Council of the Law Society of New South Wales v Kim

Court of Appeal (NSW)|2017-11-15|Before: McColl JA, White JA

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

THE COURT: By summons filed on 24 March 2017, the applicant, the Council of the Law Society of New South Wales ("the Law Society"), sought declarations and orders against the respondent, Ms Jinhi Kim, a solicitor admitted to practice on 29 August 2005 who, until May 2016, was employed by several law practices in and around Sydney. The relief sought by the summons was: 1. A declaration that the respondent is guilty of professional misconduct. 2. A declaration that the respondent is not a person of good fame and character. 3. A declaration that the respondent is not a fit and proper person to remain on the Roll of Australian lawyers maintained by the Supreme Court under s 22 of the Legal Profession Uniform Law (NSW). 4. An order that the name of the respondent be removed from that Roll. 5. An order that the respondent pay the applicant's costs of the proceedings.

Grounds

The conduct of the respondent on which the Law Society relied is conduct involving criminal dishonesty. The grounds advanced by the Law Society are set out in nine paragraphs of the summons and may be summarised under three headings, as follows: Ground 1: That, on 23 August 2016, the respondent pleaded guilty to and was convicted of two offences under s 192J of the Crimes Act 1900 (NSW) and two offences under s 25(b) of the Oaths Act 1900 (NSW) in circumstances where she used identification particulars of her ex-husband and of a client without their permission to change the driver named in penalty notices issued to her son and her father and took false declarations (the respondent accepted that she committed four other like offences which were taken into account by the Local Court). Ground 2: That the respondent failed to disclose to the Law Society within the period of seven days prescribed by s 51 of the Uniform Law the charges under s 192J of the Crimes Act and s 25(b) of the Oaths Act. [3] Ground 3: That in August 2013, the respondent directed a client of the law practice by which she was then employed to deposit money for work she was to carry out into a personal bank account and not a trust account as required by s 254 of the Legal Profession Act 2004 (NSW), which the client did.

