Victorian Legal Services Commissioner v Henderson
[2017] VSC 202
•24 March 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2016 05070
| VICTORIAN LEGAL SERVICES COMMISSIONER | Plaintiff |
| v | |
| MORRIS GEORGE HENDERSON | Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 March 2017 |
DATE OF JUDGMENT: | 24 March 2017 |
CASE MAY BE CITED AS: | Victorian Legal Services Commissioner v Henderson |
MEDIUM NEUTRAL CITATION: | [2017] VSC 202 |
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LEGAL PRACTITIONERS – Application to remove defendant’s name from roll of persons admitted to legal profession – Defendant failed to file a tax return for 11 years – Defendant not a fit and proper person and likely to remain so for the indefinite future – Order made removing defendant’s name from roll - Legal Profession Uniform LawApplication Act 2014 sch 1 s 23(1).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C E Shaw | Legal Services Commissioner |
| For the Defendant | No appearance |
HIS HONOUR:
By an originating motion dated 12 December 2016, the plaintiff, the Victorian Legal Services Commissioner, applies for an order that the name of the defendant, Morris George Henderson, be removed from the roll of persons admitted to the legal profession kept by this Court.
The Commissioner filed a number of affidavits in support of the application and the material which is before the Court and which has been admitted into evidence and is relied upon is as follows:
· exhibit A1: affidavit of Susan Mi affirmed 12 December 2016;
· exhibit A2: affidavit of Susan Mi affirmed 6 February 2017;
· exhibit A3: affidavit of Susan Mi affirmed 20 March 2017;
· exhibit A4: affidavit of Susan Mi affirmed 23 March 2017;
· exhibit A5: affidavit of service of Jodie Farrugia sworn 17 February 2017;
· exhibit A6: affidavit of attempted service of Frederick Goodall sworn 28 December 2016; and
· exhibit A7: affidavit of attempted service of Frederick Goodall sworn 23 January 2017.
I am satisfied on the evidence which is before the Court as follows. First, the plaintiff has complied with an order for substituted service made by her Honour Daly AsJ on 7 February 2017. Second, I am satisfied that the defendant is in fact on notice of the current application and today's proceedings.
I am satisfied on the basis of the affidavits of attempted service of Mr Goodall, particularly exhibit A6, that there is objective evidence from the third and fourth attempts at service that the defendant, Mr Henderson, does in fact reside at the address stated therein, albeit that at the times of the attempted service there is evidence which indicates he was not actually present at that address.
I am therefore satisfied that the order for substituted service insofar as it required that the originating process and other relevant court documents, being the affidavit in support of the application, the order for substituted service itself, and then subsequently written submissions, have been forwarded to Mr Henderson's actual address.
In reaching that conclusion, I also take note of the fact that documents having been delivered on 13 February 2017 to Mr Henderson’s address, were then subsequently returned to the Commissioner. That is, the documents which were originally served pursuant to the order for substituted service: the originating process, the affidavit in support of Ms Mi, and the order itself for substituted service were delivered on 13 February 2017, but then returned into the postal system on 16 March 2017 at Sunshine West. The written submissions in respect of this application were posted on 6 March 2017 and then returned on 20 March 2017.[1] That conduct is consistent with the documents actually having been received by Mr Henderson or by someone on his behalf.
[1]Transcript of Proceedings, Victorian Legal Services Commissioner v Henderson (Supreme Court of Victoria, S CI 2016 05070, McDonald J, 24 March 2017) T14 L4 – T15 L28.
I am satisfied that on the basis of the steps which have been taken pursuant to the order for substituted service, as well as the most recent affidavit of Ms Mi of 23 March 2017 which deposes to her having left a message on Mr Henderson's phone advising him of these proceedings,[2] that he is on notice of the proceedings.
[2]Exhibit A4: Affidavit of Susan Mi affirmed 23 March 2017, [10].
