NEW SOUTH WALES BAR ASSOCIATION v SOMOSI

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40197 of 2001 SPIGELMAN CJ SHELLER JA GILES JA

THE NEW SOUTH WALES BAR ASSOCIATION v Lawrence Robert SOMOSI

Facts The Bar Association brought proceedings in the inherent jurisdiction of the Supreme Court seeking an order that the name of Lawrence Robert Somosi be removed from the Roll of Legal Practitioners. Mr Somosi neither filed a taxation return nor paid income tax for a period of seventeen years. He failed to comply with a notice served on him by the Australian Taxation Office requiring him to file seventeen taxation returns. He was convicted of breaches of the Taxation Administration Act 1953 for this failure. He consented to an order for the removal of his name from the Roll and, on the day that the matter was heard, the Court ordered accordingly.

Held Per Spigelman CJ, Sheller and Giles JJA agreeing A Admissibility of Evidence Evidence relating to an arrangement between Mr Somosi and a representative of the Australian Taxation Office, to the admission of which the Bar Association objected, was admissible. The public policy preventing collateral attack of a conviction was not engaged. There was no unfair prejudice within s135 of the Evidence Act 1995. B Declaration as to whether fit and proper person for legal practice The level of honesty and integrity required for legal practice is such that a person who has engaged in a systematic course of tax evasion is not a fit and proper person for practice. New South Wales Bar Association v Hamman [1999] NSWCA 404, New South Wales Bar Association v Cummins [2001] NSWCA 284 applied. C Declaration of Professional Misconduct Conduct outside the course of practice may amount to professional misconduct. New South Wales Bar Association v Cummins [2001] NSWCA 284 applied.

Orders 1 Declare that Lawrence Robert Somosi has been guilty of professional misconduct.

2 Declare that Lawrence Robert Somosi is not a fit and proper person to remain on the Roll of Legal Practitioners.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40197 of 2001 SPIGELMAN CJ SHELLER JA GILES JA

THE NEW SOUTH WALES BAR ASSOCIATION v Lawrence Robert SOMOSI JUDGMENT 1 SPIGELMAN CJ: By summons the New South Wales Bar Association sought an order that the name of the Opponent, Lawrence Robert Somosi, be removed from the Roll of Legal Practitioners. Mr Somosi does not have a current Practising Certificate and has ceased practice. On 20 August 2001, when the matter was listed for hearing, counsel for the Opponent informed the Court that Mr Somosi consented to the making of an order that his name be removed from the Roll and also an order that he pay the costs of the Association. The Court made those orders on 20 August. 2 In the summons the Bar Association also sought the following orders:

"1 A declaration that the Opponent is guilty of professional misconduct.

2 A declaration that the Opponent is not a fit and proper person to remain on the Roll of Legal Practitioners of the Supreme Court of New South Wales." 3 Mr Somosi did not oppose the making of the second declaration. He did oppose the making of the first declaration. This is the only issue that remains for determination by the Court. Although there was no contest on the issue as to Mr Somosi's fitness to remain in practice as a barrister, the agreement of the parties cannot determine the exercise by the Court of its discretion to remove Mr Somosi's name from the Roll. The Court acts in its inherent jurisdiction pursuant to its function to supervise officers of the Court. Many such proceedings have, in the past, been brought by the Prothonotary of the Court. The Court has, by long established custom accepted that the two professional associations, the Bar Association and the Law Society, have standing to act on behalf of the profession and in the public interest. Nevertheless, the decision is one for the Court. Such matters are not to be determined merely by consent. The Court must record its findings of fact on the basis of which it has accepted the agreement of the legal practitioner to having his name removed. 4 The reasons of the Court are also of significance because of the possibility that a legal practitioner will, at some time in the future, seek to have his or her name restored to the Roll of Legal Practitioners. The reasons for his or her removal will affect any such future decision making process. This was emphasised by this Court in The Prothonotary of the Supreme Court of New South Wales v Ritchard (NSWCA, 31 July 1987, unreported) as adopted and applied in this Court in New South Wales Bar Association v Cummins [2001] NSWCA 284 at pars [25]-[27], a judgment which will be delivered at the same time as this judgment. 5 In the present case, as in Cummins, reasons must also be given for the issue that remained in contest, i.e. whether or not a declaration that the barrister has been guilty of professional misconduct should be made.

Conduct Complained Of 6 In response to a request for particulars, the Bar Association outlined the issues in these proceedings as follows:

"The Bar will rely upon the following conduct as demonstrating that Somosi is guilty of professional misconduct and that he is not a fit and proper person to be remain [sic] on the Roll of Legal Practitioners:

1 That as at 3 November 1994, Somosi had not filed any tax return and had not paid any income tax for any financial year in which he had practised at the Bar, ie, for the financial years ended 30 June 1978 to 30 June 1994.

2 That having received a notice from the Australian Taxation Office dated 3 November 1994 requiring him to file income tax returns for each of the 17 taxation years ending 30 June 1978 to 30 June 1994, by 28 December 1994 ('the Notice'), he failed to comply with the terms of it.

3 That on 8 February 1996, in the Local Court, he pleaded guilty to, and was convicted of, 17 offences against s 8C(1)(a) of the Taxation Administration Act 1953 (Cth) as a result of his failure to comply with the Notice in respect of each of the 17 financial years to which the Notice related.

4 That on 20 March 1996, in the Local Court, he was sentenced in respect of the 17 convictions referred to above and was ordered to pay $68,653.01 within 12 months, comprising fines, costs and amounts pursuant to s 8HA of the Taxation Administration Act 1943 (Cth).

