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[2012] VSC 394
Supreme Court of Victoria
2012-09-05
EMERTON J
Original judgment source is linked above.
LEGAL PRACTITIONERS - Appeal from Victorian Civil and Administrative Tribunal - Barrister - Non-payment of tax over 10 years - Conviction for tax offences - Guilty plea to charge of professional misconduct - Application to Tribunal for orders under Division 4 of Part 4.4 of the Legal Profession Act 2004 (Vic) - Whether the Tribunal applied the correct principles in imposing a sanction on the respondent - Whether the Tribunal's discretion miscarried in imposing a sanction - Legal Profession Act 2004 (Vic) - (Vic) , - Proceeding remitted to Tribunal for determination according to law.
ADMINISTRATIVE LAW - Misconceiving nature and extent of jurisdiction - Failure to take into account relevant considerations - Tribunal's duty to give reasons under s 117 of Victorian Civil and Administrative Tribunal Act 1998 (Vic).
1 This is an application by the Legal Services Commissioner for leave to appeal from an order made by the Victorian Civil and Administrative Tribunal imposing sanctions on the respondent, a legal practitioner, for non-payment of tax.
2 The respondent is a member of the Victorian Bar. For a period of ten years, between 1996 and 2006, he did not comply with his taxation obligations. He pleaded guilty to a charge of professional misconduct within the meaning of s 4.4.3(1)(b) of the Legal Profession Act 2004 (Vic) ('the Act') for engaging in conduct that justified a finding that he was not a fit and proper person to engage in legal practice.
3 The professional misconduct to which the responded pleaded guilty was based on the following:
(a) his conviction for tax offences on 18 June 2002 involving failure to lodge tax returns on time for the financial years 1 July 1996 to 30 June 2000;
(b) his conviction for tax offences on 28 May 2003 involving non-compliance with the order of the Magistrates' Court made on 18 June 2002 referred to above;
(c) his conviction for tax offences on 24 April 2007 involving failure to lodge on time income tax returns for the financial years from 1 July 1996 to 30 June 2005 and failing to lodge on time BAS returns for the consecutive quarters from 1 March 2002 to 30 September 2006;
(d) the respondent becoming an insolvent under administration pursuant to an insolvency agreement under Part X of the Bankruptcy Act 1966 (Cth), namely:
(i) his failure to disclose on time income he earned in a professional practice as a barrister for financial years 1 July 1996 to 30 June 2006;
(ii) his failure to make provision for and pay on time income tax on income he earned in professional practice as a barrister for financial years 1 July 1996 to 30 June 1997 and from 1 July 1998 to 30 June 2006; and
(iii) his failure to disclose, to make provision for and to pay GST on payments he received from 1 July 2000 to 30 September 2006 in professional practice as a barrister.
4 Following the respondent's plea of guilty, the Legal Services Commissioner applied to the Victorian Civil and Administrative Tribunal under s 4.4.13 of the Act for orders under Division 4 of Part 4.4 of the Act.
5 The application was heard by a single member of the Tribunal on 17 February 2012. The respondent gave evidence as to the circumstances of his offending and his efforts to pay the outstanding tax. On 2 April 2012, the Tribunal made the following order:
6 The Commissioner now seeks leave under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act') to appeal against the Tribunal's order and, if leave is granted, to have the order set aside.
7 The Commissioner's complaint is, in substance, that the Tribunal should have suspended the respondent's right to practise when it imposed a sanction. The Commissioner contends that a suspension of the respondent's practising certificate for a period of six to twelve months was appropriate.
8 However, the Court is not asked to make orders suspending the respondent's practising certificate, but rather to remit the proceeding to the Tribunal to be determined according to law on the basis that the Tribunal's reasons[1] disclose a number of errors of law.
9 The Tribunal, after finding the respondent guilty of professional misconduct, considered the question of the appropriate disposition. In recording 'Background Circumstances', the Tribunal observed:
10 The Tribunal then set out the submissions made by each of the parties and proceeded to make findings, including the following:
11 Under the heading 'Does Mr Turner's past conduct show a probable permanent unfitness for legal practice?',[4] the Tribunal said:
12 The Tribunal went on to make the order that is the subject of the proposed appeal.
13 In the proposed notice of appeal dated 30 April 2012, the Commissioner has raised 16 questions of law. It is of limited utility to set them out in full here, as they run to a number of pages. The Commissioner contends that they can be grouped by alleged error as follows:
(a) Whether the Tribunal erred in taking into account irrelevant considerations, or by failing to take into account relevant considerations (questions 1 and 2);
(b) Whether findings were made that were not open on the evidence or were contrary to the evidence (questions 3 to 5);
(c) The content of the Tribunal's duty to give reasons under s 117 of the VCAT Act (questions 6 and 14);
(d) Whether the Tribunal applied the correct principles in imposing a sanction on the respondent (questions 7 to 13);
(e) Whether the Tribunal's discretion miscarried in imposing the sanction which it did upon the respondent (questions 15 and 16).
