Administrative Decisions Tribunal
New South Wales

Medium Neutral Citation:

Council of the Law Society of NSW v Kim [2012] NSWADT 45

Decision date:

20 March 2012

Jurisdiction:

Legal Services Division

Before:

Hon G Mullane, Judicial Member
J Wakefield, Judicial Member
S Hayes, Non-Judicial Member

Decision:

1) The Respondent Solicitor is found guilty of professional misconduct and publicly reprimanded;

2) The Respondent Solicitor is fined $5,000 to be paid as to $1,000 on or before 1 March 2013; $2,000 on or before 1 March 2014; and $2,000 on or before 1 March 2015.

3) The Respondent Solicitor must pay the Law Society $3,000 for its costs of and incidental to the proceedings, such amount to be paid as to $1,500 on or before 1 September 2012, and as to the remaining $1,500 by 1 March 2013.

4) Until 1 March 2017 the Law Society of NSW must not issue to or renew any Practising Certificate of the Respondent unless she has complied with any requirements (whether by Legislation, Rules or a Condition of a Practising Certificate sought to be renewed) for her to undertake Continuing Legal Education and there is no amount payable but unpaid under order 2 or order 3.

Catchwords:

Solicitor - Disciplinary proceeding - Practice in breach of condition in Practising Certificate - Breach of Undertaking to Law Society - Failure to respond to correspondence from Law Society.

Legislation Cited:

Legal Profession Act 2004
Crimes (Sentencing and Procedure) Act 1999 NSW - Section 17
Legal Profession Regulations 2005
Revised Professional Conduct and Practice Rules 1995 (Law Society of NSW)
Mandatory Continuing Legal Education (Continuing Professional Development) (MCLE/CPD Scheme Document - Council of the Law Society of NSW
Practising Certificate Rules - Law Society of NSW

Cases Cited:

The Council of the Law Society of NSW -v- Panopoulos [2010] NSWADT 208;
Legal Services Commissioner -v- McCarthy, (unreported) ADT 2 June 2008;
NSW Bar Association -v- Howen [2008] NSWADT 148 at [59-62];
Legal Services Commissioner -v- Piper [2006] NSWADT 12;
Law Society of NSW -v- Hinde [2005] NSWADT 199 at [37-41];
Counsel of the Law Society of NSW -v- Karam [2010] NSWADT 170.

Category:

Principal judgment

Parties:

Council of the Law Society of NSW (Applicant)
Jinhi Kim (Respondent)

Representation:

Law Society of NSW (Applicant)
J Kim (Respondent in person)

File Number(s):

112019

LEGAL SERVICES DIVISION

The Hon G Mullane (Judicial Member), Mr J Wakefield (Judicial Member), and Mr S Hayes (Non-Judicial Member)

REASONS FOR DECISION

INTRODUCTION

1This was a hearing of disciplinary proceedings against the Respondent Solicitor commenced by the Application of the Law Society of NSW filed in the Tribunal on 26 July 2011.

ORDERS SOUGHT

2The Tribunal seeks the following orders:

1) The Solicitor be reprimanded

2) The Solicitor be fined

3) The Solicitor pay the Applicant's costs of these proceedings

4) Such other order as to the Tribunal seems fit.

GROUNDS OF APPLICATION

3The Applicant raises three grounds in support of the orders sought. They are:

1. The Practitioner contravened a condition of her Practicing Certificate;

2. The Practitioner failed to comply with her Undertaking of 10 June 2008 to the Law Society of NSW; and,

3. The Practitioner failed to respond to correspondence.

THE EVIDENCE

4The evidence comprises:

(1) Application for original decision filed on 26 July 2011;

(2) Affidavit of Anne-Marie Ford, Solicitor for the Law Society of NSW filed on 26 July 2011;

(3) Affidavit of Karen Margaret Burrard, Manager of the Membership Department of the Law Society of NSW, filed on 26 July 2011;

(4) Reply filed by the Respondent dated 16 September 2011;

(5) Affidavit of the Respondent filed 28 September 2011;

(6) Affidavit of the Respondent sworn 14 December 2011 annexing report by psychologist and "Supplementary Notes in Reply";

(7) Exhibit "A1" - letter from the Financial Management Research Centre regarding the Respondent's attendance at an unrestricted Practising Certificate course for sole practitioners on 9-11 February 2011; and,

(8) Admissions made by Respondent at the hearing.

