New South Wales Bar Association v Hart

[2006] NSWADT 97

CITATION:	New South Wales Bar Association v Hart [2006] NSWADT 97
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the New South Wales Bar Association RESPONDENT John Peter Hart
FILE NUMBER:	052031
HEARING DATES:	19/12/05
SUBMISSIONS CLOSED:	12/19/2005
DATE OF DECISION:	04/05/2006
BEFORE:	Chesterman M - ADCJ (Deputy President); Stenmark A - Judicial Member; Kirkby E - Non Judicial Member
CATCHWORDS:	Professional Misconduct - fail to comply with statutory notices - Professional Misconduct - fail to disclose convictions for tax offences - Unsatisfactory Professional Conduct - fail to comply with statutory notices
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Legal Profession Act 1987 Legal Profession Act 2004 Legal Profession Regulation 2002 Taxation Administration Act 1953 (Cth)
CASES CITED:	A Solicitor v Law Society of New South Wales (2003) 216 CLR 253 Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 Council of the Law Society of New South Wales v Graham [2005] NSWCA 127 Weaver v Law Society (NSW) (1979) 142 CLR 201
REPRESENTATION:	APPLICANT P Mahony SC RESPONDENT S Cuddy, solicitor
ORDERS:	1. The Respondent is found guilty of professional misconduct in respect of Ground 5 of the Information; 2. The Respondent is found guilty of unsatisfactory professional conduct in respect of Grounds 1 – 4 of the Information; 3. The Respondent is publicly reprimanded; 4. The Respondent is to pay a fine of $4,000 within three months of the date of these orders. If the fine is not paid within this period, his practising certificate is to be cancelled and no further certificate is to be issued to him until it is paid; 5. The Respondent is to pay the Applicant’s costs of these proceedings, as agreed or assessed.

Introduction

1 On 29 September 2005, the Applicant, the Council of the Bar Association of New South Wales (‘the Bar Council’) filed in the Tribunal an Information containing a complaint that the Respondent barrister, John Peter Hart (‘the Barrister’) was guilty of professional misconduct or unsatisfactory professional conduct on five Grounds. As the Information was filed before the commencement of the Legal Profession Act 2004, it fell to be determined under the Legal Profession Act 1987 (‘the Act’).

2 Although combined in the Information into a single complaint, the five Grounds followed the text of five separate complaints made against the Barrister by a resolution of the Bar Council on 7 October 2004. They all alleged failures by the Barrister during the period from May to August 2004 to comply with statutory requirements imposed by or under Division 1AA of Part 3 of the Act. At the hearing, the evidence adduced in support of these allegations was contained in material exhibited to an affidavit sworn on 29 September 2005 by Ms Rosemary MacDougal, the Solicitor for the Bar Council in these proceedings.

3 The sections making up Division 1AA of Part 3 were inserted into the Act in 2001. The associated regulations form part of the Legal Profession Regulation 2002 (‘the Regulations’). So far as is relevant to this case, these provisions obliged barristers (a) to notify the Bar Council in writing of any conviction for a ‘tax offence’ and (b) to comply with any notice served upon them by the Bar Council pursuant to the Division, requiring them to provide a written statement or written information, produce documents or otherwise assist in or co-operate with an investigation being conducted by the Council. In s 3 of the Act, ‘tax offence’ was defined to mean any offence under the Taxation Administration Act 1953 (Cth).

4 In his Reply, the Barrister admitted that under one of the five Grounds he was guilty of professional misconduct. He also admitted all the facts alleged by the Bar Council, as set out in the Particulars forming part of the Information.

5 In relation to each of the five Grounds, we will now (a) summarise the relevant evidence, (b) reproduce the text of the Ground, as set out in the Information, with supporting Particulars so far as necessary; (c) reproduce the relevant provisions of the Act and Regulations, then (d) make preliminary observations, at the least, on the question whether the Bar Council has succeeded or failed in establishing professional misconduct or unsatisfactory professional conduct. For reasons that will become apparent, we will depart from the order in which the Grounds appear in the Information.

Ground 5: Failure to give notification of tax offences

6 We must first mention a background matter. On 22 August 2001, the Barrister was convicted of a tax offence at the Local Court. He was fined $600 and ordered to file his tax return before 20 December 2001. On 23-24 October 2001, the Bar Council, having become aware of this conviction, resolved for the purposes of s 38FC(1) of the Act (this provision is set out below) that he was nonetheless a fit and proper person to hold a practising certificate.

7 On 3 May 2004, the Barrister was personally served with a Court Attendance Notice requiring him to attend the Downing Centre Local Court on 19 May 2004 to answer charges of two tax offences, namely, failing to file his income tax returns for the tax years 2002 and 2003. He sent a fax to the Court and to the Australian Tax Office, requesting an adjournment. He did not attend the hearing, at which he was convicted and fined $2,000 plus costs on each of these counts. He was also ordered to file one of the relevant returns on or before 19 May 2004 and the other on or before 19 July 2004.

8 The Bar Council alleged that at the hearing he was also convicted of four further tax offences, namely, failing to file business activity statements for four quarters within the years 2002-2003. But although a letter dated 13 September 2004 from the Australian Taxation Office to the Barrister states, without giving details, that he had been convicted and fined for offences answering this description, the Court Attendance Notice and two subsequent Notices of Penalty (sent by the Court to the Barrister on 16 June 2004) referred only to failures to file tax returns. The Barrister said in a letter dated 15 September 2004 to the Bar Council that it was only on that day that he first became aware that he might have been convicted for failing to file business activity statements. He claimed never to have received Court Attendance Notices concerning offences of that nature.

9 On 30 June 2004, the Barrister applied to the Bar Council for renewal of his practising certificate for the year 2004-05. The form of application included a question, asked in accordance with clause 7 of the Regulations, as to whether he had been found guilty of any offence, other than an ‘excluded offence’, that he had not previously disclosed to the Council. In an attached letter explaining his affirmative response to this question, he stated that on 26 May 2004 he had been convicted at the Downing Centre of ‘failure to lodge a tax return’. After providing further information about his tax affairs, he wrote: ‘I consider myself a fit and proper person to be a barrister, even though this has occurred.’

10 This was the first notification that the Bar Council received regarding his convictions on 19 May 2004. It will be noted that he supplied an incorrect date and implied incorrectly that only one tax offence was involved.

11 Ground 5 of the Information is in the following terms: -

The Respondent failed to notify the Bar Council, in contravention of s. 38FB(3) of the Legal Profession Act 1987 of his convictions of certain tax offences on 19 May 2004.

12 The Particulars relied on with regard to this ground referred to the matters just outlined and also to clauses 133 and 137 of the Regulations.

13 Section 38FB(3) states: -

(3) A barrister or solicitor who, since being admitted as a legal practitioner:
(a) has committed an act of bankruptcy, or

(b) has been found guilty of an indictable offence or a tax offence,

must provide a written statement, in accordance with the regulations, showing why, despite the act of bankruptcy or finding of guilt and any circumstances surrounding the act or finding, the barrister or solicitor considers that he or she is a fit and proper person to hold a practising certificate.

14 The relevant provisions of the Regulations are clauses 133(1), 133(3), 133(5) and 137(1)(c). These state as follows: -

133 (1) If a barrister or solicitor is found guilty of an offence (other than an excluded offence), the barrister or solicitor must:
(a) notify the appropriate Council in writing of the finding and the nature of the offence, and

(b) furnish to the appropriate Council, within the time specified by the appropriate Council, such further information as it requires relating to the finding or the commission of the offence.

133 (3) A notification under subclause (1) must be made within 7 days after the finding was made.

133 (5) In this clause, offence includes a tax offence.

137 (1) Each of the following failures to notify is declared to be professional misconduct: …

(c) a failure to notify, without reasonable cause, a finding of guilt of the commission of an indictable offence or a tax offence as required by clause 133 in the time and manner specified in that clause,…

15 It was in relation to this Ground that, in addition to admitting the facts alleged, the Barrister admitted in his Reply that these facts constituted professional misconduct.

16 This admission is clearly warranted. The period of seven days stipulated by clause 133(3) for making the notification required by clause 133(1) with respect to the Barrister’s convictions for tax offences expired on 26 May 2004. He did not make any notification at all until 30 June 2004. No reasonable cause for this failure to notify was advanced. He therefore committed professional misconduct under clause 137(1)(c).

17 We note that by virtue of his conviction in 2001 for failing to file a tax return and his subsequent correspondence with the Bar Council, the Barrister was aware in mid-2004, or clearly should have been aware, of the requirements of the Act and the Regulations regarding notification of tax offences to the Bar Council.

18 Furthermore, the notification that he did make was inadequate in two significant respects. These were that it specified an incorrect date (26 May 2004 instead of 19 May 2004) and it referred to only one conviction, whereas there were in fact at least two convictions.

19 The Barrister claimed that he was unaware until 15 September 2004 that his convictions on 19 May 2004 included convictions for failure to file business activity statements. His understanding at the time was that, as appeared from the Court Attendance Notices of 3 May 2004, he was being prosecuted only for failing to file two tax returns. In cross examination, however, he admitted that in December 2003 or January 2004 the Australian Tax Office had notified him that he would be prosecuted for failing to file documents required by tax legislation and that the documents in question included business activity statements.

20 The evidence before us did not clearly show that the Barrister understood, or should have understood, that he had been convicted for failing to file business activity statements. Offences of this nature were not mentioned on the Court Attendance Notices. On this issue, therefore, we find in his favour. It is not, however, an issue of great significance.

21 As indicated above, the Information alleged in Ground 5 itself that the relevant breach by the Barrister was of s 38FB(3) of the Act. The Particulars, however, referred only to clauses 133 and 137 of the Regulations.

22 On our interpretation of these provisions, which are not at all straightforward, it is in fact these clauses of the Regulations, standing alone, that provide the basis for a finding of professional misconduct. This follows from the fact that another clause in the Regulations, namely clause 135(2), refers specifically to s 38FB(3) of the Act. Under the heading ‘Show cause statements relating to bankruptcy and indictable and tax offences’, clause 135(2) stipulates a time-limit of fourteen, not seven, days for the provision to ‘the appropriate Council’ of the written statement required by s 38FB(3). There is no mention of either s 38FB(3) or clause 135(2) in clause 137(1), which is the provision declaring that a failure to give notification of a tax offence as required by clause 133 is, in the absence of reasonable cause, professional misconduct.

23 Since in the Particulars the relevant provisions of the Regulations were correctly identified, we do not think that this apparent inaccuracy in the framing of Ground 5 of the Information prevents us accepting the Barrister’s admission of professional misconduct and making a finding to that effect.

Ground 4: Failure to comply with ‘show cause’ notice relating to failure to notify

24 Ground 4 is in the following terms: -

The Respondent failed to provide a statement in response to a notice issued to him under s.38FC(2) of the Legal Profession Act 1987 dated 5 July 2004.

25 On 5 July 2004, a letter from the Bar Council bearing that date was posted to the Barrister. It referred to his ‘undated late notification of a tax offence’ that had been received on 30 June 2004 with his application for a practising certificate and it enclosed two statutory notices, under s 38FC(2) and s 38FI of the Act respectively. Ground 4 is concerned with the former notice.

26 Subsections (1) and (2) of s 38FC of the Act state: -

(1) A Council must refuse to issue, or must cancel or suspend, a practising certificate if:
(a) the Council is aware that the applicant for or holder of the practising certificate has, since being admitted as a legal practitioner, committed an act of bankruptcy or been found guilty of an indictable offence or a tax offence, and

(b) the Council considers that the act of bankruptcy, indictable offence or tax offence was committed in circumstances that show that the applicant or holder is not a fit and proper person to hold a practising certificate.