14 I have found it difficult to deal with so many overlapping grounds of appeal, a number of which add very little to the Commissioner's central complaint, which is that the Tribunal discounted the seriousness of the respondent's offending. In my view, the questions of law can be more conveniently grouped according to subject matter or by reference to the part of the Reasons that is challenged. Moreover, I propose to take them out of sequence and to commence with the questions of law that I consider to raise fundamental questions of principle, as the discussion of principle establishes a framework for the consideration of the further grounds.
15 In paragraph 36 of its reasons the Tribunal said:
The objective of the Tribunal's role as being primarily protective of the public is minimal in this instance as Mr Turner's actions were not directly involved with clients.
16 According to the Commissioner, the Tribunal considered its protective role to be minimal because the respondent's actions involved taking money from the state rather than from any individual or client. It submits that the Tribunal erred by treating theft from 'the Revenue' as less serious than theft from individuals, and in doing so, failed to have regard to the need to denounce the conduct engaged in by the respondent.
17 The respondent submits that the Reasons say nothing about 'theft from the Revenue' or 'theft from individuals'. He submits that the Tribunal's statement of the legal position correctly reflects the law.
18 It may be the case that the words 'theft' and 'the Revenue' are not used in the reasons, either separately or together. However, the meaning of paragraph 36 is tolerably clear: the protective role of the Tribunal is not invoked, or is invoked to a lesser degree, because the respondent did not improperly or unlawfully take money from individuals. The role of the Tribunal as protective of the public is minimal where the conduct of the legal practitioner causes no direct harm to individuals or clients.
19 In my view, this involves a misunderstanding of the nature of the Tribunal's jurisdiction under the Act.
20 The scope of the protective power to discipline members of the legal profession was considered by Warren CJ in Legal Services Board v McGrath.[6] Her Honour held that, while it had on occasion been mistakenly characterised as simply 'protective of the public', the protective power extended 'beyond protection of the public to include the legal profession as a group, the courts, the justice system and community confidence in that system'.[7] Her Honour was there speaking of the inherent power of the Court to discipline legal practitioners; however, the conferral of jurisdiction on the Tribunal to sanction legal practitioners for unsatisfactory professional conduct and professional misconduct must be taken to been for the same end.
21 The Tribunal's powers under the Act to discipline legal practitioners who fail to pay tax must be exercised having regard to this broad protective purpose. In Legal Services Commissioner v Stirling,[8] Ross P applied a line of appellate authority from New South Wales in respect of legal practitioners who fail to pay tax that establishes that theft from the state - 'the Revenue' - is as serious as theft from individuals. Thus, in New South Wales Bar Association v Hamman,[9] Mason P said:
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.[10]
22 His Honour observed that dishonest non-disclosure of income increased the burden on taxpayers generally and that, because the Australian tax system depends on the honesty of taxpayers, non-disclosure of tax liability involves an 'additional element indicative of unfitness to practise'.[11] In this context, the debate about whether the dishonesty occurred inside or outside the sphere of professional dealings was sterile. An offence of dishonesty demonstrates unfitness to practise.[12]
23 The Commissioner is right to say that a legal practitioner failing to file income tax returns and to pay tax over an extended period:
(a) demonstrates an absence of the honesty and integrity that the public is entitled to expect from a legal practitioner;
(b) reflects the practitioner's hypocrisy in purporting to practise and uphold the law while at the same time committing serious breaches of the law;
(c) shows disregard for the legal practitioner's civic responsibilities; and
(d) takes advantage of the public services made available through taxation while expecting fellow citizens to pay for those services through their taxes (many of whom will have less capacity to do so than the legal practitioner).
24 In this case, the Tribunal's disciplinary jurisdiction was invoked having regard to the need to protect the reputation of the legal profession and to maintain confidence in the justice system generally. The commission of taxation offences demonstrates an unfitness to be trusted in serious matters. There is an obligation to maintain public confidence that professional standards are being upheld, and with that the maintenance of the public's confidence in the mechanisms for supervising professional conduct. The Tribunal was obliged to exercise its jurisdiction to sanction the respondent for professional misconduct having regard to the seriousness of the conduct in question and the fact that general deterrence and denunciation are important to foster public confidence in the members of the profession upon whom the administration of justice depends.
25 The Tribunal was mindful of the need for general deterrence because in paragraph 37 of its reasons, it referred to the fact that the reputation of the legal profession suffers whenever one of its members is delinquent. However, it held that the respondent's convictions and his bankruptcy, together with the fact of the proceeding itself, provided sufficient general deterrence.[13]
26 As the Commissioner submitted, the proposition that general deterrence can be satisfied in or by other proceedings or actions cannot be sustained. This would enable a disciplinary tribunal to leave its disciplinary functions to others, which cannot have been the intention of the legislature. The fact that the Commission has instituted proceedings in the Tribunal to sanction the legal practitioner does not in and of itself qualify as general deterrence. It is the role of the Tribunal to impose a sanction having regard to the need for general deterrence. Legal practitioners should understand that if they do not comply with their taxation obligations, they will be charged, the charge will be heard and determined, and if proven they will face a sanction, including the possibility of a suspension or cancellation of the right to practise law.
