Prothonotary v Gregory

THE COURT: The Respondent, Paul John Gregory, is a solicitor admitted to practise in New South Wales. By a summons filed on 25 November 2016, the Applicant (Prothonotary) seeks the following declarations and orders against the Respondent:

Order 4 sought by the Prothonotary refers to the removal of the Respondent from the Roll of Australian lawyers maintained by the Supreme Court of New South Wales. [1] Since the proceedings commenced by the Prothonotary seek orders in the exercise of the Court’s disciplinary powers with respect to legal practitioners, the proceedings are assigned to the Court of Appeal. [2]

Chapter 5 of the Uniform Law establishes procedures for making complaints against lawyers and for the disciplining of lawyers who are found to have engaged in “unsatisfactory professional conduct” or “professional misconduct”. [3] In the present case, the Prothonotary does not rely on the provisions of Chapter 5 of the Uniform Law but invokes the inherent jurisdiction of this Court to support the declarations and orders she seeks against the Respondent.

Section 264(1) of the Uniform Law, which is in Chapter 5, preserves the inherent jurisdiction of the Court, as follows:

Section 264(1) of the Uniform Law has legislative predecessors in New South Wales dating back to 1935. [5] In A Solicitor v Council of the Law Society of New South Wales, [6] the High Court explained the nature of the Court’s inherent jurisdiction preserved by the legislative predecessors to s 264(1). The Court observed that when the inherent jurisdiction is invoked the question is not one of punishment, but:

The High Court pointed out that where an order for removal from the Roll is contemplated, the ultimate issue is whether the practitioner is shown not to be a fit and proper person to be a legal practitioner of the Supreme Court. [8] That question is to be determined at the time of the hearing, bearing in mind that in some cases (like the present case) the legal practitioner’s misconduct may have occurred many years earlier before the application is heard by the Court. [9]

The High Court in A Solicitor v Council of the Law Society of New South Wales also observed that in an appropriate case the Supreme Court may make a declaration of professional misconduct, with or without an order removing the legal practitioner from the Roll. [10] Their Honours pointed out that the statutory definition of “professional misconduct” now contained in Chapter 5 of the Uniform Law is not necessarily identical to the concept of professional misconduct for the purposes of the exercise of the Court’s inherent jurisdiction to discipline legal practitioners. The Court considered that since personal misconduct, even if it does not amount to professional misconduct, can demonstrate unfitness to practise, there is less need to “stretch” the concept of professional misconduct when the Court is exercising its inherent jurisdiction. [11] As will be seen, however, on any view the Respondent’s conduct in the present case amounted to professional misconduct.

The Respondent was represented by a solicitor at the hearing in this Court. The solicitor informed the Court that the Respondent did not oppose the orders sought by the Prothonotary and indeed consented to the orders being made. It is, however, well established that the Court must satisfy itself that it is appropriate to make orders removing a legal practitioner’s name from the Roll, even if the practitioner concedes that such an order should be made. [12]

Ms Hartstein, who appeared with Mr Liedermann for the Prothonotary, read two affidavits. These proved, among other things, the Respondent’s criminal conviction in the Supreme Court of Victoria. The affidavits exhibited a large number of documents, including the remarks of the sentencing Judge (Whelan J) and the judgment of the Victorian Court of Appeal dismissing the appeal against sentence by the Commonwealth Director of Public Prosecutions (DPP). [13] Ms Hartstein also tendered an Agreed Statement of Facts (Agreed Statement), extracted below. The Respondent’s solicitor neither adduced any evidence nor made submissions on behalf of the Respondent.

The affidavit evidence and the Agreed Statement indicated that the Respondent, in addition to being admitted in New South Wales, was admitted to practise in the Northern Territory on 13 April 1981. Section 23(2) of the Uniform Law provides that the “designated local roll authority” [14] must remove a person’s name from the Supreme Court Roll if satisfied that the person’s name has been removed from the Supreme Court Roll of another jurisdiction. The Court requested Ms Hartstein to obtain affidavit evidence confirming that the Respondent’s name had not been removed from the Roll maintained by the Supreme Court of the Northern Territory. An affidavit attesting to that fact was duly filed.

If the Respondent’s name had been removed from the Northern Territory Roll before the hearing in this Court, it would have been necessary to consider the relationship between s 23(2) of the Uniform Law and the exercise of the inherent jurisdiction of the Court. It may well be the case that if the procedure established by s 23(2) is available because the legal practitioner’s name has been removed from the Roll of another jurisdiction, that procedure should be used rather than commencing an application relying on the inherent jurisdiction of the Court. Since the Respondent remains on the Roll in the Northern Territory, the issue does not arise.

