New South Wales Bar Association v Sahade [2005] NSWADT 159 (13 July 2005)

Last Updated: 13 July 2005

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL LEGAL SERVICES DIVISION

CITATION: New South Wales Bar Association v Sahade [2005] NSWADT 159


PARTIES: APPLICANT
Council of the New South Wales Bar Association



FILE NUMBERS: 032025

HEARING DATES: 7-8/03/05

SUBMISSIONS CLOSED: 08/03/2005



DECISION DATE: 13/07/2005

BEFORE: Nader J QC - ADCJ (Deputy President)Norton S SC - Judicial MemberO'Neill A - Non Judicial Member





LEGISLATION CITED: Legal Profession Act 1987

CASES CITED: A Solicitor -v- Council of the Law Society of NSW [2004] HCA 1; (2003-2004) 216 CLR 253
Ziems v The Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279

APPLICATION: Professional Misconduct - not of good fame and character

MATTER FOR DECISION: Preliminary matter


APPLICANT REPRESENTATIVE: S D Robb, QC
C Webster, barrister

RESPONDENT REPRESENTATIVE: P Brereton, SC
G Heathcote, barrister

ORDERS: 1.The Respondent is guilty of professional misconduct in respect of each ground of the Information
2. The Respondent is not of good fame and character
3. The matter will be listed to consider appropriate orders.


Reasons for Decision:

REASONS FOR DECISION

1 By information under section 167 of the Legal Profession Act 1987 (the Act) filed 5 November 2003, the Council of the NSW Bar Association (the Council) instituted proceedings in the Legal Services Division of the Administrative Decisions Tribunal (the Tribunal) against Marcel Victor Sahade (the Barrister) a legal practitioner within the meaning of section 128 of the Act, for a finding that the Barrister is guilty of professional misconduct.

2 The Council relies on two grounds:

Ground 1

In July and August 1999 the barrister lodged 353 applications to pre-register for shares in the so-called "Telstra 2 share offer" (the Offer) using dishonest tricks and devices for the purpose of concealing the fact that the applications were multiple applications by a single person, in circumstances where he believed that the policy of the Commonwealth would be likely to be to reject multiple applications for pre-registration from the same person.

Particulars of Ground 1 are as follows:

The dishonest tricks and devices were:

(a) making the applications in names other than his own;

(b) making applications with false or artificially variegated addresses; and

(c) stating false telephone numbers in the applications.

Ground 2

Between about 17 and 19 September 1999, the Barrister lodged 215 applications, each for 400 shares in the "Telstra 2 Share Offer", as a pre-registered public applicant, using dishonest tricks and devices for the purpose of concealing the fact that the applications were multiple applications by a single person.

Particulars of Ground 2 are as follows:

(a) The applications were lodged in circumstances where:

(i) he believed it would be likely to be the policy of the Commonwealth to reject, or to aggregate, multiple applications for shares from the same person;

(ii) the offer document expressly provided:

"Public Applicant's must not lodge multiple applications."

(b) The dishonest tricks and devices were:

(i) making the applications in names other than his own;

(ii) making applications with false or artificially variegated addresses; and

(iii) signing the applications otherwise than in his own name and with his own signature.

3 By its Information the Council submits that the following findings are appropriate:

i. A finding that the Barrister has been guilty of professional misconduct with respect to the conduct contained in ground 1.

ii. A finding that the Barrister has been guilty of professional misconduct with respect to the conduct contained in ground 2.

iii. An order that the Barrister pay the costs of the Informant of these proceedings.

4 The Barrister lodged his reply on 9 January 2004 in which he made a formal, or procedural, objection to the Information. After a hearing on the point, occasioning considerable delay, the objection was dismissed and the matter later proceeded to a hearing on the substantive issues raised by the Reply.

5 The Reply, filed 9 January 2004, was lengthy and detailed. By it the Barrister admitted the primary facts but he denied that he used dishonest tricks and devices and he denied that he believed that the policy of the Commonwealth would be, or would be likely to be, to reject multiple applications for pre-registration or for shares from the same person.

6 By his Reply, paragraphs 2. (f)(i)-(iii), the barrister admitted:

"(i) that the applications were made in names other than "Marcel Victor Sahade;

(ii) that the applications were made with different addresses for correspondence, including misspelled addresses; and

(iii) that he personally signed the applications in the application name contained on the application form"

7 The Council relied on the affidavits of Philip Alan Selth, the Executive Director of the New South Wales Bar Association, sworn on 3 November 2003 and on that of Rosemary MacDougal sworn 5 November 2003. Mr Selth’s affidavit deposes to the formal, Rule 25 matters.

8 Between 26 July and 14 August 1999 the Barrister made 353 pre-registrations for the "Telstra 2 Share Offer". He was aware of publicity about an unspecified pre-registration benefit. The pre-registrations were made by mail, by telephone or by the Internet.

9 Copies of the computer screens published for the purposes of the float were accessible to the public during the pre-registration process. They were completed by the Barrister. The first paragraph stated:

"The Telstra 2 Share Offer will be made in Australia pursuant to Australian Corporations Law as well as in several foreign jurisdictions pursuant to securities laws of those jurisdictions. This website is for the information of persons eligible to participate in the Australian portion of the Telstra 2 Share Offer ..."

10 The screen document continues:

"Step 1 - Select a type of application.

Pre register for your offer document.

Please indicate how you would like to pre register.

Note that you need to provide the name and address details you would use to apply for Telstra shares. You may pre register jointly with someone else or as a company, superannuation fund or other legal entity. The Government reserves the right to reject multiple applications that appear to be from the same person. (Emphasis added)

Select one of the following eight options."

11 The Barrister selected the first of the options: "On your own as a person over 18 years."

12 The pre-registration instructions did not contain a prohibition against multiple applications.

13 At step 2 pre-registrants entered details on their computer screen; it stated: "Fill in your name in full."

14 The Barrister made the 353 pre-registrations in different names, and all of the names were different from his own.

15 Step 3 stated:

"Address details.

Fill in your address details. Please use the address you would use to apply for Telstra shares. Your Telstra 2 public offer document, including your personalised application form, and all further correspondence will be sent to this address.

