Theoretically, at least, it’s not over yet for the one time gilded darling of the Sydney Bar, Clarence Stevens QC. Last week he went down on the Bar’s appeal against Justice Greg James’ order which stayed the suspension of his practising certificate.
He still has the right to appeal against that suspension and he can still oppose a further application by the Bar council to strike him off the roll.
But when you read the Court of Appeal’s reasons of last week, one’s feeling is that Clarrie’s prospects are dim.
Justice James allowed the stay having found last December that Steven’s case in opposing the cancellation of his ticket was “strongly arguable”.
Chief Justice Spigelman said that did not give sufficient weight to the protection of the public. Apart from which any strength in Steven’s arguments dissipate rapidly on reading the materials before the court.
However, the Chief Justice was at pains to emphasise that unlike the case of John Cummins, who as a barrister “failed to discharge his civic obligations over a long period of time”, Stevens at least did make efforts to remedy his taxation default and in substantial measure did so. He added: “How these matters should balance out is a matter for the final hearing, particularly in the strike-off proceedings.”
Up to 1996 Stevens, who has been a leading silk specialising in taxation, had not lodged any tax returns for 20 years. Until April last year he had paid no income tax for 24 years. He has been at the Bar since 1977, which means for the first 20 years of his life as a barrister he did not get round to filing returns.
In April 1998 the Australian Taxation Office commenced proceedings against Stevens in the Supreme Court. Summary judgment was sought and judgment entered for $930,283.02. There was an error of $10 in the amount and so the default judgment was subsequently set aside.
On July 11, 2001, Stevens was convicted in the Local Court of two offences for failing to lodge income tax returns for 1999 and 2000. He was fined $1,500 and ordered to pay costs of $133 and had to lodge the returns by September 11, 2001.
In relation to its decision to cancel his certificate the Bar council only acted on the conviction of July 11, 2001.
As a consequence of the exposure by this newspaper of the bankruptcy of barristers, sometimes the serial bankruptcy, and the avoidance of large amount of taxation, the Bar’s procedures these days are infinitely more rigorous.
Pertinent questions are asked when a member applies to renew a practising certificate. In 2001 the question asked of all applicants was: “Have you been found guilty of any offence other than an indictable offenceÖ?” The form then gave applicants an option of ticking a “disclosure box” if they there were matters likely to affect their “good fame and character”.
In answer to the first question he replied, “yes”, he then ticked the box and provided a “disclosure”. Stevens explained that he was in dispute with the ATO in relation to the deductibility of expenses associated with a failed Queensland agricultural project. He was continuing to try and resolve the issue. He then added this piece of gobbledegook: “I have sought to defer lodgement of my tax returns for as long as possible because of the way in which the dispute remains unknown.”
The Bar council followed this up with a chilling request for specifics of Stevens’ tax affairs. There was a long and incredible explanation that he believed his returns for the 1999 and 2000 years had been lodged.
He only discovered they had not been lodged because his solicitors told him on advice from the Australian Government Solicitor that the returns were outstanding and had to be filed by September 11, 2001.
So he did not notify the Bar, as the law requires, of the offence, because, “I had believed there was no penalty and believed that the terms of the order had already been complied with.”
At the time he made his “disclosure” to the Bar he know there had been proceedings against him and that he had ordered get his returns in by September 11, yet he didn’t believe there was a penalty attached to that. This is an improbable belief, particularly if held by a silk with a huge tax practice.
That was followed up by another request for information from the Bar. “Explain with precision precisely what connection there is between your liability as a guarantor for the unsuccessful agricultural projects in Queensland on the one hand and the disputes you are involved in with the ATO in relation to the deductibility of expenditure associated with that agricultural project.”
Pressed, Stevens had to confess there was no direct connection. So his disclosure in his application was quite misleading.
Then it descended into the ludicrous, as the silk thrashed around for excuses primarily that he was acting on “advice” and it was the fault of his accountants.
By the time the strike-off application comes around this latest casualty of the new world order could decide the struggle is no longer worth it.