Council of the Law Society of New South Wales v Zhukovska - [2020] NSWCA 163 - NSWCA 2020 case summary — Zoe

NSWNSWCA

Council of the Law Society of New South Wales v Zhukovska

[2020] NSWCA 163

Court of Appeal (NSW)|2020-06-23|Before: Macfarlan JA, Leeming JA, McCallum JA

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2020-06-23

Before

Macfarlan JA, Leeming JA, McCallum JA

Catchwords

[2004] HCA 1 Allesch v Maunz (2000) 203 CLR 172
[2000] HCA 40 Attorney-General v Bax [1998] 2 Qd R 9 Betts v The Queen (2016) 258 CLR 420
217 ALR 553 Peko-Wallsend (1986) 162 CLR 24
[1986] HCA 40 Re a Practitioner (1984) 36 SASR 590 Sgro v Thompson [2017] NSWCA 326 Singer v Berghouse (1994) 181 CLR 201

Source

Original judgment source is linked above.

Catchwords

[2004] HCA 1 Allesch v Maunz (2000) 203 CLR 172[2000] HCA 40 Attorney-General v Bax [1998] 2 Qd R 9 Betts v The Queen (2016) 258 CLR 420217 ALR 553 Peko-Wallsend (1986) 162 CLR 24[1986] HCA 40 Re a Practitioner (1984) 36 SASR 590 Sgro v Thompson [2017] NSWCA 326 Singer v Berghouse (1994) 181 CLR 20192 ALJR 846 Veghelyi v The Law Society of New South Wales (unreported, Court of Appeal, 6 October 1995) Warren v Coombes (1979) 142 CLR 531[1979] HCA 9 Wentworth v New South Wales Bar Association (1992) 176 CLR 239[1992] HCA 24 Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85 Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279

Judgment (33 paragraphs)

[1]

ADT 239 New South Wales Bar Association v Cummins [2001] NSWCA 284 New South Wales Bar Association v Hamman [1999] NSWCA 404; 217 ALR 553 Peko-Wallsend (1986) 162 CLR 24; [1986] HCA 40 Re a Practitioner (1984) 36 SASR 590 Sgro v Thompson [2017] NSWCA 326 Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 Stanoevski v The Council of the Law Society of New South Wales [2008] NSWCA 93 Strang v Steiner [2019] NSWCA 143 The Council of the Law Society v Doherty [2010] NSWCA 177 The Queen v Bauer (a pseudonym) [2018] HCA 40; 92 ALJR 846 Veghelyi v The Law Society of New South Wales (unreported, Court of Appeal, 6 October 1995) Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 Wentworth v New South Wales Bar Association (1992) 176 CLR 239; [1992] HCA 24 Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85 Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279; [1957] HCA 46 Texts Cited: Dal Pont, G, Lawyers' Professional Responsibility (6th ed, Lawbook Co, 2017) New South Wales Solicitors' Manual, ch 33D Category: Principal judgment Parties: Council of the Law Society of New South Wales (Appellant) Myroslava Zhukovska (Respondent) Representation: Counsel: T Wong SC, S Barnes (Appellant) B Tronson, A Cameron (Respondent)

[4]

HEADNOTE [This headnote is not to be read as part of the decision] The Law Society brought disciplinary proceedings in the Civil and Administrative Tribunal of New South Wales against the respondent, a lawyer, in respect of conduct occurring in 2013 and 2014. The conduct included overcharging an elderly and vulnerable client, unreasonably establishing a trust structure in relation to the client's estate, and making unsecured loans from the proceeds of sale of the client's home, including to a company that the respondent controlled. The Tribunal found that the respondent had engaged in five instances of professional misconduct and five instances of unsatisfactory professional conduct, and ordered that the respondent's practising certificate be cancelled, that she be reprimanded, fined and precluded from receiving any new practising certificate for 12 months. The Tribunal made no orders imposing conditions on the issue of a new practising certificate to the respondent, instead making recommendations that the Law Society require a suitable period of supervision of the respondent and satisfactory completion by her of professional training courses before a new certificate is issued. The Law Society appealed to the Court of Appeal, on the grounds that the Tribunal erred in failing to hold that the respondent was not a fit and proper person to remain on the roll of lawyers maintained by the Supreme Court of New South Wales, and alternatively in failing to impose conditions on the issue of a new practising certificate to the respondent. The issues in the appeal were: i) Whether it was necessary for the Law Society to establish House v The King error on the part of the Tribunal; ii) Whether the Tribunal erred in failing to make an order removing the respondent's name from the roll, and in failing to impose conditions on the issue of a new practising certificate to the respondent; iii) What orders the Court of Appeal should make in the re-exercise of discretion. The Court held, ordering the parties to make submissions as to the conditions to which the respondent should be subject: As to issue (i), per Leeming JA (Macfarlan JA and McCallum JA not deciding):

It was necessary for the Law Society to establish House v The King error. Section 562 of the Legal Profession Act 2004 (NSW) conferred power to make a range of discretionary orders so as to protect the public from misconduct by lawyers. The question for the Tribunal was which of those orders were appropriate in order to serve the predominantly protective jurisdiction being exercised. This was not a case where there could be only one correct answer to that question: at [95]-[97]. In re the Will of F B Gilbert (decd) (1946) 46 SR (NSW) 318; Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40; The Council of the Law Society v Doherty [2010] NSWCA 177; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30; and The Queen v Bauer (a pseudonym) [2018] HCA 40; 92 ALJR 846 discussed. Wentworth v New South Wales Bar Association (1992) 176 CLR 239; [1992] HCA 24; Sgro v Thompson [2017] NSWCA 326; and Strang v Steiner [2019] NSWCA 143 referred to. As to issue (ii), per curiam:
If the Tribunal were satisfied that the respondent was presently unfit to practise, and likely to be unfit for the indefinite future, then it would be appropriate to order that her name be removed from the roll. If the Tribunal were not so satisfied, then such an order should not be made: at [99]. The onus was on the appellant to show probable indefinite unfitness to practise if an order removing the respondent's name from the roll was to be made: at [100], [115]. A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253; [2004] HCA 1; and Stanoevski v The Council of the Law Society of New South Wales [2008] NSWCA 93 referred to.
The distinction between suspension and cancellation of a practising certificate is not technical, and the principles applicable to the power to suspend a practising certificate do not extend to the power to cancel: at [109]. The Law Society's submission that once it was found that the respondent was not presently fit to practise, the Tribunal was required to determine when and subject to what conditions she would become fit to practise, rested on a false dichotomy: at [110].
In a case where the Tribunal is satisfied that a lawyer is not presently fit to practise, but also not satisfied that he or she is probably permanently or indefinitely unfit to practise, neither removal from the roll nor suspension for a specified period of time is appropriate in order to protect the public interest. Rather, a cancellation order is appropriate, coupled with an order preventing application for a practising certificate for at least such time as the Tribunal considers that the lawyer will not be fit to practise: at [111]-[115], [130]. Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 distinguished.
There was material error in the Tribunal's decision, insofar as it made no findings to justify the 12 month period during which the respondent could not practise. There was an implied finding that there was at least a reasonable prospect that the respondent would become fit to practise at a time after the expiration of the 12 month period, but there was no basis for that inference. It was impossible to reconcile the Tribunal's finding that the respondent was presently unfit to practise with its finding that that would change after a 12 month period when what would happen during that period was unknown: at [125]-[128].
Discharge of the Tribunal's task required imposition of conditions which, if satisfied, would give the respondent a real chance to establish that she was fit to practise, rather than merely making incomplete and non-binding recommendations to the appellant: at [128]-[131]. As to issue (iii), per curiam:
The respondent was not presently fit to practise, and could not have a realistic prospect of demonstrating that she was fit to practise unless she acknowledged the entirety of her conduct, explained the steps taken and to be taken to prevent such conduct recurring, and demonstrated a formal commitment to complete her training: at [149]-[154].

[7]

Ms Zhukovska encounters Ms Heane

In July 2013, Ms Zhukovska made a file note of a telephone call from a neighbour of Ms Dulci Barbara Heane, advising that the neighbour had been asked to be appointed by power of attorney to handle her financial affairs, now that Ms Heane had been placed at a residential aged care facility. Ms Zhukovska spoke with Ms Heane later that day, according to her affidavit and file note, and met with her at the aged care facility on 17 July 2013. She took with her a draft power of attorney, appointing herself as attorney, which appears to have been executed by Ms Heane that day.
NCAT found that at the time Ms Heane's assets included a home unit (which was sold the next month for $552,000) and other assets of some $113,000. She had no close relatives, apart from the children of a sister, from whom she had been estranged before she died.
Thereafter, the Tribunal found that Ms Zhukovska undertook the following work for Ms Heane: "(1) she prepared a standard cost agreement, standard costs disclosure and letter of instruction; (2) she prepared and witnessed a general power of attorney (that is, not an enduring power of attorney), under which she, Ms Zhukovska, was appointed as the attorney; (3) she consolidated Ms Heane's bank accounts into one account, for the purpose of using it to pay tradesmen to renovate the Collaroy unit prior to sale. Ms Zhukovska asserts that at this time she obtained Ms Heane's authorisation for her law practice to charge usual hourly rates for any attendances related to the renovation of the Collaroy unit including supervision time; (4) she obtained advice from Mr Christopher Charlton, chartered accountant about asset protection and as a result of his advice established a discretionary trust to be known as The Barbara Heane Trust ("the Trust"), (5) through Mr Charlton, she arranged the incorporation of a company, Dulbar Investments Pty Ltd ("Dulbar"), with Mr Charlton [and] herself as directors for the purpose of Dulbar acting as the trustee of the Trust; (6) she arranged for Mr Charlton to instruct another solicitor to prepare a deed of settlement to establish and to govern the Trust ("the Deed of Settlement" or "the Trust Deed"). The Deed of Settlement: (a) appointed Ms Heane as Appointor and the only member of the appointed class and described the General Beneficiaries of the Trust as "any charitable organisation which is a deductible gift recipient and has as its primary objective the care and welfare of cats or dogs or both."; (b) gave the Appointor the power to remove any trustee and appoint a new trustee; (c) gave the trustee of the Trust power to change the beneficiaries of the Trust and allowed any person other than a member of the Excluded Class to be nominated and to become a beneficiary of the Trust. Ms Zhukovska, others associated with her law practice and Mr Charlton were not members of the Excluded Class. (7) She caused to be prepared and to be executed by Ms Heane a deed of appointment of successor appointor in relation to the trust ("the Successor Appointor Deed"). The effect of the Successor Appointor Deed was to make Ms Zhukovska the Appointor of the Trust upon Ms Heane's death."
There was a dispute between Ms Zhukovska and an employee. The employee made a complaint to the Law Society triggering an investigation and these proceedings, in which the Law Society sought orders removing Ms Zhukovska's name from the roll, identifying 12 grounds which it contended amounted to professional misconduct or unsatisfactory professional conduct. The Tribunal found that 2 of the grounds were not established (these related to taking steps to ensure that Ms Heane understood the nature and effect of a power of attorney, and obstructing or misleading an investigator); they need not be mentioned. The remaining ten grounds are summarised below.