(2) A Council must, within 14 days after becoming aware that the applicant for or holder of a practising certificate has, since being admitted as a legal practitioner, committed an act of bankruptcy or been found guilty of an indictable offence or a tax offence, give notice in writing to the applicant or holder:
(a) if the Council has not received a statement under section 38FB in relation to the act of bankruptcy or the finding of guilt concerned, requiring the applicant or holder to make a statement in accordance with that section, and

(b) informing the applicant or holder that a determination in relation to the matter is required to be made under this section, and

(c) informing the applicant or holder of the relevant period in relation to the determination of the matter and that the applicant or holder will be notified of any extension of the relevant period, and

(d) informing the applicant or holder of the effect of the automatic suspension provisions in section 38FH in the event of the matter not being determined by the Council or the Commissioner within the relevant period.

27 The ‘relevant period’ mentioned in paragraph (c) of this subsection is stipulated in s 38FA to be three months, though the Legal Services Commissioner may extend it to four months. The ‘automatic suspension provisions’ mentioned in paragraph (d) are provisions in s 38FH whereby, if no determination under s 38FC is made by a Council within the ‘relevant period’, the practising certificate of the practitioner involved is automatically suspended.

28 In the notice under s 38FC(2) dated 5 July 2004, the Bar Council required the Barrister to provide by 13 July 2004 ‘a statement in accordance with s 38FB(4) of the Act in relation to your failure to notify the tax offence in accordance with the provisions of clause 133 of the Legal Profession Regulation’. The notice also conveyed the information stipulated by paragraphs (b), (c) and (d) of s 38FC(2).

29 Section 38FB(4) states: -

(4) A barrister or solicitor who fails to notify a matter as required by the regulations (being a failure declared by the regulations to be professional misconduct) must provide a written statement, in accordance with the regulations, showing why, despite the failure to notify, the barrister or solicitor considers that he or she is a fit and proper person to hold a practising certificate.

30 Under clause 136 of the Regulations, which is headed ‘Show cause statements relating to failures to notify’, a legal practitioner who has received a notice under s 38FC(2) requiring the provision of a statement under s 38FB(4) must provide the statement to the appropriate Council within seven days of ‘the date on which the notice was given’.

31 As set out briefly in the Particulars to the Information, the Barrister, having been sent the notice under s 38FC(2)(a) of the Act, did not comply with it on or before the stipulated date of 13 July 2004.

32 In a handwritten letter dated 20 July 2004 sent by fax to the Bar Council, the Barrister confirmed receipt of the Council’s letter of 5 July. He said however that because he and his family had been away from home on holidays between 30 June and 19 July he had not become aware of the letter’s contents until 20 July.

33 This letter from the Barrister did not enclose a statement as required by s 38FB(4), nor make any reference to his obligation to furnish such a statement. It instead provided answers to the questions contained in the Council’s notice under s 38FI, which is discussed below. But in response to a question in that notice as to the steps that the Barrister had taken to ascertain whether and when he was required to notify the Council of his tax offence, the letter of 20 July 2004 said: -

I was under the impression I had a month. It was only after I had actually attended the Bar Association that I realized it was more than one month.

34 In a letter to the Barrister dated 3 August 2004, the Bar Council drew his attention to his failure to provide a statement under s 38FB(4) and required him to comply with this requirement by 11 August 2004.

35 In a letter dated 15 September 2004, the Barrister advised the Bar Council that he had instructed Mr Stewart Cuddy, solicitor, to assist him in this matter and conveyed his responses to a draft of a report prepared for the Bar Council by a Professional Conduct Committee. The letter was accompanied by a statutory declaration of the same date. In the letter, the Barrister stated as follows under the heading ‘Presumably unsatisfactory explanation of failure to comply with clause 133 of the Regulation’: -

Because I was not present and had no direct contact with the court until later, my knowledge of the exact orders and penalty was indistinct. It was only later that I was able to be clearer. See the penalty notices attached to my statutory declaration.

36 The penalty notices referred to here are the notices described above at [8].

37 There followed further correspondence with the Barrister and with his solicitor, Mr Stewart Cuddy. Ultimately, the Bar Council passed resolutions on 7 October 2004 and 27 January 2005 to the effect that (a) the tax offences were not committed by the Barrister in circumstances that showed him not to be a fit and proper person to hold a practising certificate, and (b) that with the Barrister’s consent, a number of conditions should be attached to his practising certificate for the years 2004-05. With some deletions and amendments, the Council resolved on 27 July 2005 that these should be extended to the certificate issued to him for the years 2005-06. The evident aim of these conditions was to ensure compliance by him with his tax obligations.

38 The events outlined above clearly show that, as the Barrister admitted, he failed to comply with the requirement in clause 136 of the Regulations that within seven days of the Bar Council’s giving him a notice dated 5 July 2004 under s 38FC(2) of the Act he should provide to the Council a ‘show cause’ statement within s 38FB(4) – that is, a statement showing why, despite his failure to notify the Council of his convictions for tax offences within the time specified by the Regulations, he considered himself to be a fit and proper person to hold a practising certificate.

39 His subsequent letters to the Council, dated 20 July and 15 September 2004, contained, as we have indicated, some material that might have formed part of a ‘show cause’ statement. But this is as far as he went in providing an explanation for his failure to notify the Council of his convictions within the requisite period.

40 Neither in the Act nor in the Regulations is it indicated whether a failure to comply with a notice under s 38FC(2) within the stipulated period of seven days constitutes, or might constitute, professional misconduct, or unsatisfactory professional conduct. In contrast to the situation arising under Ground 5, the Act and the Regulations are silent on this question.