Facts

Three witnesses gave evidence by affidavit: Ms Anne-Marie Foord (the Law Society's Director, Professional Standards), Ms Samar Chiper (a solicitor employed by the solicitors for the respondent) and the respondent herself. The sole purpose of Ms Chiper's affidavit was to introduce into evidence a report of Dr Olav Nielssen, a psychiatrist. That report contains a declaration made by Dr Nielssen under the Expert Witness Code of Conduct and was received without objection as expert evidence.
The Court also had before it an agreed statement of facts dated 18 September 2017 and supplemented on 7 November 2017. The following outline of circumstances comes from the agreed statement of facts: 1. On 1 August 2013, a man who worked as a courier driver and had received ten traffic infringement penalty notices for driving offences sought legal advice from the respondent. It will be convenient to refer to this man as "the client". On 3 August 2013, the respondent met the client by appointment at a shop in Sydney and, having received instructions from him, said that she would write to the State Debt Recovery Office stating that the client was not the driver. The respondent asked that the client make an advance payment for her services by transferring $500 to her personal bank account, not the trust account of the firm by which she was then employed. The client complied with that request on 5 August 2013. 2. On 17 September 2013, a penalty notice for a speeding offence was issued to the respondent's son. On 14 October 2013, the respondent used the identification information for her ex-husband in order to change the driver named in respect of that offence. The respondent, as a person authorised by the Oaths Act to take and receive statutory declarations, took a statutory declaration as to the correctness of this change and witnessed the declarant's signature. Upon receiving a substituted penalty notice in relation to the offence, the ex-husband obtained online a still photograph from the relevant speed camera and concluded that it was the son who had been the driver. He then contacted the respondent who told him not to worry about the penalty notice and that she had used his identification particulars because the son did not have many demerit points left and needed his driver licence for his job. 3. In November 2013, the respondent telephoned the client and sought permission to use his identification information for her personal penalty notices. The client agreed to this because the respondent was dealing with his matter and he thought that, if he refused, she would not continue to assist him. He then sent her a copy of his passport and a copy of his driver licence. 4. On or about 13 November 2013, a penalty notice was sent to the respondent's father in relation to an offence of driving through a red light. On 1 December 2013, the respondent used the client's identification information to change the driver identity for that penalty notice. The client was nominated as the person responsible. The respondent, as a solicitor authorised by law to do so, took a statutory declaration as to the correctness of this change and witnessed the declarant's signature. 5. On 28 November 2013, another penalty notice was sent to the respondent's son. It related to a separate speeding offence. The respondent used the client's identification information for the purpose of changing the driver identity to the client. Again, the respondent took a statutory declaration as to the correctness of this change and witnessed the declarant's signature. 6. In March 2014, an employee of the business by which the respondent's son was employed received a penalty notice in relation to speeding by a vehicle registered to him. He ascertained that the vehicle had been allocated to the respondent's son and gave the notice to him. The respondent then used the client's identification information for the purpose of changing the driver named in the notice to the client. As previously, the respondent took a statutory declaration as to the correctness of this change and witnessed the declarant's signature. 7. The client subsequently contacted the State Debt Recovery Office about a number of penalty notices unrelated to the events described. He was told that there existed three further notices in which he was nominated as the driver, being those of 13 and 28 November 2013 and March 2014 (the address given for the client in the statutory declarations relating to those notices was the respondent's business address). On 15 August 2014, the client met with police and made a statement that he was not the driver of the vehicles to which the notices of 13 and 28 November 2013 and March 2014 related. 8. In January 2015, the client met the respondent by appointment. She repeatedly apologised to him and asked him to change his statement to police. She asked him to admit to being the driver for the penalty notice concerning her father. He said he would not help her and would not allow her to use his identification information. She asked him to take some time think it over. He discussed the matter with his wife. He then telephoned the respondent and told her his answer was "no". 9. The respondent was arrested by police on 29 October 2015 during the execution of a search warrant at the office of the law practice by which she was then employed. She was subsequently charged with: 1. four offences of dealing with identification information to commit or facilitate the commission of an indictable offence: Crimes Act 1900, s 192J; 2. four offences of making a false instrument to pervert the course of justice: Crimes Act 1900, s 318(2); and 3. four offences of wilfully and corruptly making and subscribing a false declaration: Oaths Act 1900, s 25(b). 1. The respondent appeared before the Local Court on 23 August 2016. As a result of her acceptance of a plea offer made by the Director of Public Prosecutions, the respondent pleaded guilty to two charges under s 192J of the Crimes Act and two charges under s 25(b) of the Oaths Act. The four charges under s 318(2) of the Crimes Act were withdrawn and the remaining four charges (two under each of s 192J and s 25(b)) were taken into account by way of Form 1. The proceedings in the Local Court were dealt with on the basis of agreed facts. The respondent was directed to enter into a bond to be of good behaviour for two years and was fined $2,200 in all. 2. The first formal notification by the respondent to the Law Society of the charges pending against her was by means of a letter sent by her dated 21 July 2016. She had sought legal advice about her reporting obligation. Her failure to report the charges at any earlier time was on the basis of legal advice she received. 3. On 20 March 2012, the Administrative Decisions Tribunal found the respondent guilty of professional misconduct under the Legal Profession Act 2004 (NSW). [4] The finding of professional misconduct was based on her failure to honour an undertaking to the Law Society to undergo practice management training and failure to reply to correspondence from the Law Society. The respondent was publicly reprimanded, fined $5,000 and ordered to pay the Law Society $3,000 for its costs. The Tribunal made a direction that a practising certificate not be issued to the respondent or renewed unless she had complied with any applicable requirements to undertake continuing legal education and had paid the fine and costs ordered to be paid.
The Court makes findings of fact in accordance with (1) to (12) above. [5] It may be noted that the offence created by each of s 192J of the Crimes Act and s 25(b) of the Oaths Act is an indictable offence and that the maximum penalty is imprisonment for ten years in the case of s 192J and five years in the case of s 25(b).
The content of Dr Nielssen's report will be considered later.