[9]

Establishing the trust (grounds 2-4)

Ms Zhukovska gave evidence that she caused the trust to be established as a result of Ms Heane's concern that a claim might be made against her estate by her estranged sister's children. The Tribunal recorded that in cross-examination Ms Zhukovska "left an unclear impression about whether or not she knew the definition of 'eligible person' at the time" and agreed with the Law Society that "her testimony in this regard was most unconvincing". There was evidence that the work had been performed unreasonably, having regard to its extent and the overall lack of benefit to Ms Heane, and that there was no occasion to bring into existence a trust structure, given the size of Ms Heane's estate. The Tribunal regarded this aspect of the conduct as falling short of the standard of competence and diligence which the public was entitled to expect from a reasonably competent practitioner, and therefore unsatisfactory professional conduct, but which fell short of professional misconduct. This was part of ground 2 of the Law Society's application.
A related but separate ground (ground 3) of the Law Society's application was the direction in the will drafted by Ms Zhukovska that Ms Heane's residuary estate be transferred to the trustee. The will drafted by Ms Zhukovska, signed by Ms Heane on 1 September 2013, replaced a previous will executed in July 1998 which appointed Permanent Trustee Co Ltd as executor and trustee and recorded Ms Heane's wishes for her estate to be distributed in equal shares to the Salvation Army and a charity caring for dogs. This was also found to constitute unsatisfactory professional conduct, but not professional misconduct.
In November 2013, Ms Heane signed the "Successor Appointor Deed", the effect of which was that Ms Zhukovska was nominated as the new appointor, effective on Ms Heane's death. The appointor had power to change the discretionary objects of trust. Ground 4 of the Law Society's application was the failure by Ms Zhukovska to ensure that Ms Heane obtained independent legal advice before conferring that benefit upon Ms Zhukovska.
The Tribunal was critical of the defence made by Ms Zhukovska to this ground. Its reasons included the following: "[65] In her closing written submissions Ms Zhukovska says that she now accepts, having obtained legal advice in relation to the Deed, that she should have referred Ms Heane directly to a specialist in wills and estates to provide independent legal advice in relation to Ms Zhukovska's own appointment as successful appointer. [66] Her submissions at [7.1] go on to indicate, apparently by way of mitigation, that: '… The evidence shows that the Deed was prepared by a wills and estates specialist on instructions provided by Mr Charlton. (Ms Zhukovska) had no reason to suspect that the Deed was anything other than what was necessary and appropriate to ensure that the assets of the Trust were distributed in accordance with Ms Heane's wishes after her death.' [67] Our reaction to that submission is that it appears to completely miss the point. In our view any reasonably competent solicitor who was seeking to act exclusively in his or her client's interests without any regard to his or her own, would have realised the stark possibility of a conflict of interests arising for them upon execution of a deed in that form. It does not matter that the Successor Appointor Deed was prepared by a specialist. It does not matter that Ms Zhukovska has the view that the deed was necessary or appropriate. Quite clearly she should have recognised the potential for conflict between her own interests, particularly as they would arise upon Ms Heane's death and her consequent substitution as appointor, and those of her client Ms Heane. [68] As submitted by the Law Society at [94] of its closing submissions: (1) the Successor Appointor Deed put Ms Zhukovska in a completely controlling position in relation to Ms Heane's assets; (2) additional beneficiaries could be appointed by being nominated by the trustee, Dulbar, which itself was controlled by Ms Zhukovska and Mr Charlton with the written consent of Ms Zhukovska. We add that fact should have made it abundantly clear to Ms Zhukovska that the provision considerably enhanced her position in a way which gave rise to a conflict of her interest and her duty to preserve the interests of Ms Heane; (3) significantly, it was quite possible for Ms Zhukovska to become a beneficiary of the trust; and (4) in all these circumstances Ms Zhukovska should have ensured that Ms Heane received independent legal advice as to the nature and effect of the Successor Appointor Deed and the Trust Deed, prior to her executing those instruments."
The Tribunal regarded this conduct as professional misconduct.

[11]

Loans made by the trustee (grounds 6, 7 and 8)

Grounds 6, 7 and 8 concerned unsecured loans which Ms Zhukovska caused Dulbar to make with the proceeds of sale. Each was different. Dealing with them in chronological order, there was a loan of $40,300 to a Ms McCann, for a period of two months at an interest rate of 8.75% per annum. The loan was documented by a deed, with an equitable mortgage and draft caveat. The minimum period of loan was two months. Dulbar's bank account showed a debit of $40,300 on 16 December 2013, and the repayment of that sum on 31 January 2014. Thus the loan was repaid in full in less than the two months minimum term. Dulbar's bank account also shows a credit of $583, reflecting interest for the full two month period.
In order to make available the $40,300, Dulbar had incurred break fees in relation to a term deposit. The Tribunal recorded that when this was put to Ms Zhukovska in cross-examination, she appeared to minimise its significance by referring to the comparatively low interest rate available on the term deposit.
The Tribunal also addressed as an issue whether the loan was in fact unsecured. The Tribunal said as follows: "[91] As to whether the loan was in fact unsecured, Ms Zhukovska's position changed. In her Reply, at [7.2] (a), she asserted that: 'the loan…was secured by an unregistered mortgage and a caveat over the property owned by Ms McCann'. [92] However under cross-examination she conceded that by lending the money by way of an unregistered mortgage she breached section 479 (see Transcript 17.12.18, page 123.3). As to whether the loan was actually secured, the position ultimately adopted by Ms Zhukovska under cross-examination was that the mortgage was indeed unregistered but that account should be taken of the fact that the security could have been perfected at any time by her arranging to have the mortgage registered. See (Transcript 17.12.18, page 123.3 to 123.6). When asked whether the breach of section 479 concerned her, Ms Zhukovska answered: 'Well, of course it concerns me. It concerns me but at the time I thought, all I have to do - I had the title and I had all the documents. I can just walk up to LPI and register it at any point…. I thought, since I have the transaction in my hands, I didn't think it was absolutely required.'"
The Tribunal found that this conduct amounted to professional misconduct. It did so because of its conclusions expressed as follows: "[97] In our view Ms Zhukovska's conduct in relation to this ground is as serious and substantial a departure of the standards expected by the profession and the public as that pleaded in respect of ground 6. She failed her basic obligation to her client to ensure that she had proper instructions to proceed, that any loan would be secured, that it would not involve unnecessary costs or losses (such as the break fees) and that it would be undertaken in accordance with the LPA".
However, in this Court, the Law Society did not rely upon this finding. It took that view because it accepted that Ms Heane's consent was not required before the trustee made investments. It may also be noted that the Tribunal appears to have proceeded on the basis that the equitable mortgage constituted by the retention of the title deeds and the obtaining of a draft legal mortgage was not security. The security obtained by an equitable mortgagee is more fragile than a legal mortgage, but a lender with the benefit of an equitable mortgage would nonetheless ordinarily be described as secured. However, before the Tribunal, Ms Zhukovska accepted that the loan was unsecured.
The second loan took place a few weeks later. This time, the loan was in an amount of $10,000 for a six week period, for which $1,000 interest was to be paid. There was no separate deed; rather, there were exchanges of emails between Mr Sean St Clair and the paralegal in Ms Zhukovska's office. Dulbar's bank statements record the $10,000 being debited on 4 March 2014, with repayments of $7,050 on 23 April 2014 and $4,000 on 1 May 2014. Unlike the loan to Ms McCann, the documentation for this transaction consisted merely of email exchanges, and was evidently wholly unsecured. Once again, the Tribunal regarded this conduct as professional misconduct, basing its conclusion on the failure to obtain instructions from Ms Heane and the risks involved. As previously noted, in this Court, the Law Society placed no reliance upon that finding, accepting that instructions were not needed from the trustee.
The third loan was documented by a single page letter from Ms Zhukovska in her capacity as a director of McMahon Todd Pty Ltd to Mr Charlton, her fellow director of Dulbar, dated 10 March 2014, the whole of which was as follows: "Dear Chris, Re: Loan from Dulbar Investments Pty Ltd to McMahon Todd Pty Ltd As discussed McMahon Todd Pty Ltd requires a loan for renovations at 56/78-80 Alexander Street, Crows Nest which is a property owned by McMahon Todd Pty Ltd. Below are details of the loan. Loan amount $150,000.00 Term Loan to be paid in full plus interest by 30 June 2015 Interest 10.5% per annum Interest payment 30 June 2015 Monthly repayments 30 June 2015 We hereby authorise Dulbar Investments Pty Ltd to lodge a Caveat on the property known as 56/78-80 Alexander Street, Crows Nest (Lot 56 SP51660). In addition the Director of McMahon Todd Pty Ltd will guarantee the loan."
It will be seen that the letter referred to the loan being paid in full plus interest by 30 June 2015 but also referred to monthly payments on "30 June 2015" (no monthly repayments were in fact made). There was a reference to authorising Dulbar to lodge a caveat, although what the caveatable interest created by the loan was was unexplained. Plainly enough, the loan was stated to be for the benefit of Ms Zhukovska's wholly owned company McMahon Todd Pty Ltd. This loan was different both in magnitude and because of Ms Zhukovska's interest in the borrower.
It was accepted that McMahon Todd drew down amounts of $5,000, $10,000 or $15,000 (and in one case an amount of $16,280) on 13 occasions between 14 March and 29 July 2014. The total amount withdrawn was $116,280. An investigation was made into the practice in early September 2014. Shortly after that occurred, Ms Zhukovska closed the Commonwealth Bank account operated by Dulbar, obtaining a bank cheque in the amount of $85,658.45, which she delivered to Mr Charlton at the same time as resigning as a director of Dulbar. Mr Charlton established a new bank account in the name of Dulbar Investments with ANZ, into which that bank cheque was deposited. That occurred on 16 September 2014. On the following day, 17 September 2014, Ms Zhukovska caused to be deposited the total amount borrowed of $116,280, together with interest in the amount of $4,432.96.
Once again, Dulbar incurred break fees because a term deposit in the amount of $150,000 was closed before its maturity date in order to permit some of the drawdowns to be made. It was not disputed that Ms Zhukovska had breached r 12.3 of the New South Wales Professional Conduct and Practice Rules 2013 (which prevents solicitors borrowing from their clients), and that the loan had been made without the direct knowledge or proper instructions of Ms Heane.
The Tribunal accepted that in March 2014, Ms Zhukovska lacked knowledge of r 12. The Tribunal concluded that this ground amounted to unsatisfactory professional conduct, but fell short of professional misconduct, explaining its conclusions as follows: "[106] Nevertheless we view most seriously Ms Zhukovska's conduct in arranging a loan of this amount in circumstances where there was a quantifiable loss to the assets of the Trust (being Dulbar's term deposit account) and a clear personal benefit to Ms Zhukovska herself and her practice at the expense of her clients Ms Heane and Dulbar. In our view it is a substantial departure from the standards of competence and diligence which a member of the public is entitled to expect of a reasonably competent legal practitioner. [107] However, we accept … that the oral evidence of Ms Zhukovska is consistent with the contemporaneous documentary evidence which indicates in general terms that in open correspondence with Mr Charlton she sought to borrow the funds from Dulbar, authorised a caveat to be lodged and agreed to provide a personal guarantee. When those factors are coupled with Ms Zhukovska's asserted lack of detailed knowledge of the relevant Rule (and notwithstanding our view of that as a serious failure of professional diligence) we are unable to conclude that her conduct amounts to something which would properly be viewed as disgraceful or dishonourable or that it would be professional misconduct as characterised in the case of Kennedy as cited at [18] above. [108] For those reasons in relation to this ground we find that Ms Zhukovska's conduct constituted unsatisfactory professional conduct but not professional misconduct".

[13]

The "stage 2" hearing on 5 November 2019

The second hearing took place on 5 November 2019. Mr Barnes appeared for the Law Society, Ms Cameron for Ms Zhukovska. Early in that hearing, the Tribunal raised with the parties the possibility that after receiving the evidence and hearing their submissions, it might be possible after an adjournment for the Tribunal to come to a decision on the same day, with reasons to be published separately. "Mr Currie: … [O]ne possible way of dealing with this matter, having read the material and having heard the matter, was to, for the three of us to, when you finish your submissions, go off the bench and consider the matter for an hour or two, to see whether we can come to a decision today with reasons to be published separately. That was a - That was, I'm not saying that's a lay down misere, it's a possibility and it seemed to be a desirable possibility. Mr Barnes: I understand. Ms Cameron: Yes, we would agree with that. Mr Barnes: Yes".
Ms Zhukovska relied upon some character references, only one of which was from a person with legal qualifications, Ms Kanokwan Subhodyana. Counsel appearing for Ms Zhukovska opposed the making of a strike-off order, acknowledged that the conduct was serious and that disciplinary orders must be made reflecting its gravity, but said there was no longer a need for protection, although because she had been outside the profession for a lengthy period, it would be appropriate that she remain as an employed solicitor for a period of time, suggesting two years. Counsel also proposed that in terms of other conditions there was not "a great concern to the public", but "if there were an ongoing concern, it would relate to dealing with vulnerable clients", and stated that "that could be dealt with by way of her being an employed solicitor for a period of time", an undertaking that she not operate any trust accounts in the immediate future, and that she physically attend some courses in continuing legal education.
There was an adjournment at around 11:20 am, following which the Tribunal advised counsel appearing for Ms Zhukovska that [while there had been some expression of contrition by her] "we've not heard from Ms Zhukovska herself in any form in relation to this part of the proceedings. We were wondering whether you wanted to consider whether Ms Zhukovska could give evidence today".
The Tribunal said that that was "obviously entirely her call" and suggested that it be "either sworn evidence or an unsworn statement - as it were, from the bar table".
Counsel for the Law Society immediately said that if Ms Zhukovska wished to give further evidence, it should be on affidavit, and provided in time for him to prepare proper cross-examination of her. The Tribunal again referred to the possibility of an unsworn statement, and continued with the following exchange: "Mr Currie: And I emphasise, for Ms Zhukovska's benefit, that it's entirely, it's entirely her option as to which way to go. Ms Cameron: The option is up to you. Mr Currie: So the options would be to just finish it there, or for Ms Zhukovska to give an unsworn statement, or Ms Zhukovska to give a sworn statement in the witness box, and be subject to cross-examination, or - or to go on affidavit, in which case we'd need to adjourn. The problem with the adjournment, of course, is that it's stretching out the proceedings even more. Ms Sindler: I think the unsworn statement has its consequences. Mr Currie: Yeah. My friend's just reminded me that, yeah, the unsworn statement can't be as of significant weight or value to us, as a sworn statement, or an affirmed statement is."
After a further adjournment, Ms Cameron advised that her instructions were to provide the Tribunal with an unsworn statement, and a handwritten statement appears to have been made available. Immediately, Mr Barnes objected and stated that this was not permitted in the proceedings, because (by reason of cl 20 of Sch 5 of the Civil and Administrative Tribunal Act 2013 (NSW)), the rules of evidence applied when the Tribunal was exercising a function for the purposes of the Legal Profession Uniform Law 2014 (NSW). No contrary submission was made by Ms Zhukovska, and the Tribunal indicated that it regarded itself as bound not to accept an unsworn statement.
Ms Cameron advised that her instructions were to proceed by way of sworn evidence in the witness box, in order to finalise the proceedings on the same day. Mr Barnes objected to that, on the basis that he was not in a position to cross-examine Ms Zhukovska on that day.
After a further short adjournment, Ms Cameron advised that if "the position is that the proceedings are to be delayed, we would prefer to not put on the further evidence, my instructions are, in order for it to be dealt with today, if that were the position". The hearing concluded shortly thereafter, and the Tribunal indicated that it was likely that it would be able to make orders that afternoon. It did so, making orders that Ms Zhukovska's local practising certificate be cancelled, that any new practising certificate should not be issued to her before the end of 12 months from the date of the Tribunal's orders, that she pay a fine of $9,000, be reprimanded, and pay the Law Society's costs of and incidental to the proceedings as agreed or assessed.

[14]

NCAT's reasons for the orders

The reasons for those orders were provided on 2 January 2020: Council of the Law Society of NSW v Zhukovska (No 2). They take the following form.
First, the Tribunal referred to its earlier decision, and observed that the provision which was central to the proceedings was s 562 of the Legal Profession Act 2004, rather than the Uniform Law. It observed by reference to New South Wales Bar Association v Cummins [2001] NSWCA 284 at [24] that the test for removal from the roll was whether the practitioner was "probably permanently unfit to practise".
The Tribunal then summarised the hearing, including the decision by Ms Zhukovska not to provide evidence. It stated that it gave very little weight to the unsworn statements by three of her referees, but gave greater weight to the character statement by Ms Subhodyana, because she appeared to be legally qualified and said she was aware of NCAT's earlier decision, albeit limited by the fact that the statement was not sworn or affirmed. After summarising the parties' submissions and authorities, the Tribunal's dispositive reasons rejecting the Law Society's application that her name be removed from the roll are relatively brief, at [51]-[54]. It will be more transparent if they are reproduced in their entirety: "[51] We concluded and informed the parties at the conclusion of the penalty hearing that we cannot be satisfied that the Respondent's conduct, as serious and deserving of condemnation as it was, demonstrated that she is 'permanently or at least indefinitely unfit to practise' (to use the terminology adopted by Spigelman CJ in NSW Bar Association v Murphy). [52] Her name should not, therefore, be removed from the Roll. [53] However her conduct does demonstrate that she is not presently a fit and proper person to be permitted to practise as a solicitor in New South Wales. She is not someone who, presently, should be held out to the public, to members of the profession or to the Courts as possessing the qualities of competence, diligence and trustworthiness required and expected of a solicitor. It must follow that her right to practise should be removed, for at least some time. [54] We came to that conclusion for the following reasons. (1) Although we had found that Ms Zhukovska's conduct had in many respects fallen below the standard to be expected of members of the profession, this was not a case which involved misappropriation of funds or clear dishonesty. That distinguishes it from many of the cases in which the Tribunal or the Court has removed the practitioner from the local Roll. (2) Again without in any way minimising the seriousness of our findings as to Ms Zhukovska's conduct, our findings were based on the course of her conduct in relation to one only of her clients. There is no indication and there have been no allegations put to us that conduct of the type which led to our findings of professional misconduct were repeated in her dealings with other clients. That is not in any sense a 'telling factor', but, in fairness, it should be and was taken into account by us in deciding the form of the penalty orders. (3) The previous factor should be assessed in conjunction with consideration of Ms Zhukovska's relative inexperience and her assertions that she received very little proper supervision or training as an employed solicitor prior to starting her own practice. We accept the substance of those assertions. (4) It is true that in the liability Reasons at [145] we emphasised that any explanation or excuse based on Ms Zhukovska's lack of experience in dealing with trusts, estates or trust property, or her misconception of the identity of her client, is 'palpably inadequate'. We reiterate those remarks, but they were directed to the central question in that stage of the proceedings; namely whether Ms Zhukovska's conduct amounted to professional misconduct. That is why we concluded that paragraph with a finding that the conduct would be regarded as disgraceful and dishonourable by solicitors of this State of good repute and competency. It follows that, despite those adverse findings and remarks in the Liability proceedings, her relative inexperience may be relevant to the question of whether she should be permanently deprived of the right to practise by way of a strike off order, or alternatively whether her immediate right to practise should be curtailed because she is not presently fit to practise."
Relevant to ground 1(b) of this appeal, are the following four paragraphs under the heading "Ms Zhukovska's wish to continue to practise": "Ms Zhukovska's wish to continue to practise (1) Notwithstanding Ms Zhukovska's decision to decline to give oral evidence at this hearing, as dealt with at [24], we accept that she does wish to continue to practise as a solicitor. That was clear from statements on her behalf from the Bar table (to which we ascribe the appropriate reduction in weight because of that mode of their presentation). Additionally, any fair reading of the unsworn statement of Ms Subhodyana, with whom it appears, Ms Zhukovska has had some contact at a professional level, reveals Ms Subhodyana's understanding that Ms Zhukovska wants a chance to practise again. Ms Zhukovska told Ms Subhodyana that: '..if given a chance (she would) ensure that she (would) not make the same mistakes again'. (2) Again, on any fair reading of it, that reveals at least some degree of recognition and acceptance of her departure from the required standard of conduct (if not quite contrition) by Ms Zhukovska. (3) We have taken into account two substantial flaws in Ms Zhukovska's case that she be allowed to practise. Firstly the relative absence of obvious and genuine contrition: Ms Zhukovska's statement concluding her affidavit of 25 January 2018 at [164] is a statement of 'deep regret' but it is an isolated one and she did not take up the opportunity to repeat it to us at this hearing. That failure to seize the opportunity to indicate genuine contrition by way of sworn testimony at the penalty hearing is the second substantial flaw in her case. (4) Nevertheless, we are satisfied to the requisite standard that Ms Zhukovska's desire to be allowed to continue professional practice is genuine and she has stated her preparedness to undertake further appropriate professional education and training or to be suitably supervised, at least for a period."
At [55], the Tribunal recorded a finding following what had been said at [53], that Ms Zhukovska was unfit to hold a practising certificate, and concluded that the public, members of the profession and the courts would be sufficiently protected by an order cancelling the certificate for "at least 12 months", "together with the other orders discussed below" (this finding is challenged in the notice of contention).
However, despite the reference to "the other orders discussed below", and the Tribunal's observation that it was important as soon as practicable for appropriate conditions to be formulated for any re-issue of the practising certificate and any ongoing practice, the Tribunal did not specify those conditions. It said it was not in a position to do so: at [58]. It said that there had been no submissions at the level of detail, save for a concession that Ms Zhukovska would be prepared to accept a condition as to ongoing practice education and training and some form of supervision. So far as I can see, the Tribunal was correct to say that it had not received submissions on detailed conditions, and the Law Society acknowledged in this Court that it had sought the removal of Ms Zhukovska's name from the roll, and had not advanced any fallback submission.
In those circumstances, the Tribunal made a series of recommendations to the Law Society, emphasising that they were not part of the Tribunal's order and were not intended to limit the Law Society's discretion: at [59]. The recommendation was expressed thus: "On that basis we recommend to the Law Society that early consideration be given to the imposition of preconditions to the reissue of a practising certificate to Ms Zhukovska and that they might well include amongst such other things as is thought appropriate, requirements for: (1) a suitable period of supervision of Ms Zhukovska's legal work and her compliance with professional ethical and accounting practices, by a solicitor of substantial relevant experience and standing; (2) satisfactory completion by Ms Zhukovska (by way of personal attendance rather than remote online participation), and assessment with a mark of not less than 65%, of recognised comprehensive professional training courses on such topics as elder law, the law of powers of attorney, wills and estates practice, ethics and trust accounts."
The Tribunal then issued a public reprimand, imposed a fine and ordered that Ms Zhukovska pay the Law Society's costs.

[15]

The grounds of appeal

The Law Society appeals on five grounds: "1. The Tribunal erred in adopting a test for determining whether an order for removal of the respondent's name from the roll of lawyers should be made which purported to follow the established lines of authorities, but which in fact misunderstood those authorities by considering the following matters: a. that the effect of such an order would be that the respondent would be 'permanently deprived of the right to practise', when the respondent would be entitled to make an application for re-admission in the future. b. that the respondent wished to continue to practise as a solicitor, which was irrelevant to the question of whether she was a fit and proper person to hold a practising certificate. 2. The Tribunal erred in making order 1 of the orders made on 5 November 2019, namely that (Cancellation Order): a. the respondent's local practising certificate is cancelled; and b. any new practising certificate shall not be issued to the respondent before the end of 12 months from the date of the Tribunal's orders. 3. Further to Ground 2, in particular, the Tribunal erred in making the Cancellation Order in circumstances where: a. the Tribunal correctly held that the respondent was not presently a fit and proper person to be permitted to practise as a solicitor in New South Wales; b. the Tribunal had not determined the nature of any conditions that ought to be imposed upon her re-issued practising certificate; and c. the Tribunal had not held that the respondent would be fit to practise if those conditions were satisfied (whose content had not, in any event, been determined) and/or a period of 12 months from the date of the Tribunal's orders had expired. 4. The Tribunal erred in holding that it was not satisfied that the respondent's conduct demonstrated that she was permanently or at least indefinitely unfit to practise including in circumstances where a. the Tribunal correctly held that the respondent's conduct was tainted with unfairness, a lack of frankness and candour, and a failure to have proper regard to the interests of her client; b. the respondent failed to give evidence at the second hearing and there was a relative absence of obvious and genuine contrition on the part of the respondent; and c. the respondent did not give evidence to demonstrate that her situation had changed such that she was either presently fit and proper to practise or would otherwise be fit and proper to practise at some specified time in the future. 5. The Tribunal erred in failing to hold that: a. the respondent was not a fit and proper person to remain on the roll of lawyers maintained by the Supreme Court of New South Wales; b. the respondent was permanently unfit to practise and/or unfit to practise for the indefinite future; and c. the respondent's name should be removed from the roll of lawyers maintained by the Supreme Court of New South Wales."

[17]

The source and nature of the various powers available to NCAT

First, in light of the parties' submissions, it is important to bear steadily in mind the difference between (a) the removal of a practitioner's name from the roll, (b) the cancellation of a practising certificate, (c) the suspension of a practising certificate for a specified period, and (d) an order that a practising certificate not issue before the end of a specified period.
Each of those orders plays a part in this appeal. 1. The Law Society sought from the Tribunal, and seeks from this Court, removal of Ms Zhukovska's name from the roll. 2. The Tribunal made orders cancelling her practising certificate, and preventing any new practising certificate from issuing for 12 months. 3. Ms Zhukovska's practising certificate had in fact been suspended by the Law Society in October 2014, and, in addition, the Law Society placed heavy emphasis in its submissions on the power to suspend a practising certificate, in contradistinction with the removal from the roll.
All these powers are sourced in statute. The current legislation is a schedule to a Victorian statute made applicable in New South Wales by s 4 of the Legal Profession Uniform Law Application Act 2014 (NSW). I shall simply refer to the schedule as the Uniform Law. Express provision is made in s 302 of the Uniform Law for all four of those orders: see s 302(1)(f), (h) and (i) of the Uniform Law (with the difference that the power is not to remove a name from the roll, but to recommend the removal of a name - see for a recent example Council of the Law Society of New South Wales v Yoon [2020] NSWCA 141).
However, because Ms Zhukovska's conduct took place in 2013 and 2014, aspects of the earlier regime were applicable. How this is so seems to be quite complex. The complaint and the investigation were taken to have been done under the Uniform Law, as explained in Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 at [224]. However, that does not prevent the Legal Profession Act 2004 from applying to proceedings in NCAT. To the contrary, the transitional provisions in cl 21 of Sch 1 of the Civil and Administrative Tribunal Act provide that a reference to the Uniform Law includes where relevant a reference to the Legal Profession Act 2004. The complaint was made in 2014, and had not been disposed of before the commencement of the Uniform Law. Clause 26 of Sch 4 of the Uniform Law provides that the complaint or investigation is to continue to be dealt with in accordance with the provisions of the "old legislation", which is a reference to the Legal Profession Act 2004. It is possible that other transitional provisions were also involved. None of this was explored in argument, for the good reason that it was common ground, both in NCAT and in this Court, that s 562 of the Legal Profession Act 2004 was the applicable source of power.
So far as I can see, in only one respect is that significant. Under the Uniform Law, NCAT only has power to recommend the removal of a practitioner's name from the roll. Under s 562, NCAT had power directly to order that the name be removed from the roll.

[18]

Section 562 of the Legal Profession Act 2004

Subsection (1) of s 562 of the Legal Profession Act provided that if the Tribunal was satisfied that a practitioner had engaged in unsatisfactory professional conduct or professional misconduct, then "the Tribunal may make such orders as it thinks fit", including any one or more of the orders specified in the section. Subsection (2) provided as follows: "(2) Orders requiring official implementation in this jurisdiction The Tribunal may make the following orders under this subsection: (a) an order that the name of the practitioner be removed from the local roll, (b) an order that the practitioner's local practising certificate be suspended for a specified period or cancelled, (c) an order that a local practising certificate not be issued to the practitioner before the end of a specified period, (d) an order that: (i) specified conditions be imposed on the practitioner's practising certificate issued or to be issued under this Act, and (ii) the conditions be imposed for a specified period, and (iii) specifies the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed, (e) an order reprimanding the practitioner, ..."
Thus the four orders of especial relevance are found in s 562(2)(a), (b) and (c).
Subsection (3) of s 562 dealt with other jurisdictions. Subsection (4) authorised the imposition of fines, requirements of further education and supervision during practice, counselling, periodic inspection and the like. Subsection (4)(j) empowered the making of an order "that the practitioner not apply for a local practising certificate before the end of a specified period". I shall return to subsection (4)(j) below.
The powers to order the removal from the roll, cancellation of a practising certificate and that a certificate not issue until the expiration of a specified period may be found in earlier regimes: see for example s 163 of the Legal Profession Act 1987 (NSW) as originally enacted and s 171C of that statute after the amendments effected by the Legal Profession Reform Act 1993 (NSW) (which replaced the concept of "serious professional misconduct" by the "professional misconduct/unsatisfactory professional conduct" dichotomy).
However, it is important to appreciate that the regulation of legal practitioners has altered considerably over the last century, and some earlier authorities need to be read with caution. In particular, as will be seen below, the Law Society relied on Law Society of New South Wales v McNamara (1980) 47 NSWLR 72. Although only reported in the New South Wales Law Reports in 2000, that was a decision of this Court delivered in 1980, hearing an appeal from the Solicitor's Statutory Committee established under the Legal Practitioners Act 1898 (NSW). Section 77 of that statute conferred powers to strike a solicitor off the roll, suspend a solicitor from practice either conditionally or otherwise and to pay a fine. There was no power to cancel or impose conditions on the terms of the solicitor's practice. There was a proviso conferring a discretion to dismiss a charge or decline to make a finding of professional misconduct and, if considered appropriate, to make an order reprimanding the solicitor. Hutley JA, after identifying the powers set out above, noted that the Law Society had power to issue a limited practising certificate, and in doing so would give weight to the views expressed by the Statutory Committee, but could not be bound by them, with the result that: "It seems to me, therefore, that the Statutory Committee, in determining whether or not it would apply the proviso, is bound to confine itself to considering the conduct of the solicitor, that is, his conduct up to the time of its decision, and is not entitled to consider the ameliorating effect of restrictions which the Law Society may think proper to impose upon the person whom it merely reprimands. In other words, it is not for it but for the Law Society to put the solicitor on probation." (at 77-78)
Mahoney JA made substantially the same point at 82.
The Law Society relied on the following passage in the reasons of Reynolds JA at 76, after his Honour had rejected the imposition of a fine: "The choice lies between suspension and striking-off. There can be little doubt that the evidence at the hearing before the Committee established that the respondent was unfit to practice as a solicitor. Although the Statutory Committee did not in terms find unfitness, it did not think he was fit to do other than occupy the position of an employed solicitor under supervision and I entertain the view that if the Statutory Committee had posed to itself the question as to his present fitness the answer would have been negative. An order for suspension must be based upon a view that at the termination of the period of suspension the practitioner will no longer be unfit to practice because, subject to any limitation imposed on the issue of a practising certificate, his name will then be on the roll of solicitors and he may resume his practice. This stated, it will be seen that in cases of present unfitness an order for suspension will not frequently be appropriate because it is difficult for a tribunal to feel confident that at the expiration of one or more years a person presently unfit to practice will be fit. The use of the power to suspend is valuable as a punitive measure but needs cautious application where fitness and the Court's protective function is involved."
The distinction between striking-off and suspension reflected the limited powers available to the Statutory Committee some 40 years ago under the 1898 statute. That distinction has, however, continued to prove influential. It may be seen, for example, in the distinction drawn between the main orders addressed in G Dal Pont, Lawyers' Professional Responsibility (6th ed, Lawbook Co, 2017) at pp 765-768 and in the discussion of "three of the most notorious forms of disciplinary order" (striking off, suspension and reprimand) in chapter 33D "Disciplinary orders" in the New South Wales Solicitors' Manual (services 58 and 69, current as at July 2020). Neither work has a section on cancellation. Both endorse the passage of Reynolds JA from McNamara, with the Solicitors' Manual reproducing part of the passage at [33,055.1].
The same care must also be taken with other passages from decisions involving former regimes. Take for example a familiar passage in the reasons of Dixon CJ, dissenting in the result, in Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 286; [1957] HCA 46, concerning the suspension and disbarment of a barrister, that "it is probably a better course in most cases where room exists for the belief that time may give the barrister a title to resume his place at the Bar to allow him to re-apply at a subsequent time and offer positive evidence of the grounds upon which he then claims to be re-admitted". That passage remains valuable insofar as it tells against suspension. However, it does not assist when the choice is between cancellation of a practising certificate and removal from the roll, both of which place an onus upon the person to reapply and justify why he or she should be permitted to return to practice.
The same may be said of passages in Mellifont v The Queensland Law Society Incorporated [1981] Qd R 17 at 31, in Attorney-General v Bax [1998] 2 Qd R 9 at 21-22, and in Re a Practitioner (1984) 36 SASR 590 at 593. The passage in Re a Practitioner was endorsed by Mason P in New South Wales Bar Association v Hamman [1999] NSWCA 404; 217 ALR 553 at [100], but, significantly, that was in a context where the barrister's practising certificate had already been cancelled (see at [17]), and the only question was whether, in an exercise of this Court's original jurisdiction supervising legal practitioners, the barrister's name should be removed from the roll.

[19]

Interaction between former and current regulatory regimes

However, while the powers exercised by NCAT (and if the appeal is successful, by this Court) are those under the former regime, the consequences of the exercise of those powers are determined by the current regime. For example, NCAT cancelled Ms Zhukovska's practising certificate. That was an exercise of the power under s 562(2)(b). If that order stands, and Ms Zhukovska wishes to practise as a legal practitioner, she will have to apply for the grant of a practising certificate under the regime presently applicable.
Significantly, in light of the Law Society's submissions based on the power to suspend, s 78 of the Uniform Law provides as follows. "Lifting of suspension and renewal during suspension (1) The designated local regulatory authority may lift the suspension of a certificate imposed under this Part at any time, whether or not in response to any written representations made to it by the holder, but must not do so inconsistently with an order of the designated tribunal in a case where the suspension was imposed at the direction of the designated tribunal. (2) The designated local regulatory authority may renew a certificate while it is suspended under this Part if the end of the period of its currency is imminent, but the renewed certificate remains suspended until it is cancelled or the suspension is lifted."
It follows that if a practising certificate is suspended, then it may be renewed, and when the period of suspension comes to an end, the practitioner will have a practising certificate which is neither suspended nor cancelled, such that the practitioner will be permitted to practise. The right of renewal is subject to the requirements of s 45 of the Uniform Law, which include a prohibition upon renewing a practising certificate if the designated local regulatory authority considers that the applicant is not a fit and proper person to hold the certificate: s 45(2).
In contrast, if a practising certificate is cancelled, the person will need to make an application to the designated local regulatory authority for the grant of a new practising certificate.

[20]

Disqualified persons

Section 6(1) of the Uniform Law defines a "disqualified person" to include (inter alia): 1. a person whose practising certificate is suspended; 2. a person whose practising certificate has been cancelled and who has not subsequently been granted another practising certificate, and 3. a person whose name is removed from the Supreme Court roll, until such time as he or she is admitted or readmitted by the Supreme Court of any jurisdiction.
It will be seen that while the class of "disqualified person" extends to those three categories, each will cease to be a disqualified person in quite different circumstances. 1. In the case of a person whose practising certificate is suspended for a specified period, the person will cease to be a disqualified person when that period expires. 2. In the case of a person whose practising certificate has been cancelled, the person will need to apply for the grant of a new practising certificate. The designated local regulatory authority must be satisfied that the person is a fit and proper person to hold a practising certificate, and may have regard to, inter alia, any previous disciplinary action (see r 13(1)(f) and (g) of the Legal Profession Uniform General Rules 2015 read with s 45(3) of the Uniform Law). 3. In the case of a person whose name is removed from the roll, that person thereupon ceased to be admitted to the Australian legal profession, and will need to reapply to the Supreme Court for admission. That involves a series of steps which need not be summarised (an aspect of which may be seen in Hilton v Legal Profession Admission Board [2017] NSWCA 232); it is sufficient for present purposes to note that it is more arduous than applying for a new practising certificate, and includes complying with the additional requirements imposed by r 14 of the Legal Profession Uniform Admission Rules 2015 (NSW).
Thus, removal from the roll will prevent Ms Zhukovska from returning to practice until such time as the Supreme Court of this or another State admits her. Cancellation of her practising certificate will prevent Ms Zhukovska from returning to practice until such time as the relevant authority (the Law Society of NSW) grants her a practising certificate.
The powers to make an order preventing an application from being made, or a practising certificate from being issued, for a specified period provide a minimum period during which the person may not practise. The actual period will depend, of course, on whether and when the person makes an application after the expiry of that period, and also on whether the relevant authority is satisfied that a practising certificate should issue.

[23]

The parties' submissions

The Law Society denied that it was necessary to establish House v The King error. It maintained that either Ms Zhukovska's name should be removed from the roll or it should not, that while undoubtedly there was an evaluative and multi-factorial process of reasoning, there was a single unique answer, and thus it was not necessary to establish House v The King error.
The Law Society accepted that there was a range of protective orders which could be made on an application such as the present following findings of unsatisfactory professional conduct or professional misconduct, but maintained that in a case such as the present, the threshold question was whether the Tribunal was satisfied that the solicitor was permanently or indefinitely unfit to practise, to which question there was a single answer. If the Tribunal was not satisfied that the practitioner's name should be removed from the roll, then there was a range of orders which could be made, and the principles of House v The King applied to that decision. But to the threshold question of whether or not the name should be removed from the roll it was submitted that the "correctness standard" (the term used by Gageler J in Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30) applied.
The Law Society in substance said the principles in Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 applied, requiring the appellate court to give effect to its own judgment if upon reviewing the trial, and whilst recognising any advantages enjoyed by the primary judge, it considers that the decision of the primary judge was wrong.
Ms Zhukovska's invocation of House v The King amounted to insisting upon a requirement of establishing material error (which could be patent or latent) in the exercise of a discretionary power. Ms Zhukovska maintained that the task faced by the Tribunal at the second hearing was a "quintessentially discretionary decision", that that was borne out by the authorities and was correct in point of principle. The jurisdiction being protective, the question was what orders were necessary to protect the public.
Ms Zhukovska pointed to some authority supporting her submissions. This Court's decision in The Council of the Law Society v Doherty [2010] NSWCA 177 proceeded on the basis that the Law Society's appeal (seeking an order that a solicitor's name be struck from the roll, as opposed to the cancellation order made by the Administrative Decisions Tribunal) required the identification of House v The King error, in particular the conclusion that the order was "within the range" at [66]. However, there is nothing to suggest that any point was taken in that appeal. There is more elaborate consideration of the evaluative process to be undertaken in such a case by Buss P in Khosa v Legal Profession Complaints Committee [2017] WASCA 192 at [44]-[45], but that did not extend to the decision to remove a name from the roll.

[24]

Consideration

I doubt whether much is likely to turn on this point in most cases. It remains necessary to identify some legal, factual or discretionary error: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 at [23]. Nothing turns on it in the present case, because I am satisfied there has been material error. Nonetheless, it is the starting point, and in deference to the parties' submissions (which were of a high quality) it is best analysed, although I shall do so concisely.
There is a helpful summary of principle and authority in Jadwan Pty Ltd v Rae & Partners (A Firm) [2020] FCAFC 62 at [402]-[415], which exposes two distinct but related aspects of appellate restraint. The first concerns the grounds on which a court will intervene, while the second concerns whether the particular ground is one where the appellate court is at a disadvantage compared to the trial judge, or in the same position as the trial judge, or indeed in an advantageous position compared to the trial judge (as Allsop P observed in Yarrabee Coal Co Pty Ltd v Lujans [2009] NSWCA 85 at [3]). Submissions in this appeal were directed to the first aspect.
The Law Society invoked the analysis of Gageler J in SZVFW, who concluded at [49] that: "The line is not drawn by reference to whether the primary judge's process of reasoning to reach a conclusion can be characterised as evaluative or is on a topic on which judicial minds might reasonably differ. The line is drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies. The resultant line is not bright; but it is tolerably clear and workable."
Subsequently, that approach (which had also been stated by Edelman J at [150]) was endorsed by a unanimous High Court constituted by seven Justices in The Queen v Bauer (a pseudonym) [2018] HCA 40; 92 ALJR 846 at [61]: "The question of whether tendency evidence is of significant probative value is one to which there can only ever be one correct answer, albeit one about which reasonable minds may sometimes differ. Consequently, in an appeal against conviction to an intermediate court of appeal, or on a subsequent appeal to this Court, it is for the court itself to determine whether evidence is of significant probative value, as opposed to deciding whether it was open to the trial judge to conclude that it was" [citation omitted].
Reasoning to similar effect was given by Jordan CJ in In re the Will of F B Gilbert (decd) (1946) 46 SR (NSW) 318 at 323: "With the trial Judge's findings of fact, a Court of Appeal will not interfere unless it comes to a clear conclusion that he was clearly wrong, eg, where he has adopted a wrong principle, or has clearly overlooked something or accepted evidence inconsistent with itself or with indisputable facts. ... This is applicable, too, to the inference drawn by the trial Judge from the facts found by him, and, in particular, to the exercise by him of a judicial discretion in assessing damages. Where these are at large, it is improbable that any two men would arrive at precisely the same figure. Hence, it has been laid down that, although the members of a Court of Appeal might themselves have been disposed to award somewhat more or somewhat less, it is not proper for them to embark upon a re-assessment of the damages in order to arrive for themselves at a compromise upon which they can all agree, unless they are satisfied that the trial Judge has acted upon a wrong principle, or has neglected to take into account something relevant, or has taken into account something irrelevant, or that the amount awarded is so much out of all reasonable proportion to the facts proved in evidence that the award should not be allowed to stand ..." [authorities omitted].
There is a superficial attraction to the Law Society's submission that there can only be one correct answer to whether Ms Zhukovska's name should be removed from the roll. However, two more general considerations cast doubt upon the correctness of the submission. 1. First, there is the question of asymmetry. It is to be borne in mind that both parties have a right of appeal from the order imposed. On the Law Society's case, the Law Society has an appeal on the correctness standard on the issue whether Ms Zhukovska's name should be removed, but Ms Zhukovska, if she wishes to challenge the conditions imposed upon her resuming practice, needs to establish House v The King error. That seems odd. There would be a similar asymmetry if the Tribunal had made an order removing a practitioner's name from the roll. 2. Secondly, anything can, in a sense, be turned into a discrete binary question if the issue be sufficiently narrowed and refined. The Law Society's submissions focussed on the binary question admitting of only one correct answer whether or not a name should be removed from the roll. There are many other ways of framing the question so as to give rise to a binary issue. Should Ms Zhukovska be entitled to practise within the next 12 months? Should Ms Zhukovska be entitled to practise only if she undertakes certain training? Should Ms Zhukovska pay a fine exceeding $10,000? All those questions are binary and have a unique correct answer. Yet the Law Society very properly conceded that a House v The King test applied to the period during which Ms Zhukovska is precluded from applying for a practising certificate, or the fine imposed upon her. Why then is the removal of a name in a different position?
Those general considerations cast doubt on the correctness of the Law Society's submission. But the analysis starts with the nature of the power being exercised by the Tribunal, and the nature of the appeal brought to this Court. It is always dangerous to take the words of a judgment which are apt for a particular statutory context, and apply them to a different statutory context. Indeed, to return to In re Gilbert's Will, Jordan CJ wrote: "it should be kept steadily in mind that the question to be answered is always the question arising upon the very words of the statute: most of the erroneous arguments put before the Courts will be found to arise from seeking to dislodge the words of the statute by phrases used in other cases in an endeavour to test the facts of those cases": at 322.
In Bauer the question under the Evidence Act was whether tendency evidence was of "significant probative value", and in SZVFW the question was whether the lower court had erred in concluding that a tribunal's decision was legally unreasonable, thereby constituting jurisdictional error.
In both Bauer and SZVFW, the statutory (and, in the case of SZVFW, the constitutional) context required the resolution of a precisely circumscribed issue, to which there was but one correct answer, albeit which turned on an evaluative determination.
Those powers may be contrasted with the "two-stage process" described by Mason CJ, Deane and McHugh JJ in Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 under ss 7 and 9 of the Family Provision Act 1982 (NSW). There, the power in s 7 to make such provision out of an estate as in the opinion of the Court ought to be made for the maintenance, education or advancement of an eligible person was by s 9(2) conditioned upon the Court being satisfied that the provision which had been made was "inadequate for the proper maintenance, education and advancement in life of the eligible person". Mason CJ, Deane and McHugh JJ said at 208-209 that: "It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question'. That description means no more than that the court's power to make an order in favour of an applicant under s 7 is conditioned upon the court being satisfied of the state of affairs predicated in s 9(2)(a)."
Their Honours held that the same principles governing review of discretionary decisions applied to an appeal from the jurisdictional question: at 212. Although on one view an eligible person either has or has not been left with adequate provision, Gageler J accepted in SZVFW at [45] that the House v The King standard necessarily applied. So far as I can see, that must be because there is more than one correct answer to the question posed by statute as to whether "inadequate" provision has been made for the "proper" maintenance, education and advancement in life of the eligible person, as was noted in Sgro v Thompson [2017] NSWCA 326 at [86]; see also Strang v Steiner [2019] NSWCA 143 at [78]-[79], [133] and [190].
Section 562 is very different. Having found five instances of professional misconduct and five instances of unsatisfactory professional conduct in its first decision, the power under s 562 to make any of the orders in that section was engaged. None was mandated. All were discretionary. In principle, except insofar as they were mutually inconsistent, it was open to NCAT to make one or more than one of the orders. In the present case it made four substantive orders (cancellation, fine, reprimand, no certificate to issue within 12 months).
That suite of orders was to be exercised so as to protect the public from misconduct by lawyers: Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 251; [1992] HCA 24. The question was which order or orders from the panoply conferred by s 562 were appropriate in order to serve the predominantly protective jurisdiction being exercised. The reasoning in SZVFW and Bauer is inapplicable.
I conclude that it is necessary for the Law Society to establish House v The King error.

[26]

(a) failing to make an order removing Ms Zhukovska from the roll

The starting point is the finding about present unsuitability to practise as a solicitor, reflected in [53] and [55]. (I note that this is the subject of Ms Zhukovska's notice of contention, to which I shall return.) If the Tribunal were satisfied not only that Ms Zhukovska was presently unfit to practise, but was likely to be unfit for the indefinite future, then it would be appropriate to order that her name be removed from the roll. If the Tribunal were not so satisfied, then such an order should not be made.
The Law Society submitted that the ultimate issue, in determining whether an order for removal from the Roll should be made, was whether the practitioner is shown not to be a fit and proper person to be an officer of the Supreme Court, to be decided at the time of hearing: A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253; [2004] HCA 1 at [15] and [21]. The Law Society bears the onus of establishing that the solicitor is likely to be unfit to practise for the indefinite future. As Campbell JA explained in Stanoevski v The Council of the Law Society of New South Wales [2008] NSWCA 93 at [53]-[54]: "Various cases concerning removal of a legal practitioner from the roll make mention of 'permanent unfitness', sometimes in the context of a presumption that arises from the making of an order for removal from the roll ..., sometimes in the context of what must be established before an order for removal can be made ... Rather, in my view, [the word 'permanent'] has the shade of meaning of being likely to be unfit to practice for the indefinite future. Some cases have recognised that shade of meaning explicitly: Maddocks at 38 per Kirby P; Ritchard at 4 per Kirby P, both of which passages are cited by Spigelman CJ in Cummins at [25] and [27]. If the Tribunal or Appeal Panel is of the view that a person is presently unfit to practice, but after a particular period of time will be once again fit to practice, then suspension for that period of time is the appropriate order. Suspension is achieved by orders under section 171C(1)(b) and (c). Removal from the roll is appropriate only when a legal practitioner is unfit to practice, and suspension for a particular period is not appropriate."
The Law Society emphasised that where, as here, there was demonstrated misconduct, and a claim for rehabilitation, then the evidentiary onus shifted to the solicitor: Stanoevski at [60].
Of the power to suspend, the Law Society submitted: "When determining whether a solicitor is unfit to practise, an order for suspension will not frequently be appropriate because it is difficult for a tribunal to feel confident that at the expiration of a certain period of time a person presently unfit to practise will be fit: Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 at 76 per Reynolds JA. The proper use of suspension is where a practitioner has fallen below the high standards to be expected of such a practitioner, but not in such a way as to indicate that he or she lacks the qualities of character and trustworthiness which are the necessary attributes of a person entrusted with the responsibilities of a legal practitioner: Re A Practitioner (1984) 36 SASR 590 at 593 per King CJ; New South Wales Bar Association v Hamman (1999) 217 ALR 553; [1999] NSWCA 404 per Mason P at [100]."
The Law Society returned to the power to suspend when addressing grounds 2 and 3. After reproducing [51]-[53] of the Tribunal's reasons, the Law Society observed, correctly, that there was a positive finding that Ms Zhukovska was presently not a fit and proper person, and no finding as to when or in what circumstances she would become a fit and proper person to practise as a solicitor. The Law Society then cited Reynolds JA in McNamara at 76: "An order for suspension must be based upon a view that at the termination of the period of suspension the practitioner will no longer be unfit to practice because, subject to any limitation imposed on the issue of a practising certificate, his name will then be on the roll of solicitors and he may resume his practice." (emphasis in Law Society's submissions).
The Law Society submitted: "The Tribunal made a finding that the Solicitor should not be issued with a new practising certificate before the end of 12 months from the date of the Orders. This was not akin to a suspension order, as no order was made that the Solicitor would be fit to practise at the end of the 12 months, only that it might be possible that fitness to practise might be established after that period. Moreover, the pre-condition for a suspension order explained by Reynolds JA in McNamara was not met, as the Tribunal did not indicate that it was satisfied that the Solicitor would be fit to practise after a further 12 months had expired. Another avenue open to the Tribunal would have been to order that the Solicitor undertake and complete specified courses of further legal education or undertake a specified period of practice under supervision: s 562, LPA. However, the Tribunal also declined to make such orders, instead stating that it was 'not in a position to settle those conditions and restrictions', and that it was appropriate that those conditions and restrictions 'be established by the Law Society' (S2D[57]-[59], Red 83). The Tribunal effectively placed the cart before the horse, by stating that it was because the Solicitor was not 'permanently or indefinitely unfit to practise', that 'appropriate conditions be settled for any re-issue of the practising certificate' and for 'ongoing conditions and restrictions to be placed' on any re-issued practising certificate (S2D[57], Red 83). This only begged the question, namely as to what conditions and restrictions should be imposed to ensure that the Solicitor would be fit to practise. These findings needed to be made, in order for the Tribunal to be satisfied that an order striking the Solicitor off the Roll was not warranted. The proceedings before the Tribunal called for the Tribunal to make a determination as to the full consequences, for the Solicitor, of her misconduct, having regard to the evidence before the Tribunal as to whether she was a fit and proper person to practise in New South Wales, or would become a fit and proper person upon the making of orders for suspension, education, supervision or the like [footnote 6]. The Tribunal's failure to do so constituted error which vitiated its conclusions as to the appropriate protective orders to be made."
Footnote 6 in that passage was: "The effect of the Tribunal's failure to make such additional orders, once it determined that it would not strike the Solicitor off the Roll, was to impose a burden upon the Society to engage in a further round of reviewable decision-making, in respect of conduct that had already been the subject of proceedings before the Tribunal."
The point was reiterated orally, by reference to the passage from Reynolds JA's judgment in McNamara reproduced above: "If the choice is between suspension and striking off, then you only make the order for suspension if you form a view that at the termination of the period of suspension the practitioner will no longer be unfit. So you have to turn your mind, if you're not going to remove them from the roll, you have to be satisfied that there is a point at which they will be fit."
The distinction between removal from the roll and cancellation of a practising certificate was raised during the hearing: "MACFARLAN JA: Ms Wong, could I interrupt for a moment. What you said just made me think of something that I thought perhaps there hasn't been as much focus on as would be appropriate. That is a difference between removal from the roll and cancellation of the practising certificate. In the former case the [Court] retains control of the solicitor's position in terms of practice whereas it's with the Law Society in terms of a reapplication for a practising certificate. Obviously the level of seriousness of the conduct is relevant to the question of whether the Court should retain control or not and, yes, anyway that may be an issue that should be agitated."
In response, the Law Society sought to conflate the principles applicable to suspension with those applicable to cancellation: "While it is the case that the tribunal did not make an order for suspension, and the respondent's counsel correctly points to that distinction, that technical distinction between the form of the orders, The Law Society submits that the principles that are applicable to determining whether a suspension should be ordered should also be applied to cancellation and I'll try to describe summarily as a not to issue power. This is because like a suspension, having regard to the protective nature of the tribunal's jurisdiction, it ought to proceed on the basis that if it makes an order that a practising certificate not be issued before the end of the specified period, then there is every prospect that the certificate will in fact be issued at the end of that period. So it is the case that the grant of a practising certificate is not automatic, in the same manner as the ability to practice after a period of suspension. However, the tribunal, if it does make a not issue order, ought not proceed on the basis that it's likely that The Law Society will in fact not issue a practising certificate once that period expires. To put the matter another way, if a tribunal does not impose any further conditions whatsoever upon the ability of a solicitor to be issued with a certificate at the end of a designated period, it must be satisfied that the community will be adequately protected if the solicitor does in fact commence practice in an unrestricted manner at the conclusion of that period."

[27]

Consideration

I do not agree that the distinction between suspension and cancellation is "technical". I do not agree that the principles applicable to the power to suspend extend to the power to cancel.
Ms Zhukovska's written submissions pointed out that the Law Society's submissions that once it was found that she was not presently fit to practise, NCAT was required to determine when and subject to what conditions she would become fit to practise, failing which her name should be removed from the roll, rest on a false dichotomy. I agree.
There is a third possibility, which is that while NCAT was satisfied that Ms Zhukovska was not presently fit to practise, it was not satisfied that she was permanently or indefinitely unfit to practise. In that case, suspension for a specified period of time is not appropriate. Nor is removal from the roll. Rather, a cancellation order is appropriate, coupled with an order preventing application from being made for at least such time during which NCAT considers that she would not be fit to practise.
As noted above, the dichotomy posed by Reynolds JA in McNamara turned on a regime where (a) the Statutory Committee lacked power to cancel a solicitor's practising certificate and (b) it was held wrong for the Statutory Committee to have regard to the limitations imposed by the Law Society upon the solicitor's practising certificate. It follows that what was said cannot be taken as authority for what is to occur under the regime applicable to Ms Zhukovska.
It is not to the point to say that the evidence and findings did not support an order which was not made by the Tribunal, namely, an order suspending Ms Zhukovska from practice. The issue is whether there was error in the order which was made, namely, that Ms Zhukovska's practising certificate be cancelled, with the consequence that she must, if she wishes in the future to return to practice, apply for a new practising certificate and satisfy the Law Society that she has ceased to be a person who was unfit to practise.
The Law Society's response was as follows: "This analysis [scil Ms Zhukovska's submissions] begs the question as to why the Tribunal was not satisfied that the Solicitor was 'indefinitely unfit to practise' (Red 80[51]). If the Tribunal was not able to or did not make a finding as to when or in what circumstances the Solicitor would be likely to become fit to practise, then the only available conclusion was that the Solicitor was indefinitely unfit to practise and her name ought to have been removed from the Roll. She was not presently fit to practise."
But this reasoning contains a series of errors. First, the legal onus at all times remained on the Law Society to show probable indefinite unfitness to practise. Accepting that the evidentiary onus might shift, it is wrong to reason that the failure to find that a solicitor would be fit to practise in the future entailed that the solicitor would be indefinitely unfit to practise. Secondly, it does not follow that "the only available conclusion" from the absence of a finding as to when she would become fit to practise is that she was indefinitely unfit to practise. If indeed the Tribunal were satisfied that she would likely become fit to practise after a specified period, then an order suspending her practising certificate for that period would be appropriate. If the Tribunal was not satisfied that she was probably permanently unfit to practise, but was unable to determine when she would become fit to practise, then a cancellation order, not the removal from the roll, was appropriate.
Hence, I reject the principal submission advanced by the Law Society.

[28]

(b) Failure to impose conditions

The Law Society complained that while the Tribunal found that Ms Zhukovska was not presently a fit and proper person to practise as a solicitor, there was no basis for the conclusion that she would be a fit and proper person in 12 months' time, when she might have (although she need not have) complied with the recommendations it made to the Law Society. This was put as a failure to make material findings of fact.
In its submissions in reply, it said that by failing to make orders concerning the conditions to be imposed, the task fell to the Law Society to do so if Ms Zhukovska reapplied for a practising certificate. The Law Society advanced the following submission: "This creates a risk that the Law Society may be too harsh (or too lenient) in determining the conditions that should be implemented, in respect of a legal practitioner that had been judged to be unfit to practise by the Tribunal at the time of its decision. By failing to make such orders, the Tribunal also creates a risk of further dispute between the Law Society and the Solicitor as to the form of the conditions the Tribunal impermissibly delegated to it to unilaterally impose, thus failing to discharge its obligation to resolve the complaints that were brought to it for determination."
While the Law Society accepted that it would assess fitness to practise at the time of any later application, it submitted that "the Tribunal must still consider the minimum conditions and/or re-education that must occur before such fitness has a prospect of being established."
Ms Zhukovska sought to draw the inference from the Tribunal's recommendations that the Tribunal was satisfied that they would be adequate to ensure that she was fit to practise: "The recommended conditions deal directly with the primary concern of the Tribunal apparent from [54] of the Decision {Red 81O}, being the Solicitor's 'relative inexperience' at the time of the conduct. It can be inferred that the Tribunal found that compliance with conditions of that kind and expiry of a period of 12 months would be adequate to ensure the Solicitor was fit to practise."
The Law Society responded that the Tribunal's recommendations did not bind the Law Society, "thereby demonstrating that it had not, itself, formed a final or definite view as to what conditions should be imposed, when it clearly had the power to do so." The Law Society also asserted that: "This was contrary to its practice in matters of this type, of ensuring that the form of such conditions is settled and is the subject of orders made by the Tribunal before the proceedings are brought to an end. A recommendation has no legal effect and is insufficient to accomplish that objective."

[29]

Consideration

I do not accept the entirety of either side's submission. I do not accept that the Tribunal impliedly found that compliance with its recommendations would ensure that Ms Zhukovska was fit to practise. I do not accept that a recommendation has no legal effect (for it is plainly a Peko-Wallsend relevant consideration in the exercise of discretion by the Law Society). I also do not accept the implicit submission that it was always for the Tribunal, as opposed to the Law Society, to impose conditions which will reduce the scope for controversy and dispute at a later application for the grant of a practising certificate.
The Tribunal's failure to make conditions was attributable to the attitude expressed by both parties, namely, to attempt to make orders immediately on the day if that was possible, and the fact that neither side advanced in any detail conditions which were appropriate. In particular, the Law Society did not propound any alternative regime against the possibility that the Tribunal might not find likely indefinite unfitness to practise.
In an ordinary case, it would have been open to the Tribunal to seek further submissions on conditions, perhaps after announcing that it was not prepared to make an order removing the name from the roll. That was not possible consistently with orders being made on the day. But short cuts can make long delays.
In the present case, I am satisfied that there was material error in the Tribunal's decision, insofar as it made no findings to justify the 12 month period during which Ms Zhukovska would not practise, and there was nothing to justify a reasonable prospect of receiving a practising certificate in 12 months' time, especially given the fact that its suggestions were non-binding recommendations.
First and foremost, there was the finding made at [53] and [55] that Ms Zhukovska was, in November 2019, not fit to practise as a solicitor. Yet the Tribunal considered that she might apply for a practising certificate, albeit subject to conditions, after 12 months. That carried with it an implied finding that there was at least a reasonable prospect that she would become fit to practise. But what basis was there for that inference? The answer is that there was none. There had been some five years since Ms Zhukovska's practice had been suspended, during which time she had, on the evidence, made scant efforts either to maintain her legal education or to fill the evident deficiencies. Most recently, she had paid to "attend" two online courses, each accredited for 1 CPD point (which may have taken an hour, or perhaps less), and had sat in on a single webinar, between the first and second hearings. She also gave evidence in very general terms, that she had taken some steps in early 2017 to maintain her legal education.
The gap in the past was not necessarily incurable. It might have been possible for Ms Zhukovska to persuade the Tribunal as to her intentions and ability to become a person who was fit to practise as a solicitor. Yet Ms Zhukovska chose not to give evidence before the Tribunal. I acknowledge that the way in which that occurred was unfortunate, insofar as it was the Tribunal which first offered the possibility of an unsworn statement, only to reject it shortly thereafter. The offer should never have been made. Yet while Ms Zhukovska was understandably concerned to finalise the proceedings as quickly as possible, she should have known that it was essential that she persuade the Tribunal of her genuine desire to reform, and her motivation to do so. She had the benefit of counsel appearing for her. The decision not to give evidence must be taken to have been an informed one. In particular, her decision not to supply a further affidavit after the first hearing to be read in support of her case at the second hearing must be taken to have been an informed one.
The Tribunal itself appreciated that conditions were necessary in order to protect the public. Those conditions included steps which Ms Zhukovska must undertake before applying for a practising certificate, and conditions upon her practice. Yet the Tribunal did not specify those conditions. Rather it made incomplete and non-binding recommendations. It is, with respect, impossible to reconcile the Tribunal's finding that Ms Zhukovska was presently unfit to practise with its finding that that would change in a 12 month period when what would happen during that period was entirely unknown.
I conclude that there was material error in this aspect of the Tribunal's decision.
My rejection of the Law Society's case that Ms Zhukovska's name should be removed from the roll carries with it the appreciable likelihood that there will come a time when she will be fit to practise. The task for the Tribunal in such a case, with the benefit of having reviewed the evidence of professional misconduct and unsatisfactory professional conduct, and Ms Zhukovska's response to that evidence, is to make such orders as are appropriate, in order to protect the public interest.
Here, that should have involved a regime for further submissions in relation to steps to be taken which if satisfied would result in Ms Zhukovska's having a real chance of establishing she was fit to practise. I shall return to those matters below.

[31]

Notice of contention

Ms Zhukovska's notice of contention was as follows: "1. The Respondent's situation had changed since the time she engaged in the conduct the subject of The Law Society of NSW v Zhukovska (No 2) [2019] NSWCATOD 196 (Decision), such that: a. she was a fit and proper person at the date of the Decision; or b. she would in future be a fit and proper person to practise as an Australian Legal practitioner, and there was evidence available to the Tribunal to support that finding. 2. The Tribunal should have found, had it been necessary to decide the issue, that the Respondent would be a fit and proper person to practise as an Australian Legal practitioner once the preconditions recommended in paragraph [60] of the Decision were satisfied and/or a period of 12 months from the date of the Decision had expired."
It should be said at the outset that it is not much to the point to assert in a notice of contention that "there is evidence available to the Tribunal to support that finding". When this Court is asked to make a finding of fact for the first time, the question is whether the finding is warranted on the basis of the entirety of the evidence, not whether there was evidence capable of supporting it.
No oral submissions were made in support of the notice of contention until this was brought to counsel's attention at the conclusion of her address. Counsel reiterated that this Court should find that Ms Zhukovska was a fit and proper person at the date of the decision, and relied on her written submissions. The written submissions occupied slightly more than half a page, although in part they referred to earlier submissions to which they were linked. It was said that Ms Zhukovska had given "clear and consistent acknowledgements of her shortcomings".
At all times, Ms Zhukovska was represented by counsel. She gave evidence and was cross-examined at the first NCAT hearing, which concerned whether any or all of 12 allegations advanced by the Law Society were made out and whether they constituted unsatisfactory professional conduct or professional misconduct. At the second hearing, which concerned orders following the findings of five instances of unsatisfactory professional conduct and five instances of professional misconduct, Ms Zhukovska did not give evidence, in circumstances explained above.
Moreover, Ms Zhukovska did not give evidence in this Court against the possibility that one or more of the grounds of appeal was made out and this Court might re-exercise the discretion. There was no affidavit analogous to the common practice in sentencing appeals of supplying updated information "on the usual basis" as explained in Betts v The Queen (2016) 258 CLR 420; [2016] HCA 25 at [11].
It follows that the most recent evidence from Ms Zhukovska herself was her cross-examination before NCAT at the first hearing in December 2018, described at [41] as a "properly vigorous cross examination", on affidavits made by her on 25 January and 10 July 2018.
Significantly, that led to gaps in evidence as to Ms Zhukovska's acknowledgement and awareness of her departures from professional standards. Without being exhaustive: 1. Ms Zhukovska maintained that ground 4 (causing herself to become the appointor to the trust) was unsatisfactory professional conduct but not in fact professional misconduct, but NCAT found that it was professional misconduct. What the Tribunal said at [65]-[68] concerning this is reproduced above; 2. Ms Zhukovska denied that ground 11 (overcharging) justified a finding of professional misconduct, which NCAT duly made. 3. Ms Zhukovska maintained that there was no breach of s 254 when she caused the proceeds of sale of Ms Heane's unit not to be placed in her firm's trust account. NCAT found that this (ground 5) constituted unsatisfactory professional conduct.
In those circumstances, contrary to ground 1(a) of her notice of contention, I am entirely unpersuaded that the Tribunal should have found that Ms Zhukovska was a fit and proper person at the date it made orders. There had not been a complete acknowledgement by Ms Zhukovska of the wrongfulness of aspects of her conduct. There was no evidence from Ms Zhukovska of the steps she would take to ensure that such conduct would not be repeated.
Ground 1(b) of the notice of contention is problematic. A finding as sought, namely, that Ms Zhukovska "would in future be a fit and proper person to practise as an Australian legal practitioner" is too imprecise to be made. In five days or five months or five years?
Ground 2 of the notice of contention is also problematic. First, the recommended conditions are imprecise, and the "and/or" yields a number of imprecisely defined circumstances. It amounts to Ms Zhukovska asking for findings that she would be a fit and proper person 1. after a "suitable" period of supervision (the duration of which was unspecified) and the "satisfactory" completion of a range of courses on such topics as elder law, powers of attorney, wills and estates practice, ethics and trust accounts; 2. alternatively, after 12 months without any supervision or completion of any course; 3. in the further alternative, after both (1) and (2).
For the reasons already given, there is no basis for making, here and now, any such finding as to Ms Zhukovska's fitness in 12 months' time or at some other unspecified time.

[32]

Orders which should be made

In some respects, Ms Zhukovska's case is highly unusual. It is not a case of dishonesty or misappropriation which will ordinarily result in removal from the roll. I entirely concur with the statement that "[t]his Court must insist on the maintenance of the highest standards of honesty and integrity in the performance of duties by legal practitioners": Council of the Law Society of New South Wales v Yoon at [34]. The circumstances in which Ms Zhukovska progressively drew down more than $100,000 of her client's money for her own benefit, which was repaid at around the same time that the Law Society investigation commenced, are concerning. Yet as it happens this sum, and the other loans, were repaid, and no case of dishonesty was advanced by the Law Society (I am not to be taken as suggesting that one should have been advanced).
Ms Zhukovska's conduct also resembles other cases of solicitors abusing elderly and vulnerable clients, which is to be firmly deprecated, but here too some important characteristics are absent. Ms Zhukovska inquired with the Law Society as to the appropriateness of being the donee of her client's power of attorney, and obtained a trust deed from a reputable firm, and on the advice of an accountant. The overcharging was egregious, but Ms Zhukovska maintained that each invoice was approved by her client.
Importantly, Ms Zhukovska was relatively recently admitted. She had been in practice for only four years. The misconduct related to a single client, and occurred seven years ago, in Ms Zhukovska's first and second years as a sole practitioner.
I am confident that Ms Zhukovska is not presently fit to practise as a solicitor. So far as the evidence discloses, nothing has changed since the Tribunal's finding last November.
Will Ms Zhukovska probably be permanently unfit to practise as a solicitor? I join with the Tribunal in not being satisfied that she will probably be unfit to practise for the indefinite future. I have borne in mind the struggles which Ms Zhukovska had endured to obtain legal qualifications in Canada as well as in this State. I am conscious that Ms Zhukovska has followed an arduous route to achieve admission. Leaving Russia to study in Canada in French, followed by the LPAB course in English, demonstrates considerable powers of self-discipline and sustained effort. I would infer that she is enterprising, diligent and self-motivating. There is every reason to think that she might be able to become fit to practise.
However, I do not see how Ms Zhukovska could have a realistic prospect of persuading the Law Society at some point in the future that she has become fit to practise unless she makes a solemn statement acknowledging the entirety of her conduct, explaining why it occurred, and what steps she has undertaken and will undertake in order to prevent anything like it from happening in the future. That conclusion is confirmed by her decision not to give evidence before the Tribunal at the second hearing, or in this Court.
I also see no reason why Ms Zhukovska should be permitted to make an application until she has demonstrated a commitment in a formal way to complete her training. I am unattracted by the idea (as was the Tribunal) that this could occur through "attendance" at two or three online courses. I am in broad agreement with the recommendations proposed by the Tribunal. Where I disagree with the Tribunal's recommendations and the findings proposed by the notice of contention is that I consider it is necessary in order properly to exercise the protective jurisdiction to specify in advance and with precision the subject matter of the courses to attend and the way in which successful completion is to be measured.
The orders I propose will permit the parties to be heard on those and any other conditions which should be imposed as preconditions to the making of an application by Ms Zhukovska. I am presently minded to impose a condition that no application for a practising certificate be made before satisfactory completion of those conditions and the expiration of 18 months from today: as presently advised, those conditions may be imposed pursuant to s 562(4)(j), as part of "an order that the practitioner not apply for a local practising certificate before the end of a specified period". I am presently minded to order that any certificate which issues should be subject to the conditions proposed by Ms Zhukovska, namely, not being permitted to hold a principal practising certificate or to become a solicitor/director of any incorporated legal practice until the expiration of two years' cumulative practice as an employed solicitor. To that I would add that she not hold office as a trustee (or director of a corporate trustee) in relation to client property in that period.
To be clear, the effect of the orders I have in mind, as to all aspects of which the Court will permit the parties to be heard, will be that if Ms Zhukovska attends and satisfactorily completes appropriate courses and provides evidence by way of statutory declaration formally acknowledging the instances of professional misconduct and unsatisfactory professional conduct found by the Tribunal, and explains the steps she has taken and will continue to take in order to prevent such conduct recurring, then it would be open to the Law Society in determining an application for a practising certificate to conclude that she was a fit and proper person. It would be for the Law Society to make its decision if and when an application is made based on the material before it. As the Law Society points out, that decision would give rise to rights of appeal. But there is no alternative to that course, in the fairly unusual present circumstances where it cannot presently be concluded that Ms Zhukovska will become fit to practise, but where the Law Society has failed to make out a case of probable indefinite unfitness to practise.
I turn to costs. Neither party has been wholly successful on appeal. I have concluded that the Law Society was justified in bringing this appeal, but I have also rejected its principal submission that Ms Zhukovska's name be removed from the roll. It may be that an appropriate exercise of the discretion as to costs be that there be no order as to either party's costs in this Court, with a view that each pays its and her own costs. As presently advised, I see no proper basis to interfere with the orders as to costs made by the Tribunal. However, the orders I propose will permit the parties to be heard as to costs, both in this Court and in the Tribunal.
The orders for the exchange of submissions below contemplate all remaining issues being heard and determined on the papers. If either side wishes to be heard orally, its or her submissions in chief should so state, and explain the reason for that application and the opposing party should indicate in its or her submissions its attitude to a further oral hearing.
For present purposes, the only orders I propose are:
The Law Society file and serve, within 14 days of today, any submissions as to the conditions to which Ms Zhukovska should be subject, and any submissions as to costs.
Ms Zhukovska file and serve, within 28 days of today, any submissions as to the conditions to which Ms Zhukovska should be subject, and any submissions as to costs.
The Law Society file and serve, within 35 days of today, any submissions in reply.
McCALLUM JA: I share Macfarlan JA's preference not to express a final view as to the appropriate test to be applied on appeal. Subject to that reservation, I agree with Leeming JA.

Council of the Law Society of New South Wales v Zhukovska

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (33 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (38)

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