FINDINGS

5We adopt the Particulars set out in the Application which are admitted by the Respondent. They are:

1. On 26 August 2005 the Respondent was admitted to practice in New South Wales.

2. Between 26 August 2005 and 30 June 2008 the Respondent practised as a non principal Solicitor.

3. On or before 10 June 2008 the Respondent sought to be issued with a Practising Certificate entitling her to practise as a Principal from 30 June 2008 ["the unrestricted certificate"].

4. On 10 June 2008 the Respondent, in pursuance of her application for the unrestricted certificate provided to the society the following undertaking:

"I JINHI KIM of Temple Lawyers undertake to complete the next applicable Practice Management Course where there is a position available." ["the undertaking"]

5. The undertaking was dated 10 June 2008.

6. On the basis on the undertaking, the unrestricted certificate was issued to the Respondent effective 1 July 2008.

7. By letter dated 30 October 2009 the Registry of the Society wrote to the Respondent noting the undertaking; noting that advice of completion of the Practice Management Course ["the course"] had not yet been received by the Society and requesting either evidence of completion of the course or advice in writing of enrolment in the course "by written confirmation from the Course Co-ordinator".

8. The Respondent completed the foot of the letter of 30 October 2009 indicating that she had "enrolled in the following Practice Management Course and have received confirmation of my enrolment from the Course Co-ordinator." The Respondent nominated the Course provider as FMRC and the course to be attended as being that on 3-5 February 2010. That notification was dated 13 November 2009 and returned to the Society on 17 November 2009.

9. By e-mail dated 2 September 2010 an officer of the Registry of the Society wrote to the Respondent and, referring to the respondent's advices in paragraph 8 above, noted that there was no record that she had attended the nominated course. The e-mail further noted that the Respondent was in breach of her undertaking, that such breach would be referred to the Professional Standards Department of the Society and required the Respondent to provide to the Society, by no later than 11 October 2010, "either proof that you have completed the course or proof that you have enrolled in a course."

There was no response from the Respondent to the e-mail of 2 September 2010.

10. By letter dated 18 October 2010 the Registry of the Society wrote to the Respondent again noting that the Society, despite the Respondent's undertaking, had not received advice that she had completed the course and requesting that the Respondent "provide evidence of completion of the course or provide advice of enrolment in a course ...".

There was no response from the Respondent to the e-mail of 18 October 2010.

11. On 16 December 2010 the Professional Conduct Committee of the Society resolved to make complaints against the Respondent. The complaints were referred to the Respondent by letter from the Society dated 22 December 2010.

12. By letter dated 14 January 2011 the Respondent advised that she had missed the course advised on 13 November 2009 as she was "in the process of relocating offices..." and had "lost opportunity to re-enroll (sic) to undertake the course as we have been continually short staffed." The Respondent further advised that she had not responded to the letter of 18 October 2010 "as the letter went missing during another move we had in September 2010." The Respondent advised that she would be attending a course conducted by FMRC between 2 and 4 February 2011.

6The unrestricted practising certificate issued to the Respondent in 2008/2009 was conditional upon her completing mandatory continuing legal education in accordance with the requirement of the Legal Profession Act 2004 and the Legal Profession Regulation 2005, as were the unrestricted practising certificates issued for 2009/2010, and 2010/2011. This requirement is pursuant to section 50 of the Act, which gives the Council power to impose conditions on the granting or renewal of a practising certificate, including a condition requiring the holder of the certificate to undertake and complete continuing legal education. Rule 42 of the Revised Professional Conduct and Practice Rules 1995 spells out the requirements for Mandatory Continuing Legal Education. The Mandatory Continuing Legal Education (Continuing Professional Development) (MCLE/CPD) Scheme document issued by the Council provides more detail of the Scheme. Practice management courses are prescribed by Regulation 142 as part of mandatory continuing legal education.

7Section 57 of the Act empowers the Law Society to impose conditions on practising certificates by Legal Profession Rules. The Practising Certificate Rules provide that an Unrestricted /Principal Practising Certificate, such as those issued to the Respondent on 1 July 2008 and subsequently, are subject to a condition that the holder complete a Practice Management Course before being eligible to be a principal of a law practice. That was the condition the Respondent breached from 1 July 2008 until February 2011.

8Between 2 and 4 February 2011 the Respondent attended 2 days of the course conducted by FMRC. She attended the third day of the course during a course conducted on 9-11 February 2011.

