Deobhakta v Waikato Bay of Plenty Standards Committee No 2 of The New Zealand Law Society [2015] NZHC 965

Deobhakta v Waikato Bay of Plenty Standards Committee No 2 of The New Zealand Law Society [2015] NZHC 965 [8 May 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-404-2614[2015] NZHC 965UNDER the Lawyers and Conveyancers Act 2006IN THE MATTER of appeals against decisions of theLawyers and Conveyancers DisciplinaryTribunal pursuant to s 253 of the Lawyersand Conveyancers Act 2006BETWEEN VINAY DEOBHAKTAAppellantAND WAIKATO BAY OF PLENTYSTANDARDS COMMITTEE NO 2 OFTHE NEW ZEALAND LAW SOCIETYRespondentHearing: 30 April 2015Counsel: DG Hayes for appellantLJ Clancy for respondentJudgment: 8 May 2015JUDGMENT OF FAIRE JThis judgment was delivered by me on 8 May 2015 at 11 am,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Eastbay Law Ltd, WhakataneMeredith Connell, AucklandContentsIntroduction ............................................................................................................ [1]Approach to appeal ................................................................................................ [4]Preliminary matter .................................................................................................. [8]The charges ............................................................................................................ [9]Background .......................................................................................................... [14]Result of investigation by Waikato Bay of Plenty Standards Committee ............ [35]Misconduct – the issue ......................................................................................... [37]The grounds of appeal .......................................................................................... [39]Analysis of each ground of appeal in relation to the misconduct decision ................The $4,000 cash payment [40]The $21,000 cheque issue [49]Contingency agreement [54]The penalty appeal ............................................................................................... [60]Conclusions .......................................................................................................... [73]Costs ..................................................................................................................... [75]Introduction[1] The appellant, Mr Deobhakta, a former barrister, appeals the decisions of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal delivered on 18 December 2013, the misconduct decision, and 27 August 2014, the penalty decision.[2] Following a hearing on 19 November 2013, the Tribunal, in its 18 December 2013 decision, found that Mr Deobhakta was guilty of misconduct on a charge brought by the Waikato Bay of Plenty Standards Committee No 2 of the NewZealand Law Society under s 241(a) of the Lawyers and Conveyancers Act 2006("the Act").1[3] At a hearing on 8 August 2014, the Tribunal considered the issue of penalty. In a reserved decision issued on 27 August 2014, it ordered:2(a) That Mr Deobhakta's name be struck off the roll;(b) That he pay $4,000 compensation to the complainant, Mr Zaheed; and(c) That he pay costs to the New Zealand Law Society of $32,249.62,made up of the Society's costs of $25,903.62 and the Tribunal's costsof $6,346.Approach to appeal[4] The appellant has a right of appeal to the High Court against an order or decision of the Disciplinary Tribunal by the combined operation of s 253(1) and (2) of the Act. Section 253(3)(a) provides that such appeals are to be by way of rehearing. Pursuant to s 253(4) the High Court may confirm, reverse or modify the order or decision appealed against.[5] In two recent decisions, Sisson v Standards Committee (2) of the Canterbury- Westland Branch of the New Zealand Law Society3 and Hart v Auckland Standards Committee 1 of New Zealand Law Society,4 the two full courts concluded that both the misconduct hearing and the penalty hearing required an assessment of fact and degree and entailed a value judgment such that the appellate court may reach its own view on both aspects. The Court recognised that in credibility determinations and1 Re Deobhakta [2013] NZLCDT 55.2 Waikato Bay of Plenty Standards Committee No 2 of the New Zealand Law Society v Deobhakta[2014] NZLCDT 50.3 Sisson v Standards Committee (2) of the Canterbury-Westland Branch of the New Zealand Law Society [2013] NZHC 349, [2013] NZAR 416 at [15].4 Hart v Auckland