Part of the background to the proceeding which is before the Court involves earlier proceedings by way of an application which was brought by the Commissioner for an order against Mr Henderson in the Victorian Civil and Administrative Tribunal (‘VCAT’). Those proceedings commenced in May 2014, and involved charges of professional misconduct pursuant to the provisions of the Legal Profession Act 2004.
The hearing of those charges proceeded before Senior Member Butcher on 20 June 2016 in Mr Henderson's absence, and the Senior Member reserved his decision. On 2 August 2016, the Tribunal found Mr Henderson guilty of four charges of professional misconduct and made a number of orders, including that a recommendation is made to the Supreme Court of Victoria pursuant to s 4.4.17(a) of the Legal Profession Act 2004 that the respondent's name be removed from the local roll.[3] It is as a result of that recommendation that the present proceeding has been brought.
[3]Exhibit A1: Affidavit of Susan Mi affirmed 12 December 2016, “SM-10”.
The Tribunal made its orders under the LegalProfession Act 2004. On 1 July 2015, that Act was repealed by s 157 of the Legal Profession Uniform LawApplication Act 2014. The Tribunal was satisfied that it was appropriate for the application to be heard under the 2004 Act and accordingly, the recommendation to this Court was made under s 4.4.17(a) of the 2004 Act.[4]
[4]See Victorian Legal Services Commissioner v Henderson [2016] VCAT 1280, [61]–[62].
Section 23(1)(b) of sch 1 of the Legal Profession Uniform LawApplication Act 2014 provides that the Supreme Court may order the removal of the name and other particulars of a person from the Supreme Court roll on the recommendation of the designated local regulatory authority. VCAT is a ‘designated tribunal’ for the purposes of that section.[5]
[5]Legal Profession Uniform LawApplication Act 2014 (Vic) s 10.
There is no question that the Court has power to remove Mr Henderson's name from the roll in the exercise either of the power conferred by s 23(1) of the Legal Profession Uniform Law or, additionally, pursuant to the Court's inherent jurisdiction. The test for removal, whether it be under s 23(1), or the inherent jurisdiction, is the same.[6]
[6]Victorian Legal Services Commissioner v Horak [2016] VSC 780, [4].
Whilst the recommendation for removal by VCAT carries the appropriate weight, only the Court itself possesses the statutory and inherent jurisdiction to make a removal order.[7] The Court must independently exercise the jurisdiction, and is not bound by the tribunal's recommendation.[8]
[7]Legal Services Commissioner v Rushford (2012) 38 VR 141, [13].
[8]Ibid.
The question for the Court in the current application is whether, at the time of this application based on the evidence before the Court, Mr Henderson is a fit and proper person to remain on the roll and, if he is not, whether he is likely to remain so for the indefinite future.[9] In considering that matter, the Court must of course take into account the gravity of the matters alleged.[10]
[9]Legal Services Board v McGrath (2010) 29 VR 325, [9] (Warren CJ) (‘McGrath’); Stanoevski v Council of the Law Society of New South Wales [2008] NSWCA 93, [54].
[10]See Evidence Act 2008 (Vic) s 140(2)(c); Legal Services Commissioner v Telehus [2014] VSC 462, [5].
It is well established that fitness to remain on the roll involves three things: honesty, knowledge and ability.[11] That test involves honesty to execute the office truly and knowledge to know what a practitioner ought duly to do.[12] The disciplinary power that the Court has, which includes the power to remove a person's name from the roll, is protective, and is to protect the public, the legal profession as a group, the justice system and community confidence in the profession.[13]
[11]Hughes & Vale Pty Ltd v New South Wales[No 2] (1955) 93 CLR 127, 156.
[12]Ibid.
[13]McGrath (2010) 29 VR 325, [10] (Warren CJ).
The heart of the application which is before the Court involves evidence that for an extended period of time, that is a period of 11 years, Mr Henderson failed to file tax returns.[14] That failure resulted in his conviction and then further penalties when he failed to comply with court orders arising out of that conviction.[15] Mr Henderson's failure over an extended period of time to file tax returns entailed defrauding the revenue, which should have been remitted to the Commonwealth, for personal gain. It is as serious as defrauding a client, a member of the public or a corporation, and there is no legal or moral distinction between defrauding an individual and defrauding the revenue.[16] A failure to file income tax returns for a period of years by a legal practitioner involves concealment of income and therefore displays a lack of integrity which justifies the removal of a practitioner's name from the roll.[17]
[14]Exhibit A1: Affidavit of Susan Mi affirmed 12 December 2016, [12].
[15]Ibid.
[16]New South WalesBar Association v Hamman (1999) 217 ALR 553, [85] (Mason P).
[17]New South Wales Bar Association v Young (2003) 54 ATR 22, [9].
In respect of a long-term failure to lodge a tax return by a legal practitioner in New South Wales Bar Association v Cummins,[18] Spigelman CJ stated:
The key admission in the statement of agreed facts is that for thirty-eight years, Mr Cummins did not lodge any taxation returns relating to his professional practice, or for any other personal income. This failure was an inexcusable pattern of illegal conduct in complete defiance of his civic responsibilities. Mr Cummins put no evidence before the Court which could explain, let alone excuse, this conduct. For almost four decades, Mr Cummins took advantage of the full range of public services made available by taxation, not least in the provision of the court system in which he earned his income. He left the burden of all of this to his fellow citizens. Throughout the four decades he engaged in the rank hypocrisy of advocating that other people should perform their legal obligations, while systematically refusing to perform his own.[19]
[18](2001) 52 NSWLR 279 (‘Cummins’).
[19]Ibid 286.
Whilst the facts of Cummins’ case are extreme, involving a failure to lodge returns over a period of 38 years, I consider that Spigelman CJ's observations apply with equal force in respect of Mr Henderson's pattern of offending over an 11-year period. I am fortified in reaching that conclusion by the observations of the New South Wales Court of Appeal in NewSouth Wales Bar Association v Somosi,[20] particularly at paragraphs 63 to 66. In that case, the failure of the practitioner to file returns covered a period of some 17 years, more proximate in time to the facts of the present case. Nevertheless, the Court of Appeal proceeded on the basis that ‘[t]he position of Mr Somosi involved a shorter period of time, but not a materially different length of time’.[21] I concur with those observations as to the history of Mr Henderson's offending over a period of 11 years.
[20](2001) 48 ATR 562.
[21]Ibid [66] (Spigelman CJ).
I return to the VCAT proceedings. In those proceedings, Mr Henderson was found guilty of four charges of professional misconduct. First, in respect of his failure to lodge income tax returns for the years 1 July 1998 to 30 June 2009.[22] Second, in respect of his failure to comply with orders of the Magistrates’ Court made 4 August 2011 that he lodge returns for the years 1 July 1998 to 30 June 2009 by 14 November 2011,[23] and his failure to pay the fine of $30,000 which he was ordered to pay by the Magistrates’ Court on 28 February 2012.[24] Third, he did not comply with the obligation under s 2.4.27 of the LegalProfession Act 2004 which required him to provide the Legal Services Board with notification of his conviction for tax offences.[25] Fourth, he did not respond to the Commissioner's request for a full written explanation.[26]
[22]Victorian Legal Services Commissioner v Henderson [2016] VCAT 1280, [53], [87].
[23]Exhibit A1: Affidavit of Susan Mi affirmed 12 December 2016, “SM-4”.
[24]Victorian Legal Services Commissioner v Henderson [2016] VCAT 1280, [55], [87]; Exhibit A1: Affidavit of Susan Mi affirmed 12 December 2016, “SM-5”.
[25]Victorian Legal Services Commissioner v Henderson [2016] VCAT 1280, [57], [87].
[26]Ibid [58], [87].