9We find all three grounds proved on the basis of the admissions, but also on the basis of supporting evidence. The Respondent breached the conditions of her practising certificate in 2008/2009, 2009/2010 and 2010/2011. She breached her undertaking given on 10 June 2008 by not undertaking the course until February 2011; about 32 months after the undertaking. This was done despite reminders from the Law Society. She also failed to respond to the Law Society's email of 2 September 2010 and its letter of 18 October 2010.

10At the end of the hearing on 6 November 2011, we made the following Orders:

1. On or before 28 November 2011 the Law Society of NSW must provide in writing to the Tribunal (copy to the Respondent) an estimate regarding costs, a submission regarding a fine, and evidence regarding whether the professional indemnity insurance of the Respondent was compromised when she failed to comply with her Undertaking and/or conditions of her Practising Certificate.

2. On or before 12 December 2011, the Respondent is to provide in writing to the Tribunal and the Law Society of NSW any submissions and evidence in respect of those three issues and any evidence by a psychologist.

3. Subject to any request by either party for further hearing time, the Tribunal may re-list the matter for further hearing on a later date.

11Submissions from the Law Society were received on 28 November 2011 and an Affidavit from the Respondent with submissions and a report from a psychologist were received on 14 December 2011. The Tribunal decided to proceed with the decision without further hearing time.

THE RESPONDENT'S CASE

12In submissions at the hearing, the Respondent said that she did not oppose the Orders sought by the Applicant and admitted the Grounds constituted professional misconduct. She said that it has been "very embarrassing" to her and the conduct was "errors of judgment". She said one of her biggest errors had been "to take on cases that wasn't (sic) paying" and referred to litigation against some of her clients by the Sydney Metro. She said that one of her staff had to leave work because she was pregnant and another left to go to live in Korea. She said she "left it too long before she went to the Law Society to ask for an extension".

13The Respondent conceded that courses are available every six months. She said she was under pressure because she "was doing a lot of work for which I wasn't being paid". She said she was under pressure from the business and her clients. She conceded that it was probably her fault that her clients were not paying. She said, "I know I shouldn't be in this position as a lawyer". We do not accept these explanations as adequate, as her failure to attend the required course occurred in the period of her 2008/2009 Practising Certificate, her 2009/2010 Practising Certificate and then continued from 1 April 2010 until she finally attended a course on 9-11 February 2011.

14In cross-examination when the Respondent was asked what stopped her taking three days to go and do the course in the period of nearly three years, she said:

"Relocating from Eastwood to the City, then running two branches, loss of solicitors from the practice, and I missed because I was short-staffed and the relocation and the internet was down for over a week during the relocation."

15The Respondent conceded that the relocation occurred in July 2009. She moved from Eastwood to an office in the City, but retained the Eastwood office. Later she moved again to a different City address in the same street. She conceded that she was not saying she did not receive the correspondence from the Law Society. She conceded that in response to a letter of 30 October 2009 from the Law Society, she informed the Law Society that she was enrolled in the necessary course to occur on 3-5 February 2010. She did not attend that course.

16The Law Society sent the Respondent an e-mail on 2 September 2010 informing her that there was no record of her attending at the course, that she was in breach of her Undertaking, and would be referred to the Professional Standards Committee. She was told, "You must provide by 11 October 2010 at the latest, either proof you have completed the course or proof that you have enrolled in a course". At one stage she conceded that she did not respond, then she said she thought she telephoned someone at the Law Society. But when it was put to her that that telephone call only occurred after the complaint to the Tribunal had been commenced, she said, "I don't know". It appeared that the telephone call did not occur until after she received the Law Society letter of 22 December 2010 notifying her that the Law Society had resolved to make a complaint against her in respect of the three Grounds alleged. She then agreed that the telephone call occurred after that letter.

17The Law Society sent to the Respondent a letter of 18 October 2010, reminding her of the condition of her Practising Certificate that she complete a Practice Management Course and that the records of the Law Society showed she had given an undertaking to complete the first applicable available Practice Management Course but the Law Society had not received any advice that she had completed such a course. She was asked to provide the Law Society with the details of an enrolment to attend such a course urgently. She was warned that the matter would be referred to the "Licensing Committee" if no response was received. She said she had received it, but after further questions retreated from that answer and said she did not recall receiving it. When she was asked whether she thought that letter was important, and she should have told the Law Society when she would be attending, she conceded that it was important, but said, "A solicitor had left before that because of problems with parents".