Principles

A series of instances of impugned conduct was placed before the Court. It was necessary to examine the several events together so that the totality of the considerations relevant to the questions for determination could be taken into account. The reason for this is twofold: [6] first, the public interest in the maintenance of confidence in the administration of justice and the legal system requires that assessment of relevant conduct should be comprehensive, complete and available for public examination so that full accountability of lawyers as participants in the administration of justice may be maintained; and, secondly, a full appraisal and assessment may be relevant if and when any application for readmission is made.
Because the Law Society's application raised three related questions - as to professional misconduct, absence of good fame and character and lack of fitness to remain on the Roll - it is apt to record that: 1. at common law, professional misconduct is conduct that would be regarded as disgraceful or dishonourable by professional colleagues; [7] 2. the concept of good fame and character has a twofold aspect, in that fame refers to a person's reputation in the relevant community and character refers to the person's actual nature; [8] and 3. considerations relevant to determining whether someone is a fit and proper person to be a solicitor may include the protection of the public against similar conduct, the character of the solicitor, and the effect which an order will have on the understanding (within the profession and amongst the public), of the standard of behaviour required of solicitors, the effect upon relationships which must exist between solicitors and the circumstances surrounding the impugned conduct. [9]

Assessment

The respondent engaged in a pattern of knowingly dishonest conduct in relation to traffic infringement penalty notices over more than a year. On four occasions, she acted in a calculated way that she knew to be dishonest in order to deceive the State Debt Recovery Office and to protect family members from legal process. She acted deliberately to interfere with the due administration of that legal process. Her conduct was premeditated and deliberate. By her pleas of guilty (and by accepting that she committed other offences and asking that they be taken into account), the respondent did not contest that she had been guilty of criminal conduct reflecting deeply on her character. It was her duty as a lawyer to uphold the law. She disobeyed the law on several occasions and connived at subversion of it.
Not only was the respondent party to the preparation and submission of what she knew to be four false statutory declarations, she also abused her position as a solicitor by witnessing the signatures of declarants on false declarations. The power of solicitors to administer oaths was created by the Legal Practitioners and Oaths (Amendment) Act 1970 (NSW). Parliament no doubt considered this an appropriate measure because solicitors could be trusted. One member of the Legislative Assembly said during debate on the Bill: The number of members of the legal profession who prove recreant to the trust reposed in them and depart from the high standards of honour, is limited indeed. It is small by comparison to the total number but because of the position that a member of the legal profession occupies such an occurrence is always highlighted. [10]
By her conduct, the respondent proved herself recreant to the trust reposed in her as a solicitor in the way here described. The conduct reflects deeply on her character.
The gravity of the respondent's criminal conduct in relation to the penalty infringement notices was exacerbated by her attempt to persuade the client to change his statement to police. She had already taken improper advantage of the client by seeking his permission to misuse his identification information in circumstances where he felt pressured to agree because he feared that refusal would cause her to cease acting for him. It is to his credit that, by resisting the respondent's urging to assist renewed deception after he had made a statement to police, the client did not allow the respondent to take further improper advantage of him. He was her client or, more precisely, the client of the law practice by which she was then employed. Her duty was to serve and protect his interests. It was a gross breach of that duty to recruit him as a participant in her dishonest design and to seek to deflect him from a course of giving the police information about her unlawful activity. In these respects also, her conduct was calculated and premeditated and reflects deeply on her character.
The matter just mentioned has another and no less serious dimension. The respondent's attempt to have the client change his statement to police demonstrated conduct inconsistent with any intention to face up to the wrong she had done. It compounded her wrongdoing. Even after her actions had come to the attention of the police, she attempted to enlist the client's assistance to change the course of the investigation and potential prosecution that were then in train. The respondent said in her affidavit that she deeply regrets her conduct and apologises to the Court and the Law Society. There was no contrition at the time at which pressure was exerted upon the client. The expressions of contrition came only after the misconduct was fully exposed and criminal sanctions had been imposed. That diminishes their force.
At the very beginning of her relationship with the client, the respondent denied him a protection that the law intended that he to be given. By directing him to pay into her personal bank account the $500 requested in advance for fees, the respondent caused that money to be received and handled outside the scheme of protection of client funds created by the Legal Profession Act 2004 (NSW). Section 254 of that Act, as in force at the relevant time, required that the money be paid into a trust account to which the protective provisions of the Act applied. The correct handling of clients' money is fundamental to the professional responsibilities of solicitors. There is never an occasion on which such money can properly be taken into a solicitor's private bank account. There is, however, no suggestion that the money was ultimately misapplied or lost.
Finally, there is the matter of failure to report to the Law Society the charges preferred under s 192J and s 318(2) of the Crimes Act and s 25(b) of the Oaths Act. The respondent accepts that formal notification was not made by her until some nine months later than it should have been. She does not suggest that the offences with which she was charged were not, for the purposes of the Uniform Law, "serious offences". An obligation to notify the Law Society in writing within seven days arose through s 51(1)(a) of the Uniform Law. The respondent's failure to perform that obligation was a product of incorrect legal advice. That is an extenuating circumstance but the requirement was plain on the face of the legislation and could have been discovered with ease by any solicitor, including the respondent herself.

Conclusions

The conduct of the respondent referred to at [13]-[17] above (relevant to Ground 1) was engaged in over a substantial period of time. It was not an isolated lapse or a mere error of judgment. It was dishonest and criminal conduct that would be regarded as disgraceful and dishonourable by professional colleagues. It may be accepted that the respondent's objective was not personal financial gain. It was a desire to shield family members from the legal consequences of their own actions by distorting the legal process. The fact that there was a pattern of unlawful activity to that end over a substantial period bespeaks lack of good character, as does the attempt to change the course of the police investigation by urging the client to change his statement. The conduct deserves strong censure and sanction so that the profession and the public might see with clarity that it falls far short of the standards that lawyers must observe. In short, the conduct constitutes professional misconduct and establishes that the respondent is a person who is neither of good fame and character nor fit and proper to be a solicitor.
The conduct of the respondent referred to at [18] above (relevant to Ground 3) was less serious but is nevertheless deserving of censure. While solicitors' duties with respect to clients' money and its protection are fundamental, there was, in this case, no loss of the relatively small sum involved. While the Ground 3 conduct was inconsistent with the norms of conduct to which solicitors must adhere, it did not, of itself, warrant a finding of unfitness to be a solicitor.
The conduct referred to at [19] above (relevant to Ground 2) also did not warrant full the characterisation attracted by the Ground 1 conduct. The notification requirement was clear on the face of the legislation and therefore readily accessible by any lawyer. There is an element of accident or inadvertence in relation to the failure to notify. But the fact remains that the respondent failed to perform a professional obligation of which she, as a solicitor, should have been aware, so that again she acted in a way that was inconsistent with the norms of conduct to which solicitors must adhere but did not, of itself, warrant a finding of unfitness to be a solicitor.
Also relevant is the disciplinary proceeding of 2012 that arose from the respondent's failure to honour an undertaking given to the Law Society and to answer correspondence from the Society. In that proceeding, it was determined that the respondent had been guilty of professional misconduct. She was reprimanded, fined and ordered to pay costs. Those orders made in March 2012 should have instilled in the respondent a consciousness of the need to be scrupulously attentive to her professional duties. But in the very next year she embarked on a course of serious dishonesty and again acted in breach of her professional obligations. This consolidated the conclusion that the respondent is not of good fame and character or fit and proper to be a solicitor.
The Court's task was to consider the whole of the evidence placed before it and to evaluate the totality of the respondent's conduct. While neither the Ground 2 conduct nor the Ground 3 conduct, viewed alone, was of a grave nature, the Ground 1 conduct undoubtedly was. The elements of context added by the Ground 2 conduct, the Ground 3 conduct and, more significantly, the findings in the 2012 disciplinary proceeding consolidated and confirmed the view that the respondent's conduct, taken as a whole, was such as to require declarations that the respondent is guilty of professional misconduct, is not a person of good fame and character and is not a fit and proper person to be a solicitor. It therefore became necessary to consider whether, as the Law Society sought, an order for removal of the respondent's name from the Roll should be made,
As the Court observed in Prothonotary v Gregory (above) at [29], where a solicitor has been convicted of a grave offence involving deliberate dishonesty in the practice of law (as is the case here), exceptional circumstances will be required before any sanction other than removal from the Roll could be contemplated. The Court also said that some lesser sanction could be considered only if the solicitor, at the least, adduced cogent evidence of extenuating circumstances or of contrition and rehabilitation countering the inference of permanent unfitness to practise law. In that connection, four matters should be mentioned.
First, the respondent entered a plea of guilty to certain charges in the Local Court and asked that other offences be taken into account. In that way, she accepted the criminality of her conduct and agreed to be sentenced on the basis of full admissions.
Secondly, reference has already been made to the fact that the respondent consented to the making of the orders sought in this Court and to her statement (made only after she had been charged, convicted and sentenced) that she deeply regrets her conduct and apologises to the Court and the Law Society.
Thirdly, the respondent ceased practising in May 2016. She is currently studying part-time for a graduate diploma in divinity at a theological college and expects to complete these studies in 2018. She hopes one day to apply for readmission but, as she says, "not until sufficient time has passed for that to be a possibility".
Fourthly, reference must be made to Dr Nielssen's report. He diagnosed an anxiety disorder when he interviewed the respondent in July 2017. The anxiety was in part a product of the stress of bringing up two sons as a sole parent and the pressures of her practice. Dr Nielssen perceived the respondent to be genuinely remorseful for her conduct and committed to continued treatment and self-improvement. He referred to the respondent's insights into her conduct and the shame she had experienced as a result of it. His opinion is that there would be a low likelihood of further similar conduct or any other breaches of professional standards if the respondent were readmitted to practice at some stage in the future.
The Court saw force in the submission of counsel for the respondent that, in relation to these proceedings, she acted in a more responsible way than some other lawyers in similar circumstances. While that and the four particular matters just mentioned indicate at least some possibility of eventual rehabilitation, the extenuating matters were insufficient to displace the inference of permanent unfitness to be a solicitor that flowed from the serious and wilful nature of the respondent's criminal conduct and the sustained pattern of dishonesty and disregard of professional obligations. An order for removal from the Roll was therefore judged necessary in the public interest.
On the basis that costs follow the event, it was appropriate to order that the respondent pay the Law Society's costs.
Orders: 1. Declare that Jinhi Kim is guilty of professional misconduct. 2. Declare that Jinhi Kim is not a person of good fame and character. 3. Declare that Jinhi Kim is not a fit and proper person to remain on the Roll of Australian lawyers maintained by the Supreme Court under s22 of the Legal Profession Uniform Law (NSW). 4. Order that the name Jinhi Kim be removed from that Roll. 5. Order that Jinhi Kim pay the Law Society of New South Wales' costs of the proceedings.

