Cameron v Bar Association of NSW

Supreme Court of NSW|2002-03-20|Before: Simpson J

Background 7 The plaintiff was admitted (under the regime then prevailing) to practise as a barrister at law on 22 November 1968. He has been in continuous private practice since 1975. A practising certificate under the regime provided by Part 3, Division 1 of the Act was issued on 1 July 2001 and (unless and until cancelled) entitled him to practise until 30 June 2002. On 1 November 2001, acting under s38FC and s38FE(1)(b), the Bar Council resolved to cancel the practising certificate. The plaintiff was advised of this resolution by a letter dated 2 November 2001. The cancellation was specified to take effect from midnight on 1 December 2001. 8 By summons dated 26 November 2001 the plaintiff sought a variety of orders, including a stay of the cancellation and a declaration that he is a fit and proper person to practise as a barrister. He sought other, consequential orders to which it is not presently necessary to refer. Despite the language used in the summons, and the formulation of the orders sought, the summons was, in effect, an appeal under s38B. 9 On 12 December 2001 the plaintiff discontinued that proceeding before any hearing commenced. 10 On 26 March 2002 the plaintiff filed a fresh summons in substantially identical terms to the earlier summons. Both parties proceeded on the basis that the hearing that ensued on that day was an interlocutory one, pending the outcome of a full and final adjudication of the plaintiff's appeal. 11 In these circumstances, it seems to me to be appropriate to confine my findings of fact to the minimum necessary to enable a proper determination of the plaintiff's interlocutory claim.

The proper approach to s38FC 30 On behalf of the plaintiff reliance was placed on the decision of McClellan J in Murphy v the Bar Association of New South Wales [2001] NSWSC 1191, unreported, 21 December 2001. 31 In that case, McClellan J was considering a similar appeal brought by a barrister whose practising certificate had been cancelled under s38FE(1)(b). His Honour held, as I understand his judgment, that, once an investigation has taken place, s38FE becomes irrelevant. The subsequent decision by the Bar Council was made and the decision by this court on an appeal under s38B is made under s38FC. The test there imposed is whether the relevant conduct of the barrister (the bankruptcy, the indictable offence(s) or tax offence(s)) was committed in circumstances that showed that the person concerned is not a fit and proper person to hold a practising certificate. 32 Since the Bar Council's resolution in the present case, and the decisions to cancel the plaintiff's practising certificate were made under both sections, I do not find it necessary to embark upon the exercise undertaken by McClellan J. 33 Section 38FB introduces the conduct to which all the sections are directed - acts of bankruptcy on the part of an applicant for the holder of a practising certificate, and indictable or tax offences committed by such persons. Section 38FE focuses upon the adequacy of any explanation given by the person concerned for that conduct; it confers upon the Bar Council a discretion to refuse to issue or to cancel or suspend a practising certificate where no explanation is given, or where the explanation given fails to show that the person is a fit and proper person. The section imposes an onus on the person concerned to provide an explanation and to satisfy the Bar Council that he/she is a fit and proper person. 34 Section 38FC is directed to where the Bar Council is in possession of sufficient facts concerning the relevant conduct to make an examination of that conduct and the circumstances in which it was committed and to form an opinion whether these circumstances show that the person concerned is not a fit and proper person. No exercise of discretion arises: once the Bar Council has formed the requisite opinion, the result is dictated. Where the Bar Council is satisfied that the person concerned is not a fit and proper person to hold a practising certificate it must refuse to issue, or it must cancel or suspend, a practising certificate. 35 Here, as I have indicated, there was a great deal of correspondence between the parties and thorough investigation of the circumstance by the Bar Council. The Bar Council was, and hence this court is, in a position to make the necessary evaluation under s38FC. It is unnecessary to have recourse to s38FE. 36 McClellan J went on to consider the correct approach to s38FC, and in particular the words "not a fit and proper person to hold a practising certificate". Essentially, he held, the words denoted dishonesty (see especially [45]). 37 In the present case counsel for the plaintiff urged that construction upon me. Counsel for the Bar Association, although expressly renouncing the construction adopted by McClellan J, did not seek to argue that I should not adopt it, recognising the principles of comity that guide first instance judges. This creates something of a difficulty. I have real reservations about McClellan J's construction of the words in the section; it seems to me that these words are intended to encompass conduct that goes outside dishonesty and embrace significant impropriety, lack of integrity or bad faith falling short of dishonesty. Dishonesty is itself a somewhat elastic concept, not necessarily conveying the same meaning to everybody. This can be seen, for example, in McClellan J's reference to Chamberlain v the Law Society of the Australian Capital Territory (1993) 43 FCR 148: conduct there characterised by the court as improper was described by McClellan J as dishonest. 38 The difficulty, however, that I now encounter is that, owing to the position adopted on behalf of the Bar Association of not seeking to challenge the Murphy construction of s38FC, no argument was addressed to the question on behalf of the plaintiff. Both parties approached the issue on the basis that I would follow and adopt the reasoning and conclusions in Murphy. Once counsel for the Bar Association signified their intention in this respect, it could hardly be expected that counsel for the plaintiff would take up time on what appeared to be a non-issue. For those reasons, and with some misgivings, I do propose to approach the question I have to decide on the statutory construction stated in Murphy.

39 I have not the slightest doubt that the conduct engaged in by the plaintiff over many years was improper. The question I have to determine, in the circumstances, is whether that conduct should also be characterised as dishonest such as to warrant a conclusion that he is not a fit and proper person to hold a practising certificate. 40 Senior counsel for the Bar Association drew my attention to an annexure to an affidavit sworn by the plaintiff on 4 March 2002, headed "Briefs Returned or to be Returned". Precisely what is intended by this document is not clear. A number of briefs are listed, each with a date, and a monetary sum, presumably representing the fees the plaintiff anticipates will be payable on completion of his work. All matters post-date 1 December 2001, the date of cancellation of the plaintiff's practising certificate. Counsel for the Bar Association invited me to draw the inference, from this, that the plaintiff has continued, since the cancellation, and in breach of the Act, to undertake work as a legal practitioner. This inference I decline to draw. There is no real explanation for the dates, the latest of which is May 2002, but it seems to me that the most likely inference is that the dates are dates allocated for hearing of the matters listed. This does not imply that the plaintiff has continued to work on the briefs or to render fees for any work he has done. It was open to counsel for the Bar Association to cross-examine the plaintiff on the affidavits he had filed but he declined to do so. Cross-examination could have elucidated the meaning of the document. Finally, I do not understand it ever to have been part of the Bar Association's case that the plaintiff is not a fit and proper person to hold a practising certificate by reason of any breach of the Act or failure to comply with the cancellation of his practising certificate. I place no reliance on the document. 41 I was referred also to two recent decisions of the Court of Appeal, each delivered after the introduction of Division 1AA into the Act, but neither specifically under those provisions. These were the decisions in the NSW Bar Association v Cummins [2001] NSWCA 284, 52 NSWLR 279, and NSW Bar Association v Somosi [2001] NSWCA 285, unreported, 31 August 2001. In each case the opponent, a barrister, had failed over many years to file income tax returns or pay tax. The Court of Appeal found, in Somosi, that: "the only inference is that he deliberately and intentionally evaded tax." (at para [63]) 42 Earlier the Court of Appeal found another barrister unfit to hold a practising certificate by reason of "a systematic course of tax evasion": NSW Bar Association v Hamman [1999] NSWCA 404, unreported, 9 September 1999. 43 Given the restraint which I have concluded I should exercise by reason of the decision in Murphy, the question I must ask myself is whether the plaintiff's conduct over the years amounted to tax evasion. If so, it is, in my opinion, axiomatically dishonest. 44 It is of some significance, in my opinion, that, in the plaintiff's first bankruptcy the only creditor was the Deputy Commissioner of Taxation. In the second bankruptcy the Deputy Commissioner of Taxation was the petitioning creditor and the only supporting creditor was a finance company that had financed the purchase of the chambers in Wentworth Chambers. This, together with the consistent history of failure to comply with taxation obligations, suggests to me that the plaintiff's conduct should be characterised as more than mere incompetence in the management of his own affairs, but a deliberate course of relegating the legitimate claims of the Deputy Commissioner of Taxation to the lowest priority. This, in turn, suggests to me that the plaintiff's conduct has crossed the line, blurry though that line may be, that distinguishes impropriety or lack of integrity from dishonesty. The filing of taxation returns, and the payment of tax, is not voluntary; it is an obligation every citizen has to every other citizen, and to the community as a whole. In the case of the self-employed, where income tax is not deducted at source, persistent failure to meet the obligation, both to disclose income and to pay tax on that income, signifies a disregard of that obligation and surpasses carelessness, incompetence, or lack of organisation. 45 Nor can I accept that the plaintiff's taxation defalcations can be traced back to the disallowance of the taxation minimisation scheme. In his initial disclosure statement (Ex A) the plaintiff said that the scheme had been allowed as a deduction for three years until 1985, when it was rejected. But the plaintiff's failure to furnish income tax returns dates back to 1983 and 1984, and the Deputy Commissioner's proof of debt dates back as far as 1979. 46 I am satisfied that, on the material before me, the plaintiff has been shown to have been guilty of relevant dishonesty and therefore to be not a fit and proper person to hold a practising certificate under the Act. I have come to this conclusion, as indicated, because it has been necessary to consider the question of dishonesty. Left to myself, without the constraints of Murphy, I would have found that the lack of integrity, and the extent of the impropriety in meeting tax obligations over the years, whether properly characterised as dishonest or not, produced the same result. 47 The orders I make are that:

the plaintiff have leave to amend the summons herein as he may be advised within 28 days from this date;
application for interlocutory relief as sought in paragraph 1 of the summons herein be dismissed;
plaintiff to pay the costs of the defendant of the application; and
summons stood over generally with leave to each party to restore same to the list on 7 days notice. **********

Last Modified: 03/26/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Cameron v Bar Association of NSW [2002] NSWSC 191 revised - 25/03/2002 FILE NUMBER(S) : SC 13646/01 HEARING DATE(S) : 08.03.02 JUDGMENT DATE : 20 March 2002

COUNSEL : D.F. Rofe QC with A.J. Tudehope (Plaintiff) P.R. Garling SC with C.E. Adamson (Defendant) SOLICITORS : McLaughlin Riordan (Plaintiff) Hicksons (Defendant) CATCHWORDS : Legal Profession Act 1987 - ss38FB, 38FC, 38FE - "fit and proper person to hold a practising certificate" - whether dishonesty necessary - dishonesty established Legal Profession Act 1987 LEGISLATION CITED : Legal Profession Regulation 1994 Taxation Administration Act 1953 Bankruptcy Act 1966 Veghelyi v Council of the Law Society of New South Wales (1989) 17 NSWLR 669; Murphy v the Bar Association of New South Wales [2001] NSWSC 1191, unreported, 21 December 2001 CASES CITED : Chamberlain v the Law Society of the Australian Capital Territory (1993) 43 FCR 148 NSW Bar Association v Cummins [2001] NSWCA 284, 52 NSWLR 279 NSW Bar Association v Somosi [2001] NSWCA 285 NSW Bar Association v Hamman [1999] NSWCA 404, unreported, 9 September 1999 DECISION : Application for interlocutory relief as sought in summons refused with costs.

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