5 That on 18 October 2000, in the Local Court, he was convicted of an offence against s 264(1)(a) of the Income Tax Assessment Act.

6 That as at 6 August 2001, he has not filed income tax returns for each of the taxation years ending 30 June 1999 and 30 June 2000.

The conduct occurred whilst Somosi was admitted as a barrister and in connection with his professional practice, in that the income which he was obliged to return was the income which he earned as a result of engaging in his profession." 7 The submissions to this Court proceeded on the basis that those acts constituted the conduct which the Court should take into account.

Factual Background 8 The Bar Association served on Mr Somosi a Notice to Admit Facts, set out below. Mr Somosi agreed to all of the facts save those numbered 15 and 17, which he contested. 9 In the course of submissions, the New South Wales Bar Association also indicated that it wished to rely on, as a fact in the present proceedings, a finding made by a judge of the District Court, in circumstances which will hereinafter be set out, that one of the purposes of Mr Somosi's reasons for not complying with a Notice was to "facilitate avoidance of an amount of his tax liability". 10 A number of affidavits were read to the Court. These affidavits contain additional information about the agreed facts and also establish a basis upon which, the parties contended, the Court should resolve the disputed issues of fact. 11 The facts agreed pursuant to the Notice were all but pars [15] and [17] of the following (hereinafter "the Agreed Facts"):

"1 That you were admitted as a barrister in New South Wales on 19 August 1977.

2 That you have practised as a barrister in New South Wales continually since your admission.

3 That you were obliged by the Taxation Administration Act 1953 (Cth) ('the TA Act') by the specified time to file an Income Tax Return for each of the years ended 30 June 1978 to 30 June 1994.

4 That as at 3 November 1994, you had not filed any Income Tax Return for the years ended 30 June 1978 to 30 June 1994.

5 That as at 3 November 1994 you had not paid any income tax for any of the years ended 30 June 1978 to 30 June 1994.

6 That you received a notice from the Australian Taxation Office dated 3 November 1994 requiring you to file income tax returns for each of the 17 taxation years ending 30 June 1978 to 30 June 1994, by 28 December 1994 ('the Notice').

7 That as at 24 February 1995, you had not complied with the Notice.

8 That on 24 February 1995, an information(s) was/were laid and a summons/17 summonses was/were issued for breaches by you of s 8C(1)(a) of the TA Act as a result of your failure to comply with the Notice in respect of each and every one of the 17 financial years to which the Notice related ('the Tax Prosecution Summons').

9 That on 19 March 1995, you were served with a copy of the Tax Prosecution Summons.

10 That until about 14 June 1995, you had not filed income tax returns for each of the financial years ending 30 June 1992 to 30 June 1994.

11 That until about 7 February 1996, you had not filed income tax returns for each of the financial years ending 30 June 1978 to 30 June 1991.

12 That on 8 February 1996, you pleaded guilty in the Local Court to each of the 17 offences in the Tax Prosecution Summons.

13 That on 8 February 1996, you were convicted in the Local Court in respect of each of the 17 offences in the Tax Prosecution Summons.

14 That on 20 March 1996 you were sentenced in the Local Court in respect of the 17 convictions referred to above and were ordered to pay $68,653.01 within 12 months, comprising the following fines, costs and amounts pursuant to s 8HA of the TA Act:-

Financial Year Fine Costs Section 8HA amount 1994 $800 $81 $9,468.18 1993 $1,500 $51 $11,667.29 1992 $1,500 $51 $14,812.54 1978-1991 ($2,000 per ($51 per year for 14 year for 14 years) years) Total: $3,800.00 $183.00 $35,956.01

15 That by your conduct in not filing income tax returns for each of the years ended 30 June 1978 to 30 June 1994, you concealed your income from the Commissioner of Taxation.

16 That as at 30 March 2001, you have not paid any income tax for the years ended 30 June 1978 to 30 June 1994.

17 That you intentionally deprived the Commonwealth of Australia of income tax payable on your income for each of the years ended 1978 to 30 June 1994." 12 A number of affidavits were read to the Court. There was, however, no cross-examination on any affidavit.

The Taxation Proceedings 13 As noted in the Agreed Facts, Mr Somosi filed no tax returns and paid no income tax for the seventeen financial years ended 30 June 1978 to 30 June 1994. On 3 November 1994 the Australian Taxation Office served a notice requiring him to file income tax returns for each of those seventeen taxation years by 28 December 1994 ("the Notice"). As at 24 February 1995 he had not complied with the Notice. On that day an Information was laid and seventeen summonses were issued for breaches by Mr Somosi of s8C(1)(a) of the Taxation Administration Act 1953 (Cth) which provides:

"8C(1) A person who refuses or fails, when and as required under or pursuant to a taxation law to do so: (a) to furnish a return or any information to the Commissioner or another person …

to the extent that the person is capable of doing so is guilty of an offence." 14 On 8 February 1996 Mr Somosi pleaded guilty in the Local Court to each of the seventeen offences in the summons and was convicted. 15 Pursuant to s8E of the Taxation Administration Act a court may impose a fine of $2,000 for a first offence against s8C, and of $4,000 for any subsequent offence. Sixteen of the seventeen summonses of which Mr Somosi was convicted could be treated as subsequent offences for the purposes of imposing a penalty. 16 An additional penalty can be imposed under s8HA of the Taxation Administration Act which provides:

"8HA(1) If: (a) a person (the 'convicted person') is convicted before a court of an offence against s8C … in relation to a refusal or failure to do a particular thing; and (b) the court is satisfied that the purpose of, or one of the purposes of, the refusal or failure was to facilitate the avoidance of an amount of a tax liability of the convicted person or another person;

the court may, in addition to imposing a penalty on the convicted person, order the convicted person to pay to the Commissioner an amount …"

The Act provides a formula to calculate this amount in different circumstances. 17 Applying these provisions, the magistrate in the Local Court at Ryde imposed the fines and added certain amounts pursuant to s8HA of the Act, as set out in par [14] of the Agreed Facts. The magistrate was satisfied, on the evidence before him, that the pre-condition to the operation of s8HA had been made out, i.e. the magistrate was satisfied that one of the purposes of Mr Somosi's failure to lodge returns in accordance with the Notice was to avoid payment of tax. It is of significance to note that this finding of purpose did not relate to the failure to file returns at the time they were originally required. It related to the failure to file those returns as required by the Notice i.e. between about 3 November 1994 and 8 December 1994, which failure continued until the dates identified in the Agreed Facts. 18 One of the matters about which there was evidence before the Local Court, and to which it will be necessary to more fully refer below, was an assertion on the part of Mr Somosi that he had made an arrangement with the Australian Taxation Office to the effect that, if he lodged returns for the three taxation years ending 30 June 1992, 1993 and 1994, the Taxation Office would accept that in satisfaction of his obligations. The magistrate said:

"In respect to the application for orders in terms of s8HA I take into account that the Taxation Office, unaware that proceedings had been instituted, had shown an intent to accept the lodgement of three tax returns for the years 1992, 1993 and 1994. Accordingly, I only intend to impose the orders in terms of s8A [sic] in respect of those three years." 19 As can be seen from par [14] of the Agreed Facts set out above, the magistrate acted on this basis and did not impose an additional s8HA amount for any of the years 1978 to 1991. 20 Mr Somosi appealed against sentence to the District Court. Additional evidence was given in the District Court, including evidence from Mr Eric Westman, an officer of the Australian Taxation Office who had a conversation with Mr Somosi about the making of an arrangement concerning the payment of his tax. Mr Somosi also gave evidence in the District Court. The transcript of the evidence in that Court was tendered before this Court without objection. 21 A number of grounds of appeal were argued in the District Court. It was submitted that the fine was excessive in the light of the agreement reached with Mr Westman. It was also submitted that the orders made under s8HA were not available, because the prosecution had failed to establish the requirement of s8HA(1)(b). On 9 December 1996, his Honour Judge Graham dismissed the appeal and confirmed the orders of the Local Court. 22 In his reasons for decision, Graham DCJ noted that Mr Somosi had filed three returns for the years 1992, 1993 and 1994, some six months after the last date on which the Notice specified that they were to be provided. His Honour also noted that the other fourteen returns were lodged with the Taxation Office, fifteen months after the Notice was issued. His Honour concluded:

"On any view of it, there was a serious delay in compliance with the notice. That delay was compounded by the circumstance that the taxpayer, whose returns were not lodged in compliance with this notice, was a professional person, a barrister, who might be expected, in ordinary circumstances at least, to have treated such a situation as a serious one, requiring swift action. Moreover, the failure to comply with those notices impeded the capacity of the Australian Tax Office to issue assessments in respect of income earned over a period of many years, and which, in total, was a substantial amount, even leaving aside administrative penalties which might have been levied in relation to those returns, the latter being foregone by the decision to institute prosecution." (JSM 10 at p6) 23 Graham DCJ considered the issue, which is also raised in the evidence before this Court, as to what transpired between Mr Somosi and Mr Westman on the occasion that Mr Westman, representing the Australian Taxation Office, indicated to Mr Somosi that the office would accept taxation returns for three years in satisfaction of his obligations. 24 His Honour referred to the fact that Mr Somosi had a conversation in May 1994 with another tax officer, Mr Turner, which culminated in the suggestion that only one return would be accepted on certain conditions. Mr Somosi had done nothing on the basis of that arrangement. In March 1995 he entered into a further arrangement with Mr Westman pursuant to which three returns would be submitted. An issue had arisen before Graham DCJ as to whether or not, during the course of the discussions with Mr Westman, any reference had been made to the fact that the Notice from the Australian Taxation Office had issued in November 1994. Graham DCJ found:

"Although the appellant has expressed a belief that some reference was made in the course of the conversation to the issue of the notice by the Australian Taxation Office in November 1994, he is not prepared to dispute Mr Westman's evidence that no such disclosure was made." (JSM 10 p12) 25 Evidence was given in support of Mr Somosi before Graham DCJ, as in this Court, from a fellow barrister Mr Alex Clout. Mr Clout had been briefed by Mr Somosi in a family law matter and thereafter in relation to bankruptcy proceedings. He also advised Mr Somosi with respect to his dealings with the Australian Taxation Office. 26 Graham DCJ said in his judgment:

"Although Mr Clout (in paragraph 7 of his affidavit) recalls the appellant drawing his, that is Mr Clout's, attention, to the issue of a notice to lodge tax returns in November or December 1994, and certainly before Christmas in 1994, it is, I think, significant that he makes no reference to the topic of that notice to lodge tax returns being raised in the course of the conversation with Mr Westman.

In the circumstances, I am satisfied beyond reasonable doubt that Mr Westman's evidence of the failure of the appellant to refer to the issue of the notices, is reliable evidence, and I accept it. Moreover, I find it more than curious that the appellant was in such an uncertain position as to whether the question of the notices was raised at that meeting. His account is that he was certain that he took the notice with him, and he had a firm belief that the issue of the notices would be a matter which Mr Westman would be able to ascertain by virtue of his access to records of the taxation office, which the appellant believed would be readily accessible by access to the Australian Taxation Office computer. Mr Westman himself confirms that such access would be readily possible.

The position clearly is, however, that the decision to agree to the lodging of three returns only was one which Mr Westman would not have made, had he known that the notice had been issued by the Chatswood office, requiring the lodging of seventeen returns. Moreover, of course, by the time the conversation took place, the taxation office had already issued the seventeen summonses. Presumably, that step would also have been recorded, and would have been accessible on the computer. It is inconceivable that Mr Westman would have arrived at this agreement about the three returns had he known that the notices had been issued.

Whilst there is no suggestion that the appellant deliberately set out to mislead Mr Westman, it does seem to me that the conclusion is, sadly, inescapable that the appellant deliberately suppressed his knowledge of the existence of that notice in the course of his discussion with Mr Westman. If there was any unconscionable conduct in the discussion with Mr Westman, the unconscionable conduct was on the part of the appellant, who sought, in my view, to avoid discussing the issue of the existence of the notice in the course of that conversation. The result was that an agreement, or an apparent agreement, was reached to accept three returns, and Mr Westman was ignorant of the existence of the notice, and in the circumstances where the appellant chose not to disclose the existence of that notice to Mr Westman." 27 In this part of the judgment, his Honour was dealing with a submission on the part of Mr Somosi that the conduct of the Australian Taxation Office in pressing for the penalties which were eventually imposed was unconscionable by reason of the existence of the agreement with Mr Westman. His Honour made the findings of fact which I have set out for that purpose. As will be shown below the evidence in this Court from both Mr Clout and Mr Somosi is different from the evidence that each of them gave before the District Court and upon which his Honour relied to draw the adverse inference about Mr Somosi's conduct in that part of his Honour's judgment I have set out above. 28 Graham DCJ then turned to the issue which is raised in this Court, as to whether or not the conduct of Mr Somosi should be classified in such a manner as to permit the Court to impose the penalty provided by s8HA of the Taxation Administration Act. Graham DCJ concluded that he was satisfied beyond reasonable doubt that at least one of the purposes of Mr Somosi in failing to comply with the Notice was to facilitate the avoidance of tax. His Honour concluded:

"It was it seems to me, disingenuous in the extreme to suggest that he was somehow so confused about his circumstances, and so powerless to do anything about them, that he failed to draw to Mr Westman's attention the existence of the notice against him. …

By April or May 1994, the appellant was aware that his financial affairs were likely to be raked over in the course of matrimonial litigation. He became aware that the Child Support Agency was interested in his position. Clearly, in my view, the reason that he went to the Taxation Office in the first instance was that he was either aware, specifically from the Family Law Act application that his estranged wife had made an application to the Child Support Agency, or he became aware, by virtue of some conflict over the telephone with her, that that was imminent in his case. He went to the taxation office, in my view by way of a pre-emptive strike, to see what could be done to sort out his situation. His failure to take up the offer thereafter is said to be itself significant evidence of his bona fides. Whatever the reason for his failure to comply with that offer, clearly enough, by the time he received the notices issued in November he must have realised that he had been extremely foolish, to put it mildly, to have neglected that arrangement.

I am satisfied that, thereafter, he was determined to try to renegotiate an arrangement so as to lessen the amount of his burden, to the extent that he was prepared to conceal from Mr Westman the existence of the notices which had been issued against him. The only rational conclusion which can be arrived at is that, in failing to comply with the notice, one of his purposes, at least, was to facilitate the avoidance of the amount of his tax liability.

Accordingly the jurisdiction exists to make an order under s8HA of the Taxation Administration Act."

Objection to Evidence 29 The Opponent sought to rely on evidence filed in this Court with respect to the circumstances of his arrangement with Mr Westman. The Bar Association objected to those parts of the evidence which related to this matter. The objection extended to parts of one of the affidavits of Mr Somosi, to an affidavit by Mr Clout, his former legal representative, and to an affidavit by Mr Metcalf, his accountant. With respect to this objection, the Bar Association relied on evidence put before the Court that it had written to the Australian Taxation Office asking that Mr Westman give evidence with respect to these matters. In response, the Office, on Mr Westman's behalf, relied on the secrecy provisions found in s16 of the Income Tax Assessment Act 1936 (Cth) and rejected the request on that basis. 30 The Bar Association, without objection, tendered in evidence in this Court the whole of the evidence before the District Court. That included a transcript of the evidence given in that Court by Mr Westman. That transcript was, it appears, tendered in order to identify the actual evidence before the District Court, should that be material to this Court's deliberations. The Bar Association did not, however, seek to use that transcript as evidence of the matter contained within it. Indeed the submissions to this Court proceeded on the assumption that no such use could be made of that transcript. 31 Sections 60 and 63 of the Evidence Act 1995 provide:

"60 The hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of the fact intended to be asserted by the representation."

"63(1) This section applies in a civil proceeding if a person who made a previous representation is not available to give evidence about an asserted fact.

… (b) a document so far as it contains the representation … ." 32 No reliance was placed by the Bar Association on s60 of the Evidence Act to the effect that, once the transcript was in evidence as proof of the fact of the evidence that was before the District Court, it could be used in the present proceedings to establish the existence of the facts that Mr Westman asserted in the course of his evidence before the District Court. It is not necessary to decide whether such a submission would have been upheld. 33 Furthermore, no reliance was placed on s63 of the Evidence Act 1995 to support the tender of the transcript. Indeed, as no objection was taken to the tender of the transcript such reliance was not necessary, but reference to s63 may have indicated an intention on the part of the Bar Association to rely on the transcript as proof of the facts asserted in the testimony which that transcript records. (There is no suggestion that s67 of the Evidence Act, requiring notice before reliance is placed on s63(2), had been acted upon.) It is not necessary for present purposes to construe the meaning of the phrase "is not available" within s63. 34 The objection of the Bar Association to the admission of the evidence was based on two alternative grounds. 35 First, that the Court should not permit a collateral attack to the findings of the District Court. This submission was directed to the express finding that was necessary for the actual decision of Graham DCJ, to the effect that one of the purposes of Mr Somosi in committing the offence was to avoid taxation, in accordance with the requirements of s8HA(1)(b) of the Taxation Administration Act set out above. 36 The second basis of the objection was reliance on s135 of the Evidence Act which relevantly states:

"The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party …" 37 Counsel for the Bar Association submitted that the evidence to which objection was taken was unfairly prejudicial, by reason of the fact that the Bar Association found itself in a position where it could not meet the evidence by calling Mr Westman in light of the secrecy provisions of the Income Assessment Act. No submission was made by counsel for Mr Somosi that s135 should have no application by reason of the tender in this Court of the transcript of the evidence of Mr Westman before the District Court and the possibility of the more general use of that transcript under either s60 or s63, to which I have referred. In these circumstances the application of s135 should proceed on the assumption that neither s60 nor s63 has any application. 38 No objection was taken to the evidence before the Court concerning the arrangement with Mr Turner. This was to the same effect as the evidence that had been before Graham DCJ. Mr Turner had indicated, apparently speaking on behalf of the Australian Taxation Office, that that Office would regard Mr Somosi's affairs as in order if he filed a single taxation return and that penalties would not be imposed because he had come forward voluntarily. Mr Somosi said with respect to this offer:

"I knew I had been made an attractive offer which was like a life saver but for some reason I just did not grab it.

I continued living my life failing to deal with my taxation matters or for that matter other financial matters relating to my affairs. I escaped from the pressures of life that I was experiencing at the time by burying myself in the practice of being a criminal law advocate. I escaped my obligations by hiding in my work." 39 Mr Somosi said that Mr Clout, the barrister who had advised him in relation to his taxation affairs, asked from time to time whether he had filed a return as agreed. On 20 November 1994 Mr Somosi was served with a notice to file the seventeen tax returns from 1978 to 1994 inclusive by 28 December 1994. At that stage he had another conversation with Mr Clout who said:

"You haven't filed it, you're an idiot." 40 Mr Clout then indicated that he would contact a senior officer of the Taxation Department to discuss the matter with him. That officer proved to be Mr Westman. 41 The evidence that is objected to concerns the negotiations that proceeded with Mr Westman, commencing on 11 March 1995, i.e. about four months after the Notice. The general thrust of these discussions was that Mr Westman said that the prior arrangement with Mr Turner was far too generous, insofar as it required only a single return to be filed. He indicated that the filing of three years of returns would be required and that, on that basis, the Australian Taxation Office would regard the affairs of Mr Somosi as being in order. 42 As indicated above, Graham DCJ placed reliance on his finding of fact that no reference was made during the discussion with Mr Westman about the service of the Notice by the Australian Taxation Office requiring the filing of the seventeen returns. Mr Somosi does not indicate in his affidavit that there was any such discussion at the meeting with Mr Westman which he attended. However he does say, in a paragraph in his affidavit to which objection is taken, that:

"I knew prior to the meeting that Mr Clout had discussed my position with Mr Westman and Mr Clout had informed me on occasions during the period from January to March he had spoken of the situation with Mr Westman and the fact that I had received a notice to file a document which had expired ." [Emphasis added] 43 The affidavit of Mr Clout, to which objection is taken, gives evidence which went beyond the affidavit that he had affirmed in the District Court proceedings. In the affidavit filed in this Court, Mr Clout said:

"My recollection is that it was the issue of the Final Notices that was the reason for contacting Eric Westman as Robert Somosi had still not filed the one return pursuant to the agreement with Kevin Turner. I am quite certain that I discussed the Final Notices that had issued with Eric Westman ." [Emphasis added] 44 Mr Clout also said:

"Sometime in March 1995, I attended a lunchtime meeting with Robert Somosi and Eric Westman during that meeting reference was made by Robert Somosi to the fact that he had received the Final Notices . I cannot recall the exact words that were said during the meeting, however I clearly recall that Eric Westman advised Robert Somosi, in my presence, words to the effect, that if he filed three returns he would regard that as compliance with Robert Somosi's taxation obligations." [Emphasis added] 45 After the meeting with Mr Westman, Mr Somosi was served with the seventeen summonses dealing with his failure to lodge returns pursuant to the Notice. Thereafter, Mr Somosi contacted a Mr Metcalf, an accountant, to assist him in this regard. Mr Metcalf in his affidavit in this Court, to the whole of which objection is taken, does not directly refer to any knowledge on the part of Mr Westman about the issue of the Notices, as at the time of the arrangement for the filing of three returns. He does refer to a note of a discussion that he had with Mr Westman which includes reference to both "seventeen years" and the involvement of the Australian Taxation Office at Chatswood. The only relevant involvement of the Office at Chatswood was in serving the notices and filing the summonses. However, Mr Metcalf does not indicate at what point of time this conversation occurred. His evidence does not corroborate in any way the suggestion that Mr Westman was aware of the issue of the Notice as at the date of the arrangements. 46 The affidavit material to which the Bar Association objects goes beyond the specific issue of Mr Westman's state of knowledge to encompass the whole of the evidence of the existence of the arrangement between Mr Westman and Mr Somosi. These include all of the matters that were not in issue before the District Court including the following facts and matters. · Mr Westman believed the arrangement with Mr Turner was too generous. · Mr Westman offered a new arrangement for Mr Somosi to file returns for three years. · Mr Somosi contacted Mr Metcalf on or about 18 April 1995 with a view to his assisting Mr Somosi in preparing the returns. 47 The objection of the Bar Association extends to the evidence of Mr Metcalf as to the steps he took to prepare the three tax returns and also his communications with Mr Westman in this regard. 48 The objection also extends to certain documents relating to the preparations for the evidence to be given in the Local Court proceedings particularly by Mr Clout, including draft statements of Mr Westman. 49 Objection is taken to pars [73] and [74] in Mr Somosi's affidavit in which he directs attention to the evidence Mr Westman gave in the District Court and also to Mr Westman's draft statements that had been forwarded by the Commonwealth Director of Public Prosecutions to Mr Alex Clout. There were two statements, one dated 4 August 1995 and one dated 6 September 1995. The first statement made no reference to the question of when Mr Westman first became aware of the Notices and the Summons. In the second statement of 6 September Mr Westman said that on 14 June 1995 he was shown a computer printout of Mr Somosi's position and that:

"This was the first knowledge I had of Final Notices being issued for Mr Somosi's non-lodgement as far as I can remember."

Presumably, this difference is relied on in some way as going to credit. 50 Some of the evidence to which objection is taken encompasses statements by Mr Somosi, and to some extent opinions of Mr Clout and Mr Metcalf, which relate to Mr Somosi's state of mind, belief or intention during this period after the arrangement with Mr Westman was made. 51 Mr Somosi said that after the meeting on 11 March 1995 and prior to the service of the summons on 20 March 1995, he conducted himself in the following way:

"After the meeting I started to make plans to file returns. I started looking for documents to put together which could be used for the purpose of my return. I was going through this process as well as dealing with my practice obligations for a period of about a week. I did not contact an accountant but I intended to do so as soon as I had sufficient documents which could be provided to him for the purpose of the returns." 52 Mr Somosi said that he contacted an accountant, eventually Mr Metcalf, after the service of the summons. He said:

"I attended a meeting with Mr Metcalf on or about 20 April 1995 and I discussed with him my failure to lodge taxation returns since I had been at the bar, my personal history, that I had made an arrangement with Mr Westman to lodge three taxation returns and was served the summonses, to my surprise, within a week and a half of making the arrangement with Mr Westman. I asked Mr Metcalf to contact Mr Westman, acting as my accountant, to confirm the arrangement he had made with me." 53 Mr Somosi said that Mr Metcalf told him that he had made contact with Mr Westman and that he confirmed the arrangements. 54 On 14 June 1995 three tax returns were provided at a meeting attended by Mr Somosi, Mr Metcalf and Mr Westman. Mr Somosi said that at that stage:

"I believed when I provided the returns the arrangement I had with Mr Westman had been honoured. I believed that Mr Westman would then make representations for the summonses that had been issued to be withdrawn." 55 Objection is taken to this evidence. Objection is also taken to the evidence of Mr Metcalf of attendance at the meeting with Mr Westman at which the three completed returns were given to him and about which he said:

'I am certain however that the purpose of the meeting was to provide the necessary returns and Mr Westman accepted the returns as compliance of the arrangement he had made with Mr Somosi. I understood when the returns were provided to Mr Westman, Mr Somosi's outstanding tax matters were at an end.

The lunch was convivial and at no time did Mr Westman raise any issue as to Mr Somosi's tax matters. He certainly did not indicate that there would be any further action in relation to Mr Somosi and I understood that by provision of the three returns the arrangements between Mr Somosi and Mr Westman were honoured." 56 To similar effect was the evidence, to which objection was also taken, from Mr Clout concerning the meeting at which the returns were handed over:

"I understood at the time of that meeting the provision of the returns was compliance by Robert Somosi, as far as the Australian Taxation Office was concerned, of his obligations concerning outstanding tax matters." 57 Objection was also taken to Mr Somosi's evidence concerning the assertion made during the course of the proceedings in the Local Court, that he had only come forward by reason of his wife's complaint to the Child Support Agency, which complaint would inevitably lead to disclosure of his failure to lodge tax returns. Mr Somosi's evidence, to which objection is taken was:

"In response to the suggestion of being 'flushed out' I say [that at] the time of the discussion I had with my wife … I was paying substantial maintenance both to her and my children and had been doing so for a significant period of time. When I advised her that it would be necessary for me to readjust the payment because of matters that were concerning me I advised her I would continue to make payment of a substantial nature. I did not believe at the time that I discussed the matter with her that she proposed to apply for Child Support. In effect I did not believe at the relevant time it was inevitable that she would approach the Child Support Agency particularly in circumstances where I made it clear I would continue to provide for my children." 58 Mr Somosi identifies a notice of 1 June 1994 as the first occasion on which he appreciated that his wife intended to seek the assistance of the Child Support Agency. 59 Mr Somosi also incorporated by reference certain passages of the evidence given before the District Court. This was also objected to, although the evidence itself had been tendered by the Bar Association. In response to what he describes as an allegation that had been put to him that his only intention in meeting with Mr Turner was to avoid the filing of returns, he referred to the evidence he had given to the effect that he had gone to see a person at the Taxation Department who would be in a position to advise him; he had not gone there with any plan in mind and had not gone with the idea of negotiating any form of arrangement. 60 As to the suggestion that he had deceived Mr Westman about the Notice, Mr Somosi referred to Mr Westman's evidence in the District Court which was as follows:

"Q And did Mr Somosi when he met with you tell you that he had received a notice from the Chatswood office in November 1994?

Q Requiring lodgement of all his outstanding returns?

He also referred to his evidence to the effect that the entry of the Notice on the computer database in the "Taxation Department" would have been readily accessible to anyone with access, such as Mr Westman had, and further evidence that Mr Westman gave that he had no positive recollection of having the Notices brought to his attention prior to 14 June 1995. 61 Mr Somosi also referred to his own evidence on this subject to the effect that his "recollection was generally that I spoke with him about" the Notice from the Chatswood office. He said that he knew "I had the notice in my pocket" and further:

"I went to the meeting fully believing that everyone knew of it and in fact I recall believing, that everything is on the tax computer. I mean this is a notice issued by the tax people, they're going to know about it. I've spoken to Mr Clout about it several times before. This meeting was arranged by Mr Clout the only purpose of the meeting, when I went there, at the beginning in my mind was what do I do because I haven't complied with the notice? When I got there I can honestly say, and I don't want to swear on oath a conversation that I can't recall occurring, even by way of conclusion that I must have had a conversation. After hearing Mr Westman's evidence I just don't feel that on oath I can say that he's lying. I can honestly say the meeting was caused because of the time having past for the notice, that's the truth." 62 Mr Somosi repeated in the course of his cross-examination that he believed that Mr Westman knew about the existence of the Notice.

The Legal Practitioner's Conduct 63 The facts which are critical for the determination of these proceedings are not in issue. Mr Somosi did not file an income tax return in any of the seventeen years ending on 30 June, between 1978 and 1994. Accordingly, he paid no income tax for any of those years. This was deliberate conduct which had the effect of concealing his income and ensuring that he paid no tax. No inadvertence or accident could conceivably explain such a sustained period of conduct over such a long period. The only inference is that he deliberately and intentionally evaded tax. 64 Mr Somosi explained his personal circumstances in the affidavits that were read in these proceedings. No aspect of those circumstances touches in any way on the degree of default that is apparent from these basic facts. He gave no evidence that could contradict the natural inference that he deliberately and intentionally evaded tax. 65 His personal life has included three marriages and subsequent relationships, with the degree of personal disruption that such a history would necessarily entail. In 1991 he contracted meningitis, which had effects upon his memory, and he suffered other sequelae including mental fatigue and confusion for several years. Nothing in his affidavits seeks to explain, let alone excuse, his failure to comply with his obligations as a citizen to file income tax returns. No doubt his personal and medical history may have had an effect on his ability to comply with his obligations from time to time. It is not capable of explaining his dereliction over such a long period and he does not suggest that it does. 66 In the case of Cummins, which will be handed down on the same day as this judgment, the Court was concerned with a legal practitioner who had not filed returns for thirty-eight years. The position of Mr Somosi involved a shorter period of time, but not a materially different length of time. Furthermore he has also failed to file returns in subsequent years, being the years ending 30 June 1999 and 30 June 2000. He has not sought to explain this subsequent failure. 67 In New South Wales Bar Association v Hamman [1999] NSWCA 404 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. 68 The factors to which I have referred in my judgment in Cummins are equally applicable here. Mr Somosi acted in complete disregard of his legal and civic obligations. He took advantage of the full range of public services made available by taxation, not least the provision of the court system in which he earned his income. He left the burden of all of this to his fellow citizens. Furthermore, for a period of almost two decades he engaged in what I described in Cummins as the hypocrisy of putting himself in a position, as a legal practitioner, in which he advocated that other people should perform their legal obligations, whilst systematically failing to perform his own. 69 In this case, unlike Cummins, the Court does have before it some information concerning the conduct of the legal practitioner in an attempt to rectify his failure to comply with his obligations. Mr Somosi did eventually reveal to the taxation authorities his long period of non-compliance. In the materials before this Court there are suggestions that the reason for Mr Somosi taking these steps was the imminent prospect of discovery, because of an awareness on his part that his wife intended to invoke the assistance of the Child Support Agency. This was not put to him in cross-examination. 70 The evidence as to Mr Somosi's motivation when he contacted the taxation authorities in 1994 is not such that I would be prepared to make a finding as to what that motivation was. His own statement is that:

"I became determined that I wanted to deal with my taxation matters." 71 This is a neutral statement in terms of any assessment of Mr Somosi's character. There is no basis on which this Court can find that his motivation was a fear of imminent discovery. Why he came forward in the way he did is, in my opinion, a neutral matter. 72 The issue that has arisen in this Court about the admissibility of evidence, focuses on a period in time after his failure to honour his legal and civic obligations had been established over a period of seventeen years. Attention focused on the Notice leading to his conviction, and the discussions with the Australian Taxation Office concerning the replacement of his full obligation by an obligation to file returns for only three of the seventeen years. Mr Somosi's efforts to regularise his affairs with the Australian Taxation Office were not pursued with any degree of diligence on his part and his side of the arrangement was only performed after considerable delay. The delay is material, but not significantly so in the light of the whole of the circmstances. 73 These proceedings are not concerned to protect the revenue. These proceedings are concerned with what Mr Somosi's default reveals about his character and fitness. No doubt the taxation authorities are and were primarily concerned to get what they can. These authorities will no doubt consider issues of punishment for purposes of general deterrence. However, the jurisdiction which this Court is exercising is a protective jurisdiction. It is not directed at punishment. It is not concerned with revenue collection. Whether or not the taxation authorities were prepared to accept three years of returns in total satisfaction of Mr Somosi's taxation obligations, is not a matter entitled to significant weight for present purposes. What the taxation authorities were prepared to accept, in the exercise of their discretion, says nothing about Mr Somosi's character or fitness. 74 The recording of a conviction is often a matter of significance for issues of fitness. It would also be material to an issue of "good fame and character" which, obviously overlaps with an issue of fitness. The issue of good fame and character has not directly arisen in these proceedings. 75 In the present case the conviction and penalty is not, of itself, a matter entitled to substantial weight. The significant matter is the conduct underlying the convictions. The convictions were for the failure to comply with a notice to file seventeen years of returns within a period of about a month from the Notice. However, the underlying conduct, to which the conviction only indirectly related, was the failure by a legal practitioner, over a long period of time and in a systematic way, to comply with his legal and civic obligations. It is that conduct that is entitled to determinative weight in making the judgments the Court has to make in these proceedings, both as to the findings of fact upon which it acts and also on the issue of relief. 76 I emphasise that, in this case it is the conduct itself that is entitled to such weight, not the fact that in an indirect manner that conduct has manifested itself in a particular conviction with a particular penalty. I am not saying the latter is irrelevant, but in the circumstances of this case I would come to no different conclusion, either in terms of identifying misconduct or in terms of determining what should be the relief, if there had never been a conviction at all. In the case of Cummins there was no conviction. 77 The matters sought to be agitated by the evidence, to the admission of which objection is taken, involve, at best, a secondary issue in the overall context. They are directed to the factual foundation for the determination by the magistrate, and by the District Court judge, that Mr Somosi's failure to comply with the Notice - not, I re-emphasise his failure to file the original returns - was in part motivated by a purpose of avoiding taxation. That purpose was, of course, of central significance in those proceedings. It is of trivial, if any, significance for the issue before this Court. It do not find it necessary to make any finding of fact about Mr Somosi's purpose for not complying with the Notice. Nor is his subsequent conduct, belatedly, to comply with the Notice, of sufficient significance to affect the outcome. 78 The determinative consideration for these proceedings is that he avoided tax for seventeen years. In the absence of any suggestion to the contrary in his own evidence, I find no difficulty in drawing the obvious inference that his failure to comply with his obligations over that period of time was deliberate and that he intended to avoid taxation. His subsequent conduct does not qualify the impropriety of this failure. Indeed, he has repeated the failure in two subsequent years. 79 The convictions must be regarded as finally determining the issues necessarily decided in those proceedings. There were, and are, options for reviewing such convictions e.g. invoking the supervisory jurisdiction of the Supreme Court or seeking review under Pt 13A of the Crimes Act 1900. 80 Insofar as the conviction itself is a material fact, this Court would not permit the opponent to challenge it in these proceedings (see Hunter v Chief Constable of the West Midlands Police [1982] AC 529 esp at 541-542; Rogers v The Queen (1994) 181 CLR 251 esp at 279-280; Minister for Immigration and Multicultural Affairs v SRT (1999) 91 FCR 234 at 240-245). However, in this case, the Court is not materially concerned with the conviction as such. 81 In proceedings of this character the Court is entitled to assess the underlying conduct on which a conviction is based from the distinctive perspectives of professional misconduct and fitness to practice (see Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 esp at 283, 285-286, 288-291, 296, 297-298, 299-300, 301). In these matters the mere fact of conviction is not necessarily determinative. It is not in this case. 82 In these circumstances the two bases on which counsel for the Bar Association contended that the evidence should be rejected have not been made out. The public policy against collateral attack of a conviction is not engaged. This Court would take no different course even if it were minded to reach a different conclusion from that of Graham DCJ and, accordingly, there is no warrant in assessing the new evidence with a view to determining any such a question. Furthermore, there is no unfair prejudice within s135 of the Evidence Act. The evidence should be admitted. However, it is not necessary to make any findings of fact with respect to the evidence.

Conclusion 83 Mr Somosi did not oppose the Court making a declaration that he was not a fit and proper person to remain on the Roll. For the above reasons such a declaration should be made. 84 Mr Somosi opposed the Court making a declaration that he has been guilty of professional misconduct. Mr F M Douglas QC, who appeared for Mr Somosi, submitted that the scope of professional misconduct should be confined to conduct in the course of practice. He indicated that he was aware that the Court had reserved its judgment on this very matter in Cummins and stated that his client would abide the outcome in that case. 85 I consider this issue at some length in my judgment in Cummins. It is unnecessary to repeat those reasons here. For the reasons I expressed in Cummins it is appropriate to make the declaration in this case. 86 On 20 August 2001, this Court made orders removing Mr Somosi's name from the Roll and that he pay costs. The Court should make the following additional orders: 1 Declare that Lawrence Robert Somosi has been guilty of professional misconduct. 2 Declare that Lawrence Robert Somosi is not a fit and proper person to remain on the Roll of Legal Practitioners of the Supreme Court of New South Wales.

88 GILES JA: I agree with Spigelman CJ. ******

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