Department’s and my own Accountant’s dead lines and my own commitments. This was the only time which I regarded as being available in which to do it. In contemplating my income details, I knew that the records were not up to date or collated. Accordingly I decided to adopt the easiest and quickest solution and to take the income figures as banked. I knew that I had received cheques which were unpresented and I knew that some cheques had been endorsed to pay third parties. I also knew that my records showed this.”

123    There is, in evidence, an affidavit from Mr P R Capelin QC, who had known Mr Hamman well on the country circuits. Mr Capelin summed up the matter in these terms, which seem to me to reflect the views of the many eminent people whose affidavits are before the Court:

“24. I know that Stirling Hamman is a good man and I accept that his affairs were so mixed up and he was so stressed with work and family that it affected his thinking and the way he conducted his business affairs. He has always been a loner and had to prove to his family and his colleagues that he was successful. He worked very hard and for long hours, however he did not organise an ordered system for management of his affairs and there is nothing in the facts of this case to change my opinion of Stirling Hamman, a good man, a good barrister, a fine father and husband.”

124    Mr Hamman has been a barrister since 1976 and a legal practitioner since May 1971. No complaint about his conduct has ever been made to the New South Wales Bar Association. No attempt has been made to show that, over the years, dishonesty or untruthfulness has been reflected in his conduct, or that he has not been regarded as trustworthy. Mr Hamman has proved to be a popular and successful barrister. His professional work has been well done. He has been a barrister for almost a quarter of a century, and a competent one. 125    Had Mr Hamman’s offences involved dishonesty in relation to a client or to a solicitor, there would be no doubt that he would be struck from the Roll. However, that is not the case. I have already referred to Ziems v The Prothonotary of the Supreme Court of NSW. That case also involved a personal, not a professional crime. The barrister had been sentenced to two years’ imprisonment for manslaughter. Fullagar, Kitto and Taylor JJ, Dixon CJ and McTiernan J dissenting, reversed the decision to remove the barrister’s name from the Roll and substituted an order that he be suspended from practice during the continuance of his imprisonment. 126    A crime involving untruthfulness, as Mr Hamman’s offences did, has particular significance in relation to the on-going daily cooperation which must occur between members of the profession and between the Bar and the Bench. As Samuel Warren said in his Introduction to Law Studies, 2nd Ed, 1845, at p 132:

“He [the practitioner] must manifest, on all occasions, especially in the conduct of business, that conscientious, rigid, and inflexible regard for TRUTH, which will not admit of loose, incautious statements, on even the most ordinary or trivial occasions. A short-coming in this respect is soon detected by both the Bar and the Bench: and the moment that a man’s representations, in addressing the court, are received with distrust - whether visibly manifested or not - whether in respect of intentional misrepresentation, or of rashness, carelessness, or thoughtlessness - he here does himself an injury which is absolutely irreparable. A thousand occasions, both great and small, arise in professional intercourse at the Bar, in which each party must rely implicitly on his opponent’s honour and veracity.”

127    In Law Society of New South Wales v Foreman (1994) 34 NSWLR 408, Mahoney JA likewise said at pp 444-5:

“The Court may also have regard to whether, in the light of the offence in question, the solicitor can establish and maintain the kind of relationship which must exist between solicitors. In Re Weare , in the passages to which I have referred, Lord Esher MR and Lindley LJ referred to the relationship which must exist between solicitors. The Master of the Rolls said of Mr Weare (at 446) that ‘no other solicitors ought to be called upon to enter into such relations’ - he had described them as ‘that intimate intercourse with him which is necessary between two solicitors’ - ‘with a person who has so conducted himself’. Lindley LJ said (at 447): ‘What respectable solicitor could without loss of self-respect, knowing the facts, meet him in business?’
Their Lordships were not referring to the niceties of social intercourse. They were referring, amongst other things, to the assumptions and the understandings which the nature of the business between solicitors requires to be made, one of the other. A solicitor should be able to place reliance upon the word of another and to accept his undertaking that he will do what he promises: as to the role and significance of solicitors’ undertakings, see generally, Halsbury’s Laws of England , 4th ed, vol 44, pars 255-258. He should be able to assume that, for example, a document bearing the solicitor’s signature as witness was executed in the solicitor’s presence and that an affidavit made by a solicitor is properly made. If such assumptions cannot be made in the ordinary course of dealing between solicitors and each is required in prudence to check the truth of what the other has suggested, the administration of justice would be seriously impeded.”

128    On the whole of the evidence, it seems to me that it should not be said of Mr Hamman that he cannot be held out to members of the public as a person in whom they can repose their confidence or that he is a person with whom other lawyers would be embarrassed to deal. I am satisfied that Mr Hamman’s offences do not show that he has a lasting character defect. Rather, I am satisfied that the aberration resulted from a lack of attention by Mr Hamman to his own personal affairs. Although, in the end, there was conscious dishonesty, Mr Hamman arrived at that stage by allowing his personal affairs to become disorganised. He did not set out, calmly and deliberately, to defraud the Commonwealth. This conclusion reflects, I believe, the sentences which were imposed. 129    Other cases are not a particularly sound guide, for each case must be determined on its own merits. However, I regard the circumstances of the present case as not more serious than those considered in the decision of the Supreme Court of South Australia in In the Matter of Mahoney, a Practitioner (11 December 1996, unreported). In that case, which also involved untrue taxation returns, Matheson and Duggan JJ, Cox J dissenting, held that an order of suspension for three years was appropriate. I mention that case as confirming, rather than guiding, the view that I take in Mr Hamman’s case. 130    Members of the profession expect other members to meet their obligations to the community, including their tax obligations, honestly and without quibble. The Bar is an honourable profession. Members of the profession have a duty to act with honour and honesty in both their personal and professional affairs. Mr Hamman clearly failed to maintain the standards which the profession expects. An order must be made which reflects Mr Hamman’s breach of the Bar’s standards. 131    However, I consider that a suspension for a period of three years, commencing on 17 July 1998, the day after Mr Hamman ceased to carry on practice as a barrister, would be appropriate. In my opinion, the matter is not so serious as to call for Mr Hamman’s removal from the Roll. Mr Hamman should pay the costs of the proceedings. The ordinary rule should apply. This is not an appropriate case for indemnity costs.

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