Endnotes

Council of the New South Wales Bar Association v Power [2008] NSWCA 135; 71 NSWLR 451; Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [12] and Council of the New South Wales Bar Association v Einfeld [2009] NSWCA 255; 258 ALR 768 at [13].
Prothonotary v Gregory [2017] NSWCA 101 at [25] citing with approval Prothonotary of the Supreme Court of NSW v P [2003] NSWCA 320 at [17].
So far as relevant to this case, s 51 states, in s 51(1)(a), that it is a statutory condition of an Australian practising certificate granted in New South Wales that the holder must notify the designated local regulatory authority in writing within seven days that the holder has been charged with or convicted of a serious offence. The expression "serious offence" is relevantly defined by s 6 as an indictable offence against a law of the Commonwealth, a State or a Territory, whether or not the offence is or may be dealt with summarily.

Council of the Law Society of New South Wales v Kim [2012] NSWADT 45.
Those facts were seen to constitute the "significant matters" as referred to in Council of the New South Wales Bar Association v Power (2008) 71 NSWLR 451; [2008] NSWCA 135 at [11]. There was no occasion for the Court to go beyond the agreed statement of facts in relation to the matters dealt with by that statement.
Council of the New South Wales Bar Association v Einfeld [2009] NSWCA 255; 258 ALR 768 at [13]-[17].
Allinson v General Council of Medical Education and Registration [1894] 1 QB 750.
McBride v Walton [1994] NSWCA 199. In that case, Powell JA stated that, in order to determine whether a finding of proven misconduct should be followed by a consequential finding that the practitioner is not of good character in the context of fitness to practise, it is necessary to consider (a) whether the misconduct can be satisfactorily explained as an error of judgment rather than a defect of character; (b) the intrinsic seriousness of the misconduct qua fitness to practise; (c) whether the misconduct should be viewed as an isolated episode and hence atypical or uncharacteristic of the practitioner's normal qualities of character; (d) the motivation which may have given rise to the proven episode of misconduct; (e) the underlying qualities of character shown by previous and other conduct; and (f) whether the practitioner's conduct post the proven episode of misconduct demonstrates that public and professional confidence may be reposed in him or her to uphold and observe relevant professional standards.
Law Society of New South Wales v Foreman (1994) 34 NSWLR 408.
The Hon W F Sheahan MLA, New South Wales Legislative Assembly, Parliamentary Debates, Hansard, 17 March 1970 page 4303. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 November 2017

Legal Practitioners and Oaths (Amendment) Act 1970(NSW)

Legal Profession Act 2004(NSW)

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