NSW Bar Association v Donnelly [2004] NSWADT 102

CITATION: NSW Bar Association v Donnelly [2004] NSWADT 102 DIVISION: Legal Services Division APPLICANT PARTIES: Council of the New South Wales Bar Association RESPONDENT Bruce Leicester Donnelly FILE NUMBER: 032016 HEARING DATES: 19/02/2004 SUBMISSIONS CLOSED: 04/28/2004 DATE OF DECISION: 05/31/2004

BEFORE: Nader J QC - ADCJ (Deputy President); Macfarlan R QC - Judicial Member; O'Neill A - Non Judicial Member APPLICATION: Professional Misconduct - fail to disclose convictions for tax offences MATTER FOR DECISION: Principal matter Legal Profession Act 1987 LEGISLATION CITED : Legal Profession Regulation 1994 Legal Profession Regulation 2002 CASES CITED: Briginshaw v Briginshaw (1938) 60 CLR 336 APPLICANT REPRESENTATION: C Adamson SC RESPONDENT In person ORDERS: That the matter be listed for addresses on penalty on a date to be arranged with the Registrar.

REASONS FOR DECISION 1 By an Information dated 25 September 2003, the Council of the NSW Bar Association ("the Informant") claims that Bruce Leicester Donnelly ("the Barrister") has been guilty of professional misconduct on two grounds. 2 The first ground is that the Barrister failed, without reasonable cause, when he applied for a practising certificate on 25 February 2003 to notify the Informant that he had been convicted of two tax offences on 21 January 2002, the disclosure being required by clause 7(1)(g) of the Legal Professional Regulation 2002. 3 The form supplied by the Informant to the Barrister and upon which he made his application for a practising certificate referred not to the then current Legal Professional Regulation 2002 but to the superseded Legal Professional Regulation 1994. 4 Nevertheless, the form posed a question which, for presently relevant purposes, sought to elicit the same information as referred to in clause 7(1)(g) of the 2002 Regulation. The question was in the following terms: "Have you been found guilty any offence other than an indictable offence, whether committed in New South Wales or outside New South Wales since being admitted in New South Wales, other than as previously disclosed to the Bar Association?" (The word "of" should plainly have appeared between the words "guilty" and "any".) 5 The question invited a "yes" or "no" answer to be indicated in the boxes provided. The Barrister marked the "yes" box and added "PCA 7/01 – fined $850 disq 6 mths". 6 The accuracy of the information in the application form was verified by statutory declaration of the Barrister made on 25 February 2003 at Tamworth. 7 What was not disclosed by the Barrister was that on 21 January 2002 he had been convicted in the Local Court at Tamworth of two offences against paragraph 8C(1)(a) of the Taxation Administration Act 1953, in that he was required by a written notice dated 20 April 2001 to furnish his return of income for the years ended 30 June 1999 and 30 June 2000 to the Deputy Commissioner of Taxation on or before 18 May 2001 and he failed to do so. 8 The second ground of the Information is in the same terms as the first save that there is no allegation that the failure occurred "without reasonable cause". 9 The first ground reflects the terms of clause 137 of the Legal Professional Regulation 2002 which declares a failure to notify, without reasonable cause, information in relation to a finding of guilt of the commission of a tax offence as required by clause 7(1)(g) to be professional misconduct. 10 Clause 133 of the 2002 Regulation imposes a duty on barristers to notify the Council of the NSW Bar Association of a finding that the barrister is guilty of certain offences including tax offences. 11 It is necessary now to describe the factual background which led up to the non-disclosure of these tax offences by the Barrister. Factual background 12 The Barrister was admitted as a barrister of the Supreme Court of New South Wales on 4 November 1988. Prior to that time, he had been a member of the police force for about 20 years and for about 10 of those years had been a police prosecutor, spending much time in the Local Courts prosecuting people for summons offences. 13 He held a practising certificate continuously from 9 November 1988 to 9 May 1996 and thereafter for most of the period up to 30 June 2001. 14 The Barrister's evidence was that in March 2001 he decided to have a break from the law, with the result that he ceased practise on 30 June 2001. He described this as a self-imposed absence from the Bar and said that from 30 June 2001 to the time that he applied for a practising certificate in February 2003 he had no involvement with the law or legal practitioners, subject to the matter next mentioned. 15 On 20 April 2001, the Council of the NSW Bar Association filed Informations against the Barrister alleging professional misconduct and/or unsatisfactory professional conduct. These matters became file numbers 012007, 012015 and 022001. The proceedings were heard together by this Tribunal on 1 and 2 July 2002 and decided on 9 January 2003 ([2003] NSW ADT 3). The Tribunal found certain of the allegations established and ordered that the Barrister be publicly reprimanded, that a practising certificate not issue to him before 1 March 2003 and that he undertake a course of further legal education. The Barrister became aware of these orders by mid January 2003. 16 On 16 August 2001, the Barrister was convicted of an offence of driving a motor vehicle with a blood alcohol reading in excess of the prescribed concentration. He was fined $750 and was required to pay a levy of $30 and court costs of $56. 17 On 7 December 2001, the Barrister was served with a summons filed at the Local Court at Tamworth relating to the two tax offences referred to earlier. 18 Rather than appearing at the hearing, the Barrister exercised his right to plead guilty by lodgement of a prescribed form of notice. He said in the notice that he had no excuses for non-lodgement of the returns but that, by reason of the small amount of income which he had earned, no tax was payable for the relevant years. He repeated this in evidence before us and there has been no attempt to contradict him. Indeed, the evidence is that his tax returns for these years when subsequently lodged showed insufficient income to render any tax payable. 19 On 21 January 2002, the Barrister was convicted of the tax offences in his absence. He was fined $800 and ordered to pay court costs of $93. He was ordered to file the tax returns by 18 March 2002 and to pay the fine and court costs by 3 April 2002. 20 The Barrister says he did not become aware of the outcome of the hearing of the summons until 26 May 2002. He explained non receipt of notice from the court by reference to changes of address on his part and explained the absence by him of any enquiry as to the outcome of the hearing by what he said was his confidence that his prior record would ensure that no fine was imposed. 21 On 6 June 2002, the Barrister wrote to the Clerk of the Local Court at Tamworth referring in the heading to the letter to both the PCA and tax matters. He said in the letter that he had signed a "Part XI Notice under the Bankruptcy Laws" and was unable to pay the amounts owing due to the financial hardship he was suffering. 22 Shortly thereafter, enforcement orders were issued, both in respect of the PCA and tax debts, and the Clerk of the Local Court wrote to the Barrister informing him that application for time to pay would now have to be made to the State Debt Recovery Office. 23 The Barrister wrote to the Registrar of the Tamworth Local Court on 7 July 2002 requesting documentation to enable him to make an application for time to pay, based on his straitened financial circumstances. The heading to his letter referred to the "taxation matter". 24 On 12 July 2002, the Barrister wrote to the State Debt Recovery Office referring to both the PCA and tax matters in the letter's heading and to his unfortunate financial situation. 25 On 24 July 2002, an order permitting the Barrister to pay the amounts due in respect of both matters by instalments of $10 per week was made. 26 The Barrister thereafter made the following payments: 21-23/8/02 $10 2/9/02 $20 19/9/02 $30 28/10/02 $50 3/12/02 $40 13/1/03 $50 7/2/03 $50 17/3/03 $60 18/3/03 Final payment made 27 As mentioned earlier, on 9 January 2003, this Tribunal handed down its reserved decision in respect of certain complaints against the Barrister. 28 On 15 January 2003, the Barrister wrote to the NSW Bar Association referring to the orders made on 9 January 2003. He referred to his proposed return to the Bar in March and made an enquiry about the legal education he was required by the orders to undertake. 29 In the first part of February 2003, the Barrister obtained from the Bar Association a form of application for issue of a practising certificate. According to the Barrister's letter dated 14 March 2003 and paragraph 12 of his affidavit, when he received the application form from Mr Anthony of the Bar Association, he rang Mr Anthony and asked him if he had to disclose that he had been fined for a PCA offence in 2001. Mr Anthony's reply was "I tell everyone who phones, if you are in doubt about disclosing an offence, it is better to disclose it". 30 The Barrister sent a letter dated 18 February 2003 to the State Debt Recovery Office. It is stamped on the original produced by that Office as having been received on 24 February 2003. The heading to the letter was in the following terms: "UNPAID FINE FOR LATE FILING OF TAX RETURN – UNPAID BALANCE OF FINE FOR PCA." 31 In the body of the letter, the Barrister asserted that there was an error in the payment schedule pursuant to which he was paying $10 per week. He referred to the "fine for submitting a late tax return" and the "fine for the p.c.a." 32 On 25 February 2003, the Barrister made the statutory declaration which formed part of the application by him for issue of a practising certificate. As indicated earlier, he did not disclose his convictions of 21 January 2002 in respect of the tax offences. The statutory declaration, together with the Application for Practising Certificate to which it related, was submitted to the Bar Association under cover of a letter from the Barrister bearing the date 18 February 2003. The Bar Association copy of the letter is date stamped 26 February 2003. 33 On 26 February 2002, the State Debt Recovery Office replied to the Barrister's letter of 18 February 2003 rejecting the assertion that there had been a calculation error and requiring payments to be made in accordance with the Time to Pay Order. 34 In his letter dated 18 February (received by the Bar Association on 26 February 2003), the Barrister asked that the Bar Association deal urgently with his Application for a Practising Certificate. He said that time was "of the essence" in relation to the issue of the certificate. In relation to news that he was returning to the Bar, he said that "people's reaction has been overwhelming. The telephone is constantly ringing for me to represent them.… It is a dream come true that people have such faith and respect in my abilities…" 35 The same message is conveyed by the Barrister's letter of 7 March 2003 to the Bar Association in which he said: "Returning to the urgency for the letter, I am inundated with work offers and ask that a decision to issue my Practising Certificate be made as soon as possible". 36 The Barrister sent follow-up letters on 12 and 13 March 2003, again pressing for the urgent issue of a practising certificate. 37 On 13 March 2003, the Bar Association however sent notices to the Barrister requiring the provision of information concerning the tax offences of which it had by then become aware and in relation to which it had contacted the Tamworth Local Court. 38 In his response of 14 March 2003, the Barrister said he was shocked by the notices and that: "It did not enter my mind when I signed the Statutory Declaration accompanying the application for A Practising Certificate to disclose I had been fined for submitting a late tax return. I had no thought of the matter when completing the application…when I wrote and while speaking to Mr Anthony about the PCA offence I had no contemplation whatsoever or any thought about a fine for submitting a late tax return." 39 Also contained in the letter was an urgent request for disclosure of the means by which the Bar Association had become aware of the tax matter. 40 On 17 March 2003, the Barrister wrote to the Tamworth Local Court seeking to ascertain how it was that the Bar Association had obtained a copy of his letter to the court of 6 June 2002. He said: "The document at this stage appears to have been improperly or illegally obtained and handed to the Bar Association for mischief and ulterior means." 41 A number of further letters from the Barrister to the Bar Association pursued, in vigorous terms, an allegation that material has been illegally obtained from the Local Court at Tamworth. 42 Thereafter there ensued correspondence between the Bar Association and the Barrister, the detail of which it is unnecessary to describe save to refer to the sending on 11 April 2003 to the Barrister of a draft report of a Professional Conduct Committee of the Bar Association. The view expressed in that report was that the Barrister had intentionally withheld the information concerning the convictions in respect of the tax offences. This conclusion was said to be applicable even if the Barrister was unaware of "certain well-publicised events" concerning tax defaults by barristers. 43 After receipt of comments from the Barrister, the Professional Conduct Committee report was finalised. In relevant respects, it reached the same conclusions as the draft report. 44 On 5 June 2003, the Bar Council resolved to make a complaint concerning the Barrister under s.134(2) of the Legal Profession Act 1987. 45 The present Information was thereafter filed with the Tribunal on 25 September 2003. Consideration 46 Even if one were to accept the Barrister's evidence that his non-disclosure of the tax convictions was inadvertent, the case against him on the first ground in the Information would in our view have been made out because no "reasonable excuse" for his failure to make the disclosure appears from the evidence. 47 The Barrister was well aware of the convictions and the question he answered plainly called for their disclosure. It was in our view professional misconduct for him not to disclose the convictions. We find both grounds contained in the Information established. 48 That is not however the end of the matter as the circumstances in which he failed to disclose the convictions are relevant to the orders which we should make. In particular, it is relevant for us to form a view as to whether the non-disclosure was intentional. Procedural fairness issue 49 The Barrister has asserted in his written submissions that there would be procedural unfairness if we considered this issue without the Information being amended. He complains that he was only made aware that the Informant alleged that his non-disclosure was intentional during the course of the hearing before us. 50 For the reasons following, we do not accept these submissions. 51 First, it would have been apparent to the Barrister from the draft and final form of the Professional Conduct Committee Report, copies of which were supplied to the Barrister by the Informant, that an intentional non-disclosure was the basis upon which the investigation within the Informant had proceeded and concluded. It was made clear to the Barrister by the letter to him of 6 June 2003 that the material considered by the Bar Council in resolving to make a complaint of professional misconduct against the Barrister included the Professional Conduct Committee Report. 52 Secondly, the way in which the Informant put its case appeared clearly from the opening of its counsel. Enquiry was made of the Barrister by the Tribunal as to whether he needed "any time or other opportunity to deal with the allegation". The Barrister, who represented himself at the hearing, indicated that he did not. 53 Thirdly, it is in our view proper and relevant to consider whether the non-disclosure was intentional when considering whether the Barrister had "reasonable cause" for the non-disclosure. Thus, in our view the issue is properly raised by the Information which does not require amendment. Whether the non-disclosure was intentional 54 We turn then to the question of whether the non-disclosure was intentional and indicate at the outset our conclusion that it was. In forming this view, we have of course applied the civil standard of proof but we have been mindful of the serious nature of the allegation that the non-disclosure was intentional and the gravity of the consequences which may flow from finding it established (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362). 55 In essence, we do not find as credible the Barrister's assertion that he overlooked the tax convictions when making his application for a practising certificate. In forming this view, we do not make any assumption that the Barrister was aware of publicity given to tax defaults by barristers or was aware of the legislative changes which brought a greater focus on tax offences. The Barrister expressly denied any such knowledge and the Informant disavowed any attempt to contradict that evidence. 56 Nevertheless, the evidence and circumstances that remain are in our view compelling in favour of the view that the non-disclosure was intentional and that the Barrister's evidence that the non-disclosure was inadvertent should be rejected. 57 The Barrister was a police officer for 20 years and acted as a police prosecutor for 10 of those years. His work in that capacity involved much Local Court work. He inevitably became very familiar with the distinction between indictable and summary offences and the characterisation of matters such as those in respect of which he was convicted as "offences". 58 The tax convictions were not by any means a matter of insignificance to the Barrister. They resulted in the imposition on him of a financial burden which he clearly regarded as of significance. His letter of 6 June 2002 to the Clerk of the Local Court at Tamworth, for example, indicated that he had been forced to sign a notice under "the Bankruptcy Laws". 59 The burden was one which must have been repeatedly brought to his mind when he incurred the expense and inconvenience of making the many instalment payments that he did in the second half of 2002 and in early 2003. 60 Further, he engaged in correspondence about the fine that had been imposed and, as late as 18 February 2003, referred explicitly to the tax matter in the letter that he wrote to the State Debt Recovery Office on that date. The reply to his letter of 18 February was dated the day after he made the subject statutory declaration and again must have brought to his mind the taxation convictions. When asked in cross examination whether his memory of the offences to which the fines related would have been jogged by receipt of the letter of 26 February, the Barrister replied "Yes most certainly" (Transcript, page 87). On receipt of this letter of 26 February from the State Debt Recovery Office, the Barrister did not contact the Informant and indicate that he had overlooked disclosing the tax convictions in his Application for Practising Certificate. He did not do this, we conclude, because the tax convictions had not at any relevant time in fact been out of his mind. 61 The letter which the Barrister wrote to the State Debt Recovery Office dated 18 February 2003 bore the same date as the letter which he wrote to the Bar Association enclosing his application for a practising certificate. It may be that the Barrister filled in the form of application for a practising certificate on the very day that he wrote to the State Debt Recovery Office about the tax matter but it is not necessary to conclude that this was so because the form was at least completed by 25 February 2003 and thus within a week of the time when the tax matter was prominent in his mind. As the Barrister said in his evidence in relation to the 18 February letter to the State Debt Recovery Office, "It's plainly obvious I had tax on my mind in relation to the 18th of February in the letter there..." (Transcript, page 98). 62 The Barrister did not claim that he failed to read the question concerning non-indictable offences and indeed gave evidence suggesting that he had read it carefully. 63 Paragraph 18 of the Barrister's affidavit was in the following terms: "I did not ever consider, turn my mind to, have the presence of mind when reading the form that a 'fine for a late tax return' was in the category of 'any offence other than an indictable offence' (F7 p.6). If I had the presence of mind or state of mind at the time when completing the forms I would have disclosed the 'fine for a late tax return' as I disclosed everything else when completing the application ." (Emphasis as in affidavit.) 64 This evidence seems to suggest that although the Barrister was fully cognisant of the terms of the relevant question, he did not characterise the tax convictions as ones for "any offence other than an indictable offence". He however conceded in his oral evidence (Transcript, page 78) that he understood that the tax matters for which he was being summonsed constituted an offence. When asked "Are you telling us that you didn't think that you were being summonsed for an offence?", he responded "Oh no, no, no. I'm not saying that" and went on to suggest that the offences had gone out of his mind by the time that he made the statutory declaration. This assertion that the tax offences were not in his mind when he completed the form was one which was repeated many times in the Barrister's affidavit and oral evidence. 65 The question in the application form plainly led him to turn his mind to the PCA conviction and cannot in our view have failed to cause his mind to be turned to the tax offences. 66 The question then arises as to why he disclosed the PCA conviction but not the tax convictions. 67 The probabilities in our view strongly suggest that the reason was that he believed that information as to the PCA conviction would have been readily accessible to the Bar Association whereas information as to the tax convictions would not have been. 68 The reason for this lies in the fact that a PCA conviction, being a matter in relation to which fingerprints are taken, would appear on a criminal record whereas convictions in respect of taxation and other similar offences, not being matters for which fingerprints are required to be taken, would not so appear. The Barrister was asked about this distinction and indicated that he was well aware of it. This was not surprising in light of his extensive experience in the Police Force. 69 The inference which we draw is that the Barrister took the view that the Bar Association was never likely to come to know of the tax convictions and that their disclosure might thwart or delay the issue of a practising certificate which he repeatedly said was a matter of considerable urgency. 70 Supportive of this inference is the circumstance that when he became aware of the Bar Association's knowledge of the taxation convictions, he expressed outrage on a number of occasions at the fact that the Bar Association had come by that information. His reaction was indicative of real surprise on his part that the convictions had become known to the Bar Association and a belief on his part that it could only have happened as a result of the improper provision of information. Orders 71 The Informant has sought the opportunity to address on penalty once our principal findings have been made. We think it appropriate to accede to this request. Accordingly, the only formal order we make at this stage is that the matter be re-listed for addresses on penalty on a date to be arranged with the Registrar.