Council of the Law Society of New South Wales v Kinchington

Background circumstances

1. The following circumstances were identified in three affidavits filed by the applicant, copies of which were served on the respondent pursuant to the order for substituted service. The circumstances are also set out in narrative form in a statement of facts, a copy of which was also contained within the material served on the respondent in the manner noted above.
2. From 19 October 2001, the respondent carried on a law practice, Kinchington & Associates, from premises at 246 Pacific Highway, Hornsby.
3. The primary basis on which the applicant now seeks the orders from this Court concern the conduct of the respondent in acting for a client in relation to certain criminal charges. The client originally engaged the respondent on 17 August 2010. In September 2010 the client signed a costs retainer agreement. At that stage he intended to plead not guilty and the criminal proceedings were set down for a 10 day hearing in the District Court in Sydney, commencing on 16 May 2011.
4. On 17 February 2011 the client signed an amended retainer agreement which stated, under the heading "Estimate of Costs": "We have reserved the days of 10 May 2011 to 27 May 2011 as an allocated period … we will charge our daily rate for those days that we appear in court."
5. The material before the Court does not disclose the steps taken with respect to preparation for the trial. However, at some stage the respondent prepared and dated 5 May 2011 a further amended retainer agreement which, in place of the statement set out above, contained the following: "We have reserved the days of 10 May 2011 to 27 May 2011 as an allocated period … we will charge our daily rate for those ten (10) days set down for trial in any case."
6. The fees estimated in the further amended agreement were at least $15,232 more than the estimate contained in the earlier amended agreement. (Although the document was dated 5 May 2011, there was an available inference that it was prepared later; the actual date of creation is not known.)
7. By mid-April 2011, the client and his partner had deposited an amount of $86,919 into the respondent's trust account.
8. The detail of the events which occurred in May 2011 are not revealed by the evidence. In fact the period from 10-27 May 2011 involved 14 working days. For which of those days the matter had been fixed for trial is not entirely clear. However, on 16 May a plea of guilty was negotiated and the trial was adjourned until 18 May 2011. On that day the client entered a plea of guilty and the matter was adjourned to 15 July 2011 for sentence.
9. The respondent withdrew funds from his trust account, including professional fees totalling $15,232 for the period 10‑27 May 2011, in accordance with the further amended retainer agreement.
10. On about 2 November 2011 the client's partner complained to the Office of the Legal Services Commissioner in relation to the legal services provided by the respondent. She alleged that he had engaged in overcharging, provided inferior service, refused to refund moneys held in trust and had been deliberately misleading. As became clear in the course of inquiries, the respondent had not obtained the client's agreement to the further amended retainer, but had simply cut and pasted his signature from the earlier agreement and inserted it in the further amended agreement dated 5 May 2011. Nevertheless, he maintained in correspondence with the Law Society that the client had in fact signed the further amended retainer agreement on 6 May 2011 at a conference. The first statement to that effect appeared in a letter to the Legal Services Commissioner dated 24 December 2011. On 19 March 2012, the client's partner made a complaint of fraud against the respondent at Hornsby Police Station.
11. On 24 March 2012 the respondent wrote again to the Legal Services Commissioner stating that the client had in fact signed the further amended retainer agreement but that he was unable to provide a copy of the original because the firm did not have "the space to keep all original documents", noting that the Commissioner had a scanned copy. That letter was the second in which the respondent falsely alleged that the client had signed the agreement dated 5 May 2011.
12. On 9 May 2012 the respondent again wrote to the Legal Services Commissioner, noting that original documents were not kept and "[t]hey are disposed and shredded after scanning."
13. On 30 May 2012 the Commissioner wrote to the Law Society seeking to have the complaint by the client's partner investigated by the Professional Standards Department of the Society. The Commissioner stated a concern that "Mr Kinchington fraudulently doctored a costs agreement to provide authority to charge for aborted trial dates and to transfer the balance of moneys held in trust." The Commissioner noted that the client's signatures on the agreements of 24 September 2010 and 5 May 2011 appeared to be identical. In the course of investigating the client's complaint, the Society obtained a preliminary advice dated 25 June 2012 from a document examiner, Ms Moussa, who confirmed that the signature on the further amended agreement was a "copy and paste" image of the signature on the earlier agreement. She concluded that the two documents could not both be genuine documents.