41 This silence is the explanation for the Barrister’s claim, in his Reply to the Information, that under this Ground he did not commit either professional misconduct or unsatisfactory professional conduct. The submission put to us on his behalf was, in brief, that on this issue there was a lacuna in the legislation, which should operate for his benefit.

42 The same submission was made with regard to the three remaining Grounds of the Information. In these circumstances, the most convenient course for us in this judgment is to proceed with outlining the facts relating to each of those Grounds. We will then discuss (a) whether, despite the failure of the Act and the Regulations to deal expressly with the issue, a finding of professional misconduct or of unsatisfactory professional misconduct can be made against the Barrister under any or all of these Grounds and (b) if so, what finding or findings of this nature, if any, should be made.

Ground 1: Failure to answer questions in a notice dated 5 July 2004 from the Bar Council and to verify his response to the notice

43 Ground 1 is in the following terms: -

The Respondent failed to answer a notice issued to him pursuant to s.38FI of the Legal Profession Act 1987 dated 5 July 2004 and to verify by statutory declaration his response.

44 The Particulars relating to this Ground alleged that the Barrister’s response, dated 20 July 2004, was not verified by statutory declaration. In another clause of the Particulars, not expressed to relate to this Ground, it was stated that in this letter the Barrister ‘purported to respond in part’ to the s 38FI notice.

45 Section 38FI relevantly states: -

(1) For the purpose of investigating a matter under this Division, a Council or the Commissioner may, by notice in writing served on any legal practitioner, require the legal practitioner to do any one or more of the following:
(a) to provide written information, by a date specified in the notice, and to verify the information by statutory declaration,

(b) to produce, at a time and place specified in the notice, any document (or copy of any document) specified in the notice,

(c) to otherwise assist in, or cooperate with, the investigation in a specified manner.

(2) ….

(3) A requirement under this section is to specify a reasonable time for compliance.

(4) A legal practitioner must not mislead or obstruct a Council or the Commissioner in the exercise of any function under this Division.

46 As indicated above, the Council’s letter of 5 July 2004 to the Barrister enclosed a notice under s 38FI. This notice stated that, for the purpose of investigating ‘the tax offence notified (late)’ in his undated statement accompanying his application for a practising certificate for 2004-05, the Bar Council was imposing a number of requirements upon him. These were (a) to answer fifteen questions, set out in the notice, relating to the hearing on 26 May 2004 (this being the correct date, so far as the Bar Council then knew) and to his tax affairs; (b) to provide copies of five specified documents relating to this hearing; and (c) to ‘otherwise assist or co-operate with the investigation’ by (i) obtaining specified information relating to his tax affairs from the Australian Taxation Office and (ii) authorising the Bar Council to seek information from an accountant to whom the Barrister had referred in his ‘undated statement’.

47 The date specified for compliance with this notice was 20 July 2004. This was, however, subject to a statement that if the Barrister did not have all the information and material requested by the due date, he should still respond to the notice and should also convey specified details regarding any information or material that was not yet available. There was no claim by or on behalf of the Barrister that the period allowed for his response to the notice was not a ‘reasonable time for compliance’ as required by s 38FI(3).

48 On 20 July 2004, as mentioned above, the Barrister sent a letter to the Bar Council containing responses to the fifteen questions contained in the s 38FI notice. These responses were not verified by statutory declaration.

49 In a letter of reply to the Barrister, dated 3 August 2004, the Bar Council pointed out that his responses to some of the questions were ‘partial only’, that they were not verified by statutory declaration and that he had not produced any of the five documents were required in the notice. The letter required full compliance with these aspects of the notice by 11 August 2004.

50 It was not, however, until 15 September 2004 that, in circumstances outlined above, the Barrister provided verified answers to the questions in the s 38FI notice.

51 Although Ground 1 states that the Barrister ‘failed to answer’ the notice under s 38FI dated 5 July 2004, he did in fact send by fax a response dated 20 July 2004. This was the date stipulated for compliance. In its letter of 3 August 2004, the Bar Council claimed that some of his answers in that letter were only ‘partial’ responses. But this letter is not mentioned in the Particulars to Ground 1. The only defect in his response that these Particulars identify is that, as the Barrister admits and was clear from the evidence, it was not verified by statutory declaration.

52 In these circumstances, our finding in relation to Ground 1 is the limited finding that the Barrister failed to comply by the stipulated date with the requirement in the Bar Council’s notice under s 38FI dated 5 August 2004 that in accordance with s 38FI(1)(a) he should verify by statutory declaration his answers to the questions contained in the notice. The period allowed for compliance was reasonable, as required by s 38FI(3).

53 For reasons given above at [40 – 42], we will not deal at this stage with the relationship of this finding to the question whether the Barrister should, as alleged, be found guilty of professional misconduct or of unsatisfactory professional conduct.

Ground 2: Failure to assist or co-operate with the Bar Council’s investigation

54 Ground 2 is in the following terms: -

The Respondent failed to comply with a requirement in the said s.38FI Notice dated 5 July 2004 to assist or co-operate with the investigation being carried out by the Bar Council by obtaining information therein referred to from the Australian Taxation Office.

55 The associated Particulars indicated that, as mentioned above, the Bar Council’s notice of 5 July 2004 required the Barrister to ‘assist or co-operate with’ its investigation by obtaining certain information from the Australian Tax Office and providing it to the Council. This information comprised (a) details of the Barrister’s lodgement of tax returns ‘for the years ending 30 June 1998 to date’; (b) statements of account for the years ended 30 June 1998; and (c) ‘details relating to the lodgement of Business Activity Statements (“BAS”) and payments made to date’.

56 The date stipulated for compliance, subject to the exceptions outlined above at [47], was 20 July 2004. It was not contended on the Barrister’s behalf that the period allowed for compliance was other than reasonable, as required by s 38FI(3).

57 The Barrister did not, however, obtain the information from the Tax Office as required. It did not form part of his letter faxed to the Bar Council on 20 July 2004. It was not in fact provided until he included it in an annexure to his statutory declaration of 15 September 2004.

58 The Particulars associated with Ground 2 refer to the Bar Council’s letter of 3 August 2004 to the Barrister (see [49] above). They assert that this letter required him by 11 August 2004 ‘to remedy a number of deficiencies in his response to the s 38FI notice dated 5 July 2004’, and that he failed to respond to this letter.

59 The deficiencies described in the Bar Council’s letter of 3 August 2004 did not, however, include his failure to obtain the specified information from the Tax Office and provide it to the Bar Council. No mention was made of this aspect of the s 38FI notice.

60 For this reason, this component of the Particulars to Ground 2 has not been established.

61 Our finding in relation to Ground 2 is that the Barrister failed to comply by the stipulated date with the requirement in the Bar Council’s notice under s 38FI dated 5 July 2004 that he should obtain specified information from the Australian Tax Office. The period allowed for compliance was reasonable, as required by s 38FI(3).

62 Again, we will defer our discussion of the relationship of this finding to the question whether the Barrister should, as alleged, be found guilty of professional misconduct or of unsatisfactory professional conduct.

Ground 3: Failure to answer questions in a notice dated 4 August 2004 from the Bar Council and to verify his response to the notice

63 Ground 3 is in the following terms: -

The Respondent failed to answer a notice issued to him pursuant to s.38FI of the Legal Profession Act 1987 dated 4 August 2004 and to verify by statutory declaration his response.

64 This Ground is in the same terms as Ground 1, except that it refers to a second notice under s 38FI of the Act, dated almost exactly one month later than the first notice.

65 The requirements imposed on the Barrister by this notice dated 4 August 2004 were to answer twelve questions, set out in the notice, and to provide copies of nine specified documents. Both the questions and the documents related to (a) the tax offences for which he had been convicted and (b) his having obtained approval to borrow funds in order to purchase a unit at Coolangatta for $500,000. He had mentioned the second of these matters in his reply to the earlier notice under s 38FI.

66 The date stipulated for compliance, subject to the exceptions outlined above at [47], was 19 August 2004. It was not contended on the Barrister’s behalf that the period allowed for compliance was other than reasonable, as required by s 38FI(3).

67 The Barrister responded to this notice by faxing a handwritten letter dated 19 August 2004 to the Bar Council. It contained answers to the twelve questions in the notice, but none of the required documents were enclosed. The Barrister gave various reasons for not complying with this requirement, including that he had not been able to locate some of the specified documents, or to obtain them from relevant authorities. He said that he was awaiting the receipt of documents from the Downing Centre Local Court and from his accountant.

68 In his statutory declaration dated 15 September 2004, the Barrister provided answers to the questions in the s 38FI notice and annexed most of the requested documents. His letter of the same date set out reasons why the remaining documents were not produced.

69 The Particulars to Ground 3 included allegations (a) that the Barrister had not verified his response dated 19 August 2004 by statutory declaration; (b) that in response to the request for documents he had stated ‘I have not been able to obtain all of this’; and (c) that he did not provide any documents at all in response to this request.

70 Our finding in relation to Ground 3, the last of the five Grounds, is that the Barrister failed to comply by the stipulated date with the requirements in the Bar Council’s notice under s 38FI dated 4 August 2004 that (a) in accordance with s 38FI(1)(a), he should verify by statutory declaration his answers to the questions contained in the notice and (b) that he should provide copies of specified documents. The period allowed for compliance was reasonable, as required by s 38FI(3).

The implications of our findings under Grounds 1 to 4

71 Submissions on behalf of the Bar Council. The primary submission of Mr Mahony SC, appearing for the Bar Council, was that the deficiencies in the Barrister’s responses to the notices issued by the Council, coupled with his failures to respond fully within the stipulated time, constituted significant breaches of his duty to display candour in his dealings with the Council.

72 In support of the proposition that breaches of the duty of candour owed to professional bodies such as the Bar Council could constitute professional misconduct at common law, Mr Mahony cited a passage in the judgment of the High Court in A Solicitor v Law Society of New South Wales (2003) 216 CLR 253.

73 This case involved a solicitor who pleaded guilty in 1997 to four counts of aggravated indecent assault on a person under sixteen years of age. His sentence of imprisonment was quashed on appeal, with a recognisance to be of good behaviour being substituted. In 2001, the Law Society of New South Wales commenced Supreme Court disciplinary proceedings against him alleging professional misconduct on account of his having been convicted in these circumstances. Shortly before these proceedings began, one of the victims of the earlier offences laid further charges against him. He did not notify the Law Society that these charges had been laid. Having pleaded not guilty to them, he was convicted and sentenced to two years’ imprisonment, but the convictions were quashed on appeal. He then filed an affidavit in the disciplinary proceedings disclosing the further convictions and the outcome of his appeal. At the hearing of those proceedings, the Law Society argued that his failure to disclose the later charges and convictions provided grounds for a further charge of professional misconduct.

74 While determining, for reasons that need not concern us, that in all the circumstances the claim of professional misconduct based on the earlier convictions was not made out, the High Court upheld the Court of Appeal’s decision that the solicitor’s failure to disclose the later charges and convictions until after his appeal had concluded successfully did constitute professional misconduct. At 272-273 (paragraph [30]), the Court said: -

Although the specific focus of [correspondence between the appellant solicitor and the respondent Law Society in October and November 2000] was the conduct of the appellant in 1997 and although the respondent, being unaware of the new allegations, did not ask any questions about them, the appellant’s professional obligations to the Law Society required him to disclose facts that were material to the respondent’s decision as to what, if any, action should be taken against him. Giles JA was right to observe that the appellant “succumbed to the temptation of keeping from [the respondent] something clearly relevant to its decisions because he feared that disclosure would be against his interests”. It is no excuse that he believed in his own innocence, and that his convictions were ultimately quashed. Frankness required the disclosure of the convictions and sentence, even if he regarded them as unjust, and hoped (or even expected) that they would be overturned on appeal. Furthermore, the appellant’s duty of candour in his dealings with the Law Society was a professional duty, and its breach was professional misconduct.