18The Respondent later also conceded that when she wrote on 14 February saying that she had attended a course, she referred to the wrong course (one which was not for sole practitioners). It was later established that she had attended two days of the first course and then attended the last day of the correct course in the following week, which arrangement was permitted by the Financial Management Research Centre, which conducted the courses.

19In further cross-examination the Respondent conceded that she did not book to attend a course until the Law Society wrote to her in December 2010 to tell her that a complaint was being made against her. That was when she telephoned the Law Society.

20In her oral submissions, the Respondent described what she conceded was professional misconduct as, "errors of judgment", and said that she relied upon the explanation as to "why I was put in this position". She said that she was fit to practise because they were merely errors. She said she was under pressures because of the business, her family and other matters. She said she has since sought psychological counselling and has learned how serious an undertaking is. She said she has also overcome the financial problems in the business by now not doing pro bono work. She said she is not aware of any complaints from any of her clients.

21The Respondent requested that there not be fine imposed because of financial difficulties of the practice at the moment. She said she is chasing up clients who have not paid their bills and that she had a "a bit of a cash flow problem". She said she has been injecting funds into the business by re-financing her home. She said that she would need time if she has to pay a fine.

22In its written submissions, the Law Society relied upon various previous decisions of the Tribunal and submitted that the fine should be in the range of $3,000-$5,000. The Law Society sought costs of $3,000. The Law Society produced correspondence with Law Cover in which Law Cover pointed out that the professional indemnity policy "does not contain a specific exclusion with respect to solicitors who have been found guilty of a breach by the Administrative Decisions Tribunal". The "breach" referred to, was a breach of a condition of the Practising Certificate for the Respondent to complete a Practice Management course. It appears, then, that the Respondent's professional indemnity insurance would not be compromised by reason of her failure to attend the course as such. The policy conditions, a copy of which is attached to the submission, do not include a specific exemption in respect of conduct by the practitioner which constitutes unsatisfactory professional conduct or professional misconduct.

23In her affidavit of 12 December 2011, the Respondent said that she has nothing to add in relation to the range of fine as submitted by the Applicant, but she would need time and the fine should be "the least amount in the range".

24Regarding costs, she conceded that the costs order is reasonable, but she sought an order extending the time to pay. She said she agreed with the Applicant's submission in relation to professional indemnity insurance cover.

25The evidence of the psychologist, Dr S T Dang, was that she has seen the Respondent on 19 October 2011 and 16 November 2011, both occasions being in the month before the hearing. She stated:

"Ms Kim reported a number of negative life events in the past four years. Since the divorce she has been struggling with running a legal practice/working full-time, parenting two teenage boys, financial pressures, etc. On assessment she presented with high levels of depressive and anxiety symptoms. These symptoms no doubt have had a negative impact on her sleep, concentration, memory and some aspects of her life, although it appears that her occupational functioning is good. She is very motivated to over-come her emotional difficulties and it is my opinion that she has clear and realistic goals in her professional and personal life. Treatment is on-going."

UNSATISFACTORY PROFESSIONAL CONDUCT AND PROFESSIONAL MISCONDUCT

26Subsection 58(1) of the Act provides:

(1) The holder of a current local practising certificate must not contravene (in this jurisdiction or elsewhere) a condition to which the certificate is subject.

Maximum penalty: 100 penalty units.

27Section 17 of the Crimes (Sentencing and Procedure) Act 1999 NSW states that a penalty unit is $110.

28It is important to note that the breach of the condition of her Practising Certificates was that the Respondent practised as a principal of a legal practice when her Practising Certificate did not authorise her to do so. She had no authority to practice as a principal, but particularly as a sole practitioner, until February 2011.

29Sections 496, 497 and 498 of the Legal Profession Act 2004 provide:

496 Unsatisfactory professional conduct

For the purposes of this Act:

"unsatisfactory professional conduct" includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

497 Professional misconduct

(1) For the purposes of this Act:

"professional misconduct" includes:

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters.

498 Conduct capable of being unsatisfactory professional conduct or professional misconduct

(1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct:

(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules,

..............................................................................

(2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention.

THE BREACH OF THE PRACTISING CERTIFICATE CONDITION

30The breach of the condition was quite serious because without compliance, the Practising Certificate did not authorise the Respondent to be a sole practitioner and she practised as a sole practitioner dealing with the public for 32 months on that basis. It was a more serious breach than where a practitioner does not complete the required number of units of Mandatory Continuing Legal Education in a particular year and renews his or her certificate.

