THE PERMANENT CANCELLATION OF A LAWYER'S LICENCE IS AN INJUSTICE STEMMING FROM FOUL PLAY

See the case at this link: https://www.jade.io/article/758379 Council of the Law Society of New South Wales v Zhukovska [2020] NSWCA 163 I copy an excerpt from this case. The reader may read the full case to get a fuller understanding: Consideration I do not agree that the distinction between suspension and cancellation is “technical”. I do not agree that the principles applicable to the power to suspend extend to the power to cancel. Ms Zhukovska’s written submissions pointed out that the Law Society’s submissions that once it was found that she was not presently fit to practise, NCAT was required to determine when and subject to what conditions she would become fit to practise, failing which her name should be removed from the roll, rest on a false dichotomy. I agree. There is a third possibility, which is that while NCAT was satisfied that Ms Zhukovska was not presently fit to practise, it was not satisfied that she was permanently or indefinitely unfit to practise. In that case, suspension for a specified period of time is not appropriate. Nor is removal from the roll. Rather, a cancellation order is appropriate, coupled with an order preventing application from being made for at least such time during which NCAT considers that she would not be fit to practise. As noted above, the dichotomy posed by Reynolds JA in McNamara turned on a regime where (a) the Statutory Committee lacked power to cancel a solicitor’s practising certificate and (b) it was held wrong for the Statutory Committee to have regard to the limitations imposed by the Law Society upon the solicitor’s practising certificate. It follows that what was said cannot be taken as authority for what is to occur under the regime applicable to Ms Zhukovska. It is not to the point to say that the evidence and findings did not support an order which was not made by the Tribunal, namely, an order suspending Ms Zhukovska from practice. The issue is whether there was error in the order which was made, namely, that Ms Zhukovska’s practising certificate be cancelled, with the consequence that she must, if she wishes in the future to return to practice, apply for a new practising certificate and satisfy the Law Society that she has ceased to be a person who was unfit to practise. The Law Society’s response was as follows: “This analysis [scil Ms Zhukovska’s submissions] begs the question as to why the Tribunal was not satisfied that the Solicitor was ‘indefinitely unfit to practise’ (Red 80[51]). If the Tribunal was not able to or did not make a finding as to when or in what circumstances the Solicitor would be likely to become fit to practise, then the only available conclusion was that the Solicitor was indefinitely unfit to practise and her name ought to have been removed from the Roll. She was not presently fit to practise.” But this reasoning contains a series of errors. First, the legal onus at all times remained on the Law Society to show probable indefinite unfitness to practise. Accepting that the evidentiary onus might shift, it is wrong to reason that the failure to find that a solicitor would be fit to practise in the future entailed that the solicitor would be indefinitely unfit to practise. Secondly, it does not follow that “the only available conclusion” from the absence of a finding as to when she would become fit to practise is that she was indefinitely unfit to practise. If indeed the Tribunal were satisfied that she would likely become fit to practise after a specified period, then an order suspending her practising certificate for that period would be appropriate. If the Tribunal was not satisfied that she was probably permanently unfit to practise, but was unable to determine when she would become fit to practise, then a cancellation order, not the removal from the roll, was appropriate. Hence, I reject the principal submission advanced by the Law Society. (b) Failure to impose conditions The Law Society complained that while the Tribunal found that Ms Zhukovska was not presently a fit and proper person to practise as a solicitor, there was no basis for the conclusion that she would be a fit and proper person in 12 months’ time, when she might have (although she need not have) complied with the recommendations it made to the Law Society. This was put as a failure to make material findings of fact. In its submissions in reply, it said that by failing to make orders concerning the conditions to be imposed, the task fell to the Law Society to do so if Ms Zhukovska reapplied for a practising certificate. The Law Society advanced the following submission: “This creates a risk that the Law Society may be too harsh (or too lenient) in determining the conditions that should be implemented, in respect of a legal practitioner that had been judged to be unfit to practise by the Tribunal at the time of its decision. By failing to make such orders, the Tribunal also creates a risk of further dispute between the Law Society and the Solicitor as to the form of the conditions the Tribunal impermissibly delegated to it to unilaterally impose, thus failing to discharge its obligation to resolve the complaints that were brought to it for determination.” While the Law Society accepted that it would assess fitness to practise at the time of any later