14. This material was sent to the respondent for comment. On 31 May 2013 the respondent replied, stating: "We deny forging any signature on the cost agreement. [The client] signed all three [retainer] agreements dated 24 September 2010, 15 February 2011 and 5 May 2011 on three separate occasions. … We note that he does not make any complaint about the two retainers provided to him well prior to the last retainer." The statement that the client had signed all three agreements was false, in that he did not sign the last agreement.
15. On 10 September 2013 the respondent sent a further letter to the Society stating that "the signature signed on 6 May 2011 was signed by [the client] on his lap whilst sitting in his chair." The letter continued: "We do not know what was given to the expert by [the client] or his wife …. Our retainer was based on the same terms as the barrister. We both provided a copy to [the client] which he read and then signed and returned to us."
16. On 5 December 2013, the three agreements were sent to detectives at Hornsby Police Station. The New South Wales Police Forensic Services group undertook a document examination which confirmed the conclusion reached by Ms Moussa, namely that as between the second and third documents, "[t]he total lack of natural variation … means that the signature stems from a single act of writing".
17. On 26 August 2014 the respondent was charged with an offence under s 254(b)(ii) of the Crimes Act 1900 (NSW) of using a false document to obtain a financial advantage. The Legal Profession Act 2004 (NSW) (since repealed) in 2011-2012 imposed a statutory condition on all practising certificates that the holder must notify the Council within seven days of being charged with a "serious offence". [1] The term "serious offence" included any indictable offence (whether or not it might be dealt with summarily). [2] The conviction for a serious offence was a "show cause event" for the purposes of the Legal Profession Act. A solicitor was required to provide written notice to the Council within seven days of conviction for such an offence. [3] Failure to comply was "professional misconduct." [4]
18. The respondent did not immediately notify the Society of the charge. In response to a letter from the Law Society dated 17 September 2014 requesting notification and disclosure, the respondent notified the Law Society of the charge. The charge carried a maximum penalty of imprisonment for 10 years.
19. Later the charge was varied to allege a separate offence (under s 192G(b) of the Crimes Act) of publishing a false or misleading statement with the intention of obtaining a financial advantage. The charge alleged that "between 6:00am on 24/12/2011 and 6:00pm on 09/01/2012 at Hornsby [the accused] did publish … a retainer agreement that was false or misleading in a material particular, with the intention of obtaining a financial advantage to wit $15,232." The first date (24 December 2011) was the date of the letter to the Legal Services Commissioner in which the respondent first alleged to a third party that the client had signed the further amended agreement on 6 May 2011. The second date (9 January 2012) was the date of the receipt of the letter in the Commissioner's office. The charge under s 192G carried a lesser maximum penalty of 5 years imprisonment. However, the apparent reason for the change in the charge was the inability of the prosecution to identify a date on which the false agreement had been prepared, between the date of the first amended agreement and the date on which the further amended agreement was despatched to the Commissioner. There was no evidence that the further amended agreement was provided to the client.
20. On 12 October 2015 the respondent entered a plea of guilty to the latter charge and tendered a cheque to the court for the amount identified as the financial advantage in the charge. On 2 February 2016 he was convicted and sentenced to a term of imprisonment of 12 months, which was wholly suspended on condition that he enter into a good behaviour bond for that period and repay the client the amount of $15,232, although there is no dispute that the amount had already been repaid.
21. The gravamen of the offending was succinctly explained by Senior Counsel for the respondent, who appeared on the sentencing hearing: [5] "What has happened here is that in order to head off what might have been perceived as an unwarranted complaint, an expedient … but fundamentally dishonest course was taken of doing a copy and paste of a signature in order to head off any argument about it."
22. That understanding was accepted by the Magistrate in her sentencing reasons in the course of which she stated: [6] "An amended retainer agreement purportedly signed by [the client] on 5 May was subsequently determined to effectively contain a copy and paste of his signature from an earlier costs agreement. It is the provision of that fraudulent document to the Legal Services Commissioner, with the implicit intention of justifying the retention of fees for the substantial proportion of the allocated period, which forms the basis of the charge to which you have pleaded guilty."

Grounds set out in summons

1. The grounds upon which the Council seeks the orders against the respondent focus upon five matters, namely: 1. the preparation of the false costs agreement dated 5 May 2011; 2. the charging of professional fees referrable to the entire trial period, including days during which he was not in court or undertaking preparatory work; 3. making false and misleading statements to the Legal Services Commissioner and the Law Society asserting that the client had in fact signed the further amended costs agreement; 4. the plea and conviction for the offence charged under s 192G(b) of the Crimes Act, and 5. the failure to disclose the original charge, as required ss 55 and 67 of the Legal Profession Act 2004 (NSW).
2. On the basis of the material set out above, and subject to one qualification, each of these grounds is made good. The qualification is that s 67 of the Legal Profession Act, dealing with "show cause events", rendered it professional misconduct to fail to disclose a conviction (not a charge) with respect to a serious offence. The relevant obligation to disclose a charge was that contained in s 55, not s 67. (So much is expressly acknowledged in former s 55(3).)

Relief sought

1. The jurisdiction of this Court has been considered in A Solicitor v Council of the Law Society of New South Wales, [7] and, more recently by this Court in Prothonotary v Gregory. [8]
2. It is well established that fitness to practise law carries with it as an essential characteristic, that the person concerned exhibit honesty and integrity. As explained by Spigelman CJ in New South Wales Bar Association v Cummins: [9] "19 Honesty and integrity are important in many spheres of conduct. However, in some spheres significant public interests are involved in the conduct of particular persons and the state regulates and restricts those who are entitled to engage in those activities and acquire the privileges associated with a particular status. The legal profession has long required the highest standards of integrity. 20 There are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people."
3. No doubt it is true that dishonesty may occur in a variety of ways, some of which are more serious than others. Financial dishonesty in relation to a client of a legal practice strikes at the heart of the professional requirements for the practice of law. Copying the signature of a client from one document to another in order to allow the practitioner to obtain an additional amount of costs in excess of $15,000 was a flagrant and serious act of dishonesty. It was criminal conduct, the elements of the crime being fully admitted by the plea of guilty.
4. Having embarked on the course of deception when challenged as to his entitlements to the payment obtained by a transfer of funds from his trust account, the seriousness of the conduct was exacerbated by continuing false statements in correspondence with the Legal Services Commissioner and the Law Society, while investigations were underway. The falsity continued over more than two years, and in the face of knowledge that an investigation was being undertaken which included the obtaining of expert advice from a document examiner. Even when finally charged in August 2014, the respondent failed voluntarily to reveal that fact to the Law Society as required by the statutory condition of his practising certificate. The principle of candour in relation to dealings with professional bodies has been treated as an essential precondition to entry to and maintenance of membership of the legal profession: see New South Wales Bar Association v Davis. [10]
5. In Prothonotary of the Supreme Court of New South Wales v Leon Nikolaidis, [11] the Court considered the removal from the roll of a practitioner who, as a solicitor, had created and backdated a document with the intention of justifying costs to which he was not otherwise entitled. The document was placed on a file provided to a costs assessor with the intention of it being used to support the claimed costs. [12] He was later charged with a criminal offence and convicted following a jury trial. He was sentenced to 2 years imprisonment with a 1 year non-parole period.
6. Mr Nikolaidis was found to be unfit to practise and an order which was not contested was made removing his name from the roll. However, in circumstances where the events occurred more than 10 years before the disciplinary proceedings were brought, and there was no up-to-date material before the Court in relation to the intervening decade, the Court declined to make a declaration that the respondent in that case was not of good fame and character.
7. In the present case, the respondent asserted and maintained the genuineness of the false document he had created from December 2011 until September 2013. Some 11 months later he was charged with a criminal offence. It was not until October 2015 that he demonstrated his willingness to accept his guilt of the charge to which he then pleaded and for which he was convicted.
8. That course of conduct is indicative of a lack of that good fame and character which is a necessary precondition to the practice of law. As was explained by the Court in Ex parte Tziniolis; Re Medical Practitioner's Act, [13] in a passage accepted as relevant to a lawyer in Nikolaidis, [14] reformation of character over a period of time may occur, but should not be assumed. In the present case, the Court cannot make an assumption of reformation. The respondent failed to engage with the Law Society by answering correspondence or responding to notices sent to him since advising him of its findings as to his professional misconduct in October 2014. He did not respond to letters concerning a further complaint in 2015, nor to a notice of appointment of a manager to his practice in November 2015. He was notified of the suspension of his practising certificate in February 2016 but, again, did not respond. In March 2016 the Society issued a notice indicating its belief that he had abandoned his practice, but seeking a response. The failure of the respondent to engage either with the Society, or with this Court once the proceedings had commenced, meant the Court had no explanation of his conduct. There is no doubt that the repayment of the funds was the proper course to take, but whether it revealed genuine remorse based on insight, or was merely a tactical response in the face of a possible prison sentence the Court cannot know. The period of misconduct, unaccompanied by any explanation, warrants the conclusion that the respondent is not a person of good fame and character.

Orders

1. The Court is satisfied that the orders sought by the applicant should be made, in the following terms: 1. Declare that Michael Leon Kinchington has been guilty of professional misconduct. 2. Declare that Michael Leon Kinchington is not a person of good fame and character and is not a fit and proper person to remain on the roll of Australian lawyers maintained pursuant to s 22 of the Legal Profession Uniform Law. 3. Order that the name of Michael Leon Kinchington be removed from the roll. 4. Order that Michael Leon Kinchington pay the costs of the Council of the Law Society of New South Wales of these proceedings. 5. Direct that the Law Society serve on Mr Kinchington a copy of this judgment in accordance with the provisions for substituted service.

Endnotes

1. Legal Profession Act, s 55.
2. Legal Profession Act, s 4.
3. Legal Profession Act, s 67.
4. Legal Profession Act, s 67(3).
5. Local Court tcpt, 20/11/15, p 7(20).
6. Tcpt, 02/02/16, p 3(20).
7. (2004) 216 CLR 253; [2004] HCA 1 at [10]-[11].
8. [2017] NSWCA 101 at [5].
9. (2001) 52 NSWLR 279; [2001] NSWCA 284 (Mason P and Handley JA agreeing).
10. (1963) 109 CLR 428; [1963] HCA 31.
11. [2010] NSWCA 73 (Allsop P, McColl and Young JJA).
12. Nikolaidis at [3]-[4].
13. (1966) 67 SR (NSW) 448 at 460-461 (Walsh JA, Wallace P agreeing).
14. Nikolaidis at [23]. 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: 31 October 2017