31In our view this evidences a substantial failure by the Respondent to reach or maintain a reasonable standard of competence and also demonstrates failure to achieve a reasonable level of diligence.

32We consider that the explanations offered by the Respondent do not provide any reasonable excuse for her conduct. There is no doubt that every legal practitioner during their career and perhaps especially at the beginning of the their career if they are establishing a practice, face pressures from financial issues, the responsibilities of family life, and selecting, training and dealing with staff and their needs. Those responsibilities do not provide a reasonable excuse for failing to comply with the conditions of the Practising Certificate and failing to comply with the undertaking she gave to the Law Society, particularly over an extended period of time.

33With regard to the undertaking, some authorities in support of a finding of professional misconduct are The Council of the Law Society of NSW -v- Panopoulos [2010] NSWADT 208 (On issue of an unrestricted practising certificate the practitioner on 5 May 2006 undertook to complete next applicable practice Management Course, but did not attend such a course until 12-14 March 2009) ; Legal Services Commissioner -v- McCarthy, unreported ADT 2 June 2008 (Breach of undertaking to the Tribunal to reply within 28 days to correspondence from the Legal Services Commissioner - relatively short delay.); NSW Bar Association -v- Howen [2008] NSWADT 148 (Breach of undertaking to Bar Association to reply to any notice under section 152 of the Legal Profession Act 1987 within 21 days.); Legal Services Commissioner -v- Piper [2006] NSWADT 12 (Breach of undertaking to Legal Services Commissioner to give "the highest priority" to correspondence from his office and "respond within a reasonable time"); and, Law Society of NSW -v- Hinde [2005] NSWADT 199 (Breach of undertaking to real estate agent to pay his commission from deposit held when sale completed.)

34With regard to the breach of the condition of a Practising Certificate, such conduct was held to be professional misconduct in Counsel of the Law Society of NSW -v- Karam [2010] NSWADT 170. The respondent there held a restricted 'corporate' Practising Certificate which limited his entitlement to practice to acting for his employer corporation only. He breached the condition by acting in legal proceedings for other clients. It appears from the reasons of the Tribunal that the period that he was involved with other clients was about 10 months.

35The correspondence from the Law Society to which the respondent did not respond concerned very serious issues. Her failure to respond was a serious departure from the reasonable standard of competence and diligence in a situation where any reasonable practitioner would have perceived that he or she should respond urgently to the correspondence.

COSTS

36Subsection 566(1) of the Legal Profession Act 2004 provides:

(1) The Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist.

37The evidence does not disclose any "exceptional circumstances", and accordingly, the Respondent should pay the costs of the Law Society.

CONCLUSIONS

38The Respondent before us conceded that the grounds each amount to professional misconduct. We are satisfied that each of the established grounds evidence a substantial failure by the Respondent to reach or maintain a reasonable standard of competence and diligence as a solicitor. Diligence, of course, involves maintaining ethical standards and integrity, and complying with Practising Certificate conditions and undertakings for continuing legal education.

39The clients, the public, other members of the profession and the courts are entitled to expect a solicitor to be a person of honesty and integrity and to comply with legal requirements in relation to her Practising Certificate and undertakings given by her to the Law Society. They are entitled to expect a solicitor will be committed to continuing legal education as part of achieving and maintaining competence. They are also entitled to expect that a practitioner would exercise due competence, diligence and care in relation to any dealings with the Law Society concerning professional conduct. That includes replying promptly to correspondence from the Law Society.

40The Respondent's failure in each of these Grounds is a failure to achieve a reasonable level of competence and diligence.

41We are satisfied that her conduct in each of the established Grounds is professional misconduct.

42We are especially concerned to ensure that the Respondent does not in future obtain or renew a Practising Certificate without first complying with any outstanding obligations for Continuing Legal Education and payment of any fine. We have reached a view that the Law Society should be ordered to ensure that she is not able to do so in the next five years.

43In relation to a fine and also in relation to the payment of costs, we have taken into account the submissions for the Respondent and would incorporate in the orders time for payment. We have also taken into account that the Respondent admitted the particulars of Grounds of application and that she has accepted that the conduct the subject of the application is professional misconduct.

44We consider that the seriousness of the professional misconduct is such that a fine of $5,000 is warranted.

45We find that the appropriate sanctions to deter the Respondent and other practitioners from such professional misconduct or unsatisfactory professional conduct in the future, and to protect the public and the legal profession are as set out in the following orders.

ORDERS

46The orders are: