[2009] NSWCA 255
Hilton v Legal Profession Admission Board [2017] NSWCA 232
New South Wales Bar Association v Cummins (2001) 52 NSWLR 279
Source
Original judgment source is linked above.
Catchwords
[2009] NSWCA 255
Hilton v Legal Profession Admission Board [2017] NSWCA 232
New South Wales Bar Association v Cummins (2001) 52 NSWLR 279
Judgment (3 paragraphs)
[1]
[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.]
[2]
JUDGMENT
BELL CJ: By summons filed on 12 June 2024, the Council of the Law Society of New South Wales (Law Society) sought the following relief:
1. a declaration that Gen (James) Li (the Respondent) is not a fit and proper person to remain on the roll of Australian lawyers maintained by the Supreme Court of New South Wales (the Roll) under s 22 of the Legal Profession Uniform Law (NSW) (Uniform Law);
2. an order that the Respondent be removed from the Roll; and
3. an order that the Respondent pay the Law Society's costs of (including those incidental to) the proceedings.
As recently noted in Council of the Law Society of New South Wales v Croke [2024] NSWCA 195 at [2] (Croke), such relief lies within this Court's inherent jurisdiction, and is statutorily preserved by ss 22, 23 and 264 of the Uniform Law: see also Council of the Law Society of New South Wales v Karimjee [2021] NSWCA 179 at [5]-[6].
On 10 May 2023, the Respondent was convicted, following a plea of guilty to three counts of dishonestly obtaining a financial advantage by deception under s 192E(1)(b) of the Crimes Act 1900 (NSW) (Crimes Act). The counts involved defalcations from accounts held by the law firm in which he was then employed. The three counts were as follows:
"(a) Between 18 April 2019 and 1 September 2022, the Respondent did, by deception on 5 occasions, cause funds totalling $213,708.00 to be transferred from clients of Sun Lawyers to bank accounts held in his own name which ought to have been transferred to Sun Lawyers' office account.
(b) Between 1 March 2020 and 7 September 2022, the Respondent did, by deception, by fraudulently altering bank account details, dishonestly obtain a financial advantage and/or cause a financial disadvantage, in the sum of $67,000.00, which belonged to the Client.
(c) Between 1 July 2020 and 1 September 2022, the Respondent did, by deception on 144 occasions, cause funds totalling $198,319.00 to be transferred from clients of Sun Lawyers to bank accounts held in his own name which ought to have been transferred to Sun Lawyers' office account."
The Respondent was sentenced to an aggregate term of imprisonment of 2 years and 8 months, to commence on 10 May 2023 and expire on 9 January 2026, with a non-parole period of 14 months.
By letter dated 1 November 2023, the Respondent advised the Law Society that he considered himself currently unfit to engage in legal practice, and that he agreed with the resolutions proposed by the Law Society which included the initiation of proceedings for the purposes of s 23(1)(b) of the Uniform Law in which the Council would apply for a declaration as to his unfitness for practice and the removal of his name from the Roll. The Respondent indicated that he would consent to such orders. He added that:
"As to whether I am permanently unfit to engage in legal practise, I am unable to form a view at this stage and expect that I would require additional advice on that issue. I do hope that I will be able to prove myself to be a fit and proper person and engage in legal practise at some stage in the future, but whether or not this is feasible is what I do not know and, quite possibly, cannot decide."
By subsequent letter dated 9 July 2024, the Respondent advised the Law Society that he consented to the declarations and orders sought in the summons filed on 12 June 2024.
Notwithstanding the Respondent's consent to the orders sought, this Court must be independently satisfied that the Respondent is "not presently fit to practise and is likely to be unfit in the indefinite future such that the removal of his name from the Roll is appropriate": Croke at [10]; see also Council of the Law Society of New South Wales v Duncan [2024] NSWCA 147 at [3].
In Council of the New South Wales Bar Association v Einfeld (2009) 258 ALR 768; [2009] NSWCA 255 at [16], it was observed that:
"…When, as happens from time to time, a member of the profession so conducts him or herself as to bring disrepute on to the profession, the administration of justice and the legal system, procedures (such as this hearing) should be unquestionably complete in examination of relevant conduct. To do less may lead to a view (even if misguided) that the system operates without a full opportunity for the public examination of such wrongful conduct. This is not part of any process of punishment; rather, it is as an aspect of protecting the public and fostering the public interest by maintaining full accountability of those in the profession and involved in the administration of justice."
In that context, it is important in an application of this kind to provide some detail of the nature and extent of the offending which has rendered the Respondent unfit to practice and which warrants his removal from the Roll. The Respondent's conduct has brought great discredit on the legal profession, and it is importance for the maintenance (and restoration) of confidence in the administration of justice that the public knows that such conduct is not tolerated and meets with professional consequences that are ultimately for the public's protection.
The following details of the offending are taken largely from the agreed statement of facts.
From 18 April 2019 to 1 September 2022, the Respondent, while employed as a solicitor with Sun Lawyers, deceptively caused amounts due to Sun Lawyers or its clients to be paid into bank accounts held in his own name. The amount misappropriated totalled $412,027.
On 6 September 2022, the offences were discovered when Ms Sun, the Principal of Sun Lawyers, received a complaint from a client about the Respondent's conduct.
On 7 September 2022, Ms Sun notified the Law Society, and summarily dismissed the Respondent from employment at Sun Lawyers. On the same day, the Law Society engaged trust account inspectors to investigate the notification and prepare a report pursuant to s 165 of the Uniform Law. The Respondent cooperated with Sun Lawyers by providing a spreadsheet outlining each incidence of fraud - which was provided to the Law Society.
On 8 September 2022, the Respondent made a notification under s 154(1) of the Uniform Law, making admissions that: (i) in 2020, he caused trust monies in the sum of $67,000 to be paid into his personal bank account, rather than into Sun Lawyers' trust account; (ii) around September 2022, he transferred a client $67,000 from trust funds held by Sun Lawyers on behalf of other clients; and (iii) from early to mid-2021, he issued clients of Sun Lawyers false invoices which directed payments to his personal bank account rather than Sun Lawyers' trust account. In addition, the Respondent admitted that he failed to commence proceedings on behalf of clients, and misled them to believe that they had been commenced.
On 9 September 2022, the Respondent attended Surry Hills Police Station, where he made full admissions of the fraudulent conduct. On the same day, the Respondent was charged with one offence of dishonestly obtaining a financial advantage by deception under s 192E(1)(b) of the Crimes Act.
On 15 September 2022, the Law Society resolved to immediately suspend the Respondent's practising certificate pursuant to s 77 of the Uniform Law. On 19 September 2022, the Law Society served the Respondent with notices, pursuant to s 83 of the Uniform Law, of its intention to cancel the Respondent's practising certificate. On 26 September 2022, the Respondent notified the Law Society that he would not provide submissions in response to the notices. On 20 October 2022, the Law Society resolved to cancel the Respondent's practising certificate for the year ending 30 June 2023.
On 10 May 2023, as explained above at [4], the Respondent was convicted on his pleas of guilty and was sentenced to an aggregate term of imprisonment of 2 years and 8 months, to expire on 9 January 2026. The non-parole period was 14 months, meaning that he was eligible for parole on 9 July 2024. The Respondent was also ordered to pay an aggregate sum of $167,000 to Sun Lawyers and the defrauded clients.
On the same day, her Honour Magistrate Farnan made the following sentencing remarks:
the objective seriousness of the offences was "high" for two of the offences, and "very serious" for the other offence because a large sum of money was misappropriated, affecting a "significant" number of clients;
the conduct was "extensively planned" and involved "multiple acts of fraud";
the motivation for committing the offences related to a desire to live an "extravagant lifestyle";
the Respondent had prior good character; and
the Respondent took "very significant steps to facilitate the course of justice" by entering pleas of guilty at the earliest possible opportunity, cooperating with the Law Society and attempting to repay some of the monies misappropriated (approximately $95,000).
This Court is not precluded by s 91 of the Evidence Act 1995 (NSW) from relying upon the sentencing remarks. The Respondent expressly consented to the Law Society tendering her Honour's reasons, after having been informed that those reasons may not be admissible to prove the truth of their contents without his consent: and see Croke at [9]; Hilton v Legal Profession Admission Board [2017] NSWCA 232 at [55]-[56].
The Law Society submitted that, having regard to the Respondent's conduct, the Respondent is not a fit and proper person to remain on the Roll and he is probably permanently, or at least indefinitely, unfit to engage in legal practice.
In Croke, I explained at [11] that:
"…Admission to legal practice is a privilege, not a right. The administration of justice in this State relies upon legal practitioners adhering unwaveringly to the oaths or affirmations they swear or make on admission to legal practice, a core component of which is an undertaking to the Supreme Court to conduct themselves honestly in the practice of the law. That oath or affirmation, sworn or made at the outset of a lawyer's career, is one of a continuing and critical nature and significance. The privilege of admission will be withdrawn in cases where a lawyer is established not to be a fit and proper person to continue in practice."
As Spigelman CJ emphasised in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [20], the legal profession demands the highest levels of integrity for various important reasons:
"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."
Critical to upholding confidence in the legal profession is the appropriate maintenance of trust accounts, as this Court explained in Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32 at [118]:
"… The trust and confidence which clients place in their solicitors are a basic element of the administration of justice in this country. Violations by legal practitioners of trust accounts betray that trust and harm public confidence in the legal system. This explains the sacrosanct nature of trust accounts and the acute concern that courts have when practitioners, in breach of their fiduciary obligations, misuse trust moneys for their own benefit."
See also Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258 at [21].
In Council of the Law Society of New South Wales v Yoon [2020] NSWCA 141 at [28] (Yoon), this Court held that an amount just over $400,000 was a "substantial" sum to have misappropriated, and justified an order removing the practitioner's name from the Roll. The misappropriation of any sum of money by a lawyer is a gross violation of the oath or affirmation which every new lawyer makes on admission to practice, namely to "truly and honestly conduct" themselves in the practice of a lawyer of the Supreme Court of New South Wales. Indeed, as this Court explained in Council of the Law Society of New South Wales v Green [2022] NSWCA 257 at [65], "the ordinary consequence of misappropriation of trust funds by a practitioner is removal from the roll".
The Respondent misappropriated a substantial sum of money, affecting a wide range of clients. As in Council of the Law Society of New South Wales v Clarke [2022] NSWCA 57 at [9], and as described in Croke at [15], the Respondent's offences:
"'involved him taking advantage in a deliberate and calculated fashion of opportunities arising out of his employment as a solicitor and involved significant breaches of trust and serious dishonesty' such that they were 'antithetical to central requirements for being a fit and proper person, namely honesty and integrity'".
Such dishonourable conduct harms the reputation of lawyers practising in this State and undermines public confidence in the legal profession: Croke at [13]. As such, the damage done by the Respondent's acts extended well beyond the clients and principals of the firm by which he was employed. The relief sought by the Law Society is entirely justified.
For the above reasons, the Court should make the following orders:
1. a declaration that Gen (James) Li is not a fit and proper person to remain on the Roll;
2. an order that the name Gen (James) Li be removed from the Roll; and
3. an order that Gen (James) Li pay the Law Society's costs of (and incidental to) the proceedings.
KIRK JA: I agree with Bell CJ.
STERN JA: I agree with the Chief Justice.
[3]
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Decision last updated: 09 September 2024