27 I find that the Tribunal misconceived the nature of its disciplinary jurisdiction by treating professional misconduct arising from the commission of taxation offences as making a 'minimal' call on the protective role of the Tribunal. This is an error that could have materially affected the order that was made.
Questions 11, 12 and 13: the protection of the public
29 Grounds 11, 12 and 13 again challenge the proposition in paragraph 36 of the Reasons that the Tribunal's protective role was minimal as the offending conduct did not directly involve members of the public.
30 In order to cover every conceivable base, and rather confusingly, the Commissioner submits that the Tribunal erred in holding that:
(a) the effect of the respondent's conduct on the public was minimal because the conduct was not directly involved with clients;
(b) the objective of its role as being primarily protective of the public was minimal in this instance; and
(c) the respondent's actions being not directly involved with clients had the result that there was minimal need for protection of the public in imposing a sanction.
31 These grounds are again based on the contention that the Tribunal failed to recognise that the protective role of the Tribunal is wider than protecting clients from misconduct by legal practitioners. The Commissioner submits that if the protection of the reputation of the profession and confidence in the justice system was correctly recognised as relevant to the protection of the public, a more severe sanction would have been imposed on the respondent.
32 Although they have a different focus, the answers to Questions 11, 12 and 13 plainly overlap to a considerable extent with the answer to Question 10.
33 As I have said, the authorities establish that an important purpose of imposing a disciplinary sanction on a legal practitioner is the protection of the reputation of the legal profession, and confidence in the courts and the justice system generally.[14]
34 In Hamman, Mason P commented that the reputation and standing of the legal profession meant little in themselves, but they were 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 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.[15]
35 For his part, the respondent submits that the Tribunal's statement of the legal position correctly reflects the law. Further, the conduct of the respondent was not directly involved with clients and if he was permitted to remain in practice, he would have no direct involvement with clients.
36 For the reasons I have given, I cannot accept the respondent's submissions. They fail to recognise the more general protective imperative to properly sanction the respondent so as to maintain confidence in legal practitioners in their role as ministers of justice and in the justice system more generally. This was so, whether or not the respondent dealt directly with members of the public and whether or not the conduct that amounted to professional misconduct directly affected the practitioner's clients.
37 In holding that '[t]he objective of the Tribunal's role as being primarily protective of the public is minimal in this instance as Mr Turner's actions were not directly involved with clients',[16] the Tribunal misconceived the nature of its disciplinary jurisdiction and made an error of law. It was a material error in that it had the capacity to affect the severity sanction that was imposed.
39 These grounds are based on paragraph 6 of the Reasons, which reads:
Mr Turner's delinquency in taxation matters arises from the breakdown of his marriage and his allocation of the bulk of his available income to his wife and son. It is clear that, whilst there was income in excess of these payments, Mr Turner's lifestyle was far from lavish. The allocation of income over and above his basic living requirements was a contest between paying tax or paying for small luxuries. The small luxuries won.[17]
40 'Small luxuries' were also mentioned further into the Reasons as follows:
Whilst it was admitted by Mr Turner that he was able to save some money to spend on small luxuries, I find that these were very minor indeed in the overall scheme of things. It is clear that Mr Turner's financial situation went into decline as a result of the breakdown in his marriage and his continuing support for his wife and son. In particular, Mr Turner paid for his son's private school education. Essentially, after these were paid for and Mr Turner's living expenses met, there was not much left over.[18]
41 The Commissioner contends that the Tribunal erred in law by taking into account a supposed contest between paying tax or paying for small luxuries, which was an irrelevant consideration. He further contends that there was no evidence of any such contest and the finding that the Tribunal made was not open on the evidence. To the contrary, the respondent's evidence showed that he simply ignored his taxation obligations.
42 Although the respondent submits that the Tribunal's reference to the contest was a 'fair observation open to the Tribunal on the evidence',[19] the respondent did not direct the Court to any evidence about a 'contest' of the kind described or about the respondent spending his money on 'small luxuries'. In fact, in written submissions the respondent said:
It is correct that in the later years there was, on the evidence, an available surplus which could have gone towards his taxation debts but, by then, it was too late. Disposition of the surplus was unexplained by the respondent on the evidence.[20]
43 There was no evidentiary basis for a finding that the respondent experienced a contest between paying tax and paying for small luxuries and certainly no evidence that the respondent struggled to decide whether he would pay tax or spend available monies on small luxuries. In cross-examination, the respondent conceded that there was 'money left over in the later years'. However, he did not say how he spent it or what he thought about spending it otherwise than to satisfy his taxation obligations. He referred only to sticking his head in the sand.[21]
44 It seems to me that by referring to a contest between paying tax and spending money on small luxuries, the Tribunal was seeking to convey that the respondent was a modest man who did not use the money that he wrongly withheld from the Commissioner for Taxation to indulge himself. It was certainly open to the Tribunal to find that the respondent did not lead a lavish lifestyle and that his means were relatively modest. This appears to be the substance of the paragraph containing the second reference to 'small luxuries'.
45 Nonetheless, I am satisfied that in finding that the respondent's allocation of income over and above his basic living requirements was a contest between paying tax or paying for small luxuries, the Tribunal made a finding for which there was no evidence. This error matters because it enabled the Tribunal to 'gloss over' the significant change in the respondent's financial circumstances after 2005, his ability to meet his taxation obligations during a period that he described as 'the later years', and his failure to do so.
46 This, in my view, was a material omission by the Tribunal. I find that the error, although slight on its face, was a material one.
47 It follows that I do not accept the respondent's submissions that the Tribunal's reference to small luxuries was not a finding or that it was a fair observation open to the Tribunal on the evidence.
48 Ground 3 is made out. It is unnecessary to consider Ground 2. However, a finding (assuming that there was evidence to support it) that the respondent experienced a contest between paying tax and spending money on small luxuries for himself would not necessarily have been an irrelevant consideration.
Question 2: Changed circumstances as a relevant consideration
49 Ground 2 is raises a similar issue. The Commissioner contends that the Tribunal failed to take into account a relevant consideration, in that the material before it showed that there was significant variation in the respondent's earnings and financial commitments in the period between 1997 and 2006 and that towards the end of that period, the respondent had significantly more resources from which to meet his taxation obligations than at the beginning of that period.
50 The respondent's response that it 'is plain that the entire decision is dealing with the respondent's financial and personal circumstances and the changes that occurred over time to the respondent's situation'[22] provides no answer. Although the Tribunal recorded changes to the respondent's circumstances when it recited his admissions and the submissions made on his behalf, the Tribunal did not 'deal' with those changes in that there was no consideration or analysis of those changes by the Tribunal. The Tribunal paid no attention to the fact that the respondent's financial obligations to his wife and child ceased in July 2005, and his income increased after that date as well, leaving him with more disposable income.
51 In my view, the Tribunal was obliged to identify and distinguish the respondent's capacity to meet his taxation obligations from time to time when assessing the gravity of his failure to do so. The Tribunal's failure to do so is a material error, as consideration of the respondent's capacity to pay tax in the later years could have led it to impose a different sanction.
Questions 4, 5 and 6: incorrect finding that taxation liabilities were met
53 In paragraph 26 of its reasons, the Tribunal recorded the following:
Once Mr Turner's payment liabilities to his spouse and child ceased in July 2005, he has met his ongoing taxation and payment obligations.
54 The Commissioner contends that this was not open on the evidence or was contrary to the evidence.
55 This ground is premised on the statement in paragraph 26 being a finding of fact made by the Tribunal. It is not. Paragraph 26 appears in the part of the Reasons setting out the submissions made on behalf of the respondent. The Tribunal's own findings are contained in the following section.[23]
56 The Commissioner submits, in the alternative, that if paragraph 26 was merely the recitation of a submission, the Tribunal erred in failing to make a finding as to when the respondent commenced meeting his taxation obligations.
57 Again, I reject this submission. The Tribunal set out the conduct constituting professional misconduct, which showed that the respondent failed to disclose income and failed to pay income tax from 1 July 1996 to 30 June 2006, failed to lodge BAS returns for the consecutive quarters from 1 March 2002 to 30 September 2006 and failed to make the corresponding payments on time.
58 Finally, the Commissioner submits that the Tribunal did not set out in the Reasons its process of reasoning in relation to when the respondent recommenced meeting his taxation obligations. This, so it says, was important in the disposition of the matter in circumstances where a failure to meet taxation obligations was the substance of the charges. It submits that it was incumbent upon the Tribunal to explain which version of the narrative it had accepted and why.
59 Again, the fact that the Tribunal commenced the Reasons by setting out the conduct that amounted to professional misconduct (including the periods of non-lodgement of returns and non-payment of tax) makes it clear which narrative it accepted. That the Tribunal recorded an incorrect submission by the respondent does not detract from this fact.
61 In paragraph 33 of its reasons, the Tribunal stated:
Whilst it is clear that Mr Turner does not and did not at the relevant time suffer from a mental condition, it is clear that he developed a head in the sand approach to his taxation problems.[24]
62 The Commissioner submits that the Tribunal erred in holding that the respondent's 'head in the sand' approach to his taxation problems reduced the utility of general deterrence. Unlike a mental condition, there is no authority that a 'head in the sand' approach is a factor that is capable of reducing the relevance of general deterrence or denunciation.
63 If the finding in question was not made in relation to general deterrence, the Commissioner submits that the Tribunal was obliged by s 117 of the VCAT Act to explain the use it made, if any, of this finding. Alternatively, it submits that it was an irrelevant consideration.
64 For his part, the respondent submits that looking at the 'offending years' overall, the non-payment of his taxation debts was explained by a psychologist who considered him to have adopted what she described as a 'dissociative state'. This was described by the respondent using his own words as a 'head in the sand' approach.[25]
65 It is not easy to discern from the way that that the propositions in paragraphs 33 and 34 of the Reasons are developed how the Tribunal used the 'head in the sand' finding. It appears to me that the 'head in the sand' finding may have sat more comfortably in paragraph 34 than in paragraph 33. It seems to amount to a finding that even after the respondent's financial circumstances improved, he could not confront the very real issue of not having attended to his taxation affairs over a number of years because the thought of doing so was overwhelming. This might explain why the respondent did not respond to his improved financial circumstances in 2005 and 2006 by paying his tax.