Standards Committee 1 of New Zealand Law Society [2013] NZHC 83, [2013] 3 NZLR 103 at [12].matters involving technical expertise the High Court will adopt a cautious approach before differing from the Tribunal in relation to its findings.5[6] This approach differed from earlier decisions which had favoured a divided approach whereby the misconduct findings were to be considered afresh, but the penalty decisions were to be determined by reference to the principles that govern the exercise of a discretion.6[7] I will approach this appeal following the approach adopted in Sisson v Standards Committee (2) of the Canterbury-Westland Branch of the New Zealand Law Society and Hart v Auckland Standards Committee 1 of New Zealand Law Society.Preliminary matter[8] At the commencement of the hearing, Mr Hayes, on behalf of Mr Deobhakta, raised an issue concerning the content of the documents which had been produced to support the cost orders made by the Tribunal. He drew attention to the fact that some inquiries had been undertaken, and statements taken, which had not been revealed to Mr Deobhakta before the hearings. A short adjournment was arranged. Mr Clancy arranged for the files to be brought to court. They were made available to Mr Hayes, who took instructions from Mr Deobhakta. Subject to Mr Clancy's agreement, hewas happy that the matter proceed. Mr Clancy's agreement required consent to theproduction of a tax invoice issued by Mr Deobhakta, dated 23 October 2009, and a statement taken by Mr Hikaka from the complainant, Mr Zaheed. Mr Clancy agreed to the production of those documents. The hearing then proceeded.The charges[9] The charges are set out in a formal document which provides as follows:Waikato Bay of Plenty Standards Committee No 2 of the New Zealand Law Society (Standards Committee) charges Vinay Deobhakta of Tauranga, barrister and solicitor, with:5 At [12].6 See for example, Bhanabhai v Auckland District Law Society [2009] NZAR 282 (HC) andAuckland Standards Committee (1) v Fendall [2012] NZHC 1825, (2012) 21 PRNZ 279.(a) conduct that would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable (ss 7(1)(a)(i) and 241(a)); or(b) in the alternative, negligence or incompetence in his professional capacity, and that the negligence or incompetence has been of such a degree or so frequent as to reflect on his fitness to practise or as to bring his profession into disrepute (s 241(c)).[10] The Tribunal found the first charge proven. Understandably, it did not determine the alternative charge.[11] The charging document contains a summary of the facts and matters relied upon, together with particulars of the charge. I will refer to that shortly.[12] The Tribunal, in its misconduct decision, described the charges and the particulars in the following way:7[23] The charges and their particulars specified matters arising in respect of: a retainer of $15,000 paid to Mr Deobhakta by Mr Zaheed and the operation of an associated contingency agreement; the circumstances involved in an allegation that a cheque for $21,000 plus $4,000 cash had been given to Mr Deobhakta in place of a cheque for $25,000; the attempts by Mr Deobhakta to obtain the consent of Mr Zaheed for Mr Deobhakta to use the funds represented by the cheque for $21,000 for a purpose not approved by Mr Zaheed; and the sending of abusive and offensive text messages by Mr Deobhakta to Mr Zaheed.[13] Mr Hayes did not raise any objection to this summary of the allegations faced by Mr Deobhakta, nor is that particular summary the subject of matters raised by the appeal. In my view, it is a proper summary of the matters that were to be considered by the Tribunal in determining the case against Mr Deobhakta.Background[14] As mentioned, the charging documents set out the background facts. Mr Deobhakta filed a detailed response to each of the numbered paragraphs. From that I draw a summary of the background to this matter.7 Re Deobhakta above, n 1.[15] Mr Deobhakta held a practising certificate as a barrister sole issued under the Act between 18 August 2009 and 30 June 2010. His previous practising certificate has expired on 31 January 2008.[16] In May 2009, Mr Zaheed, who is the complainant, received a letter from Mr Peter Hastings, a fraud investigator at the Inland Revenue Department. It advised him that his company owed approximately $400,000 in PAYE and GST.