75 In a footnote to the last sentence of this passage, the Court referred to its decision in Weaver v Law Society (NSW) (1979) 142 CLR 201, in which it upheld a declaration that a solicitor who gave false evidence in the course of disciplinary proceedings was guilty of professional misconduct.

76 Mr Mahony drew our attention to the following statement in the Barrister’s letter dated 15 September 2004, forming part of his response to the draft report prepared by the Professional Conduct Committee: ‘I did not intend to mislead or to hinder the Association or you in the exercise of its or your inquiries.’ In Mr Mahony’s submission, this statement implied that the Barrister recognised his own lack of candour.

77 In arguing that the Barrister’s delay in complying with the notices issued by the Bar Council should be held to amount to lack of candour, Mr Mahony stressed the significance of the provisions in ss 38FA, 38FC and 38FH requiring the Council to determine within three months, or at most four months, of being notified of a tax offence whether the barrister in question is a fit and proper person to hold a practising certificate (see [26 – 27] above). He argued that the Barrister, on account of having notified the Council in 2001 of an earlier tax offence (see [6] above) was or should have been fully aware of the provisions of Division 1AA and should have appreciated the importance of complying with the Bar Council’s notices within the required periods. Instead, the Barrister provided grossly inadequate responses at first, and only achieved full compliance with the notices by sending his letter and statutory declaration of 15 September 2004. This was more than seven weeks after 20 July, the date on which he should have complied with the notices issued on 5 July.

78 Mr Mahony referred us also to the final provision in Division 1AA, which is s 38FJ. This section, he said, shows that even though nothing in the Act or the Regulations indicates that a failure to comply with a notice under s 38FC(2) or s 38FI is, or is capable of being, either professional misconduct or unsatisfactory professional conduct, one or more of such failures may provide the basis for a finding of one or other of these disciplinary offences.

79 Under the heading ‘Complaint may be made’, s 38FJ states: -

Nothing in this Division prevents a complaint from being made under Part 10 involving a matter that requires a determination to be made under this Division or in respect of which a determination has been made under this Division.

80 An alternative contention by Mr Mahony was that the Barrister’s failures to comply with the notices displayed a serious and continuing lack of diligence on his part in fulfilling his duties to the Bar Council, and for this reason amounted to unsatisfactory professional conduct within the meaning of s 127(2) of the Act. This subsection states: -

(2) For the purposes of this Part:

unsatisfactory professional conduct includes conduct (whether consisting of an act or omission) occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.

81 Mr Mahony’s submitted that although at first sight this definition might appear to focus only on the duties of legal practitioners to their clients, it was not expressed to be an exhaustive definition. Since the duties of a legal practitioner to a professional regulatory authority such as the Bar Council were integral to the practice of law, a failure of diligence in attending to them could also fall within the statutory concept established in s 127(2).

82 Submissions on behalf of the Barrister. On behalf of the Barrister, Mr Cuddy argued that since neither the Act nor the Regulations specified any consequences, within disciplinary proceedings such as these, of a failure to comply with a notice under s 38FC(2) or s 38FI, no finding of professional misconduct or unsatisfactory professional conduct should be made. This ‘lacuna’ in the legislation, he said, should operate for the benefit of the Barrister.

83 He reinforced this argument by pointing to the fact that clause 137(1) of the Regulations, as illustrated by the circumstances of Ground 5, declared breaches of some of the group of regulations associated with Division 1AA to be professional misconduct, and clause 137(2) stated that other breaches of these regulations were ‘capable of constituting professional misconduct or unsatisfactory professional conduct’. Neither of these subclauses covered breaches of any regulations relating to s 38FC(2) or s 38FI. They concerned failures to notify offences, including tax offences, or acts of bankruptcy, not failures to comply with notices issued by a Council.

84 Mr Cuddy pointed out also that sanctions for breaches of s 38FC(2) or s 38FI were in fact provided in s 38FE(1). This subsection empowers a Council to refuse to issue, cancel or suspend a practising certificate if, inter alia, the applicant or holder has failed to provide a written statement in accordance with s 38FB if required to do so (subparagraph (a)), or has failed to comply with a requirement under s 38FI (subparagraph (c)). Since the requirement imposed on a practitioner by a notice under s 38FC(2) is to furnish a statement ‘in accordance with’ s 38FB, a breach of the time limit for responding to the notice would, he argued, attract the operation of subparagraph (a).

85 In Mr Cuddy’s submission, these aspects of the legislation indicated that Division 1AA of the Act, with its associated regulations, established a regime relating to practising certificates that was quite separate from the regime established by Part 10 for investigating and resolving complaints alleging one or more disciplinary offences.

86 Mr Cuddy disputed Mr Mahony’s proposition that the Barrister’s conduct displayed lack of candour within the scope of decisions such as A Solicitor v Law Society of New South Wales. There were, he said, failures on the Barrister’s part to comply promptly and fully with the requirements of the Council’s notices. But these failures were attributable to the fact that he was not a well-organised person and that he lacked technical support in his practice. He did his best to comply, and did not deliberately seek to mislead the Council by making false statements or omitting material facts. Ultimately, he did succeed in complying as fully as he could with the requirements of the notices.