66 I am not persuaded that the Tribunal treated the respondent's 'head in the sand' approach as relevant to the issue of general deterrence on the basis that it was a mental condition. The Tribunal made it clear that it did not fall within the category of a mental condition.
67 The Commissioner submits that if the 'head in the sand' approach was not made in substitution of a finding about the respondent's mental condition, then the consideration was irrelevant.
68 I do not consider the respondent's 'head in the sand' approach to his tax affairs was necessarily an irrelevant consideration. It may explain why the respondent did not regularise his tax affairs as soon as he was in a position to do so (or to begin to do so). It explains his culpability, at least in part, by reference to something other than simple greed.
69 However, the Commissioner is correct to say that it is not clear how the Tribunal used this finding. The obligation in s 117 of the VCAT Act to provide reasons for decision requires the Tribunal to set out an intelligible path of reasoning by which the factors relevant to the final decision are weighed and synthesised. Reasons are not intelligible if they leave the reader to wonder about the process of reasoning that has been followed.[26]
70 In my view, the Reasons leave the reader to wonder about how the 'head in the sand' finding was used by the Tribunal.
71 In so finding, I am conscious that the Reasons should not be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which they are expressed.[27] The Reasons as a whole are detailed and generally cogent. However, this particular finding does not form part of an intelligible path of reasoning and the reader is left to wonder how it has been used by the Tribunal.
72 Ground 8 is made out. It is unnecessary to consider Grounds 7 and 9.
73 Paragraph 38 of the Reasons, which appears under the heading 'Findings', reads as follows:
Mr Turner is in the twilight of his professional career and has limited prospects. Whilst personal consequences of a disposition are not relevant factors, it is open to the Tribunal to take a global view of all of the circumstances and the consequences of Mr Turner's actions. He has not profited from his actions. He has suffered the indignity of several convictions and bankruptcy. He now suffers the further indignity of the findings of this Tribunal.
74 The Commissioner contends that the Tribunal was obliged by s 117 of the VCAT Act to explain the use that it made, if any, of the matters referred to in paragraph 38. It contends that the Tribunal's reference to taking a 'global view' is unintelligible unless it evinces a misplaced sympathy for the respondent's circumstances.
75 I agree. The 'global view' to which the Tribunal refers indicates that a number of matters will be placed in the mix when it comes to exercise its discretion. However, it is not clear from the Reasons which of the matters (if any) referred to in paragraph 38 fall into that category. Paragraphs 43 to 51 do not suggest that any of these matters have been taken into account in the final disposition. On that basis, the Tribunal's reference to the respondent's age and prospects, and to the indignity of the various proceedings brought against him, would seem to serve no purpose other than to display sympathy for the respondent.
76 It might be said that paragraph 38 could be ignored. However, the Tribunal's reference to taking a 'global view' does raise questions about the manner in which it exercised its discretion to impose the sanction.
77 Once again, I do not wish to engage over-zealous scrutiny of the Reasons.[28] However, in leaving the matters in paragraph 38 hanging in the air apparently disconnected from its final conclusions, I find that the Tribunal has not clearly set out its path of reasoning as required by s 117 of the VCAT Act.
Questions 15 and 16: Sanction manifestly inadequate
79 The Commissioner contends that the Tribunal erred in imposing a sanction that was in all the circumstances manifestly inadequate and/or that the Tribunal's discretion as to the sanction to be imposed miscarried in a manner that was unreasonable or plainly unjust such that the Court may infer that there has been a failure to properly exercise the discretion which the law reposes in the Tribunal.
80 According to the Commissioner, the sanction that was imposed is not adequate for the protection of the public and, in particular, is not adequate to protect the reputation of the profession and to provide general deterrence to other members of the profession who may be tempted to engage in such conduct. It is important that disciplinary proceedings send the right message to the public and to the profession, and where it goes wrong, as it has here, it is even more important that the Court gives principled guidance to the Tribunal below so that it does not happen again.
81 The role of the Court on an appeal brought under s 148 of the VCAT Act from a decision of the Tribunal is different from that of an appellate court in an appeal against sentence. I have found that there was specific error in this case that warrants setting aside of the Tribunal's order and remitting of the proceeding to the Tribunal to be heard and determined again. In my view, it is both inappropriate and unnecessary for the Court to now decide whether the sanction imposed by the Tribunal was manifestly inadequate, as the Tribunal will have to reconsider the sanction that should be imposed on the basis of correct principle and taking into account only relevant considerations. Moreover, having regard to the discussion below on the effect of delay on the respondent, it would not be appropriate for the Court to purport to state authoritatively that any sanction imposed on the respondent that did not include a period of suspension would be manifestly inadequate.
Further issue: the relevance of the respondent's current fitness
82 In his written submissions, the respondent submitted that his present fitness to practise was a factor that militated against his suspension.
83 The Tribunal considered what it described as 'fitness to practice', observing that an inquiry under s 4.4.3(1)(b) of the Act is necessarily retrospective: it is whether conduct which has happened in the past justifies a finding that the legal practitioner at the time of the conduct demonstrated unfitness to practise. However, Tribunal also observed that in determining whether to grant or renew a practicing certificate, the requirement that the Legal Services Board be satisfied that an applicant is a fit and proper person is expressed in the present tense. The Tribunal found that the respondent was now a fit and proper person to engage in legal practice despite not being fit and proper whilst not meeting his tax obligations.[29]
84 The Commissioner submits that to find that the respondent is currently a fit and proper person is no answer to the proposition that his practising certificate should be suspended, because s 4.4.3(1)(b) of the Act looks to the character of the conduct that constitutes professional misconduct at the time it occurred.
85 I accept this submission. It follows from s 4.4.16 of the Act, which requires the Tribunal 'after it has completed a hearing' to be satisfied that the respondent 'is guilty of unsatisfactory professional conduct or professional misconduct' in order to make an order under s 4.4.17. The conduct amounting to unsatisfactory professional conduct or professional misconduct is conduct that occurred prior to the hearing. Pursuant to s 4.4.3(1)(b) of the Act, the Tribunal can be satisfied that a person is guilty of 'professional misconduct' by reason of conduct that would justify a finding that the practitioner is not a fit and proper person to engage in legal practice. The formulation in s 4.4.3(1)(b) directs attention to the conduct of the practitioner that would justify such a finding, not to the character of the practitioner at the time of disposition.
86 If it were the case that a suspension could only be ordered if the practitioner was not a fit and proper person at the time of disposition by the Tribunal, s 4.4.17 of the Act would have little work to do. If the Tribunal's inquiry was not directed to past conduct, then no practitioner who was at the time of disposition fit and proper could have his or her practising certificate suspended or cancelled. That cannot have been the intention of the legislature.
87 Indeed, the Tribunal would be impeded in the exercise of its jurisdiction to protect the reputation of the legal profession by sanctioning errant legal practitioners if the present conduct or present fitness of the practitioner were determinative of whether a suspension could be imposed. The fact that the public is not in need of protection from the practitioner at the time of disposition does not mean that the public is not in need of the protection that is afforded by sanctioning practitioners for past conduct.
88 This is not to say, however, that steps taken by the practitioner to rehabilitate him or herself and the success (or otherwise) of those actions may not be relevant to the exercise of the Tribunal's discretion.
89 Section 148 of the VCAT Act imposes a requirement for the grant of leave to appeal the orders of the Tribunal.
90 In Secretary to the Department of Premier and Cabinet v Hulls,[30] Phillips JA discussed the matters relevant to the grant of leave to appeal. His Honour said:
Once a question of law has been identified which bears directly upon the relief which will be sought on the appeal, and once it has been shown that there is sufficient doubt attending that question to justify the grant of leave to appeal, it may be supposed that leave will ordinarily go if the order below is a final order.[31]
91 However, Phillips JA qualified that statement as follows:
That must always be subject to its being just to grant leave, a consideration which will in some cases be determinative. It directs attention to the position of the parties - and perhaps third parties if directly affected by the order below or the proposed appeal - and perhaps the simplest example arises when the order below is plainly interlocutory.[32]
92 His Honour went on to say that where the order under challenge was final (as is here the clearly the case), the injustice of allowing the determination below to stand uncorrected, if it is indeed attended by error, will be more readily discerned. To leave a final order standing which would be reversed if error of law were established is unjust to the party adversely affected by the order: the prejudice lies in that party being bound to comply with an order that ought not to have been made as a matter of law. However, that might not always be so. Even in the case of a final order, the Court might sometimes require persuasion that there would be prejudice if the order below were allowed to stand, even though tainted by error.
93 Summarising the position in respect of leave to appeal, Phillips JA said:
When leave is sought under s 148, it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would-be appellant in the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the error below is final, that injustice will often be more readily discernible.[33]
94 Hulls concerned a number of related freedom of information requests that had been refused by the relevant departmental head but allowed on review by the Tribunal. The question of delay was raised as a reason for not granting leave to appeal, as the requests had been made in April 1996, but the application for review of the departmental refusal had not been heard by the Tribunal until November 1998. The Court held that the period between the freedom of information requests and the Tribunal hearing was 'surprisingly long', but that the delay should not operate against the department in that case because there were other reasons for it. However, Phillips JA recognised that delay might have been a reason for refusing leave to appeal. He said:
I am not satisfied that in this case the delay was such that leave to appeal should be refused on that account. Three years have passed since the initial requests for information, but the departments still seek to resist. Notwithstanding the passage of time, I think that in all the circumstances they are entitled to their day on appeal, the more so as the hearing of the appeals, in conjunction with the applications for leave to appeal, can occasion no further delay.[34]
95 In this case, having regard to my conclusions on the questions of law, the grant of leave to appeal will result in the proceeding being remitted to the Tribunal to be heard and decided afresh. The respondent will face further months of uncertainty regarding his ability to practise.
96 The respondent first approached the Victorian Bar to admit to not having met his taxation obligations in August 2006. He lodged returns in January 2007. The Court was informed that the Commissioner was notified of the respondent's non-payment of tax in August 2008. However, it was only in April 2011 that the Commissioner applied to the Tribunal for a sanction to be imposed, on the basis that the respondent had pleaded guilty to a charge of professional misconduct within the meaning of s 4.4.3(1)(b) of the Act. The Tribunal heard the Commissioner's application in February 2012 and made the order in April 2012.
97 Six years have therefore elapsed since the respondent first embarked on the process of regularising his taxation affairs and approached the Victorian Bar and his clerk for assistance. No explanation has been given for why it took the Commissioner from August 2008 until April 2011 to investigate the matter and apply to the Tribunal for the imposition of sanctions under the Act. Section 4.4.12(1) provides that an investigation by the Commissioner under Division 3 of Part 4.4 of the Act must be conducted as expeditiously as possible.
98 There is no suggestion that the respondent caused or contributed in any significant way to the delay. The submissions to the Tribunal made on behalf of the Commissioner suggest that the delay rests principally with the Commissioner. Supplementary submissions to the Tribunal dated 9 March 2012, filed on behalf of the Commissioner, contain the following passage:
[The Commissioner] accepts there has been delay in this case and this is a strong mitigatory factor. Although the period between the start of the investigation and the hearing of the application is about the same as in Long's case, it is submitted that the delay is a slightly lesser factor because some - but not much - of the period is attributable to the respondent: he sought and obtained short extensions of time for doing things during the investigation and hearing, and he requested adjournment of the hearing of the application.
99 I take this to be a concession that 'not much' of the delay was attributable to the respondent.
100 In Legal Services Commissioner v Long,[35] the respondent barrister pleaded guilty to professional misconduct for failing to lodge tax returns in respect of the income he earned in the financial years from 1 July 1994 to 30 June 2006. After rehearing the matter, the Tribunal upheld the original decision of Deputy President Macnamara and suspended the respondent's practising certificate for four months. The Tribunal recorded that the higher sanction sought by the Commissioner (that Mr Long's practising certificate be cancelled and that he not be allowed to re-apply for a practising certificate for three to four years) would have been 'entirely appropriate' were it not for two factors in mitigation: Mr Long's mental condition and the delay in bringing the proceedings. The delay was described as 'considerable'.
101 In fact, the delay in Long was not quite as long as the delay in this case. [36]
102 Apart from the fact that the respondent will continue to live his life under a cloud more than six years since first he moved to sort out his taxation affairs, he will suffer significant prejudice from further delay by reason of his age. The respondent is nearly 60 years of age. He may well be in his 60s before any new sanction is imposed. If the Commissioner's submissions are accepted by the Tribunal, the respondent faces a period of suspension of up to twelve months that is unlikely to commence before next year. This means that he will be required to rebuild his practice late in life. Although barristers may and do continue to practise well into their dotage, the effect of a suspension of the right to practise on a barrister of the respondent's age will be more serious than had it occurred five, or even three, years ago. Given the nature of the respondent's practice, a suspension at this late stage in his career could well spell the end of his practice.
103 As a result, I have given very careful thought to whether, having regard to the existing delay, to subject the respondent to further delay before finally resolving his situation would be unjust. I have considered whether leave to appeal should be refused on this basis.
104 Given the importance of the protective jurisdiction of the Tribunal under the Act, the reputation of the legal profession and the role of legal practitioners as ministers of justice, as well as the gravity of the respondent's conduct in breaking the law over a period of 10 years, I have concluded that the very real and prejudicial delay that has occurred ought not to preclude the grant of leave to appeal.
105 However, delay may be a relevant factor in the disposition of the Commissioner's application by the Tribunal. In R v Talia,[37] Ashley and Weinberg JJA said of the effect of delay in sentencing:
Delay may stand as a powerful mitigatory feature. If the accused has not re-offended in a lengthy period between offending and sentence, it will tend to show that there is an enhanced prospect of rehabilitation. There is also a question of fairness in the event that a matter is left hanging over an offender's head during an apparently leisurely process of investigation and prosecution. The longer the period of delay, the greater its likely weight as a mitigatory circumstance, particularly when the delay is not attributable to the conduct of the accused. Again, whilst it is not necessary for delay to operate as a circumstance of mitigation, that it be unexplained, the fact that it is not attributable to the conduct of the accused will likely make it of greater significance.[38]
106 It will be a matter for the Tribunal to consider the mitigatory effect of delay, as it did in Long.
107 The respondent submitted that because sentencing principles apply by analogy,[39] the principle of double jeopardy ought to tell against the proceeding being re-opened. He relied upon to the decision of Kirby P (as his Honour then was) in Law Society of NSW v Foreman.[40] That too was a case involving disciplinary proceedings against a legal practitioner. His Honour found that there was an element of double jeopardy to which the practitioner was exposed as a result of the appeal brought by the Law Society of NSW. Although it was not 'double jeopardy' in the technical sense, it involved a second exposure to the scrutiny of the body that supervised the legal profession with the prospects of the loss of entitlement to practise and serious personal consequences for the practitioner. His Honour observed that behind the rules relating to double jeopardy was 'a sense of justice' that was not confined to criminal cases, and concluded that 'if the case is at the borderline, I would take the exposure to a form of double jeopardy into account in deciding the order which it is appropriate for this Court to make.'[41]
108 Since the enactment of the Criminal Procedure Act 2009 (Vic), s 287 provides for the pre-conditions governing a Crown appeal. In DPP v Karazisis,[42] the majority held that the principle of double jeopardy which had developed at common law as a restraint on the institution and disposition of Crown appeals had been displaced by the statute at all stages: in considering whether there had been a sentencing error; in determining whether a different sentence should be imposed; and in fixing a sentence. The landscape has therefore changed significantly in relation to the application of the principle of double jeopardy in Victoria.
109 I am not, in any event, persuaded that the principle should prevent the review by the Court of a decision by the Tribunal that is affected by error of law. Moreover, to the extent that it has misconceived the nature and extent of its disciplinary jurisdiction, the Tribunal has made a jurisdictional error and its decision is not only unlawful, it is arguably no decision at all.[43] A sentencing principle that is no longer applicable in respect of criminal appeals in this State should not stand in the way of the grant of leave to appeal.
110 Having regard to all of the circumstances, I have concluded that leave to appeal should be granted notwithstanding the delay in dealing with the respondent's conduct, the likely further delay in resolving his situation, and the fact that the respondent has already been reprimanded.
111 Leave to appeal is granted, the appeal is treated as having been instituted and heard instanter and the appeal is allowed.
112 The proceeding will be remitted to the Tribunal to be heard and decided according to law. In the circumstances, the proceeding should be remitted to the same division of the Tribunal to be heard and decided again. It will be a matter for the Tribunal member whether he wishes to hear any further evidence. The effect of the existing delay requires the matter to be dealt with expeditiously, and that is best achieved, in my view, by remitting the proceeding to the same Tribunal member.
[1] Legal Services Commissioner v Turner (Legal Practice) [2012] VCAT 373 ('Reasons').
[4] I have considered this heading to be inappropriate, as the respondent's current fitness to practice was not in issue, and it was not proposed that he be struck off the roll of counsel.
[6] (2010) 29 VR 325, 329 ('McGrath').
[8] [2012] VCAT 347 ('Stirling').
[9] [1999] NSWCA 404 (29 October 1999) ('Hamman').
[14] Legal Services Board v McGrath (2010) 29 VR 325, 329.
[15] New South Wales Bar Association v Hamman [1999] NSWCA 404 (29 October 1999) [89].
[19] Respondent's Outline of Submissions, dated 28 May 2012 [22].
[20] Respondent's Supplementary Submissions, dated 13 July 2012 [18].
[21] Transcript of Proceedings, Legal Services Commissioner v Nigel Turner (Victorian Civil and Administrative Tribunal, J59/2011, Member G Butcher, 17 February 2012) 58-59.
[22] Respondent's Outline of Submissions, [23].
[25] Respondent's Supplementary Submissions, [18].
[26] Commissioner of State Revenue v Anderson [2004] VSC 152 (12 May 2004) [33].
[27] Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259, 272.
[28] Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259, 272.
[30] [1999] VSCA 117; [1999] 3 VR 331 ('Hulls').
[34] Ibid 338 [20] [Emphasis added].
[36] Mr Long did not comply with his taxation obligations between July 1994 and June 2006. He informed the Victorian Bar in November 2007 that he was insolvent under administration and of the circumstances that gave rise to that situation. The Commissioner began investigating in July 2008 and charges were filed with the Tribunal in December 2010, some two and a half years later. The Tribunal began hearing the matter some six months later and the rehearing occurred six months after that. As a result, about three years and nine months had elapsed since the Commissioner began his investigation. The Tribunal held that a significant proportion of the delay was 'unreasonable'.
[37] [2009] VSCA 260 (16 November 2009).
[38] Ibid [22]. See also Chandler v R [2010] VSCA 338 (9 December 2010) [16]; R v Bernstein [2008] VSC 254 (27 June 2008) [43]; R v Just [2003] VSC 274 (3 February 2004) [32], [46].
[39] See Quinn v Law Institute of Victoria [2007] VSCA 122 (14 June 2007) [35]. There, Maxwell P said, 'Because the Tribunal's disciplinary jurisdiction is inescapably - indeed, intentionally - punitive, in the service of protecting the public, it is appropriate that the principles applicable in this court to sentencing appeals should apply by analogy to appeals from disciplinary decisions of the Tribunal. The most obvious example is the approach to a submission that the penalty is manifestly excessive.'
[40] (1994) 34 NSWLR 408, 413.
[42] [2010] VSCA 350 (17 December 2010).
[43] See Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597, 614-5 [51] (Gaudron and Gummow JJ).
Legal Services Commissioner
Turner [2012] VSC 394
(2010) 29 VR 325
(1996) 185 CLR 259
(1994) 34 NSWLR 408
(2002) 209 CLR 597