[17] Later in May 2009, Mr Zaheed contacted Mr Deobhakta. Mr Deobhakta had been recommended to him as a person who could give advice in relation to the matters raised in the letter from the Inland Revenue Department. A meeting was arranged. Mr Zaheed was told to bring $2,000 cash if he wanted Mr Deobhakta to act for him.[18] Mr Zaheed met Mr Deobhakta on the following day and paid him $2,000.[19] A meeting was held between Mr Deobhakta, Mr Zaheed and a representative of the Inland Revenue Department on the following Tuesday. At that meeting, settlement of the outstanding money owed to the Inland Revenue Department was discussed.[20] Shortly after that meeting, Mr Zaheed travelled to the United Kingdom. Exactly when he returned is not recorded.[21] Soon after he returned to New Zealand, Mr Deobhakta advised him that the matter was complex and that he would need to charge Mr Zaheed $15,000 to resolve Mr Zaheed's tax liability. Mr Zaheed advised Mr Deobhakta that he was prepared to pay $75,000 to the Inland Revenue Department in three instalments of $25,000. Mr Deobhakta advised him that was a good offer. As recorded earlier in this judgment, an invoice dated 23 October 2009 under Mr Deobhakta's name wasprepared. It describes Mr Deobhakta as a barrister. It records a GST number. It contains a notation as follows:My fees for receiving instructions,considering the various issues, providingongoing advice and attending ongoingmeetings with Inland Revenue, including alldisbursements, telephone attendances andincidentals.Fee inclusive of GSTPaidBalance15,000.009,000.00________$6,000.00========[22] On 18 November 2009, Mr Zaheed obtained a bank cheque made out to the Inland Revenue Department for $25,000. He and Mr Deobhakta then had a meeting with Inland Revenue Department staff. At the meeting, Mr Deobhakta told Mr Zaheed to get the bank to cancel the bank cheque and to give him a replacement cheque for $21,000 and also to have available $4,000 cash. Mr Zaheed did this. He took photocopies of both bank cheques, which were available to the Tribunal. He returned and gave the cheque and cash to Mr Deobhakta.[23] There is a contest as to what additional money was paid by Mr Zaheed. That was subject of a finding in favour of the evidence adduced by Mr Zaheed by the Tribunal to the effect that in addition to the $15,000 fee which Mr Deobhakta required to be paid, Mr Zaheed had also paid him $4,000, with the result that a total payment to Mr Deobhakta of $19,000 had been made.[24] The money was not immediately provided to the Inland Revenue Department. Mr Deobhakta then requested Mr Zaheed to change the bank cheque which had been made out to the Inland Revenue Department for $21,000 to cash and to provide it to him, rather than to the Inland Revenue Department. He said that he wished to use the money for a personal matter he was dealing with. In making that request, Mr Deobhakta prepared a document which was entitled "Punjab Tour". Thedocument is dated 23 November 2009. It is a request to the Bangladesh communityto "fork out some cash" to be used for a specific purpose. The purpose wasunrelated to Mr Zaheed and was designed to establish that a third party had sought bribes or favours for the purpose of approving immigration applications.[25] It is unnecessary to go into the precise detail of this. Suffice to say, it was a personal matter which Mr Deobhakta wished to pursue and which had no direct bearing on Mr Zaheed.[26] Understandably, Mr Zaheed was concerned about this request. It had the effect of reducing the resource that he had available to meet the claims of the Inland Revenue Department. He refused the request.[27] Within approximately two weeks of the meeting with the Inland Revenue Department officers when the cheques were sought, Mr Zaheed was advised that there could be no settlement with Inland Revenue Department. That advice was followed very shortly by the laying of charges against Mr Zaheed.[28] At about the same time, Mr Deobhakta drew up a document called a contingency agreement. It is dated 5 December 2009. It was drawn up because Mr Zaheed had wanted confirmation that his $15,000 paid for fees would be returned if Mr Deobhakta was unsuccessful in settling the dispute with Inland Revenue Department.[29] The contingency agreement is written on the letterhead of Mr Deobhakta, in which he is described as a barrister. It bears the date 5 December 2009. It records Mr Zaheed's name and has the title "Contingency Agreement". It then states:1 Mr Deobhakta's retainer of $15,000 NZ was paid successfully;2 The above aims must now be sought:(a) Abdul [Mr Zaheed] must avoid any criminal charges and prosecution by IRD/Crown Solicitor;(b) Must settle the IRD claim for an amount satisfactory to both Abdul and IRD;3. Otherwise, Vinay Deobhakta agrees to refund the retainer of $15,000 NZD to Abdul.[30] On 9 December 2009, Mr Deobhakta was adjudicated bankrupt on the application of the ASB Bank. That indebtedness arose from his commercial activities and was not directly related to his practice as a barrister. What is apparentfrom that adjudication is that there must have been proceedings upon which judgment had been entered, a bankruptcy notice issued, followed then by the adjudication. Mr Deobhakta must have been aware of his precarious financial position and the fact that unless the funds were held in a trust account, Mr Zaheed would have no prospect of recovering them.[31] Mr Zaheed was required to appear in the Tauranga District Court in respect of charges which had been laid by the Inland Revenue Department on 28 January 2010. He was eventually convicted in the Tauranga District Court on 14 charges of tax avoidance on 24 November 2010.[32] As a result of his receiving a summons to attend the Tauranga District Court, Mr Zaheed instructed another Tauranga practitioner to act for him. Mr Deobhakta did not refund the $15,000 retainer paid to him. Mr Zaheed's relationship withMr Deobhakta broke down and there followed a number of offensive texts, described in the charging document, which I need not repeat now. Mr Deobhakta accepts that they were sent and that it was inappropriate for him to communicate with a client in the abusive manner which he did.[33] Mr Zaheed sent a letter of complaint to the Law Society, which was dated 8 June 2010 but apparently not received until 6 July 2010. The Law Society sent the letter of complaint to Mr Deobhakta. He did not respond. A further letter was sent to Mr Deobhakta on 1 December 2010. That produced no response. The inquiry was continued by the Law Society and involved a request for further information from Mr Zaheed in June 2011. On 12 August 2011, the Waikato Bay of Plenty Branch of the New Zealand Law Society Standards Committee No 2, sent a notice of complaint to Mr Deobhakta and advised him that a hearing was to be conducted on the papers. It called for submissions to be provided not later than 26 August 2011. I will return to the result of that determination shortly.[34] Mr Deobhakta was discharged from bankruptcy on 25 July 2013.Result of investigation by Waikato Bay of Plenty Standards Committee[35] The Committee issued its notice indicating the result of its determination on 15 February 2012. It recorded that there were two aspects of the complaint made by Mr Zaheed, namely:(a) That Mr Deobhakta has not refunded Mr Zaheed a retainer of $15,000 that Mr Zaheed says Mr Deobhakta owes him; and(b) That Mr Deobhakta acted unethically, possibly dishonestly, in relation to a cheque for $21,000 that, at Mr Deobhakta's request, Mr Zaheed drew in favour of the Inland Revenue Department ("the IRD").[36] The document then records information Mr Zaheed provided to it and the response from Mr Deobhakta and concludes that Mr Zaheed's complaint should beconsidered by the Disciplinary Tribunal pursuant to s 152(2)(a) of the Act. It recorded that counsel was to be instructed to draft appropriate charges and to submit them to the Tribunal.Misconduct – the issue[37] This appeal requires a consideration of misconduct. Misconduct, for the purposes of this appeal, is defined in s 7(1)(a) of the Act:7 Misconduct defined in relation to lawyer and incorporated law firm(1) (a) (i) that would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable; or[38] In S v New Zealand Law Society (Auckland Standards Committee No 2)Winkelmann J, discussing the definition of misconduct, said:8[22] In Complaints Committee No. 1 of the Auckland District Law Society v C a Full Court of this Court commented that expressions such as "disgraceful" and "dishonourable" describe the seriousness of the misconduct but reveal little of the type of conduct intended to be caught by the expression professional misconduct. The Court held that the essential characteristics of conduct that will amount to professional misconduct are well described in Re A (Barrister and Solicitor of Auckland) and in particular in the passages set out there from Pillai v Messiter. Kirby P said this of professional misconduct in the medical context:Departures from elementary and