87 Mr Cuddy submitted further that, if any ‘lack of candour’ by the Barrister was to be held to constitute professional misconduct at common law, it would have to satisfy the criterion of conduct ‘which would be reasonably regarded as disgraceful or dishonourable’ by fellow-practitioners who are ‘of good repute and competency’. This is the Allinson test, derived from the judgments of Esher MR and Lopes LJ in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at 761, 763, and approved on many subsequent occasions (for a recent instance, see Council of the Law Society of New South Wales v Graham [2005] NSWCA 127 at [31]). In Mr Cuddy’ submission, the Barrister’s failures fell far short of being ‘disgraceful’ or dishonourable’.

88 The final contention by Mr Cuddy relating to this part of Mr Mahony’s submissions was that no case based on ‘lack of candour’ of the type asserted had been spelt out in the Information or the associated Particulars.

89 As to Mr Mahony’s alternative submission that the Barrister could be held guilty of unsatisfactory professional conduct, Mr Cuddy argued that the definition in s 127(2) of the Act confined the concept to breaches of the duties of practitioners to clients, and that nothing else in the Act implied that it could extend to the quite different range of duties to professional associations.

90 Our conclusions regarding professional misconduct. In our opinion, the matters established under Grounds 1 to 4, even taken collectively, do not constitute professional misconduct at common law. The Barrister’s conduct in this regard fell short of the standards that should be expected of a legal practitioner. But it was not ‘disgraceful’ or ‘dishonourable’ as required by the Allinson test.

91 In so holding, we should say that, on our understanding of the High Court’s judgment in A Solicitor v Law Society of New South Wales (2003) 216 CLR 253, it is concerned with distinctly more serious instances of misrepresentation or concealment than are involved in this case. The defects of the Barrister’s conduct that has been established under Grounds 1 to 4 took the form of inaccuracy, incompleteness, tardiness and non-observance of an important formality (that of verifying his answers by statutory declaration). Within these limits, they were not trivial failures. But they were not nearly as serious as the conscious act of concealment with which the High Court was concerned. In the telling phraseology of Giles JA, quoted with approval by the Court at 272, the solicitor ‘succumbed to the temptation of keeping from [the respondent] something clearly relevant to its decisions because he feared that disclosure would be against his interests’.

92 Our conclusions regarding unsatisfactory professional conduct. On the other hand, we find that the behaviour of the Barrister established under Grounds 1 to 4 did amount to unsatisfactory professional conduct.

93 In so ruling, we reject Mr Cuddy’s arguments to the effect that (a) non-compliance with notices under s 38FC(2) or s 38FI cannot amount to a disciplinary offence because the legislation contains no express provision to this effect and (b) such non-compliance could not be unsatisfactory professional conduct because this species of disciplinary offence is concerned only with the duties of legal practitioners to their clients.

94 As to the first of these arguments, our opinion is that the absence of any express stipulation that non-compliance with a notice under one of these provisions constitutes, or is capable of constituting, a disciplinary offence rules out any claim that a single instance of non-compliance must or can be characterised in this way. By contrast, single instances of failure to notify an offence or an act of bankruptcy will or may, by virtue of clause 137, be so characterised. But a series of instances of non-compliance with a notice under s 38FC(2) or s 38FI stands on a different footing. The Act and the Regulations make it clear that any such non-compliance must be deemed a breach of the duty of a practitioner to his or her professional association. Section 38FE provides that it may prompt a Council to refuse to issue, cancel or suspend a practising certificate. But if a course of conduct made up of a series of such breaches is established, we do not see – particularly when s 38FJ is taken into account (see [79] above) – why it may not fall within the common law concept of professional misconduct or (in the light of what we say in the next three paragraphs) unsatisfactory professional conduct.

95 Mr Cuddy’s second contention was based on the fact that the criterion formulated in s 127(2) is ‘the standard of competence and diligence that a member of the public is entitled to expect’. But the definition that this subsection gives of unsatisfactory professional conduct is not framed as an exhaustive definition and it is not the only provision in the Act or the Regulations that indicates the scope of this concept. Other provisions do in fact extend it, in limited ways, to breaches of the duties of practitioners to regulatory authorities.

96 A striking instance is s 171U(2) of the Act, which states that failure to comply with an undertaking given to a Council, or to the Legal Services Commissioner, in the course of the investigation of a complaint may constitute professional misconduct or unsatisfactory professional conduct. As pointed out at the hearing, clause 137(2) of the Regulations (see [83] above) similarly brings failures to notify offences or acts of bankruptcy to the appropriate Council within the potential scope of unsatisfactory professional conduct.

97 For these reasons, there is, in our judgment, no neat and simple rule to the effect that this disciplinary offence is wholly confined to the one category of professional duties to which s 127(2) refers. It may extend to breaches of duties to regulatory authorities such as the Bar Council.

98 When the Barrister’s failures under Grounds 1 to 4 are viewed collectively, they amount, in our opinion, to a course of conduct of negligent failure to comply promptly and fully with precise, albeit demanding, requirements imposed by the Bar Council following its receipt of his notification of a tax offence. Even though the Barrister should have realised, in consequence of the Council’s reaction to his letter of 20 July 2004, that strict compliance with the requirements of any notices issued by it was essential, he continued to provide inadequate responses to further communications from the Council. The matters established under Ground 3, relating to the notice under s 38FI dated 4 August 2004, provide a good example.

99 For these reasons, we accept Mr Mahony’s submission that the Barrister’s continuing lack of diligence as established under Grounds 1 to 4 was serious enough to amount to unsatisfactory professional conduct.

The orders that we should make

100 We have found that, as the Barrister admitted, he was guilty of professional misconduct on account of the conduct alleged in Ground 5 of the Information. We have also found that he was guilty of unsatisfactory professional conduct on account of the conduct alleged in Grounds 1 to 4. The question now to be determined is what order or orders we should make under s 171C(1) of the Act.

101 Relevant evidence. In a ‘chronology on penalty’ handed up by the Bar Council with the Barrister’s consent, the following events of significance were outlined: -

1. During 1998, the Barrister was reprimanded by the Council, and conditions were placed on his practising certificate, on account of complaints that he had (a) practised without a practising certificate for periods totalling nearly ten months during 1996-97 and (b) failed to respond to letters from the Bar Council relating to this matter.

2. In April 2001, he notified the Council of two PCA convictions and a conviction for driving while disqualified, following which the Council in November 2001 imposed conditions on his practising certificate.

3. As outlined above at [6], he was convicted and fined $600 in the Local Court for a tax offence in August 2001, following which the Council resolved in October 2001 that he was nonetheless a fit and proper person to hold a practising certificate.

4. In February 2002, he was convicted and fined $1,000 for failure to comply with an order made by the Local Court that he should file a tax return before December 2001. After investigation, the Council resolved to take no action on this matter.

102 The Bar Council’s evidence showed that an accountant’s report required to be filed with it on or before 16 November 2004 under the conditions attached to the Barrister’s practising certificate for 2004-05 (see above at [37]) was not in fact been filed until 12 December 2004.

103 It was also evident from the Tribunal’s file that an affidavit sworn by the Barrister on 16 December 2005 and filed on that day exceeded by more than one month the time-limit stipulated at a directions hearing. It reached the Tribunal only three days before the present hearing. The Barrister’s explanation in cross-examination was that he thought that he had successfully transmitted the relevant material to Mr Cuddy in time for the affidavit to be filed in accordance with the directions. He admitted that he had made no attempt to check whether it had been transmitted.

104 In this affidavit, the Barrister indicated that, save in this respect, he had complied with the conditions attached to his practising certificates for 2004-05 and 2005-06. He also stated that, as far as he was aware, he had no current liabilities to the Australian Tax Office. The Bar Council did not dispute these assertions.

105 The Barrister acknowledged in his affidavit that he had ‘failed in time and properly to report the nature and fact of the tax convictions in 2004’. He also stated that he was ‘ashamed’ that these failures ‘might possibly lead to bad publicity’ for barristers in this State and for members of his family’. He mentioned that two of his six children were, or would soon be, law students.

106 The Barrister also stated that as a result of his ‘personal lack of diligence in attending to taxation affairs’, he had incurred penalties and interest charges imposed under taxation law amounting to more than $18,000. He had also incurred legal fees in obtaining assistance in complying with the notices issued to him by the Bar Council.

107 The parties’ submissions. Mr Mahony pointed out that, while the Barrister displayed some contrition for his breaches of professional duty, his continuing unwillingness or inability to adhere to important deadlines appeared not to have been remedied. This was illustrated by his failure to ensure that his affidavit in these proceedings was filed in accordance with the Tribunal directions.

108 Mr Mahony maintained also that it was irrelevant for present purposes that the Barrister had incurred penalties and interest charges on account of his failures to comply with his tax obligations. The present case, he said, was not concerned with such failures, but with failures of the Barrister’s obligations with regard to notifying the Bar Council.

109 In Mr Mahony’s submission, we were bound to take into account the number of breaches of the statutory requirements that the Barrister had committed, the damage inflicted on the legal profession and the drain imposed on the resources of the Bar Association. The appropriate orders by way of penalty under s 171C(1) were, he said, a fine and a public reprimand. He drew to our attention the upper limits for fines set by s 171C(1)(e), namely, $50,000 for professional misconduct and $5,000 for unsatisfactory professional conduct.

110 In a short written submission filed on the day of the hearing, Mr Cuddy indicated that his client consented to a public reprimand. He argued that no other penalty was warranted. The Barrister, he said, had admitted all relevant allegations and had shown contrition. He had suffered significantly from being referred to the Tribunal. He and his family, notably his two sons engaged in law studies, would suffer from the attendant publicity. He had incurred substantial financial penalties on account of these proceedings.

111 Our conclusions. In our judgment, a public reprimand alone would be insufficient and a fine of $4,000 should be imposed as well.

112 In so deciding, we take particular account of the following factors. The Barrister has already been reprimanded on one occasion and has had conditions imposed on his practising certificate. We have found in these proceedings that he committed two separate disciplinary ‘offences’, each relating to different breaches of duty on his part. The significance of the first and more serious of them, constituted by failure to notify the Bar Council of his convictions for tax offences, is not open to mitigation on the ground that he did not know the precise requirements imposed by the Act and Regulations. He must be treated as having been fully aware of them ever since he faced possible disciplinary action on account of a conviction for a tax offence in 2001. His later failures, providing the basis for our finding of unsatisfactory professional conduct, persisted despite repeated notifications from the Bar Council that he was obliged to comply with statutory time limits and requirements as to accuracy, completeness and verification. Neither he nor Mr Cuddy has provided any explanation for his conduct in committing either ‘offence’, other than Mr Cuddy’s claim that he was not a very organised person and that he lacked technical support. His unwillingness or inability to adhere to important deadlines persisted almost to the day of the hearing before us.

113 With regard specifically to the amount of the fine, which is not inconsiderable, we received no evidence as to his current means and we consider the scale of the penalties and interest charges that he has incurred under tax law to be irrelevant. We can therefore make no allowance in his favour on these accounts.

114 In the Information, the Bar Council sought an order for costs. In his written submission, Mr Cuddy indicated his client’s consent to such an order.

115 We accordingly order as follows: -

1. The Respondent is found guilty of professional misconduct in respect of Ground 5 of the Information.

2. The Respondent is found guilty of unsatisfactory professional conduct in respect of Grounds 1 – 4 of the Information.

3. The Respondent is publicly reprimanded.

4. The Respondent is to pay a fine of $4,000 within three months of the date of these orders. If the fine is not paid within this period, his practising certificate is to be cancelled and no further certificate is to be issued to him until it is paid.

5. The Respondent is to pay the Applicant’s costs of these proceedings, as agreed or assessed.

116 We direct the Registry that the reprimand of the Respondent under Order 3 be published pursuant to s 171C(3) of the Act.