I accept Mr Shaw's submission that Mr Henderson showed a contumelious disregard for the law requiring the lodgement of income tax returns over an extended period of time.[27] He also showed a serious disregard for the orders of the court and his obligation to notify the regulator of the legal profession of his convictions. It is significant that upon his conviction for his failure to file those tax returns, Mr Henderson was further ordered to file returns by a particular date. He failed to do so. I accept Mr Shaw's submission that an inference should be drawn from his failure to lodge returns for a period of 11 years that Mr Henderson deliberately and intentionally evaded the payment of tax.[28]
[27]‘Outline of Submissions of the Plaintiff’ dated 6 March 2017, [26].
[28]Ibid.
In Cummins,[29] to which I have already referred, Spigelman CJ stated:
Honesty and integrity are important in many spheres of conduct. However, in some spheres significant public interests are involved in the conduct of particular persons and the state regulates and restricts those who are entitled to engage in those activities and acquire the privileges associated with a particular status. The legal profession has long required the highest standards of integrity.
There are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people.[30]
[29](2001) 52 NSWLR 279.
[30]Ibid 284.
I have concluded that Mr Henderson is not a fit and proper person to remain on the roll and that he will remain so for the indefinite future. He has deliberately and intentionally evaded his taxation obligations for a period of 11 years by failing to file tax returns during that period. Upon conviction for this failure, and in the face of orders to file the returns by a stated date, he did not do so, and he did not notify the regulator of his conviction as required by statute. His conduct displayed a lack of integrity which justifies his removal from the roll. It is to be noted he has made no attempt either in this Court, or before VCAT, to explain his conduct. The matters to which I have referred above in isolation justify strongly the orders which I propose to make. However, in doing so, I am fortified by the fact that there is further conduct in evidence before the Court which reinforces the appropriateness of the removal of Mr Henderson's name from the roll.
First, on 3 August 1999, the Full Tribunal of the Legal Profession Tribunal found Mr Henderson guilty of professional misconduct as a result of appearing as counsel in a criminal trial in the County Court, which ultimately resulted in the trial being aborted after three and a half months as he was not lawfully entitled to appear.[31] It was ordered that he was not entitled to apply for a practising certificate prior to 1 August 2002, and he was ordered to pay costs of $6,000.[32] He was also convicted of a criminal offence for this conduct.
[31]Exhibit A1: Affidavit of Susan Mi affirmed 12 December 2016, “SM-15”, 8–9.
[32]Ibid ‘Order of Full Tribunal’.
Second, on 3 December 2002, the Full Tribunal of the Legal Profession Tribunal lifted the prohibition on the granting of a practising certificate.[33] The Tribunal did so notwithstanding Mr Henderson's convictions for unlicensed legal practice, driving while disqualified, and drink driving, but placed conditions on his practising certificate.[34]
[33]Ibid “SM-17”, ‘Order of Full Tribunal’.
[34]Ibid.
Third, on 1 July 1999 Mr Henderson pleaded guilty to falsely pretending to be duly admitted to practise as a barrister in the Supreme Court of Queensland and promising to appear for a client and obtaining money from the client on that basis.[35]
[35]Ibid “SM-20”.
Fourth, on 20 March 2002 Mr Henderson was convicted in the Melbourne County Court of driving while disqualified.[36]
[36]Ibid “SM-22”, 1.
Those convictions reinforce the basis on which the Court is satisfied that Mr Henderson is not a fit and proper person to remain on the roll and will remain so for the indefinite future.
Having regard to the matters set out above, the Court proposes to make an order in the terms sought by the plaintiff, the Legal Services Commissioner:
1. The plaintiff is authorised to issue the proceeding in Form 5C of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’).
2. The requirements of rules 5.03(1) and 8.02 of the Rules are dispensed with.
3. The name of the defendant, Morris George Henderson, be removed from the roll of persons admitted to the legal profession kept by this Honourable Court.
4. The defendant pay the plaintiff’s costs of and incidental to the proceeding including reserved costs, on a standard basis, to be taxed in default of agreement.
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