generally accepted standards, of which a medical practitioner could scarcely be heard to say that he or she was ignorant could amount to such professional misconduct ... But the statutory test [misconduct in a professional respect] is not met by mere professional incompetence or by deficiencies in the practice of the profession. Something more is required. It includes a deliberate departure from accepted standards or such serious negligence as, although not deliberate, to portray indifference and an abuse of the privileges which accompany registration as a medical practitioner ...The grounds of appeal[39] Three grounds of appeal in relation to the misconduct decision are expressed as follows:(a) The finding that $4000 was not accounted for given the appellant had accepted in evidence it was received as payment towards a $15,000 invoice dated 23 October 2009 and that evidence of prior payments of $9000 and $2000 was consistent with the appellants evidence.(b) The appellants request to use the $21,000 was based on his understanding the money belong to the Bangladeshi Community Group (not the client) who had a common interest in immigration matters and was reasonable in the circumstances. No reasonable basis was advanced as to why the suggested use of the $21,000 wasa "significant failure" of any particular duty to a client.(c) The "contingency agreement" was prepared after full payment of the$15,000 had been made and the agreed work performed. The"contingency agreement" was not legally enforceable lackingconsideration but improved the client's position as the client wouldbe able to make a claim in the bankruptcy that otherwise would not have been available. Further the lack of clarity in the mind of the Disciplinary Tribunal in determining whether the drafting of the8 S v New Zealand Law Society (Auckland Standards Committee No 2) HC Auckland CIV-2011- 404-3044, 1 June 2012 (citations omitted).contingency agreement was " dishonest, or very close to dishonesty" was not decisive enough to support the striking offdecision.Analysis of each ground of appeal in relation to the misconduct decisionThe $4,000 cash payment[40] It will be apparent from the summary of facts that I recorded that no precise dates when payments were made was available. The difficulty with this issue arises from the fact that Mr Deobhakta had no practising certificate when he first met Mr Zaheed. When he took instructions from Mr Zaheed, he had no instructingsolicitor. None of the payments made to him were processed through a solicitor'strust account. There is no evidence of any receipt having been issued. No bank records indicating what payments were made, and when, were produced.[41] Mr Zaheed's position before the Tribunal was that, in addition to $15,000 that he paid for the fees, he also gave Mr Deobhakta $4,000 in cash on 18 November 2009. He said that, at that time, Mr Deobhakta described it as a commission. He said he did not know who the commission was to be paid to.[42] All of that happened at the time Mr Zaheed was asked to exchange a $25,000 bank cheque payable to the Inland Revenue Department for a cheque for $21,000 payable to the Inland Revenue Department. The fact that two cheques were issued at that time is indisputable. Further, if the bank cheque for $25,000 was indeed cashed and an exchange cheque issued there must be credit of some sort given to Mr Zaheed at the time. He said it was, in fact, $4,000 in cash.[43] It is apparent that when Mr Deobhakta was questioned about the $4,000 he did not deny receipt of it, but asserted that it could only have been paid in satisfaction of what was owing for his fees.[44] The Tribunal had the benefit of listening to the evidence given by Mr Zaheed and Mr Deobhakta, and their responses in cross-examination. It said that it preferred the evidence of Mr Zaheed. It noted that the existence of the two cheques supported Mr Zaheed's position. It further noted that Mr Deobhakta provided no evidence tosupport precisely what he received and how much. He said that he had lost the file as a result of actions taken against his property, which apparently was the subject of a mortgagee sale.[45] Mr Hayes emphasised that there is some basis for questioning Mr Zaheed'saccount of the payments. The first letter of complaint did not expressly seek a recovery of $19,000. It was written because of a failure to account for the $15,000. Subsequent correspondence and Mr Zaheed's evidence, however, makes it clear thathis claim was that he had paid a total of $19,000.[46] Mr Hayes referred to the 23 October 2009 invoice, which gave credit for $9,000. That, in my view, does not provide any significant assistance, nor does itsuggest that the Tribunal's assessment of the true position was wrong. When one looks at the matter in the round, it is apparent that when the payment that was made on 18 November 2009 of cash, at a time when the bank cheque for $21,000 was handed to Mr Deobhakta, the sole issue under consideration was settlement with the Inland Revenue Department. There was no suggestion in the evidence that Mr Deobhakta had demanded an additional $4,000 to complete the fee payment at that time. Further, the evidence is quite clear that Mr Zaheed had left the $21,000 cheque with Mr Deobhakta, for the sole purpose of seeing if a settlement proposal with the Inland Revenue Department was acceptable to the Department.[47] In short, the funds were being held to see if the Department would complete a settlement with the clear implication being that they would then be applied as part of any settlement being reached.[48] I am satisfied that the Tribunal was justified in accepting Mr Zaheed'sevidence in relation to this matter.The $21,000 cheque issue[49] The facts here are not in dispute. Mr Deobhakta proposed to pay the money to a person that he suspected of fraud in relation to immigration matters. Mr Deobhakta had complained to the police and the New Zealand Immigration Service about this person but had not received any positive response. Mr Deobhaktaaccepted that he attempted to persuade Mr Zaheed to agree to using the funds that had been arranged for the purpose of the Inland Revenue Department default.[50] A witness, Mr Kahn, who was present during the discussion with Mr Deobhakta and Mr Zaheed described Mr Deobhakta's approach as pushy.Mr Deobhakta used a document which was described as the "Punjab Tour" documentas being the basis for persuading Mr Zaheed to agree to the use of the money. That document records that the local Bangladesh Community Committee was asked to"fork out some cash towards the fees" the fraudulent person had demanded. It also records that Mr Deobhakta would indemnify the committee for the $21,000 and pay it back at the week's end.[51] Mr Deobhakta sought to give legitimacy to the document by saying that it had been witnessed by a police officer. There was some cross-examination as to whether the $21,000 was, in fact, Mr Zaheed's money. It is difficult to follow therelevance of that approach. Mr Zaheed had, after all, obtained a bank cheque from a bank account in his name. Whether he made arrangements for third parties to borrow the money is irrelevant. As far as the lawyer/client relationship was concerned, it could only be considered as Mr Zaheed's money.[52] I agree with the Tribunal that a suggestion that the $21,000 be diverted to a purpose unrelated to the Inland Revenue Department dispute was a significant failure on Mr Deobhakta's part in respect of the duty which he owed to his client,Mr Zaheed. I must also take into account that this document was signed so close to Mr Deobhakta's adjudication in bankruptcy, that any promise to repay was, for allintents and purposes, worthless.[53] This aspect is, on its own, evidence of serious misconduct. It is not surprising that the Tribunal came to that conclusion in its decision.Contingency agreement[54] Mr Deobhakta's position in relation to the contingency agreement changed.He acknowledged in cross-examination that he had no intention of paying the $15,000 back should Mr Zaheed ultimately face prosecution or fail to settle the feewith the Inland Revenue Department. The argument put forward on his behalf that, in fact, he had carried out the terms of the contingency agreement by attempting to achieve its aims is inconsistent with the actions that Mr Deobhakta took at the time. As late 24 November 2009 he had texted Mr Zaheed:Abdul. Ird not going to settle with u. I am refunding yr 15k. v[55] Mr Deobhakta's use of this document, coupled with his explanations to hisclient are clearly misleading and are simply further evidence of his misconduct.[56] I can find no criticism of the Tribunal's conclusion. Mr Deobhakta's conductwent beyond mere professional incompetence or deficiencies in practice. His actions were clearly disgraceful and dishonourable and amounted to misconduct.[57] There is no excuse, in my view, for the abusive text messages that Mr Deobhakta sent when he found out that Mr Zaheed had sought advice from another lawyer. To his credit, through his counsel, he acknowledged that the sending of those texts amounted to misconduct. The fact that Mr Zaheed sought alternative legal advice, in the circumstances was not at all surprising. He had been faced with the rejection of any settlement basis with the Inland Revenue Department by a person who had then attempted to divert his funds to a purpose unrelated to anything concerning Mr Zaheed, for the practitioner's own benefit.[58] These actions collectively are misconduct and can quite properly be described as disgraceful and dishonourable.[59] Accordingly, I dismiss the appeal against the misconduct decision.The penalty appeal[60] Mr Deobhakta advanced three grounds in his notice of appeal as follows:(a) The decision to strike off was excessive in the circumstances and failed to give weight to the appellants mental health issues, the stress associated with his impending bankruptcy and the rehabilitativeefforts he has since made. The finding that "eventual reinstatement"is possible confirms an expectation that the appellant is capable of being rehabilitated to the profession with assistance.(b) The orders for payment of money to the original complainant by way of effective refund appear to breach insolvency rules as it gave the complainant a preferential payment.(c) The orders for costs were unreasonable as to (i) quantum being 100% of costs; (ii) did not consider the appellants impecuniosity; (iii) arose out of matters predating bankruptcy being a contingent liability as at date of bankruptcy.[61] Counsel were in agreement as to the principles and approach that should be adopted in considering penalty. Both referred to helpful decisions in this area.[62] In Daniels v Complaints Committee 2 of the Wellington District Law Societythe Full Court said of the Tribunal's penalty function:9[22] It is well known that the Disciplinary Tribunal's penalty functiondoes not have as its primary purpose punishment, although orders inevitably will have some such effect. The predominant purposes areto advance the public interest (which include "protection of thepublic"), to maintain professional standards, to impose sanctions ona practitioner for breach of his/her duties, and to provide scope for rehabilitation in appropriate cases. Tribunals are required to carefully consider alternatives to striking off a practitioner. If the purposes of imposing disciplinary sanctions can be achieved short of striking off then it is the lesser alternative that should be adopted as theproportionate response. That is "the least restrictive outcome"principle applicable in criminal sentencing. In the end, however, the test is whether a practitioner is a fit and proper person to continue in practice. If not, striking off should follow. If striking off is not required but the misconduct is serious, then it may be that suspension from practising for a fixed period will be required.[63] The Full Court in Dorbu v New Zealand Law Society said in relation to an order striking off a practitioner:10The question posed by the legislation is whether, by reason of his or her conduct, the person accused is not a fit and proper person to be a practitioner. Professional misconduct having been established, the overall question is whether the practitioner's conduct, viewed overall, warranted striking off. The Tribunal must consider both the risk of reoffending and the need to maintain the reputation and standards of the legal profession. It must also consider whether a lesser penalty will suffice. The Court recognises that the Tribunal is normally best placed to assess the seriousness of the practitioner's offending. Wilful and calculated dishonesty normally justifies striking off. So too does a practitioner's decision to knowingly swear a false9 Daniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850.10 Dorbu v New Zealand Law Society [2012] NZHC 564, [2012] NZAR 481 at [35]. (Citations omitted)affidavit. Finally, personal mitigating factors may play a less significant role than they do in sentencing.[64] The Tribunal dealt with the strike off issue and, in doing so, adopted eight specific matters that were advanced by the Standards Committee as follows:a. His failure to account for $4,000 cash received from his client was a serious transgression aggravated by the fact that at the time of receiving instructions he did not hold a practising certificate.b. He did not have an instructing solicitor at the time of receiving instructions and did not pay the money into a trust account.c. His request to use, for an unrelated purpose, $21,000 that the client had paid to him to be available to reduce a tax liability is a relevant consideration in determining whether the practitioner is a fit and proper person to practise as a lawyer. The Tribunal had found this request to be a significant failure in his duty to his client.d. That the Tribunal had found that the practitioner had provided the"Contingency" agreement knowing it to be worthless, given that hewas about to be made bankrupt and given that he, the practitioner, regarded the document as requiring that certain "aims" be soughtrather than any particular outcomes achieved.e. That the practitioner's actions in respect of the agreement were dishonest, or very close to dishonesty, such that they should be treated extremely seriously by the Tribunal and therefore justify strike-off having regard to the decisions in Hart and Dorbu.f. That he admitted sending extremely abusive and obscene text messages to his client which was conduct that must bring the profession into disrepute.g. That taken as a whole, the practitioner's conduct was so serious as to undermine the reputation and standards of the legal profession. It established that he is not a fit and proper person to practise as a lawyer.h. That the public interest, including the protection of the public, and the need to maintain professional standards, require that he be prohibited from practice.[65] I was referred to information provided to the Tribunal, including material which suggested that a period of suspension to be followed by a period of supervision would be appropriate in the circumstances. A letter from a practitioner, who had indicated that he would invite Mr Deobhakta to join to his chambers, was tendered.[66] I agree with, and adopt, the Tribunal's reasons.[67] Accordingly, the first ground of appeal fails.[68] The summary of points presented to the Tribunal when it was considering penalty and which I have listed above was justified because the misconduct, when analysed, called for the response which the Tribunal delivered.[69] In respect of the second ground, the order requiring Mr Deobhakta to pay Mr Zaheed $4,000 compensation, it was not suggested that the Tribunal lacked jurisdiction to make such order. Indeed, such jurisdiction is provided for pursuant to ss 156(1)(d) and 242(1)(a) of the Act. The Tribunal was, in fact, justified in making the order it did.[70] Nor can it be said that such order infringed the provisions of the Insolvency Act 2006. Any suggestion that it did was authoritatively determined by the Full Court in Kaye v Auckland District Law Society.11 Accordingly, the second ground for challenging the penalty imposed is not justified.[71] In relation to the third ground, the appellant's impecuniosity, whilst it is always important that the circumstances of the practitioner are taken into account before any financial order is imposed, the orders that were imposed in this particularcase simply reflect costs that arise from the investigation of the practitioner'smisconduct. It was not suggested that the costs, themselves, were unreasonable as to quantum, but simply that a lesser sum might have been considered. I am advised by counsel that Mr Deobhakta, who appeared for himself at the penalty hearing, provided limited information and no document evidence as to his impecuniosity.[72] I see no basis for setting aside the financial penalty imposed by the Tribunal. Whether they are ultimately enforceable in bankruptcy proceedings is an entirely11 Kaye v Auckland District Law Society [1998] 1 NZLR 151 (HC). This case was decided under the Insolvency Act 1967 and has been applied in relation to the 2006 Act; see for example Dorbu v New Zealand Law Society [2012] NZHC 1239 at [4].different matter where different considerations apply. They are not matters, however, with which I need directly concern myself in determining this appeal.Conclusions[73] The conclusion I reach is that the appellant's appeal must be dismissed.[74] I order accordingly.Costs[75] Counsel were not able, in the time available, to address the question of costs. I reserve costs and allow the parties to consider the same. If the parties are unable to agree and an order is sought, memoranda in support, opposition and reply shall be filed and served at seven day intervals.____________________JA Faire J