As has been noted, the Prothonotary commenced the proceedings in this Court in November 2016. This was more than six years after the Respondent’s conviction in the Supreme Court of Victoria. Affidavit evidence adduced on behalf of the Prothonotary established that the Professional Standards Manager of the Law Society informed the then Prothonotary on 28 April 2010 of the Respondent’s conviction and requested the Prothonotary to consider commencing appropriate proceedings in this Court. The Prothonotary promptly requested advice from the Crown Solicitor but it appears that no advice was provided. Unfortunately the matter was not followed up until December 2015, when the Law Society reactivated its inquiry. The delay in bringing the disciplinary proceedings against the Respondent is regrettable, not least because the timely exercise of the Court’s disciplinary powers is important in protecting members of the public and in ensuring that the profession maintains the highest standards of integrity.

The Agreed Statement is as follows:

The matters recorded in [7] and [9] of the Agreed Statement reflect the contents of a certificate issued on 22 July 2016 by the Acting Prothonotary of the Supreme Court of Victoria (Certificate of Conviction). The Certificate of Conviction was issued pursuant to s 178 of the Evidence Act 2008 (Vic), the counterpart to which in New South Wales is s 178 of the Evidence Act 1995 (NSW). Although the Agreed Statement does not say so, the Certificate of Conviction records that the Respondent was tried and found not guilty of the charge of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) (Counts 1 and 2).

The authorities establish that the Court should make findings in appropriate detail as to the basis of its orders, in part because the findings may be significant in the event that a practitioner removed from the Roll subsequently applies for readmission. [16] Findings need not necessarily be made on all matters alleged against the legal practitioner, but findings should be made on “significant matters”. [17] In some circumstances it is appropriate for the Court to address allegations of misconduct that go beyond the offence or offences of which the legal practitioner has been convicted. [18] Except for the Respondent’s failure to acknowledge guilt or express remorse, the only allegation of misconduct against him relates to his conviction for conspiring to dishonestly cause a risk of loss to a Commonwealth entity.

The task of making detailed findings concerning the Respondent’s conduct has been made more difficult than it should be because the Prothonotary’s submissions, both written and oral, seem to assume that this Court can take into account the findings made by the sentencing Judge and the Victorian Court of Appeal. The assumption overlooks the provisions of the Evidence Act 1995 (NSW) limiting the use this Court can make in disciplinary proceedings of the findings made by a court in criminal proceedings. [19] The oversight is surprising because the Prothonotary’s written submissions refer, albeit in a different context, to two decisions of this Court dealing precisely with this question. [20]

Section 178(3) of the Evidence Act 1995 (NSW) provides that a certificate given by an officer of any Australian court is evidence of the particular offence in respect of which the conviction was recorded and of the sentence imposed. Section 178(5) provides that a certificate given under s 178 purporting to contain particulars of an indictment or conviction is evidence of the matters stated in the certificate. The Certificate of Conviction concerning the Respondent records the offence of which he was convicted but contains no particulars of the offence.

Section 91(1) of the Evidence Act 1995 (NSW) provides that evidence of findings of fact made in an Australian proceeding is not admissible to prove the existence of a fact that was in issue in the proceedings. Section 91(2) states that evidence that is not admissible under Part 3.5 (including s 91) to prove the existence of a fact may not be used to prove that fact even if it is relevant for another purpose. Section 92(2) creates an exception to the general rule stated in s 91(1), by providing that evidence that a person has been convicted of an offence may be admitted to show the fact of conviction.

In Sukkar, this Court held that in disciplinary proceedings neither the findings made by the sentencing Judge following a solicitor’s conviction nor the remarks of the Court of Criminal Appeal on a subsequent appeal were evidence of the facts found or referred to in the judgments. Hodgson JA observed that the detailed facts set out in the Court of Criminal Appeal’s judgment: [21]

Sukkar was followed in Livanes. [22] In that case, the Court suggested to the Prothonotary’s counsel during the hearing that a notice to admit facts be served on the solicitor to allow the facts relied on to be placed before the Court in admissible form. [23] This course was followed and the solicitor made the necessary admissions. Unfortunately, the Prothonotary’s advisors did not follow the same course in the present case.

The Agreed Statement sets out Count 3 on which the Respondent was convicted. A finding can therefore be made that the offence of which the Respondent was convicted comprised the following elements:

The Agreed Statement cannot be used to make more detailed findings as to the Respondent’s criminal conduct. This is because the Agreed Statement merely records the findings made by the sentencing Judge, not the Respondent’s agreement that the findings were correct as a matter of fact. On the contrary, the Agreed Statement (and other evidence) shows that the Respondent has consistently maintained his innocence of the charge of which he was convicted. He took this course most recently, so far as the evidence reveals, in a letter of 12 July 2016 to the Professional Standards Manager of the Law Society of New South Wales.