application, it submitted that “the Tribunal must still consider the minimum conditions and/or re-education that must occur before such fitness has a prospect of being established.” Ms Zhukovska sought to draw the inference from the Tribunal’s recommendations that the Tribunal was satisfied that they would be adequate to ensure that she was fit to practise: “The recommended conditions deal directly with the primary concern of the Tribunal apparent from [54] of the Decision {Red 81O}, being the Solicitor’s ‘relative inexperience’ at the time of the conduct. It can be inferred that the Tribunal found that compliance with conditions of that kind and expiry of a period of 12 months would be adequate to ensure the Solicitor was fit to practise.” The Law Society responded that the Tribunal’s recommendations did not bind the Law Society, “thereby demonstrating that it had not, itself, formed a final or definite view as to what conditions should be imposed, when it clearly had the power to do so.” The Law Society also asserted that: “This was contrary to its practice in matters of this type, of ensuring that the form of such conditions is settled and is the subject of orders made by the Tribunal before the proceedings are brought to an end. A recommendation has no legal effect and is insufficient to accomplish that objective.” Consideration I do not accept the entirety of either side’s submission. I do not accept that the Tribunal impliedly found that compliance with its recommendations would ensure that Ms Zhukovska was fit to practise. I do not accept that a recommendation has no legal effect (for it is plainly a Peko-Wallsend relevant consideration in the exercise of discretion by the Law Society). I also do not accept the implicit submission that it was always for the Tribunal, as opposed to the Law Society, to impose conditions which will reduce the scope for controversy and dispute at a later application for the grant of a practising certificate. The Tribunal’s failure to make conditions was attributable to the attitude expressed by both parties, namely, to attempt to make orders immediately on the day if that was possible, and the fact that neither side advanced in any detail conditions which were appropriate. In particular, the Law Society did not propound any alternative regime against the possibility that the Tribunal might not find likely indefinite unfitness to practise. In an ordinary case, it would have been open to the Tribunal to seek further submissions on conditions, perhaps after announcing that it was not prepared to make an order removing the name from the roll. That was not possible consistently with orders being made on the day. But short cuts can make long delays. In the present case, I am satisfied that there was material error in the Tribunal’s decision, insofar as it made no findings to justify the 12 month period during which Ms Zhukovska would not practise, and there was nothing to justify a reasonable prospect of receiving a practising certificate in 12 months’ time, especially given the fact that its suggestions were non-binding recommendations. First and foremost, there was the finding made at [53] and [55] that Ms Zhukovska was, in November 2019, not fit to practise as a solicitor. Yet the Tribunal considered that she might apply for a practising certificate, albeit subject to conditions, after 12 months. That carried with it an implied finding that there was at least a reasonable prospect that she would become fit to practise. But what basis was there for that inference? The answer is that there was none. There had been some five years since Ms Zhukovska’s practice had been suspended, during which time she had, on the evidence, made scant efforts either to maintain her legal education or to fill the evident deficiencies. Most recently, she had paid to “attend” two online courses, each accredited for 1 CPD point (which may have taken an hour, or perhaps less), and had sat in on a single webinar, between the first and second hearings. She also gave evidence in very general terms, that she had taken some steps in early 2017 to maintain her legal education. The gap in the past was not necessarily incurable. It might have been possible for Ms Zhukovska to persuade the Tribunal as to her intentions and ability to become a person who was fit to practise as a solicitor. Yet Ms Zhukovska chose not to give evidence before the Tribunal. I acknowledge that the way in which that occurred was unfortunate, insofar as it was the Tribunal which first offered the possibility of an unsworn statement, only to reject it shortly thereafter. The offer should never have been made. Yet while Ms Zhukovska was understandably concerned to finalise the proceedings as quickly as possible, she should have known that it was essential that she persuade the Tribunal of her genuine desire to reform, and her motivation to do so. She had the benefit of counsel appearing for her. The decision not to give evidence must be taken to have been an informed one. In particular, her decision not to supply a further affidavit after the first hearing to be read in support of her case at the second hearing must be taken to have been an informed one. The Tribunal itself appreciated that conditions were necessary in order to protect the public. Those conditions included steps which Ms Zhukovska must undertake before applying for a practising certificate, and conditions upon her practice. Yet the Tribunal did not specify those conditions. Rather it made incomplete and non-binding recommendations. It is, with respect, impossible to reconcile the Tribunal’s finding that Ms Zhukovska was presently unfit to practise with its finding that that would change in a 12 month period when what would happen during that period was entirely unknown. I conclude that there was material error in this aspect of the Tribunal’s decision. My rejection of the Law Society’s case that Ms Zhukovska’s name should be removed from the roll carries with it the appreciable likelihood that there will come a time when she will be fit to practise. The task for the Tribunal in such a case, with the benefit of having reviewed the evidence of professional misconduct and unsatisfactory professional conduct, and Ms Zhukovska’s response to that evidence, is to make such orders as are appropriate, in order to protect the public interest. Here, that should have involved a regime for further submissions in relation to steps to be taken which if satisfied would result in Ms Zhukovska’s having a real chance of establishing she was fit to practise. I shall return to those matters below. (c) Remaining errors In relation to ground 1, the Law Society is correct to contend that removal from the roll would not, strictly, mean that she was “permanently deprived of the right to practise”. She would, however, be deprived of the right to practise for an indefinite period, and until such time as she had demonstrated she was fit to practise. That is how the Tribunal’s language is to be understood when read fairly. I do not consider that ground 1(a) amounts to an error which is material to the outcome. Ground 1(b) complained that the Tribunal wrongly had regard to Ms Zhukovska’s wish to continue to practise. That was not relevant to the question whether she was a fit and proper person, but it was relevant to the other orders which the Tribunal was invited to make. Arguably, the Tribunal may have reasoned from the inference of her wish to return that it might be inferred that she would become of good character. If so, that was wrong. Practitioners facing disciplinary proceedings with the prospect of the suspension or cancellation of their practising certificates, or with removal from the roll, should be in no uncertainty. If they wish to maintain that they will take steps to become fit to practise in the future, the usual if not invariable approach should be to say so under oath or affirmation, and explain the steps they propose to take and why they should be believed, in a way which permits that evidence to be tested by cross-examination if thought appropriate. Ground 2(a) draws attention to another minor error in the decision. Ms Zhukovska’s practising certificate had been suspended in 2014, and would have (unless it were renewed) expired years before NCAT’s orders were made. This was not wholly insignificant. The fact that her certificate had been cancelled would be relevant to a decision on any further application by Ms Zhukovska for a practising certificate. However, nothing material turns on this for present purposes. Notice of contention Ms Zhukovska’s notice of contention was as follows: “1. The Respondent’s situation had changed since the time she engaged in the conduct the subject of The Law Society of NSW v Zhukovska (No 2) [2019] NSWCATOD 196 (Decision), such that: a. she was a fit and proper person at the date of the Decision; or b. she would in future be a fit and proper person to practise as an Australian Legal practitioner, and there was evidence available to the Tribunal to support that finding. 2. The Tribunal should have found, had it been necessary to decide the issue, that the Respondent would be a fit and proper person to practise as an Australian Legal practitioner once the preconditions recommended in paragraph [60] of the Decision were satisfied and/or a period of 12 months from the date of the Decision had expired.” It should be said at the outset that it is not much to the point to assert in a notice of contention that “there is evidence available to the Tribunal to support that finding”. When this Court is asked to make a finding of fact for the first time, the question is whether the finding is warranted on the basis of the entirety of the evidence, not whether there was evidence capable of supporting it. No oral submissions were made in support of the notice of contention until this was brought to counsel’s attention at the conclusion of her address. Counsel reiterated that this Court should find that Ms Zhukovska was a fit and proper person at the date of the decision, and relied on her written submissions. The written submissions occupied slightly more than half a page, although in part they referred to earlier submissions to which they were linked. It was said that Ms Zhukovska had given “clear and consistent acknowledgements of her shortcomings”. At all times, Ms Zhukovska was represented by counsel. She gave evidence and was cross-examined at the first NCAT hearing, which concerned whether any or all of 12 allegations advanced by the Law Society were made out and whether they constituted unsatisfactory professional conduct or professional misconduct. At the second hearing, which concerned orders following the findings of five instances of unsatisfactory professional conduct and five instances of professional misconduct, Ms Zhukovska did not give evidence, in circumstances explained above. Moreover, Ms Zhukovska did not give evidence in this Court against the possibility that one or more of the grounds of appeal was made out and this Court might re-exercise the discretion. There was no affidavit analogous to the common practice in sentencing appeals of supplying updated information “on the usual basis” as explained in Betts v The Queen (2016) 258 CLR 420; [2016] HCA 25 at [11]. It follows that the most recent evidence from Ms Zhukovska herself was her cross-examination before NCAT at the first hearing in December 2018, described at [41] as a “properly vigorous cross examination”, on affidavits made by her on 25 January and 10 July 2018. Significantly, that led to gaps in evidence as to Ms Zhukovska’s acknowledgement and awareness of her departures from professional standards. Without being exhaustive: Ms Zhukovska maintained that ground 4 (causing herself to become the appointor to the trust) was unsatisfactory professional conduct but not in fact professional misconduct, but NCAT found that it was professional misconduct. What the Tribunal said at [65]-[68] concerning this is reproduced above; Ms Zhukovska denied that ground 11 (overcharging) justified a finding of professional misconduct, which NCAT duly made. Ms Zhukovska maintained that there was no breach of s 254 when she caused the proceeds of sale of Ms Heane’s unit not to be placed in her firm’s trust account. NCAT found that this (ground 5) constituted unsatisfactory professional conduct. In those circumstances, contrary to ground 1(a) of her notice of contention, I am entirely unpersuaded that the Tribunal should have found that Ms Zhukovska was a fit and proper person at the date it made orders. There had not been a complete acknowledgement by Ms Zhukovska of the wrongfulness of aspects of her conduct. There was no evidence from Ms Zhukovska of the steps she would take to ensure that such conduct would not be repeated. Ground 1(b) of the notice of contention is problematic. A finding as sought, namely, that Ms Zhukovska “would in future be a fit and proper person to practise as an Australian legal practitioner” is too imprecise to be made. In five days or five months or five years? Ground 2 of the notice of contention is also problematic. First, the recommended conditions are imprecise, and the “and/or” yields a number of imprecisely defined circumstances. It amounts to Ms Zhukovska asking for findings that she would be a fit and proper person after a “suitable” period of supervision (the duration of which was unspecified) and the “satisfactory” completion of a range of courses on such topics as elder law, powers of attorney, wills and estates practice, ethics and trust accounts; alternatively, after 12 months without any supervision or completion of any course; in the further alternative, after both (1) and (2). For the reasons already given, there is no basis for making, here and now, any such finding as to Ms Zhukovska’s fitness in 12 months’ time or at some other unspecified time. Orders which should be made In some respects, Ms Zhukovska’s case is highly unusual. It is not a case of dishonesty or misappropriation which will ordinarily result in removal from the roll. I entirely concur with the statement that “[t]his Court must insist on the maintenance of the highest standards of honesty and integrity in the performance of duties by legal practitioners”: Council of the Law Society of New South Wales v Yoon at [34]. The circumstances in which Ms Zhukovska progressively drew down more than $100,000 of her client’s money for her own benefit, which was repaid at around the same time that the Law Society investigation commenced, are concerning. Yet as it happens this sum, and the other loans, were repaid, and no case of dishonesty was advanced by the Law Society (I am not to be taken as suggesting that one should have been advanced). Ms Zhukovska’s conduct also resembles other cases of solicitors abusing elderly and vulnerable clients, which is to be firmly deprecated, but here too some important characteristics are absent. Ms Zhukovska inquired with the Law Society as to the appropriateness of being the donee of her client’s power of attorney, and obtained a trust deed from a reputable firm, and on the advice of an accountant. The overcharging was egregious, but Ms Zhukovska maintained that each invoice was approved by her client. Importantly, Ms Zhukovska was relatively recently admitted. She had been in practice for only four years. The misconduct related to a single client, and occurred seven years ago, in Ms Zhukovska’s first and second years as a sole practitioner. I am confident that Ms Zhukovska is not presently fit to practise as a solicitor. So far as the evidence discloses, nothing has changed since the Tribunal’s finding last November. Will Ms Zhukovska probably be permanently unfit to practise as a solicitor? I join with the Tribunal in not being satisfied that she will probably be unfit to practise for the indefinite future. I have borne in mind the struggles which Ms Zhukovska had endured to obtain legal qualifications in Canada as well as in this State. I am conscious that Ms Zhukovska has followed an arduous route to achieve admission. Leaving Russia to study in Canada in French, followed by the LPAB course in English, demonstrates considerable powers of self-discipline and sustained effort. I would infer that she is enterprising, diligent and self-motivating. There is every reason to think that she might be able to become fit to practise. However, I do not see how Ms Zhukovska could have a realistic prospect of persuading the Law Society at some point in the future that she has become fit to practise unless she makes a solemn statement acknowledging the entirety of her conduct, explaining why it occurred, and what steps she has undertaken and will undertake in order to prevent anything like it from happening in the future. That conclusion is confirmed by her decision not to give evidence before the Tribunal at the second hearing, or in this Court. I also see no reason why Ms Zhukovska should be permitted to make an application until she has demonstrated a commitment in a formal way to complete her training. I am unattracted by the idea (as was the Tribunal) that this could occur through “attendance” at two or three online courses. I am in broad agreement with the recommendations proposed by the Tribunal. Where I disagree with the Tribunal’s recommendations and the findings proposed by the notice of contention is that I consider it is necessary in order properly to exercise the protective jurisdiction to specify in advance and with precision the subject matter of the courses to attend and the way in which successful completion is to be measured. The orders I propose will permit the parties to be heard on those and any other conditions which should be imposed as preconditions to the making of an application by Ms Zhukovska. I am presently minded to impose a condition that no application for a practising certificate be made before satisfactory completion of those conditions and the expiration of 18 months from today: as presently advised, those conditions may be imposed pursuant to s 562(4)(j), as part of “an order that the practitioner not apply for a local practising certificate before the end of a specified period”. I am presently minded to order that any certificate which issues should be subject to the conditions proposed by Ms Zhukovska, namely, not being permitted to hold a principal practising certificate or to become a solicitor/director of any incorporated legal practice until the expiration of two years’ cumulative practice as an employed solicitor. To that I would add that she not hold office as a trustee (or director of a corporate trustee) in relation to client property in that period. To be clear, the effect of the orders I have in mind, as to all aspects of which the Court will permit the parties to be heard, will be that if Ms Zhukovska attends and satisfactorily completes appropriate courses and provides evidence by way of statutory declaration formally acknowledging the instances of professional misconduct and unsatisfactory professional conduct found by the Tribunal, and explains the steps she has taken and will continue to take in order to prevent such conduct recurring, then it would be open to the Law Society in determining an application for a practising certificate to conclude that she was a fit and proper person. It would be for the Law Society to make its decision if and when an application is made based on the material before it. As the Law Society points out, that decision would give rise to rights of appeal. But there is no alternative to that course, in the fairly unusual present circumstances where it cannot presently be concluded that Ms Zhukovska will become fit to practise, but where the Law Society has failed to make out a case of probable indefinite unfitness to practise. I turn to costs. Neither party has been wholly successful on appeal. I have concluded that the Law Society was justified in bringing this appeal, but I have also rejected its principal submission that Ms Zhukovska’s name be removed from the roll. It may be that an appropriate exercise of the discretion as to costs be that there be no order as to either party’s costs in this Court, with a view that each pays its and her own costs. As presently advised, I see no proper basis to interfere with the orders as to costs made by the Tribunal. However, the orders I propose will permit the parties to be heard as to costs, both in this Court and in the Tribunal. The orders for the exchange of submissions below contemplate all remaining issues being heard and determined on the papers. If either side wishes to be heard orally, its or her submissions in chief should so state, and explain the reason for that application and the opposing party should indicate in its or her submissions its attitude to a further oral hearing. For present purposes, the only orders I propose are: 1. The Law Society file and serve, within 14 days of today, any submissions as to the conditions to which Ms Zhukovska should be subject, and any submissions as to costs. 2. Ms Zhukovska file and serve, within 28 days of today, any submissions as to the conditions to which Ms Zhukovska should be subject, and any submissions as to costs. 3. The Law Society file and serve, within 35 days of today, any submissions in reply. McCALLUM JA: I share Macfarlan JA’s preference not to express a final view as to the appropriate test to be applied on appeal. Subject to that reservation, I agree with Leeming JA.