Please use a valid mailing address"

16 In making his 353 pre-registrations, the barrister supplied addresses which were variations of five different addresses. Those five addresses were associated with himself or his brother. Step 4 deals with contact details, including daytime phone numbers. For many of the pre-registrations the Barrister supplied his correct telephone number. For others, he supplied false telephone numbers.

17 Step 5 required the applicant to confirm the application.

"Confirm your details.

Please check the following details carefully to ensure they are correct."

18 The web page continues:

"Please note that you should have provided the name and address details you would use to apply for Telstra shares. Your application form will be personalised based on the details you provide. You will not be able to alter the name and address details on your personalised application form. If you change your name or address details on the personalised application form, you may lose your guaranteed pre-registration benefit."

19 Between about 17 and 19 September 1999, the Barrister lodged 215 applications, each for 400 shares in the "Telstra 2 Share Offer".

20 The coloured spreadsheet exhibited to Ms MacDougal's affidavit sets out the names and addresses in which the 215 applications for shares were made. It also included the date, time and method of pre-registration. The addresses shown in the document are grouped and coloured to show the five "core" addresses associated with the barrister or his brother (RM 9 pages 98-104. The subtle variations of those addresses is apparent.

21 It is not practicable to include the whole schedule in these reasons, but a short description of part of it is enough to convey graphically the manner in which the Barrister executed his deceptive scheme.

22 There were 7 vertical columns with the following headings:

i. Count no. (This is a reference to counts in an indictment upon which the Barrister was unsuccessfully prosecuted by the Commonwealth DPP.)

ii. Shareholder Reference No.

iii. First Name

iv. Address

v. Pre-Registration Time

vi. Date of Application

vii. Method of Pre-Registration

23 There are 215 horizontal columns, all relating to applications for shares seemingly made by different persons. A small extract from them will illustrate the way in which the Barrister managed his applications. The same pattern is seen in all, or almost all, of them. Because each application was made in the same surname, "Sahade", that fact is not included on the schedule.

24 Selected horizontal rows:

19. First Name - Einstein; Address - Lot 4 456 Rocky Point Road Sans Souci NSW 2219; Pre Registration Time - 31 July 1999 11:44:50 AM; Date of Application - 17 September 1999; Method of Pre-Registration - Internet.

20. First Name - Jacob; Address - 4/456 Rocky Point Rd Sans Souci NSW 2219; Pre-Registration Time - 31 July 1999 11:44:51; Date of Application - 18 September 1999; Method of Pre-Registration - Internet

25. First Name - Helium; Address - Shop 4/456 Rocky Point Road Sans Souci NSW 2219; Pre-Registration Time - 31 July 1999 11:55:26 AM; Date of Application - 18 September 1999; Method of Pre-Registration - Internet.

27. First Name - Lithium; Address - Lot 4/458 Rocky Point Road Sans Souci NSW 2219; Pre-Registration Time - 31 July 1999 12:02:57 PM; Date of Application - 18 September 1999; Method of Pre-Registration - Internet.

25 Thirty-seven of the applications on the schedule give a Sans Souci address. Each address is different (see the samples above) but very similar to the others.

26 It is sufficient to note now that the same general observations can be made about all of the 215 applications. The applications fall into five groups with subtly varied addresses within each group but quite different addresses between the groups themselves.

27 The 215 (at least) Public Offer Documents received by the Barrister included a letter from Mr Fahey, the then Minister for Finance and Administration, addressed to investors:

"On behalf of the Australian Government I am delighted to offer you the opportunity to participate in the Telstra 2 Share Offer ...

This offer gives all Australians, whether they are existing Telstra shareholders or not, the opportunity to participate in the next stage of the transformation of Telstra and the telecommunications industry.

The Government is offering people who reserved a Public Offer Document by 16 August 1999 the right to apply for a guaranteed pre registration benefit of 400 shares. ...

Investors may apply for more than their guaranteed allocation. However, to ensure that as many Australians as possible have the opportunity to invest in the Telstra 2 Share Offer, the minimum application has been set at 150 shares and payment will be by two instalments. ..."

28 At page 64 of RM 8 there appeared the following note to pre registrants:

"If you are not registered as a Telstra shareholder at the close of business but you reserved a Public Offer Document ..., you should have received a green personalised application form with your Public Offer Document. You must use this green form or the corresponding form on the Telstra 2 website if you wish to receive all or some of your guaranteed benefit of 400 shares. However, you can apply for more or less shares than this number. If you apply for more than 400 shares, the precise number of shares you are allocated will not be known until after the offer closes. If the Telstra 2 Share Offer is oversubscribed, you will be allocated at least 400 shares. ..."

29 The last sentence of this extract, italicised by us, is significant. Over-subscription was foreseen as a possibility with the consequence that some applicants may not receive any (if not pre-registered) or all of the shares applied for.

30 The public offer document contained the statement: "If you have any questions about procedures for investing in Telstra you should call Telstra 2 Share information Centre...."

31 It is material to our finding that the last paragraph of the document, in the left hand column, under the heading "Acceptance of Applications", reads:

"Public applicants must not lodge multiple applications. The Commonwealth reserves the right to reject or aggregate applications which appear to be multiple applications from the same person."

32 Between 17 and 18 September 1999 the barrister completed and lodged the 215 personalised applications for shares as a pre-registered public applicant, completing personalised applications forms in pre-registration names sent to the addresses given during the pre-registration process.

33 The applications were made in the names the Barrister used in the pre-registration process, being names other than his own.

34 The applications specified the addresses given during the pre-registration process, being variations of the five addresses associated with the Barrister or his brother.

35 The personalised application forms stated:

"Your guaranteed pre-registration benefit is 400 shares. If you apply for more than 400 shares you will be allocated at least 400 shares if applications need to be scaled back."

36 We construe this as a further reference, albeit oblique, to the possibility of oversubscription.

37 The form offered two options, A and B. The heading of option A stated: "Use this side if you want to apply for ALL your pre registration benefit AND also if you want to apply for more shares." (Option B, in the right hand column, applied where the applicant wanted to apply for fewer shares than the pre-registration benefit).

38 In each of the 215 applications made, the Barrister applied for the pre registration benefit, 400 shares, inserting $1,800 against step 2 being the amount for the first instalment for 400 shares, and in each case leaving blank the following steps 3 and 4 under the text: "PLUS number of shares applied for in addition to the guaranteed pre registration benefit".

39 The Barrister did not include contact telephone numbers in his share applications in the section "contact details", step 11.

40 The Barrister signed each application in the name appearing on it (such as "Frederick Sahade") and dated the application: see RM 5 (Exhibit A2).

41 The place for signature was on the reverse of the form, as step 13 following text under the headings "Treatment of Applications" and "Declaration and Statement":

"Treatment of Applications

1. The Commonwealth’s decision as to whether to treat your application as valid, and how to construe, amend or complete it, will be final.

...

3. The acceptance of applications and the allocation of shares is at the discretion of the Commonwealth.

4. The Commonwealth intends to accept all valid applications from... pre-registered applicants for their guaranteed benefits... In all other cases, the Commonwealth reserve the right to reject any application or to allocate to any person fewer shares than applied for by that person...

5. The Commonwealth reserves the right to aggregate or reject multiple applications.... (Emphasis added)

Declaration and Statement

1. All details and statement made by me/us in this application are complete and correct that this application complies with the terms of the Public Offer Document.

2. I/we accept and agree to be bound by all the terms and conditions of the sale of the shares set out in the Public Offer Document and the terms and conditions of the Trust Deed..."

42 The Barrister signed 215 personal cheques for $1,800 payable to the Telstra 2 Share Offer (a total of $387,000).

43 In the course of the investigation by the Bar Council, he provided copies of the completed forms with their accompanying cheques to the Bar Association.

44 The Barrister subsequently received 215 allocations of 400 Telstra 2 instalment receipts; a total of 86,000 Telstra 2 instalment receipts.

45 The Barrister also kept a list of the names and addresses in which he had applied for shares, together with the cheque numbers. He gave to Merrill Lynch, for the purposes of selling the installment receipts, a spreadsheet with those details and the shareholder reference numbers for the Telstra 2 installments receipts he received; a copy of the spreadsheet was provided to the Bar Association.

46 The Barrister also received a "firm allocation" of 7,300 Telstra 2 shares from his stockbrokers, J B Were and Co.

47 The 93,300 [86,000 + 7,300] Telstra 2 instalment receipts were sold on behalf of the Barrister by Merrill Lynch.

48 The expression "multiple applications from the same person", or similar words, were used by the Commonwealth in relation to the share issue and has been and will be used in these reasons. The expression, "multiple applications from the same person" is, certainly in the circumstances of this case, synonymous with the phrase, "more than one application from the same person". Therefore, an applicant was prohibited from making more than one application for any number of shares. The prohibition was directed to persons, not to names. One person, by whatever name or names s/he or it may be known, was permitted to make only one application.

49 We do not have to consider whether that prohibition was legally binding. But, as will be seen, the effect of a breach of the prohibition was possible adverse consequences for an applicant.

THE BARRISTER’S STATE OF MIND

50 The Council has charged that the Barrister used "dishonest tricks and devices for the purpose of concealing the fact that the applications were multiple applications by a single person, in circumstantial as where he believed that the policy of the Commonwealth would be likely to be to reject multiple applications for pre-registration from the same person." (Our emphasis) (See ground 1 above) Similar language is used in stating ground 2.

51 These words were apt, because, if the Barrister is guilty, it is because he had a belief in a state of facts which he attempted to circumvent by deception. Unless the use of false names and addresses was intended to deceive Telstra in order that Telstra would not act to the Barrister’s disadvantage when, in the mind of the Barrister, there was a risk that it might otherwise do so, the Barrister would not be guilty of misconduct.

52 It does not affect the Tribunal’s findings in these proceedings that it was not an infringement of the law to lodge multiple applications. The Barrister is not accused of making multiple applications; he is accused of using dishonest means to disguise the fact that his applications were multiple applications by one person. There could have been no criticism of the Barrister if he had lodged multiple applications in his own name, or in names that revealed his true identity. In substance it is alleged that he used deceitful means to disguise his real identity.

53 The sanction against the making of multiple applications was the risk that the Commonwealth might exercise its discretion to reject such applications, or to aggregate them as if they were a single application, with possible adverse consequences for an applicant. The Barrister would have known that if he could avoid being detected as making multiple applications he would avoid the risk of having his applications rejected or aggregated.

54 Therefore, we should consider whether the Barrister believed that unless he acted deceitfully, as he did, his multiple applications for shares might have been rejected.

55 The Barrister testified at the hearing at length. He was thoroughly cross-examined. He was given many opportunities of informing the Tribunal of his reason or reasons for using false names, addresses and phone numbers.

56 In general, under cross-examination by Mr Robb as to the Barrister's justification for using numerous different names, the Barrister was evasive and unconvincing. It became clear that there was no explanation that the Barrister was able to give, worthy of credence that did not involve his using the false names in an attempt to deceive the share issuing authority in an important respect.

57 Mr Robb’s searching cross-examination gave the Barrister a full and fair opportunity to explain his conduct and the reasons for it. If there had been any reason untainted with deceit or trickery, the Barrister was given every possible opportunity to explain it.

58 Upon a consideration of all of the circumstances, the only rational inference is that the Barrister's use of false names, deliberately varied addresses and some false phone numbers, was a premeditated deception designed to avoid losing a possible unfair advantage, namely, the risk of his applications being rejected or aggregated, which risk would have been an incident of his using his own name, address and phone number in the event of over-subscription for the available shares. We are satisfied of this conclusion.

59 The following passage appears in the transcript of the Barrister’s evidence:

‘HIS HONOUR: Q. ... what I want to ask you is whether you realised it or not at the time, do you now agree that that was the effect of what you did, that a person using his or her real name was not going to have the advantage that you had?

A. That is absolutely correct.

Q. All right.

A. That was an advantage that I was doing it for.

A. And that’s one of the reasons why I say that it was unfair, and I wouldn’t do it on that basis alone, but at the time I said, "Here’s a loophole. You can get an advantage over the ordinary public applicant," and that’s why I did it at the time.’

60 There are two matters that might be observed here. In the first place, the Barrister here admits that he used the scheme described in order to gain an advantage over others. Secondly, he describes those others as ‘ordinary public applicants’.

61 We have decided that we ought not to rely upon any common law concept of professional misconduct. However, we mention in passing that the Barrister said that his advantage over ordinary public applicants arose from the fact that he was not an ‘ordinary’ applicant. As we construe his answers, he said in effect that his advantage arose because he was a barrister. His pursuit of this advantage may have been closely enough related to a barrister’s professional activity to amount to professional misconduct in the common law sense. See A Solicitor –v- Council of the Law Society of NSW [2004] HCA 1; (2003-2004) 216 CLR 253 at 273 [30] when referring to Cummins’ case. But, for the avoidance of any misunderstanding, we repeat that we rely only on the statutory definition of professional misconduct: section 127(1)(b) of the Act. The statutory definition requires no connection with the practice of law.

62 Upon a consideration of all the circumstances, it is clear that the variations made to the five core addresses supplied on pre-registration were made deliberately in order to deceive or trick the share issuing authority, by reason of the inability of its computer to ‘understand’ that the addresses related to the same places, into failing to detect that they referred to the same addresses. However, it was the intention of the Barrister that the addresses be kept sufficiently similar to enable the person who would deliver the mail to locate the address intended by the Barrister. The premises intended were the places from which the Barrister would ultimately take delivery of his mail. The dishonestly of this device is manifest.

63 Technically unlawful or not, the Barrister's conduct was dishonest and calculated to deceive the Commonwealth with possible consequent disadvantage to other share applicants in what, for all the Barrister knew, might have been a market with a restricted availability of shares. The whole rationale of the Commonwealth's restrictions was to ensure that as many persons as possible who wanted shares were able to acquire them.

64 The Barrister's deception, therefore, was potentially harmful to other applicants.

65 It is in this that the real vice of the Barrister’s conduct lies. Put briefly, the Barrister attempted to deceive the Commonwealth – ground 1, 353 attempted deceptions, and ground 2, 215 attempted deceptions – and as one might expect he went to the great deal of trouble involved in his scheme for a purpose, namely, in order to increase his chances of being allocated a larger number of shares, or instalment receipts, than might otherwise have been allocated to him. The advantage to the Barrister to which his false statements were directed, for all he knew, may have come to him at the cost of financial disadvantage to other applicants for shares who, in the event of over-subscription, might have been allotted fewer shares than they were otherwise entitled to.

66 The possible scarcity of shares was referred to in the Public Offer document. At page 64, the following passage appears:

"If you apply for more than 400 shares, the precise number of shares you are allocated will not be known until after the offer closes. If the Telstra 2 Share Offer is oversubscribed, you will be allocated at least 400 shares. ..."

67 The expression ‘dishonest tricks and devices’ aptly describes the Barrister’s conduct in respect of both grounds in the Information.

THE LAW

68 The fundamental statement of the law for present purposes is section 127 of the Act which defines professional misconduct as including a number of specified kinds of conduct. The part of the definition relevant for present purposes is as follows:

"(1) For the purposes of this Part, "professional misconduct" includes:

(a) ...

(b) conduct (whether consisting of an act or omission) occurring otherwise

than in connection with the practice of law which, if established, would justify a finding that a legal practitioner is not of good fame and character or is not a fit and proper person to remain on the roll of legal practitioners, or

(c) ..., or

(d) ....

(2) ....

(3) ....

(4) ...."

69 Paragraph (b) is the only part of section 127 that deals expressly with conduct occurring otherwise than in connection with the practice of law. It is common ground in these proceedings that the subject conduct of the Barrister occurred otherwise than in connection with the practice of law. (This assumption may not be strictly correct by reason of the possible connection with the practice of law referred to above.) A finding of statutory professional misconduct, unlike professional misconduct within the inherent jurisdiction of the Supreme Court, would seem necessarily to require a finding that the conduct would justify a finding that the Barrister is not of good fame and character or is not now a fit and proper person to remain on the roll of legal practitioners. It is not easy to see how such a finding could result in any order other than removal from the roll of legal practitioners.

70 The use of the present tense in section 127 is significant – "is not of good fame and character or is not a fit and proper person to remain on the roll etc."

71 The High Court has said: "fitness is to be decided at the time of the hearing": A Solicitor v Council of the Law Society of NSW [2004] HCA 1; (2003-2004) 216 CLR 253 at p.268 [21]. (In the context in which that was said, we take it to mean ‘as at the time of the hearing’.) The whole of par. [21] is instructive in the present context and we quote it in full:

"Professional misconduct may not necessarily require a conclusion of unfitness to practice, and removal from the roll. In that regard, it is to be remembered that fitness is to be decided at the time of the hearing. The misconduct, whether or not it amounts to professional misconduct, may have occurred years earlier. At the same time, personal misconduct, even if it does not amount to professional misconduct, may demonstrate unfitness, and require an order of removal. The statutory definition in s.127 involves both concepts and, where it applies, must be given effect according to its terms. However, when the Supreme Court is exercising its inherent jurisdiction, it has the capacity to determine, and act on the basis of, unfitness, where appropriate, without any need to stretch the concept of professional misconduct beyond conduct having some real and substantial connection with professional practice. In a statutory context where the power of removal depends upon a finding of professional misconduct, it may be appropriate to give the expression a wider meaning, similar to in s.127. There is no such necessity in the present case."

72 Section 127(1)(b) extends the meaning which the words ‘professional misconduct’ would otherwise bear at common law in order to include the conduct described in s.127(1)(b), but they do so only to the extent defined in s.127(1)(b).

73 In order to constitute professional misconduct within the meaning of section 127(1)(b), the established conduct must be such as to justify a finding that the practitioner is, at the date of decision, not of good fame or character, or not a fit and proper person to remain on the roll.

74 Ultimately the question is whether the Barrister’s established conduct occurring, as it did, otherwise than in connection with the practice of law, justifies a finding that he is not now of good fame and character or is not now a fit and proper person to remain on the roll of legal practitioners.

APPLICATION OF THE LAW TO THE FACTS

75 We now turn to consider whether in all the circumstances the Barrister's conduct amounts to professional misconduct as defined.

76 It may be observed at once that the Barrister's conduct was not a fleeting act or brief aberration with little or no forethought of which it might be thought that the Barrister did not reflect on what he was about to do and, later, on what he was in fact doing. His actions were carefully premeditated, and the execution of his scheme was such that the contemplation of what he was doing necessarily continued over time. It was time during which he thought about and executed with some cunning his scheme of deception. Therefore, it can only be judged as reprehensible conduct that, had it been perpetrated by any person in any profession, would rightly be regarded as seriously dishonest.

77 We are proceeding on the basis that the conduct of the Barrister complained of by the Council did not occur in connection with the practice of law. This fact has important consequences by reason of the terms of the Act.

78 In order to find the Barrister guilty of professional misconduct, his conduct, as alleged in the Information and established by the evidence, must have been such as to justify a finding that the Barrister is not now of good fame and character or is not now a fit and proper person to remain on the roll of legal practitioners.

79 The difficulty in making such a decision is that, whilst one might readily find that the conduct described was seriously reprehensible when it occurred, that is not the question. The question is whether, by reason of that conduct looked at in the light of what may have occurred since the conduct, the Barrister is not now of good fame and character or is not now a fit and proper person to remain on the roll of legal practitioners.

80 It is not easy to formulate a test in a case such as this. We are in no doubt that if the Barrister possesses today the same attitudes, opinions and dispositions concerning the kind of conduct he is shown to have indulged in, he would not be a fit and proper person to remain on the roll of legal practitioners. We are aware of, and have considered, the dictum of Kitto J in Ziems v The Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279 at p298:

"The ends which [a barrister] has to serve are lofty indeed, but it is with men and not with paragons that he is required to pursue them. ... it will generally be agreed that there are many kinds of conduct deserving of disapproval, and many kinds of conviction of breaches of the law, which do not spell unfitness for the Bar; and to draw the dividing line is by no means always an easy task."

81 The facts leading to Ziems’ conviction of manslaughter were considerably mitigated by circumstances and did not involve the kind of character defect such that his fellow barristers and judges would feel real difficulty in meeting with him and co-operating with him in the life and work of the bar. He would not have been thought of as a cheat. He would not have been thought of as person who might use tricks to gain an advantage over others.

82 Trust is utterly vital at the bar. It is essential that what a legal practitioner says in the course of his practice must be implicitly reliable. He must be trusted by the court, his colleagues and by his clients. It would create great concern if it were reasonably thought that a legal practitioner may, from time to time, be dishonest and tricky. See, ibid, at p299.

83 A difficulty in this case is that deceitfulness is a character flaw that is thought by most legal practitioners as well as others not to be confined in separate compartments of one’s life. It is commonly thought that people who have indulged in deceit for their own advantage are likely to be deceitful again when its suits them, whatever they are involved in and whether it be in the course of legal practice or otherwise. Trust is one of the cornerstones of legal practice. Honest dealing is fundamental to fitness to practice law. One would expect a clear sign of a change of attitude with respect to the matter of trustworthiness.

84 If the Barrister continues to be a person who would indulge in deceit of the kind in which he indulged at the time of the Telstra 2 float, he would not be a fit and proper person to remain on the roll of legal practitioners.

85 It is reasonable that the test to be applied is not whether the legal practitioner was, at the time of the conduct, not of good fame and character or not a fit and proper person to remain on the roll. If the test were to be applied as at that time, the jurisdiction would be punitive. But the jurisdiction is not punitive. It exists to protect the community which the legal profession exists to serve. Therefore, the test is concerned with the immediate and further future. The past and the present are relevant only to the extent that they bear on the issue of the practitioner’s likely conduct if permitted to practice. That the effect of an order may well be felt by the subject legal practitioner to be punitive is an unavoidable incident, but not the reason for the order.

86 The Barrister has tried to justify his conduct from the beginning of the Council’s investigation. His efforts to justify his conduct under cross-examination amounted to inconsistent rationalizations that varied according to the needs of the question being answered. At no time has he unequivocally and for the right reasons admitted that his conduct was without any ethical justification. Such an admission would have been a good starting point for consideration of whether he had undergone a change of attitude or disposition towards the kind of conduct he indulged in.

87 His conduct was obviously and seriously dishonest and deceptive, and it is inconceivable that he persisted for so long in trying to characterise it as innocent and permissible, even if unfair to persons who could not see the loophole that he could see.

88 The overwhelming impression given by his testimony was that he was attempting to make just sufficient concession to recognize some wrongness in his behaviour and to seem contrite about that, but at the same time he was attempting to hold back from admitting the real vice of what he did. He failed on both scores. There was a quantum leap from the unfairness admitted to the gross dishonesty of his conduct.

89 Throughout these proceedings the Barrister has contended that the rules of the float contemplated the use of "holding names" and "correspondence" addresses, none of which need be his real name or address. (That contention could not be criticised if applications had been associated with clear information as to who he was: his real identity and his true address.) The use of false names and addresses without additional information conceal the true identity of the applicant and create false identities. In this case, many false identities.

90 The Barrister sought throughout to treat the basic issue between himself and the Council as one of technical construction of the rules of the float, imposed on applicants for shares by the issuing authority. That is not and never was the real issue. The true issue is whether the Barrister indulged in deceit in order to maximise his chances of getting a large number of shares, to the possible detriment of others. No argument that, on a technical construction of the words used in offer documents, what he did was not forbidden is of any relevance to the true issue.

91 In order to make a decision concerning the Barrister’s present fitness to practice, we intend to examine a number of identifiable stages commencing with the time of the reprehensible conduct itself. We have to try to assess the relevant matters at a time six years after the reprehensible conduct. We will examine the various stages since the conduct for some indicators that may enable us to make a correct finding.

IN ABOUT JULY 1999 TO SEPTEMBER 1999

92 During this period the Barrister was engaged in putting into effect his scheme. He was then not a fit and proper person to remain on the roll of legal practitioners. We have said all we need say about that conduct. His conduct showed him to be a person who would seek to gain advantage by deception notwithstanding the possibility of detriment to others.

ON 9 JANUARY 2004, THE DATE OF THE LODGING OF THE BARRISTER’S REPLY TO THE INFORMATION.

93 In his Reply, the Barrister said [I paraphrase] that at the time of pre-registration and the later applications for shares, he thought that the use of different applications names accorded with the express instructions given at the pre-registration stage: ‘Note that you need to provide the name and address details you would use to apply for Telstra shares.’ The Barrister said that the names and addresses that he provided for pre-registration were the names and addresses that he ‘would use’.

94 The Reply went on to say that, on the application for shares, the terms and conditions provided, ‘Write the full name in which you wish to hold your shares.’ The Barrister said that he used names in which he wished to hold his shares.

95 We interpolate that the Barrister was here responding to a false issue. He is not charged with using a name other than his own, he is charged with using names other than his own in order to deceived Telstra into believing falsely that his applications came from different persons and not the same person. It may well be that the Barrister could have used any name, including if he wished Helium Sahade, if the use of the name were not part of a scheme calculated to deceive Tesltra in a material matter.

96 The Barrister’s Reply went on to say that he believed at the time of making the pre-registrations, that multiple re-registrations were permitted and specifically provided for by the Internet pre-registration screens and that the Commonwealth deliberately left open the making of multiple pre-registrations.

97 The Barrister was again developing the false issue. It was the deceit in what he did, and not the mere fact of making multiple applications, that is the vice of the Barrister’s conduct. The latter may have run counter to the rules of the issue, but the former was implicitly forbidden. One would not expect to find in a prospectus an express prohibition against deceit. The mere absence of such a prohibition does not constitute an implied permission to be deceitful in any material respect.

98 Then the Reply said that the pre-registration instructions sought only a correspondence address, not a residential address. We need make no comment on this assertion. It is remote from any issue to be considered here.

99 The Barrister also defended his right to make multiple applications: paragraph (e) of the Reply. We do not propose to enter into an examination of that question. It is enough to understand that the Barrister not only made multiple applications but that he did so in a way intended to conceal that he had done so and to gain a benefit to which he may not have been entitled. We do not rely on the making of multiple applications, although contrary to an instruction, to reach our findings. The prohibition of multiple applications is only relevant to our findings in that the method used to conceal the fact of multiple applications was deceitful. If the Barrister had merely made multiple applications openly, he could not be accused of any impropriety.

100 We do not think that is helpful to continue with an analysis of the Reply. But, the Barrister’s attitude at the time of his Reply may be summed up in the words of the Reply:

At the time of making this Reply the Barrister still contended that a literal approach to the interpretation of the relevant documents of the Telstra 2 sale did leave available the "loophole" that the Barrister sought to avail himself of in his application for shares.

But the barrister at the time of the making of this Reply (and since his acquittal by the jury in May 2001):

(i) considers that his actions were unfair in that it denied other public applicants an equal opportunity for shares; and

(ii) he does not now consider that it was proper for him to have engaged in such actions; and

(iii) he has regretted and continues to regret that he engaged in such actions; and

(iv) he appreciates that other person may interpret the relevant terms and conditions differently (applying a more purposeful approach rather than a literal approach); and

(v) he would not engage in actions in the future.’

101 Therefore as at 9 January 2004, about a year and a half ago, the Barrister had still not unconditionally recognized the real reasons for the Council’s charges against him. He still asserted that what he had done was permissible but that he ought not to do it again because it was taking a potentially unfair advantage of other applicants. There was no recognition of the serious deceit involved in his conduct. We do not accept the sincerity of the Barrister’s Reply. It is hardly conceivable that the bright and intelligent person who presented to us in the witness box could be so grossly blind to ordinary ethical principles as to have failed to understand the real reason for the Councils charges.

ON THE DATE OF MR BRERETON’S OPENING ADDRESS TO THE TRIBUNAL.

102 Mr Brereton reinforced the Barrister’s position as revealed by the Reply in his opening address to the Tribunal. He said:

‘First, given the terms and context and content of the offer document as a whole, it was not impermissible for Mr Sahade to make the applications as he did for shares in the Telstra 2 float. ... In short, the submission is one that what he did was in accordance with the letter, if not the spirit, of the law. ...

The second submission is that ... even if on a proper construction of the offer documentation it was not permissible for him to proceed as he did, he honestly believed that it was permissible for him to do so. That is a question of his subjective honesty. ...

The third proposition is that his honest belief was not an unreasonable one, and that is a question of objective as distinct from subjective honesty. It is illuminated in part by what we will submit is the arguability of his position on the construction of the offer documentation, and it is confirmed in part by the fact that, as we will show, various of the post-float documents frequently asked questions, ministerial statements, and the like, seem to have allowed that multiple shareholdings would have been acquired as a result of multiple applications.

But, fourthly, and fundamentally, and perhaps most important of all, even if each of those submission fails, it will be our submission that in the context in which this Tribunal in 2005 comes to consider this matter, the conduct does not now, if ever, satisfy the test contained in section 127(1)(b)- in other words, conduct such as to justify a finding that he is now not of good fame and character or is not now a fit and proper person to remain on the roll.’

103 With a view to the construction of section 127(1)(b) of the Act, Mr. Brereton added:

‘...the conduct in question took place six years ago; that in the interim he's been tried and acquitted of imposing on the Commonwealth in respect of that conduct; that he will adduce affirmative evidence of good fame and character; that he says, and you will have read in his reply and in his affidavit that he says, that though in 1999 he honestly believed it was open to him to proceed as he did, he now considers that it is inappropriate for a barrister to do so having regard to the potential unfairness of such a course to other applicants and, he will tell you, having regard also to the impact which it has had on the reputation of the bar, which he values.’

104 We think it is correct to say that at no time before the Barrister testified at the hearing did he admit that what he had done was wrong. He had conceded it unfairness, but the unfairness admitted on the one hand and the wrongness of his conduct on the other are in start contrast. Simple unfairness to people without the legal skills to perceive loopholes, as such, is hardly a matter that could be a basis for a finding of professional misconduct. Wrongdoing constituted by deception and trickery to the potential disadvantage of others is of a quite different order from mere unfairness.

ON 7 & 8 MARCH 2005: THE DATES OF THE BARRISTER’S TESTIMONY.

105 Mr Robb pointed out in his submissions that there were times in the Barrister’s evidence when he accepted that what he did was wrong, to a point.

HIS HONOUR: Q. So what you did was not really right?

A. I regret having done it, and I'm ashamed

Q. No, no, no, no. Did you think it was wrong, or not?

A. At the time that I did it I thought it was opening

Q. Do you think- now do you think it was wrong?

A. Now? Yes, I think it was wrong.

Q. Why was it wrong?

A. Now or at the time?

Q. Tell us why it was wrong now that you look back on it?

A. I look back at it and say to myself I read the rules in a certain way and I believed it was open under the terms and conditions of the document in the way I read it but now I read it and I say that the moment you do it other people are asking what these applications mean, and it's prone to controversy and explanation and it looks - as other people say, "This looks dishonest."

Q. So it's wrong because other people might say it looks dishonest

A. No.

Q. -- not that it is dishonest?

A. Well, I say that my mind at the time was that it was a dishonest

Q. No, no. I'm really interested in what your present state of mind is because your counsel has rightly submitted that it is your present state of mind that matters. Do you say that apart from the fact that people might look at it and say, "Something funny going on here," there really wasn't anything wrong with it?

A. No, what I'm saying, with respect, is that I wouldn't do it now because I would consider it improper and wrong.

Q. But why? That's what I want to know. Why was it wrong?

A. Now?

Q. No, no. No, look, I'm not asking any dodgy questions.

A. I'm sorry. I'm doing my best.

Q. I'm asking you now to tell us why it was wrong to do what you did?

A. I believe that if the loophole that I believed to be open was open, it ought to have been expressed in a more obvious and clear way rather than me having to show people that it is open when it may not have been open, and I'm just not - there's a

Q. Mister, I'm not trying to trap you, you know. You've come here and said, "What I did was inappropriate." You said that in your affidavit. I take it you mean what you did was wrong?

A. That

Q. No, please, leave that. Is that what you meant? I'm going to let you say what you want to say.

A. Yes.

Q. I take it you mean what you did with the benefit of hindsight was the wrong thing to do?

A. Yes, I agree to that.

Q. And all I'm asking you, in the simplest possible way, is tell us why it was wrong to do what you did, wrong in a real sense, not because it might have upset your uncle, or something, wrong in the real sense of the word.

A. Right. Well

Q. Well, why was it wrong?

A. It's wrong in a number of respects. One is that loophole conduct itself is - whether it's reasonably arguable or not, is not something which is conduct to be proud of. You are taking advantage over other people who are applying in an ordinary way. It is shameful to have used different names, regardless of the context. The word "alias" is a terrible word, and when that is associated with me, I think people do not know me as a person, they don't understand my character.

Q. I'm not drawing any generalities from this about you as a person. I'm only interested in this case. You understand that?

A. My

Q. But, mister, you said "something shameful". Why is you keep going a step back, but I want you to go right back and tell me why it was wrong in an objective sense, forgetting about whether it was shameful. For example, why was it shameful?

A. I believe that even if the loophole that I believed was open at the time was open, a barrister still shouldn't have done it. It's not the proper I don't consider it proper or the right thing to do for a barrister to read the rules and say, "Aha! There's a loophole here which other members of the public may not see and I'm going to exploit," and a loophole that requires an explanation, not just to a tribunal but to a stockbroker or a bank or other legal people associated with it. That in itself is inappropriate. And, secondly, I look at this now and I shudder at what I did, and I can see my alarm bells didn't ring at the time, but I look back now and I say, "I wouldn't do this."

When you can argue that it is right or wrong, I just would not do this now, and I've never done it since, and I've dramatically decreased my share trading, and when I did this I was only four years at the Bar, and I think, like all junior barristers, I felt a little bit like as honest as Superman but as impenetrable as Superman, and I said, "Well, look, they're the rules. I believe it's open, and I'll do it." I don't consider that now. I say, "Of course, people are going to look at it, they're going to question it, and even if you think it's open, that doesn't mean you should do it." And I'm a different person now than I was back then.

Q. And looking back now you don't think it was open, do you?

A. I do not.(T 68.45-71.5)

106 That concession seems to have been half-hearted difficult to extract. Shortly afterwards the following exchange took place:

MR ROBB: Q. Mr Sahade, do you now accept that each of your 353 applications for pre-registrations was misleading and deceptive?

A. Now, as I look at it I see that that is very open.

Q. Well, just open? Are you saying it's arguably misleading and deceptive but not you won't accept that each of them was misleading and deceptive?

A. No, what I'm saying is that I still believe that the loophole that I held at the time is legitimately and reasonably open to be argued, and even if it's right or wrong I still wouldn't do it, but I don't say that the way I read it at the time was just so wrong that no reasonable person would have read it that way. I thought it was capable of being read that way, and that was my honest construction of the words.

Q. Well, you don't put to this Tribunal, do you, that when you filled out those 353 applications you understood that the Commonwealth was inviting you to mislead and deceive it?

A. Of course not.

Q. Do you not accept that all of this material in the web page invited applications to be made in true names, correct names, or names that people were actually known by?

A. You're asking my current state of mind?

Q. Yes.

A. Yes.

Q. Do you accept that there was no reasonable way that these documents could be read as actually inviting or permitting an application in the name of Crumpet Sahade?

A. As I sit here now I say that that is a reasonably arguable proposition for whatever reason.

HIS HONOUR: Q. Won't you go further than that, Mr Sahade? Look, you're asking us to take the view that you've so cleared your mind of things that deceived you in the past that you should be forgiven for what you did. You're asking us to look at you now and say you are now a person fit and proper to practise, continue practising law, but how can we do that if you keep telling us that what you did was all right?

A. What I'm trying to say is this. At the time I did it I did it with a clear conscience, and I didn't believe I was doing anything dishonest, and I say here today

Q. We're talking about now.

A. But I say here today that what I did then was not done at that time with a dishonest trick or device in my mind. I thought at the time I was quite entitled to do it.

Q. I'm asking you to tell us subjectively do you now agree, objectively speaking, whether you knew it or not, that what you did was quite wrong?

A. Yes, I say that now. (T81.26-81.28)

107 On 8 March, in re-examination the Barrister made his most unequivocal concession that what he had done was misleading, deceptive and dishonest.

A. I accept now, and have accepted for quite some time that the applications I put in are misleading and deceptive, and I believed at the time that they were not, and I also believed at the time that they were not entitled to think that they came from different persons, but I accept that they are misleading and deceptive now.

I also accept, and I understand fully, they don't have to spell out what is honest and what is not in the terms and conditions of an offer document.

I accept that rules can allow things to be done and may not allow things to be done, and I fully appreciate that matters of honesty and integrity do not - are simply just not done and don't have to be expressed in an offer document, and if I look at it now, I simply would consider that is not honest, and I would not do it now, but at the time I believed the rules allowed me to do it. (T114.11-114.37)

108 We think that we should note what seems to us to be an inconsistency in the testimony of the Barrister concerning the reason for his conduct in applying for shares. The following passages juxtaposed need little commentary, but they bear on his state of mind at the time of his conduct and do not sit comfortably together:

HIS HONOUR: Q. ... do you now agree that that was the effect of what you did, that a person using his or her real name was not going to have the advantage that you had?

A. That is absolutely correct.

Q. All right.

A. That was an advantage that I was doing it for. (Emphasis added) (T80.7-80.23)

109 Then, on 8 March, the following exchange occurred:

Q. It was put to you, you did your level best to try to avoid the Commonwealth appreciating that the applications were from different persons, and you answered to the effect, "No, to make the applications different." Looking at the matter now, what do you say as to whether or not what you did was calculated to - and "calculated", I use the word objectively - to cause the Commonwealth to think the applications came from different persons?

A. If I step outside of what I was believing at that time and just look at what I did, I don't think I'd have any hesitation in saying that gives the false impression that they come from different persons, and that was not what I was intending at the time, but I can see that now, and I can see that easily. (Emphasis added) (T116)

110 It is needless to go to every part of the transcript of the Barrister’s evidence relevant to his state of mind. It is a fair assessment that, whilst he eventually conceded that what he did was in fact misleading and deceptive, he persisted to the end in saying that it was not his intention to act deceptively or dishonestly when he did the acts.

111 We do not accept this claim of subjective honesty because the scheme was manifestly deceptive and dishonest and its very motivation was to deceive.

112 One must suspect the Barrister of playing to the Tribunal. He knew that if he continued to insist that he could see no wrong in what he did he risked being found unfit to practise law by reason of his inability to distinguish right from wrong in an important respect. On the other hand he may have persisted in saying that, when he did the acts he thought that they were permissible, in order not to appear to have been a dishonest and deceitful person.

113 In this respect, Mr Robb made the following written submissions:

‘113.It was open to the barrister to concede that his conduct was misleading and deceptive before his re-examination:

(a) in answer to the questions put to him in cross-examination (to which reference has already been made);

(b) in answer to the open-ended questions put to him by the Tribunal during the course of his cross-examination (to which reference has already been made);

(c) he could have instructed his counsel to make the concession in opening;

He did none of these things. Rather, there was a significant change in the evidence that he gave in re-examination.

114 If the Barrister knew during his re-examination that it was misleading and deceptive to have made the applications in the way that he did, as he says, he must have known that:

(a) when preparing and signing his Reply dated 9 January 2004;

(b) when swearing his affidavit dated 30 January 2004;

(c) when he gave instructions to counsel about the matters to be put in opening his case on 7 March 2005, and the concessions to be made regarding his conduct;

(d) when he gave his oral evidence in chief on 7 March 2005 (T43) and when he was being cross-examined.

115 Considering all of the evidence given, the Informant submits that there substantial grounds for the Tribunal to conclude that rather than genuine evidence of contrition, the re-examination simply reflected overnight consideration of the effect of his cross-examination, and to reject his evidence that he would have at the time advised a client against making multiple applications in the manner that he adopted (set out at paragraph 111). That evidence was directly contradictory of his earlier evidence about the time at which he knew that his conduct was wrong: see the evidence set out in paragraph 109.’

116 This eleventh hour acknowledgement by the Barrister of the deceitful and misleading nature of his conduct makes it quite impossible to accept the sincerity of his evidence under re-examination. We were not told by the Barrister what had occurred to give him more insight into his conduct than he showed at any time until his re-examination. The re-examination coming after an overnight adjournment suggests that the Barrister may by then have realized that in order to show that he is now a fit and proper person etc, in the terms of section 127(1)(b) of the Act, he had to change his position. We can think of no other explanation for the marked change.

117 Therefore, we formally find:

That Barrister’s conduct, as alleged by the Council in Grounds 1 and 2, has been established.

We find that the conduct occurred otherwise than in connection with the practice of law.

We find that the Barrister was not, at the time of the conduct, a fit and proper person to remain on the roll of legal practitioners.

118 The question remains whether the Barrister is now not a fit and proper person to remain on the roll of legal practitioners.

119 We look for indicia that the Barrister is not now unfit to practice law. Nothing that emerged from the Tribunal hearing leads us to believe that, between the time of the offending conduct and the end of the hearing itself, the Barrister had changed significantly in any material respect. Quite apart from the equivocal recognition given by him in evidence that what he had done was wrong, we have to say that as the tribunal of fact we found his evidence unconvincing in any event. It impressed us as being shaped in order to gain a favourable result from the hearing.

120 If the Barrister’s attempts to justify his conduct, when under investigation and up to the time that he testified in these proceedings, were genuine, he still faces a serious difficulty. If he honestly thought that his conduct in connection with the purchase of the shares was justifiable, he would demonstrate such a purblind critical faculty in matters of basic ethics as to demonstrate unfitness to practice law. In fact, we do not think that the Barrister was ever in doubt about the serious wrongness of what he did and that his protestations of an innocent mind were false.

121 The Barrister has not credibly shown any real contrition for what he did. Indeed, his conduct in respect of the investigation of this matter from its very beginning until the last part of his testimony is that of a person attempting to justify his conduct. As we have tried to make clear, the conduct was manifestly unjustifiable and the Barrister’s attempts to justify it reflect badly on him.

122 We find that the Barrister is guilty of professional misconduct under section 127(1)(b) of the Act in respect of each ground of the Information. In particular we find that he is not of good fame and character.

123 We have made no decision as to the appropriate orders to be made. The matter will be listed to consider that question.