The findings made by the sentencing Judge are referred to in other documents which were admitted into evidence. But they carry the matter no further since s 91(1) of the Evidence Act 1995 (NSW) renders the evidence inadmissible to prove the existence of a fact in issue in the current proceedings. The absence of any objection by the Respondent to the tendering of this material does not make it admissible to prove the facts underlying the Respondent’s conviction and sentence.

Nonetheless, the Agreed Statement and the Respondent’s statement to the Law Society under s 87 of the Uniform Law (s 87 Statement) (which is in evidence) make it clear that the conduct which led to the Respondent’s conviction was committed in his capacity as the solicitor acting for Mr Wheatley. There is therefore no doubt in this case, unlike some others, [24] that the Respondent’s criminal conduct amounted to professional misconduct (as distinct from personal misconduct demonstrating unfitness to practise). There is also no doubt that the Respondent has never acknowledged his guilt, despite the jury verdict, and has not exhibited any remorse for his conduct.

The general principles applicable to a case such as the present were conveniently summarised by Young CJ in Eq in Prothonotary of the Supreme Court of NSW v P. [25] Insofar as relevant, the passage is as follows:

A conviction even for a serious offence does not necessarily warrant a finding that a legal practitioner is permanently unfit to practise. [26] However, the Respondent was convicted of a particularly serious offence clearly involving the use of his position as a solicitor to conspire with others to perpetrate an act of calculated dishonesty. The terms of the charge make it clear that the object of the conspiracy was to enable the Respondent’s client to obtain a benefit at the cost of the Commonwealth. The inference is readily available that the Respondent acted dishonestly in order to facilitate the evasion by his client of a large amount of tax. In any event, the Respondent’s s 87 Statement makes it clear that the payment of $400,000 was to an offshore company and enabled Mr Wheatley, a co-conspirator, to evade the tax due on that amount.

There are, no doubt, many examples of dishonest conduct by legal practitioners that demonstrate unfitness to practise law. However, a solicitor’s dishonest participation in a conspiracy designed to enable a client unlawfully to evade tax strikes at the very heart of the qualities required to practise law. Spigelman CJ explained why that is so in a case involving a barrister who failed to lodge tax returns over many years: [27]

The gravity of the Respondent’s conduct is demonstrated by the custodial sentence imposed on him by the Supreme Court of Victoria. As we have noted, the judgment of the Victorian Court of Appeal on the appeal by the DPP against sentence cannot be used for the purpose of making findings of fact in disciplinary proceedings. Nonetheless, it is a further indication of the seriousness of the Respondent’s dishonest conduct that the Court of Appeal considered that the trial Judge should have imposed a much longer sentence of imprisonment. The Court declined to allow the DPP’s appeal only because there were unusual circumstances which made it inappropriate to interfere with the sentence imposed at trial. These included the Court’s view that the DPP was bound by the way in which the prosecution had been conducted, the delay in instituting the prosecution and the fact that the Respondent had been released from full-time custody by the time the appeal was heard. [28]

Where a solicitor has been convicted of a grave offence involving deliberate dishonesty in the practice of law, exceptional circumstances will be required before the Court could contemplate any sanction other than removal from the Roll. [29] For some lesser sanction to be considered the legal practitioner would at least have to adduce cogent evidence of extenuating circumstances or of contrition and rehabilitation countering the inference of permanent unfitness to practise law. In the present case, the Respondent has offered no evidence of extenuating circumstances that may have ameliorated the gravity of his professional misconduct. By persistently maintaining his innocence in the face of his conviction (against which he apparently did not appeal), he has precluded any reliance on contrition or rehabilitation.

There are two unsatisfactory features of this application. The first is the delay in bringing the application. The second is that the Prothonotary’s case attributed greater evidentiary significance to the findings of the sentencing Judge and of the Victorian Court of Appeal than can be justified under the relevant provisions of the Evidence Act 1995 (NSW). Accordingly, this Court has had to approach the application without the benefit of admissible evidence that would have shed light, for example, on the Respondent’s motive for engaging in the conspiracy and the full nature and extent of his dishonesty.

Despite the limited evidence in admissible form adduced by the Prothonotary, we are satisfied that the Respondent has been guilty of professional misconduct and is not a fit and proper person to be entrusted with the duties and responsibilities of a solicitor. We are also satisfied that he is not a fit and proper person to be enrolled as a legal practitioner of the Supreme Court of New South Wales. The probabilities are that he is permanently unfit to practise law.

Bearing in mind that the jurisdiction of this Court to remove a legal practitioner from the Roll is “entirely protective”, [30] such an order should be made in the present case. The following declarations and orders should be made: