On 11 October 2012, the NSW Bar Association attached eleven financial management and reporting conditions upon the practising certificate of a NSW barrister to ensure he met his obligations to submit business activity statements and tax returns with the Australian Tax Office.
These conditions continued to apply to his practising certificates up until the year ending in June 2015, with a further stipulation being applied to his 2015-16 certificate, which required him to receive quarterly specialised medical treatment for his then diagnosed depressive disorder.
The Bar Association refused to renew the barrister’s practising certificate as of July 2016, as it found he was not a fit and proper person to practise law in NSW due to his failure to comply with one of the practising conditions that stipulated he pay off his outstanding tax liability.
In June 2015, the Bar Association commenced action against the barrister – referred to as DEJ – and by July 2017, it added extra complaints, alleging the lawyer had knowingly made false statements to the NSW Civil and Administrative Tribunal (NCAT) in June 2016 regarding the ownership of his home.
In the second half of 2016, DEJ and his wife sold a regional NSW property – registered solely to her – and the couple’s Sydney home, registered to them both. The over $1.7 million in proceeds from the sales were placed directly into his wife’s account despite his still owing over $550,000 to the ATO.
In mid-2017, DEJ provided two affidavits to the NCAT. In the earlier one, he claimed for the first time that he’d transferred sole ownership of the Sydney property to his wife in 1996, while, in the second statement, he maintained the transfer document had been signed but he’d neglected to register it.
Disciplinary proceedings
The NSW Bar Association initially submitted four grounds for disciplinary consideration, which all pertained to DEJ not having fulfilled his practising conditions, while a further three were added after the sale of the two properties.
The additional grounds involved falsely asserting sole home ownership to his wife, having previously declared it was joint ownership, and failing to pay off his tax debt using the sale proceeds of his home, which he’d assured the Bar Association he would do back in 2014.
The NCAT found that DEJ’s psychiatric condition wasn’t to blame for not having complied with the practising certificate conditions, rather these breaches constituted professional misconduct under section 73(1) of the Legal Profession Act 2004 (NSW) (the old Act).
The Legal Profession Act was repealed and replaced by the Legal Profession Uniform Law (NSW) on 1 July 2015. However, the new legislation provides that an offence that was committed prior to its enactment can be dealt with under the old Act.
In regard to the further grounds, the NCAT found the couple had signed the 1996 transfer, but then changed their minds, and, therefore, DEJ had submitted a false statement. And his failure to pay off his tax debt with the sale proceeds again constituted professional misconduct.
On 11 December 2019, the NCAT ordered that DEJ’s name be removed from the NSW roll of lawyers.
Appealing the order
DEJ appealed the finding of the NCAT to the NSW Supreme Court in August last year. The barrister did so based on three main grounds, which, he claimed, ultimately led to the conclusion that his name ought not to have been struck off the roll.
The first was that the NCAT had made an error in finding that the barrister’s psychiatric condition did not provide a “reasonable excuse” for his contravening of the conditions that the Bar Association had placed on his practising certificate.
The next was that NCAT was in error in having found the barrister had knowingly lied in his affidavits relating to his wife’s sole owner of the Sydney property. And the last ground questioned the finding of professional misconduct in relation to not having paid his tax liability off with the sale proceeds.
The reasonable excuse
“A ‘reasonable excuse’ is one which in the circumstances justifies the contravening conduct not being treated as professional misconduct and as sufficiently serious to enliven the power to cancel or suspend the practising certificate,” explained NSW Supreme Court Justice Anthony Meagher.
The justice made the remark in relation to the first ground of appeal regarding DEJ’s psychiatric condition, of which the Bar Association had agreed could have constituted a reasonable excuse if it was shown it had led to his not complying with the practising conditions.
His Honour outlined that three psychiatrists had provided evidence as to whether DEJ’s condition had caused him to contravene the stipulations. Two of the doctors found the condition had contributed to the noncompliance, while the third found it was unlikely to have been the cause.
The Bar Association submitted that DEJ had failed to comply with the conditions since 2012, however a significant mood disorder did not arise until mid-2014, and, at least through to the end of that year, he continued to adequately manage his own, as well as his family’s, financial affairs.
The Supreme Court set out that the two doctors who had asserted the condition caused noncompliance had also admitted they had no detailed history of DEJ’s mental state, and, under these circumstances, it was found there was no error in having given little weight to their evidence.
Justice Meagher held that it was DEJ’s lack of sufficient funds that led to his not paying off his debt, and because of this, he failed in lodging his tax statements and returns. And it was rather due to this compounding situation that his psychiatric disorder arose.
“The appellant’s mild severity depressive symptoms apparent at that time arose from his becoming progressively more distressed about his inability and failure to meet his tax obligations and the conditions imposed on his practising certificate,” his Honour said.
Therefore, the finding of professional misconduct was upheld.
The barrister remains barred
In relation to the further grounds, the court found the evidence didn’t permit the NCAT to conclude that DEJ had knowingly lied on his 2017 affidavit, and nor was it open to find that the failure to pay off his tax debt with the proceeds from the property sales constituted professional misconduct.
In September 2014, DEJ stated that he would, if necessary, sell the Sydney property to pay off his tax liability, which wasn’t misleading then. And the reason the barrister didn’t comply with covering his debt with the sale proceeds was that his circumstances had changed in the preceeding years.
However, as the finding of professional misconduct had been upheld in relation to the first ground, the disciplinary action taken against DEJ by the NCAT was still valid. This meant that the barrister’s name would not be reinstated upon the NSW roll of lawyers.
“In the circumstances no substantial wrong or miscarriage has been occasioned by the errors” made by the NCAT in relation to grounds 2 and 3, Justice Meagher set out. Therefore, the appeal against the Tribunal’s order was dismissed on 28 April this year.
The Supreme Court agreed to suppress the names of the barrister and his wife in accordance with section 8 of the Court Suppression and Non-Publication Orders Act 2010 (NSW), as there was a “sufficiently realistic prospect of harm” if this didn’t occur.
NSW Supreme Court Justices Robert Macfarlane and Richard White agreed with the orders.
