Law Society of Tasmania v Schouten [2003] TASSC 143 (19 December 2003)

[2003] TASSC 143

CITATION: Law Society of Tasmania v Schouten [2003] TASSC 143

Professions and Trades - Lawyers - Misconduct, unfitness and discipline - Grounds for disciplinary orders - In general - What constitutes professional misconduct - Persistent course of failing to lodge income tax returns and failing to comply with consent orders - Whether sufficiently serious to warrant disbarment.

Ziems v The Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279; Gersten v Law Society of New South Wales [2002] NSWCA 344; (2002) 56 NSWLR 16; Barristers' Board v Darveniza (2000) 112 A Crim R 438; New South Wales Bar Association v Cummins (2001) 52 NSWLR 284; New South Wales Bar Association v Somosi [2001] NSWCA 285, referred to.

Judgment Number: [2003] TASSC 143

THE LAW SOCIETY OF TASMANIA v PIET ANTHONY SCHOUTEN

1 The Law Society of Tasmania seeks a declaration that the respondent, a practitioner of this Court admitted to practise on 31 August 1990, is not a fit and proper person to remain a legal practitioner, an "order" (sic) that his conduct as identified in the affidavit of the Executive Director of the applicant, Mr Hagan, sworn on 6 March 2003, constitutes professional misconduct, and an order that the respondent's name be removed from the Roll of Practitioners of the Court.

2 The conduct complained of in Mr Hagan's affidavit is a persistent failure to file income tax returns in respect of himself and of a family trust ("the trust") under his control, notwithstanding the obligations imposed by law, notwithstanding the requirements of the Commissioner of Taxation ("the Commissioner") and notwithstanding the orders of a magistrate and subsequently of a judge of this Court. The result of this conduct has been the imposition of substantial fines and of sentences of imprisonment, albeit execution of the latter has been suspended on conditions.

3 The respondent failed to furnish his personal return for each of the years 1985 to 1995 until May or June 1996. He was not prosecuted for these failures.

4 On 9 March 1998, he was convicted in the Court of Petty Session, Hobart of failing to furnish his personal income tax return for the year ending 30 June 1996 by 19 June 1997, as required by the Commissioner by a notice issued pursuant to the Income Tax Assessment Act 1936, s162(1). He was fined $200 and ordered by the magistrate to furnish that return by 13 April 1998. He failed to comply with the magistrate's order and, on 14 December 1998, was convicted of such failure and fined $400. He continued in his failure to lodge his return for 1996 and failed to comply with further notices from the Commissioner requiring him to file personal and trust returns for that year and the years ending 30 June 1997 and 1998. The Commissioner laid complaint in respect of these failures and on 5 October 2000, the respondent was convicted of three contraventions of the Income Tax Assessment Act in respect of his personal returns for 1996, 1997 and 1998 and three contraventions in respect of the trust returns for those years. By this date he still had not lodged any of the six outstanding returns. On 31 October 2000, he was fined $200 on each count on each complaint and ordered to furnish the returns by 31 January 2001.

5 The Commissioner appealed against the inadequacy of these penalties. Slicer J heard the appeals and upheld them on 22 February 2001, publishing his reasons sub nom Kay v Schouten [2001] TASSC 11. Having given his reserved reasons for decision, Slicer J indicated that the parties to the appeal would be afforded the opportunity to make submissions in relation to the appropriate penalty to be imposed upon the respondent in place of the penalties imposed by the magistrate on 31 October 2000. On 17 May 2001, Slicer J ordered that the respondent be convicted on the three charges of failure to file his personal returns for 1996, 1997 and 1998, fined him $5,000 in respect of the year 1996, and in respect of the offences relating to 1997 and 1998, without passing sentence, ordered that he be released upon his entering into a recognizance to be of good behaviour for two years and not contravene the provisions of the Taxation Administration Act 1943 during that period. He further ordered him to furnish returns for those three years by 31 July 2001. On the complaint in respect of the trust returns, he ordered convictions on each count, did not impose any penalty on the first count (1996) and made identical orders on the remaining counts in respect of the years 1997 and 1998, a condition of the recognizance again being the furnishing of the three trust returns by 31 July 2001.

6 The respondent failed to comply with the orders of Slicer J to furnish the six returns by 31 July 2001 and on 23 October 2001, the Commissioner made application that the respondent be brought before the Supreme Court for the hearing of a complaint with two counts of breaches of the Crimes Act 1914, s20A, in failing to comply with those orders. The respondent pleaded guilty to both counts before Slicer J who, on 24 May 2002, revoked the orders made by him on 17 May 2001 in respect of counts 2 and 3 (1997 and 1998) and ordered that in lieu thereof he be sentenced to imprisonment for three months, but that he be released forthwith upon entering into a recognizance to be of good behaviour for a period of two years and not contravene the provisions of the Taxation Administration Act during that period. The respondent furnished the six returns six days before the last-mentioned sentence was imposed.

7 Further offences not disclosed in Mr Hagan's affidavit were committed by the respondent, and his failure to advert to them in an affidavit filed in answer to the application and his evidence concerning them and other matters on his cross-examination before me are also relied upon by the Law Society as indicative of his unfitness to remain a legal practitioner. Details of the offences are as follows:

* On 22 November 2000, a complaint was issued for failing to furnish his 1999 personal return. The record of proceeding sheet shows that a warrant for his arrest was issued by the Court of Petty Sessions because of his failure to appear. It does not appear to have ever been executed.

* On 20 February 2001, two further complaints were issued, the first of failing to comply with the magistrate's order of 31 October 2000 requiring him to lodge his personal returns for 1996, 1997 and 1998 and the second of failing to comply with a similar order in respect of the trust returns for those years.

* On 28 August 2002, he was convicted on all three complaints. On the first, the failure to furnish the 1999 return as required by the Commissioner, he was fined $2,000 and given 12 months to pay. On the second, the breach of the magistrate's order to furnish personal returns for 1996 to 1998 inclusive, he was fined $5,000 with twelve months to pay and sentenced to two months' imprisonment, but forthwith released on a recognizance not to commit any offence under the Taxation Administration Act for two years. On the third, failing to lodge the trust returns, a cumulative sentence of two months' imprisonment was imposed, but he was released on a similar recognizance.

8 The respondent's explanation for this extraordinary behaviour was that he was under personal and work-related pressure to such an extent that he was suffering from a form of clinical depression which rendered him incapable of performing the tasks necessary to furnish the returns. Before the magistrate hearing the complaint in respect of his failure to lodge the six returns from 1996 to 1998 from which there was an appeal to the Supreme Court, medical evidence was given that he had suffered from a depressive illness coupled with anxiety. The learned magistrate accepted the substance of that evidence, but while accepting it as a mitigating factor, did not accept that it rendered him incapable of compliance. In his reasons for judgment, Slicer J reviewed the medical evidence before the magistrate and noted that the respondent had received treatment for depression between June and September 1998. He concluded that the failure to put his affairs in order in April 1999 could only be partly explained by the medical condition and that the nature of the medical evidence did not warrant the imposition of a nominal penalty. His Honour held that the respondent, as a legal practitioner, ought to have been aware of the necessity to comply with an important statutory obligation imposed on all citizens to disclose assessable income.

9 When, in May 2002, the respondent was brought before Slicer J for failing to comply with his order to furnish the returns by 31 July 2001, his Honour said that he accepted the opinions expressed by Drs Sale and Chapman as to the on-going problems experienced by the respondent and that if they were not accepted, the penalty imposed would have been one of an immediate custodial sentence. In a report dated 25 February 2002, Dr Sale, psychiatrist, said:

"While I would accept that Mr Schouten has experienced fluctuating levels of anxiety and depressive symptoms, these did not appear to be to a degree that constituted a major depressive illness, or if they did, the level of illness was mild.

His difficulties with procrastination and indecisiveness are not pervasive. They appear to apply to some specific areas of his day to day function. If a depressive illness were responsible for this, then it would be expected to be pervasive rather than selective."

Dr Geoff Chapman, a general practitioner in a report dated 7 May 2002, said:

"I admit that I remain uncertain as to the exact diagnosis of Mr Schouten's condition. I do not think that it fits neatly into any one diagnostic category, but I nevertheless feel that he has a deep-seated psychological disturbance that has contributed substantially to his behaviour. He has clearly at times experienced major depressive symptoms, but has responded poorly to antidepressant medication as some people unfortunately do. He is also prone to periods of acute anxiety. Moreover, he has demonstrated a pathological inability to deal with matters of substance in his life. This has applied to both his work and his personal affairs over a number of years. In a more acute setting he would be regarded as having an adjustment disorder, more commonly known as a nervous breakdown. The behaviour has however lasted for several years. This leads me to conclude that there must be interplay between depression and anxiety. There are also likely to be contributions from both his underlying personality and upbringing.

I was not treating Mr Schouten at the time that he failed to furnish his taxation returns, namely 20 April 2000 to 11 May, and 5 October 2000 to 31 January 2001. However, I would surmise that his behaviour then was little different to that I have observed subsequently. I believe it highly unlikely that that he simply chose to ignore the directions from either Justice Slicer or Magistrate Tennent, nor that he underestimated the gravity of the situation in which he found himself. Indeed, it is a feature of his condition that he appears to retain insight and to continue to function at a superficial level. His inability to deal with the conveyancing matter for his wife, when she was under considerable stress in relation to her father's estate, demonstrates remarkably similar behaviour

Mr Schouten has clearly demonstrated in the past that he has the intellectual and organisational capacity to undertake his professional duties and to order his own affairs. We have to find some way of overcoming the psychological hurdles that stand in the way. If this can be found then he stands a very good prospect of achieving a satisfactory recovery. This may take some time however. I would suggest, in relation to the taxation matters, that the best approach would be a very structured timetable and a requirement to work with a psychologist and presumably an accountant. His medical condition is such that he is effectively unable to work, and I have advised him that he needs to take leave, invoking his income protection policy. It would not be unreasonable to expect him to work towards the requirements of the court during this period."

10 Dr Geoff Chapman gave evidence before me on the hearing of this application. In a letter to the Law Society dated 16 December 2002, he had written:

"Mr Schouten has attended today seeking further medical certification in relation to his fitness to work. He has certainly improved significantly from a medical perspective. He returned to work, on a part-time basis on 7 September 2002. He has been working for no more than six hours a day on from Tuesday to Friday.

He has taken up the psychologist's suggestions in relation to stress reduction, and seems to be benefiting from this. He tells me that he is able to bring a fresher mind to his work, and is able to deal with problems more readily.

I feel that he is certainly now capable of working more independently, in that he has returned to very much his premorbid state of health. He would nevertheless benefit from an arrangement whereby he was able to consult with a colleague if he found himself approaching the same problem of inertia he experienced previously."

The Law Society issued the respondent with a limited practising certificate for the calendar year 2003 authorising him to practice only as the employee of another legal practitioner.

11 Mr John Chapman, a psychologist, also gave evidence. He saw the respondent on five occasions between 13 June 2002 and 18 July 2002, once in October of that year and he had a lengthy telephone conversation with him on 9 January 2003. On that date, he wrote to the Law Society:

"On examination today I found no evidence of depression, of anxiety symptoms or of the effects on cognitive functioning and memory which were evident earlier. As a precaution I had arranged a full cognitive assessment in August last to exclude any evidence of organic pathology. His results indicated superior general levels of cognitive functioning, an absence of any organic indicators and only mild disruption due to anxiety and excessive pressure to perform well on the test items.

He is now much more self assured and in charge of his life than in June. He is confident that he will be able to function as a solo practitioner, although he anticipates that he will keep an informal collegial relationship with the solicitor presently supervising him as he has found this support important in his recovery.

Much of his previous problem was due to him expecting too much of himself, being perfectionistic, trying to meet too many external expectations and difficulty in saying no to excessive demands made of him. This created a high level of stress which was in time sufficient to immobilise him and prevent him fulfilling work he had agreed to with the genuine intent of delivering. His guilt would then escalate further increasing his stress and inner conflict.

We have now worked on these issues and he is continuing to be aware of these and to manage his work to avoid these pitfalls. He is more able to monitor and manage his stress levels than previously and has a much better boundary around his work preventing the old obsessive pattern of worry. Although I now consider him capable of resuming full time independent work, I shall meet with him monthly for a time to further assist him in avoiding the old patterns and in maintaining his present progress."

It does not appear that there have been any follow-up consultations as foreshadowed in that letter as Mr Chapman said the last time he had had professional contact with the respondent was on 9 January 2003.

12 The respondent filed an affidavit traversing much of Mr Hagan's recitation of the facts known to the Law Society in respect of the failure to comply with the order of Slicer J in May 2001 that he file the returns by 31 July 2001. He swore:

"6 ... I recall I provided all of my books and documents to my accountant in early May 2001 for him to prepare my returns. On 9 May the accountant required me to locate further documents and provide further information. I admit that I was not able to provide the information within the time frame requested by him, or as set by the Court. The information requested was not of itself of a complex nature, but it came at the time when I was still feeling very stressed, and in particular addressing the issue of complying with the Orders to provide the tax returns."

In respect of the failure to lodge returns between 1985 and 1995, he swore:

"9 ... in 1985 I moved house and I also purchased two investment properties. From being a simple tax return for me in previous years, matters became more complex and occurred at a time when I continued preparing my own tax returns even though their complexity had increased. I also had obligations towards my own legal practice after 1994. Previous to 1995 the amount of tax I had to pay was minimal. I believe that many of these returns were filed earlier, but a number of amendments and reassessments were carried out so that a final assessment of all these returns appeared at the same time. The timing for assessment of these returns was in the hands of the Tax Office. I deny that all of the returns were furnished to the Commissioner of Taxation between May and June 1996. Before March 1993 I was an employee, except during a period of unemployment and the period that I attended the Legal Practice Course in 1989. For all of the years to 1993, I was in credit with the Tax Office. It was only a result of the 1995 tax return that a debt arose for both tax and provisional tax which was of approximately $10,000 which was paid."

As to his reasons for not filing the returns, he swore:

"10 The failure to file all my tax returns as and when they became due, was not due to me avoiding tax, it was simply that the complexity of the matters that I had to account for and the various amendments and reassessments caused the backlog.

17 My failure to file my tax returns and comply with Court orders was not due to indifference or to avoid tax. It was simply due to my inability to face the task of assembling all documents to prepare the returns. That inability was compounded by the medical condition I was experiencing as a result of stress. My general wellbeing and health have improved considerably since having a lengthy break between June and September 2002, and the short hours thereafter, and will continue to improve with my employment by Mr Alexander."

13 In cross-examination, he confirmed that he did not file a return in the decade from 1985. Asked why he did not do so, he claimed that in 1985 he had purchased an investment property which included some furniture and that as there was difficulty in determining the value of the furniture, he had been unable to work out the depreciation claim. He expressed embarrassment that so simple a problem had prevented him from filing a return at the time. In fact, there were no significant complications about his tax returns. There should have been no difficulty in attending to them himself and if he were not disposed to do so, for whatever reason, no difficulty in engaging an accountant or tax agent to assist him to complete them. The amount of tax involved was relatively small and I am quite satisfied that his failures were not motivated by any desire to cheat the revenue, nor were they the result of contumelious defiance of judicial orders.

14 Mr Gunson SC, counsel for the Law Society, urged me to find that the respondent was untruthful in the witness box concerning two investment properties he said in his affidavit he had bought in 1985. When questioned about this, he conceded that he had not bought two such properties in 1985, but had bought only one at King Street, which was in his name as opposed to that of the trust. He said he had earlier owned two investment properties in Battery Point, but shortly before buying the one in King Street he had sold one of those in Battery Point and moved into the other. There followed the luncheon break, and on resumption he said that he was mistaken about when he purchased these various properties but now believed he had bought the King Street property and two properties in Launceston, which were owned by the trust, in January 1984. I am not prepared to find the respondent deliberately untruthful about these matters. The evidence was confusing and I think he was simply mistaken about when the properties were bought. Nothing really turned on his claim of having purchased two investment properties in 1985.

15 It was also contended that he had displayed a lack of candour in not revealing to the Court the prosecutions which resulted in the convictions of August 2002 and the sentences of fines totalling $7,000 and of imprisonment, albeit suspended, totalling four months. Indeed, when first questioned about it in cross-examination he said he had no recollection of being convicted of failing to furnish his 1999 return or of being fined $2,000 therefor. He persisted in stating that he had no recollection of this offence and fine. There was a gap in the hearing of this application of about two weeks, as the medical witnesses were not at first available and, on the resumed hearing, the Law Society obtained leave to further cross-examine the respondent. He explained that he remembered being prosecuted on or about 28 August 2002 in respect of his failure to obey the magistrate's order, but not the conviction and penalty for not filing the 1999 return. When it was put to him that he had not told the Court he had been sentenced to imprisonment for a total of four further months, he said he could not recall receiving that sentence at all. He did recall the fine of $5,000, but not the suspended sentence of imprisonment. Confronted with his signature on the recognizance, he still maintained having no recollection of the reason for the recognizance.

16 Mr Gunson submits that the respondent could not have forgotten these further penalties and that his omission of details of them in his affidavit was deliberate. Again, I am unpersuaded of the respondent's mendacity. At the time of these convictions, he had been seeing Mr Chapman with some frequency. While the prosecution for disobeying the magistrate's order was different from the proceedings before Slicer J, which were for breach of a condition of the recognizance, it was, in one sense at least, a consequence of the same shortcoming on his part, namely his failure to lodge the returns for 1996, 1997 and 1998. I suspect he simply shut it out of his mind as an unpleasant experience about which he did not wish to be reminded. He did nothing about paying the fines until after the adjournment of the proceedings before me on 7 October last and on the day before they resumed, he enquired of the Fines Recovery Unit if he could pay the fines of $7,000 off by instalments. He was told that he could not do so as a warrant for his arrest for unpaid fines had already issued. I do not consider that his omission of details of the convictions in August 2002 in an affidavit responding to that of Mr Hagan is indicative of a deliberate lack of the candour which the Court is entitled to expect of a person seeking admission as a legal practitioner, or of a legal practitioner facing disciplinary proceedings. I accept his claim to have forgotten the conviction for failing to file his 1999 return and the fine of $2,000. I also accept that he did not advert to the convictions and sentences imposed for failing to obey the magistrate's order when swearing the affidavit in response to that of Mr Hagan.

17 The present proceedings invoke the inherent jurisdiction of the Court to discipline one of its practitioners and are not taken under the Legal Profession Act 1993. Their nature is conveniently described by Handley JA in Gersten v Law Society of New South Wales [2002] NSWCA 344; (2002) 56 NSWLR 16 at 24, where he said:

"The jurisdiction of superior courts in Australia to discipline legal practitioners is protective in nature and not punitive. In New South Wales Bar Association v Evatt [1968] HCA 20; (1968) 117 CLR 177, 183-4 the Court said:

'... The power of the Court to discipline a barrister is ... entirely protective, and notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved'.

This principle was applied to solicitors in Harvey v The Law Society of New South Wales (1975) 49 ALJR 362, 364 where Barwick CJ, speaking with the concurrence of the other Justices, said:

'The function of a court called upon to consider an application to remove the name of a practitioner from a roll of practitioners is ... to determine whether ... the solicitor has failed, by action or inaction, to maintain in his conduct the standards required of him as a member of the profession. The court's duty is to ensure that those standards ... are fully maintained in relation to the proper relationship of practitioner with practitioner, practitioner with the Court and practitioner with ... members of the public .... It is no part of that function to punish the solicitor whose conduct the court finds to be in breach of those professional standards'.

This jurisdiction is exercisable in the public interest and for the protection of the public. See Weaver v Law Society of New South Wales [1979] HCA 35; (1979) 142 CLR 201, 207, and Wentworth v NSW Bar Association [1992] HCA 24; (1992) 176 CLR 239, 250-1; Smith v NSW Bar Association [1992] HCA 36; (1992) 176 CLR 256, 270. These principles have been consistently applied by this Court. See McCarthy v Law Society of New South Wales (1997) 43 NSWLR 42, 58."

18 The persistent breaches by the respondent of the taxation laws of the country requiring him to disclose his assessable income extending over a period of about 15 years and resulting in the plethora of convictions and penalties, including fines exceeding $13,000 and three separate sentences of imprisonment totalling seven months as detailed above, strongly suggest that the respondent is not a person who can "command the personal confidence and respect of clients and fellow members of the profession", a characteristic emphasised by Crawford J as necessary in one seeking to be admitted or to remain as a legal practitioner (Law Society of Tasmania v Richardson [2003] TASSC 9 at par76), still less do his prolonged failures to comply with the orders to file returns which were made by the magistrate at first instance and the judge on appeal reveal the presence of this characteristic. Speaking of the case of a barrister who appealed against his removal from the Roll following his conviction and prison sentence for motor manslaughter, Kitto J said in Ziems v The Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279 at 298:

"... a barrister is more than his client's confidant, adviser and advocate, and must therefore possess more than honesty, learning and forensic ability. He is, by virtue of a long tradition, in a relationship of intimate collaboration with the judges, as well as with his fellow-members of the Bar, in the high task of endeavouring to make successful the service of the law to the community. That is a delicate relationship, and it carries exceptional privileges and exceptional obligations. If a barrister is found to be, for any reason, an unsuitable person to share in the enjoyment of those privileges and in the effective discharge of those responsibilities, he is not a fit and proper person to remain at the Bar.

Yet it cannot be that every proof which he may give of human frailty so disqualifies him. The ends which he has to serve are lofty indeed, but it is with men and not with paragons that he is required to pursue them. It is not difficult to see in some forms of conduct, or in convictions of some kinds of offences, instant demonstration of unfitness for the Bar. Conduct may show a defect of character incompatible with membership of a self-respecting profession; or, short of that, it may show unfitness to be joined with the Bench and the Bar in the daily co-operation which the satisfactory working of the courts demands. A conviction may of its own force carry such a stigma that judges and members of the profession may be expected to find it too much for their self-respect to share with the person convicted the kind and degree of association which membership of the Bar entails. But it will be generally agreed that there are many kinds of conduct deserving of disapproval, and many kinds of convictions of breaches of the law, which do not spell unfitness for the Bar; and to draw the dividing line is by no means always an easy task."

19 In Barristers' Board v Darveniza (2000) 112 A Crim R 438, a barrister was disbarred for drug convictions, which he had not disclosed on admission, and for offering to launder money. Thomas JA, delivering the leading judgment in the Queensland Court of Appeal, said (at 444 - 445):

"The court recognises that the loss by striking off or even by suspension for a limited period of the right to earn the livelihood for which the practitioner has trained is a very severe hardship. When it makes such orders the court does so not by way of punishment but in order to protect the public and maintain public confidence in the administration of justice. ...

In the present case the respondent's conduct falls into a category described by Fullagar J in Ziems (supra) at 290 as "personal misconduct". Such conduct is different from that which directly relates to the conduct of his profession. It is however regarded as a form of "unprofessional conduct" which, if serious enough, can lead to disbarment: Queensland Law society Inc v Smith [2000] QCA 109. The ultimate test is whether the respondent is a fit and proper person to remain a barrister. Generally speaking the quality most likely to result in striking off is conduct which undermines the trustworthiness of the practitioner, or which suggests a lack of integrity or that the practitioner cannot be trusted to deal fairly within the system which he or she practises. ...

In NSW Bar Association v Hamman [1999] NSWCA 404 a barrister who was convicted of five charges relating to the dishonest understatement of income in his tax returns, with a total income understatement of over $600,000, was held by majority to warrant being struck from the roll. Significant character evidence was given in Hamman's favour from colleagues at the Bar by describing his misconduct as being out of character. He had repaid all of the taxes and paid all penalties and had suffered adverse publicity. Notwithstanding those circumstances Mason P agreed with the following comments:

'In its own interest, the organised Bar simply cannot permit the public to gain the impression that its members flout the revenue laws or that it condones or tolerates or belittles the seriousness of crimes against the revenue.'; and

'To lawyers especially, respect for the law should be more than a platitude.'

'The legal profession enjoys a monopoly of the right to practise on the theory that those possessed of the requisite learning, skill and character can be trusted to perform legal services involving high levels of trustworthiness. Removal from the rolls for unfitness is an extreme remedy, but it is necessary in order to maintain public respect for the legal process.'"

20 In two recent New South Wales cases, barristers have been disbarred and declarations of guilt of professional misconduct have been made for deliberate flouting of the revenue laws. In New South Wales Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279, the respondent had failed for the 38 years following his admission to the Bar to lodge any taxation returns relating to his professional practice or his personal income. He had channelled his assets into a trust which provided a safe harbour for them against the prospect of being sued. Reciting the agreed facts, Spigelman CJ said at 283:

"These agreed facts make it clear that over about four decades of practice as a barrister, Mr Cummins was perfectly capable of conducting his personal and financial affairs - as a practitioner, director, investor, manager - save in one respect. He never performed his duties as a citizen and taxpayer.

At 285, he agreed with the observation of McHugh JA in Prothonotary of the Supreme Court of New South Wales v Ritchard NSWCA, 31 July 1987, unreported:

"An order for the involuntary removal of the name of a practitioner from the Roll of solicitors is made only because the probability is that the solicitor is permanently unfit to practise. Unless the court is persuaded that the probability exists, the proper order to make will usually be one of suspension or fine instead of removal." (Par26)

Further at 285, he adverted to an observation of Kirby P in New South Wales Bar Association v Maddocks NSWCA, 23 August 1988, unreported:

" ... normally, removal is taken to imply a judgment that a person is forever, or at least indefinitely, disqualified from practising. If this is not the conclusion which the Court has reached, it should stop short of removal."

"In the present case, I am satisfied that the barrister's complete disregard of his legal and civic obligations with respect to the payment of income tax was such that he must be regarded, at the present time, as permanently unfit to practice." (Ibid)

21 The second case is that of the New South Wales Bar Association v Somosi delivered on the same day, [2001] NSWCA 285, unreported. Somosi was a barrister who had not filed an income tax return for 17 years and who was convicted in 1996 of 17 offences of failing to comply with a Commissioner's Notice requiring him to file same. He was ordered by the lower court to pay over $68,000 in fines, costs and amounts pursuant to the Taxation Administration Act, s8HA. As at 6 August 2001, a few days before the application to disbar him was heard, he still had not filed returns for the years 1999 and 2000. The court concluded that the only inference from his conduct was that he deliberately and intentionally evaded tax. At par67, Spigelman CJ referred to New South Wales Bar Association v Hamman (supra) and said that in that case:

"... this Court made it clear that a systematic course of tax evasion demonstrated unfitness for practice. The requirements of honesty and integrity in legal practice are such that conduct of this character must be regarded as impermissible. This has been confirmed in Cummins (supra)."

Somosi was disbarred and declared guilty of professional misconduct.

22 There is a clear distinction to be drawn between the taxation cases I have referred to and that of the respondent to these proceedings in that, in his case, I have found that he was not motivated by a desire to cheat the revenue. His failure to file the returns as required by the taxation authorities and by order of the magistrate and the judge was the result of inertia which he did not discipline himself, as he should, to overcome. That inertia stemmed in part from personal and professional pressures and he has now, with medical assistance and counselling, improved his capacity to overcome it. I do not regard him at the present time as permanently unfit to practice and in these circumstances the penalty of striking him from the Roll of practitioners is not appropriate. Pursuant to the Legal Profession Act 1993, s51, the Law Society has a discretion to limit his right of practice to that of an employed practitioner.

23 The Law Society seeks a declaration that his conduct amounted to professional misconduct. Spigelman CJ in Cummins (supra) gave consideration to this concept. At 286 he said:

"The conduct involved was not directly referable to his practice as a barrister. Counsel for Mr Cummins submitted that a formal finding of professional misconduct should not be made unless the conduct occurred in connection with legal practice.

In Ziems supra at 290, Fullagar J distinguished between "personal misconduct" and "professional misconduct", each of which could support a finding of unfitness to practice. For some purposes, such a distinction will be useful."

"The term 'professional misconduct' has sometimes been limited to misconduct in the course of professional work (see eg Re Wheeler [1991] 2 Qd R 690 at 697; Queensland Law Society Incorporated v Smith [2001] 1 Qd R 649 at [10]). ...

It has not generally been useful or necessary to distinguish the terminology of 'professional misconduct' from other phrases such as a 'fit and proper person', 'good fame and character', 'unprofessional conduct', 'unsatisfactory professional conduct' etc. Statutory formulations differ from one jurisdiction to another. Some of the terminology, originally based on statute, has been adopted in cases decided under the inherent jurisdiction. In the exercise of this jurisdiction, it is not appropriate that the Court should indulge in the splitting of fine hairs on terminology.

The words 'professional misconduct' are broad and general words. Their meaning may vary from one context to another. Their interpretation involves what is often referred to as an 'ambiguity', although I prefer to describe this kind of difficulty for an interpreter as one of 'inexplicitness' rather than 'ambiguity' (see Repatriation Commission v Vietnam Veterans' Association of Australia NSW Branch Inc [2000] NSWCA 65; (2000) 48 NSWLR 548 at [116]).

It is possible to confine the words 'professional misconduct' to apply only to conduct in the course of actual professional practice narrowly defined. In a context where a court must construe a document, such as a statute, such an interpretation may be entirely appropriate in order to maintain fidelity to the text as compiled by the authors of that text. In the present context the Court is not confined by issues of fidelity of this character. The present case does not raise an issue of interpretation. It raises an issue of usage."

"There is authority in favour of extending the terminology 'professional misconduct' to acts not occurring directly in the course of professional practice. That is not to say that any form of personal conduct may be regarded as professional misconduct. The authorities appear to me to suggest two kinds of relationships that justify applying the terminology in this broader way. First, acts may be sufficiently closely connected with actual practice, albeit not occurring in the course of such practice. Secondly, conduct outside the course of practice may manifest the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice. In this second case, the terminology of 'professional misconduct' overlaps with and, usually it is not necessary to distinguish it from, the terminology of 'good fame and character' or 'fit and proper person'."

"The preparation and filing of tax returns is closely related to the earning of income, including professional income. The link is 'sufficiently close' to justify a finding of professional misconduct on the basis of Mr Cummins' failure to lodge returns for thirty-eight years."

"As in the case of the declaration of unfitness, in my opinion, the maintenance of the confidence of the public in the legal profession makes it appropriate to formally declare that Mr Cummins' conduct was professional misconduct.

This declaration refers to past conduct. The declaration as to lack of fitness speaks at the present time."

24 In my opinion, the respondent's conduct did amount to professional misconduct. It involved, so far as his personal returns since his admission are concerned, a failure to disclose his income earned from the practice of his profession and in respect of the orders of a magistrate at first instance and Slicer J on appeal, it involved a failure to respect and uphold the authority of the Courts to ensure compliance with the law. Such a failure by an officer of the Court is, in my view, professional misconduct as that expression is understood in proceedings involving the inherent jurisdiction of the Court, even though in proceedings under the Legal Practitioners Act 1993 it may arguably have a slightly more restricted meaning. Accordingly, there will be a declaration that the respondent has been guilty of professional misconduct.