The recent Banksia Securities test outlines the fit and proper person test

Article by Nadia Maynard

What does it mean to be a “fit and proper person”?

Introduction

When applying for a licence or registration, or for a renewal of a licence or registration, some professions have an inherent requirement that the applicant be a “fit and proper person”. If an applicant fails to pass the “fit and proper” person test, it generally means, that they are unable to practise in their chosen profession.

The requirement to be fit and proper

An applicant will only be accepted to practise within their profession when they have proven that they are a “fit and proper” person. But what does it really mean to be a “fit and proper person”?

The phrase “fit and proper person”, standing alone, provides no precise meaning. In determining whether a person is fit and proper, it is also essential to take into consideration its context and the activities in which the applicant is or will engage.

The case of Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 considered a “fit and proper person” be required to demonstrate that they possess the requisite knowledge of the duties and responsibilities involved in being the holder of a particular licence. They further considered that the licence holder should also possess moral integrity and rectitude of character to allow the applicant to be safely accredited to the public.  

Similarly, the case of Australian Broadcasting Tribunal v Bond (1990) 64 ALJR 462 (“the Bond Case”) also provides a good understanding of what the “fit and proper person” test entails. The Bond Case emphasizes the importance of taking into consideration the notion of protection, trust, character and reputation when assessing whether a person is “fit and proper”. The High Court held that decision makers must take into account:

“..whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.”

Health Practitioner Regulation National Law and the requirement to be a Fit and Proper Person

To become a health practitioner, you are firstly required to obtain the relevant qualifications, followed by undertaking a supervised period of practise. A further requirement pursuant to the Health Practitioner Regulation National Law (“the National Law”) is that an applicant be a “fit and proper person”.

The National Law Act does not precisely define the term “fit and proper” person, therefore to gain an understanding of the factors that should be considered when making such assessment, one must refer to the common law principles. The case of Psychology Board of Australia v Griersmith [2019] VCAT 52 provides the following:

“The test does not carry defined criteria but allows for a wide range of matters to be considered. It includes not only whether a person has the necessary honesty, knowledge and ability but also whether the person possesses sufficient moral integrity and rectitude of character to permit them to be accredited to the public as a person to be entrusted with the sort of work the relevant registration or licence entails. The decision maker needs to make a value judgment and, in so doing, must make an assessment of the seriousness or otherwise of the particular conduct for evaluation. The same approach is to be applied to weighing matters in favour of the person. The test must be applied in the context of what the person will be authorised to do if the relevant permission is given.”

Furthermore, it is also important to have regard to section 55 of the National Law which provides criteria for when a health practitioner may not be suitable to hold general registration. Section 55(1)(b) has regard to an applicant’s criminal history and section 55(h)(i) considers whether the individual is a fit and proper person for general registration.

A criminal history may result in a finding that a health practitioner is not a “fit and proper person” to hold registration. When determining whether an applicant’s criminal history impacts on the requirement to be a “fit and proper person”, the Board or Tribunal will consider the intention behind the behaviour, whether the behaviour is reoccurring or habitual, severity of the alleged offence and behaviour since the offence occurred.

The question of whether a health practitioner is a “fit and proper person” to practise must also be considered in the context of the definition of professional misconduct. Section 5 of the National Law states that “professional misconduct, of a registered health practitioner, includes—

(a) unprofessional conduct by the practitioner that amounts to conduct that is substantially below the standard reasonably expected of a registered health practitioner of an equivalent level of training or experience; and

(b) more than one instance of unprofessional conduct that, when considered together, amounts to conduct that is substantially below the standard reasonably expected of a registered health practitioner of an equivalent level of training or experience; and

(c) conduct of the practitioner, whether occurring in connection with the practice of the health practitioner’s profession or not, that is inconsistent with the practitioner being a fit and proper person to hold registration in the profession.

In the context of professional misconduct, the case of Medical Board of Australia v Christopher Kwan Chen Lee [2019] TASHPT 3, explains that it is crucial to understand that the primary objective is protecting the public and maintaining standards of and public confidence in the medical profession. This is due to health professionals being highly regarded as honest and trustworthy individuals who possess moral integrity and rectitude of character.  

Conduct Inconsistent with Being a Fit and Proper Person

The recent case involving barrister Norman O’Bryan SC (“Mr O’Bryan”) highlights examples of conduct that are inconsistent with being a “fit and proper person”. Mr O’Bryan, previously one of Victoria’s top legal figures, was embroiled in a fees scandal and subsequently conceded that he should be struck off the roll.

Mr O’Bryan, was the leading Counsel involved in the Banksia Securities class action, funded by late Mr Mark Elliott’s (‘Mr Elliott’) firm Australian Funding Partners Limited. The Banksia Securities class action involved more than 16,000 investors that were owed $660 million in funds. The class action settled for $64 million in 2018 and it was submitted to the Court that appointing a contradictor (as one normally would) would be a waste of the victims’ money and further delay their payment. Justice Clyde Croft agreed with Mr O’Bryan that involving a contradictor would be a waste of limited resources. Subsequently, Justice Croft approved the settlement and ordered Mr Elliott’s company to be paid $12.8 million (plus GST) and the legal team $4.75 million (plus GST).

An investor of the Banksia Securities class action challenged the $64 million settlement as he considered it to be low and the amount given to the funders and lawyers seemed significantly high. As such, it was challenged in the Court of Appeal.  

Mr Peter Jopling QC, the contradictor, presented to the Court that Mr O’Bryan had not submitted his fees via his clerk, fabricated legal fees which included charging a cancellation fee of $300,000 for the trial, and discussions transpired between junior barrister Mr Michael Symons and Mr Elliott as to how they may deceive a costs consultant in relation to their fees.

On 3 August 2020 during the trial of the remitter, Mr David Batt QC, Mr O’Bryan’s barrister, submitted to the Court that his client would no longer dispute the allegations against him and conceded that he should be struck off from the roll of legal practitioners. Mr Batt QC further submitted that Mr O’Bryan consents to the entry of judgement against him for money liability under section 29 of the Civil Procedure Act 2010.

On 11 October 2021, the Supreme Court of Victoria handed down judgement, that Mr O’Bryan be removed from the roll of persons admitted to the legal profession. The Supreme Court found that the removal of a practitioner from the Roll is not a punitive measure. Rather, it is a function to protect the public from misconduct by practitioners and encourage public confidence in the proper administration of justice.

The Supreme Court of Victoria stated the following in relation to its assessment of determining whether a one is a ‘fit and proper’ person:

“In order for a person to be ‘fit and proper’ to become, or remain, a legal practitioner, they must be honest, independent, able to judge what ethical conduct is required of them, and then be capable of diligently discharging the responsibilities of their office.  A legal practitioner must be ‘possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public, without further inquiry, as a person to be entrusted with the sort of work which the licence entails.”  at [1398].

Further, in making an assessment, the Court must also consider whether the wrongdoer has insight into, and fully appreciates, the gravity of the wrongdoing and has shown effective rehabilitation.

A practitioner will not be regarded as ‘fit and proper’ ‘if:

they pose a direct risk to the public, to the legal fraternity, to the courts, to the system of professional co-operation and trust on which they both depend, and to the administration of justice’. at [1400].

The Supreme Court of Victoria relied on the comments of Forbes J in Victoria Legal Services Board v Gobbo [2020] VSC 692 at [49]:

‘Reliance by a court on the integrity of those who are its officers is … fundamental to the proper administration of justice. Repeated breaches in a number of proceedings over such a period of time as is demonstrated by the agreed facts is incapable of being overcome.’

Taking into account the above reasoning, the Supreme Court of Victoria held that Mr O’Bryan should be removed from the Roll as he engaged in conduct that is regarded as disgraceful or dishonourable by legal practitioners who are of good repute and competency.

We note with interest that Mr Michael Symons of Counsel was also struck off the Roll and Mr Anthony Zita and Mr Alex Elliott (both lawyers) are required to show cause as to whether they are ‘fit and proper’ to remain on the roll.

Conclusion

It is essential that a person is considered “fit and proper” in order to be eligible to obtain a licence or registration for certain professions. This article recognises that there is no static meaning to the phrase “fit and proper” person, however factors that are considered in determining whether a person is ‘fit and proper’ include that they must possess characteristics, such as honesty, be able to judge what ethical conduct is required of them, be of good moral integrity and rectitude of character.