Council of the Law Society of New South Wales v Yoon

Background

1. Mr Yoon is a solicitor. From the material before the Tribunal in the Tribunal proceedings it appears that he was admitted as a lawyer on 7 December 2007.
2. In his amended reply filed 12 June 2018 in the Tribunal proceedings, Mr Yoon admitted that between 26 March 2010 and 10 June 2015 he was the principal of El Khan Legal (a law firm) and that, from 12 June 2015 he was the principal of Boep Jeong Pty Ltd (an incorporated legal practice). Mr Yoon admitted that while at those firms, he acted for Korea Deposit Insurance Corporation (KDIC) in litigation seeking the registration and enforcement of three foreign judgments against three individuals. Mr Yoon did not admit that neither of those two firms maintained a general trust account.
3. Mr Yoon admitted that he and KDIC entered into costs agreements in respect of the three matters, each of which, contrary to s 325 of the Legal Profession Act, specified that the solicitor's fees were to be calculated on a contingency basis.
4. Mr Yoon admitted that under the costs agreements a sum of $6,000 per matter was paid to him on account of costs and disbursements and that those amounts, and a further sum of $3,960, were paid into a bank account in the name of El Khan on particular dates in 2015. Mr Yoon also admitted that in or about June 2015, a sum of $397,971.20 was paid into an account held by Boep Jeog Pty Ltd (it appears following a settlement of one of the proceedings), and that those funds were subsequently used by him for purposes other than for his client (KDIC). In the amended reply Mr Yoon says that they were "applied in payment for his fees which he is happy to have assessed by a Costs Assessor".
5. Mr Yoon further admitted that he did not comply with the requirements of a notice issued on 23 December 2015 by the trust account inspector, Mr Peter Edwards, requiring production of certain documents by 30 December 2015.
6. Following an investigation into suspected irregularities in relation to Mr Yoon's handling of trust funds and the report dated 27 January 2016 of Mr Peter Edwards (made pursuant to the provisions of s 165 of the NSW Uniform Law), on 4 February 2016 the Council of the Law Society suspended Mr Yoon's practising certificate pursuant to s 77 of the NSW Uniform Law and a manager was appointed to his law practice on the same date.
7. A complaint investigation was undertaken by the applicant and, on 17 November 2017, the applicant's Professional Conduct Committee resolved to commence proceedings against Mr Yoon in the Tribunal pursuant to s 300(1)(b) of the NSW Uniform Law.
8. The applicant filed an Application for Disciplinary Findings and Orders on 4 May 2017, alleging that Mr Yoon had breached ss 254, 255, 260, 264 and 325 of the Legal Profession Act, had misappropriated trust funds, and had failed to comply with a notice issued pursuant to s 370 of the NSW Uniform Law. Mr Yoon filed a Reply on 1 June 2018 and an Amended Reply on 12 June 2018. Mr Yoon filed an affidavit affirmed 17 April 2018 in the Tribunal proceedings, in which he deposed to his account of the relevant events. Although represented at various times during the course of the Tribunal proceedings, Mr Yoon did not appear and was not represented at the final hearing before the Tribunal on 13 July 2018.
9. The Tribunal published its reasons on 20 February 2019, finding Mr Yoon guilty of professional misconduct and recommending the removal of his name from the roll kept by the Supreme Court of NSW and the Australian Legal Profession Register.
10. Proceedings were then commenced by the applicant in this Court by summons filed on 5 April 2019 seeking to give effect to the Tribunal's recommendation. Those proceedings were discontinued, by consent, on 28 August 2019 (following the decision of the Tribunal in another matter - see Council of the Law Society of NSW v DXW [2019] NSWCATOD 101).
11. Following the amendment to the Legal Profession Uniform Law Application Act 2014 (NSW) (NSW Application Act) by the insertion of cl 23 in Sch 9 (see the Justice Legislation Amendment Act (No 2) 2019 (NSW), which was given assent on 22 November 2019), the current proceedings were commenced.

Legislation

1. Pursuant to s 23(1)(c) of the NSW Uniform Law, the Supreme Court may order the removal of the name and other particulars of a person from the Supreme Court roll on the recommendation of the designated tribunal (which in the case of this jurisdiction is the Tribunal - see s 11(3) of the NSW Application Act). This statutory jurisdiction supplements, and does not detract from, the Court's inherent jurisdiction with respect to the control and discipline of Australian lawyers, which is expressly preserved by s 264 of the NSW Uniform Law (see Prothonotary of the Supreme Court of New South Wales v Livanes [2012] NSWCA 325 at [24] per McColl JA, Campbell and Meagher JJA agreeing).
2. Pursuant to s 302(1)(f) of the NSW Uniform Law, if the Tribunal, after a hearing into the conduct of a lawyer, finds that the lawyer is guilty of unsatisfactory professional conduct or professional misconduct, the Tribunal may make an order recommending that the name of the lawyer be removed from a roll kept by the Supreme Court, a register of lawyers kept under jurisdictional legislation, or the Australian Legal Profession Register.

Nature of these proceedings

1. These proceedings are assigned to the Court of Appeal pursuant to s 48(2)(k) of the Supreme Court Act 1970 (NSW) and Part 65A rule 2 of the Supreme Court Rules 1970 (NSW).
2. As the applicant notes, these proceedings are founded upon the statutory disciplinary process provided for by the NSW Uniform Law (as opposed to an exercise of the Court's inherent jurisdiction). The proceedings are not in the nature of an appeal and Mr Yoon has not filed a Notice of Intention to Appeal or Notice of Appeal from the Tribunal's decision.
3. The applicant draws a distinction between the statutory process found in the NSW Uniform Law and the exercise of the Court's inherent jurisdiction. In particular, the applicant submits that the consideration by the Court of a recommendation under s 302(1)(f) of the NSW Uniform Law is the culmination of a process in which the Tribunal is charged with making findings and orders; and submits that, in the absence of any challenge to the Tribunal's findings of fact by way of an appeal by the respondent, this Court should accept the findings of fact and characterisation of Mr Yoon's conduct as set out in the Tribunal's decision.

Issue presently for determination

1. The issue for determination in these proceedings is whether Mr Yoon has been shown not to be a fit and proper person to be a legal practitioner of this Court. The applicant submits that this Court, in making such a determination, may have regard to the Tribunal's findings of fact and characterisation of the respondent's conduct.
2. The applicant raised for consideration an issue as to what use may here be made as to the Tribunal's decision, having regard to s 91 of the Evidence Act 1995 (NSW) (Evidence Act), noting that the scope of the prohibition under s 91 was considered in the context of professional disciplinary proceedings by this Court in Hilton v Legal Profession Admission Board [2017] NSWCA 232 and King v Muriniti (2018) 97 NSWLR 991; [2018] NSWCA 98. In particular, reference was made to the obiter observations of Basten JA in King v Muriniti at [35] (Gleeson JA agreeing) that: [35] … because of the relationship between the court and a legal practitioner, with the concomitant duty of candour imposed on the practitioner, the disciplinary jurisdiction would not permit a practitioner to require the Prothonotary to prove again a finding of misconduct made in other proceedings because reliance could not be placed upon those findings. Hence s 91 was not engaged.
3. Reference was also made by the applicant to the observations by the Full Court of the Federal Court in Law Society (ACT) v Powrie (2017) 12 ACTLR 184; [2017] ACTSCFC 4 at [79] (though not made by reference to s 91 of the Evidence Act), namely: [79] [w]hen one considers the statutory regime in the LPA as a whole, including the authority given to the ACAT to determine whether conduct constitutes professional misconduct or unsatisfactory professional conduct, and the availability of appeals from such determination, it is impossible to conceive that the legislature intended that this Court, in determining whether to accept and act upon a recommendation of the ACAT that the name of a practitioner be removed from the roll, would engage in a review of those determinations. To construe the relevant provisions of the LPA otherwise would be to effectively grant the practitioner a right of appeal outside the terms of the statute. Such a construction would also negate the very purpose of the provisions, because there would effectively be no difference between the Court considering a recommendation of the ACAT under s 425 of the LPA, and the exercise of its inherent jurisdiction. In the statutory process for disciplining practitioners found in the LPA, the legislature has seen fit to bestow upon the ACAT, and not upon this Court, the authority to make findings of fact and to determine how the facts as found are to be characterised. To construe the LPA as submitted by the practitioner would be to render that conferral of authority nugatory.

Applicant's submissions as to Mr Yoon's conduct

1. The applicant submits that Mr Yoon's conduct involved significant failures in complying with the provisions of the Legal Profession Act governing trust money. It is submitted that although the breaches of ss 254, 255, 260 and 264 of the Legal Profession Act were in relation to only one client, the breaches were demonstrative of Mr Yoon's lack of understanding of his obligations in handling trust money. It is submitted that it is immaterial in this regard that Mr Yoon did not operate a trust account; he admits that he received money in advance from his client, and received the amount on behalf of his client pursuant to consent orders made in the litigation. (It is said by the applicant that Mr Yoon's costs agreements with his client each contained a clause authorising the transfer of money from the respondent's (non-existent) trust account, but the Court has not reviewed those costs agreements.)
2. The applicant submits that the admitted breach of s 325 of the Legal Profession Act in relation to the costs agreements in question demonstrates Mr Yoon's lack of understanding of the applicable law regarding cost disclosure (and says, as the Tribunal found, that the issue of who proposed a contingency fee agreement is irrelevant, since such costs agreements were prohibited by the legislation).
3. In relation to the finding of misappropriation of trust moneys, the applicant notes that Mr Yoon's evidence that his client had provided oral approval for his appropriation of those moneys was not accepted by the Tribunal. The applicant points out that misappropriation of trust money is a serious breach of a solicitor's obligations (pointing to the cases referred to by the Tribunal referred in its reasons namely: Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258; Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32; and Dupal v Law Society of New South Wales [1990] NSWCA 56). Although the present proceedings concerned a single instance of misappropriation, the amount was substantial.
4. Finally, as to Mr Yoon's admitted failure to comply with a notice issued pursuant to s 370 of the NSW Uniform Law, the applicant notes that failure to comply with a requirement under s 370 of the NSW Uniform Law is capable of constituting either unsatisfactory professional conduct or professional misconduct (see s 466(6) of the NSW Uniform Law). It submitted that Mr Yoon's evidence before the Tribunal (that he believed that the bank statements sought under the notice could be obtained by the applicant by subpoenaing a third party) does not excuse him from compliance with that notice.

Conclusion

1. In the present case, it is not necessary to determine the issue as to what limitation s 91 of the Evidence Act places on assessment of whether the respondent is a fit and proper person to remain on the roll of Australian lawyers, nor is it appropriate to do so where there was no contradictor to argue the issue before this Court. Nor is it necessary to decide whether a lawyer who opposes a recommendation that his or her name be removed from the roll, but who has not appealed the order made under s 302(1)(f) of the NSW Uniform Law nor appealed any anterior decision of professional misconduct, is precluded from challenging the Tribunal's findings on which the recommendation is based. It is sufficient to note that there has been a finding (for the reasons given by the Tribunal) that Mr Yoon has been guilty of professional misconduct as identified in the Tribunal's reasons and there has been no challenge to that finding.
2. This Court can therefore proceed on the basis that Mr Yoon has been found guilty of the relevant breaches of the Legal Profession Act, of misappropriating trust funds of his client, and of failure to comply with a notice issued under s 370 of the NSW Uniform Law. Conduct of that kind, and in particular the misappropriation of trust moneys, is a serious matter. This Court has a duty to protect the public from misconduct of this kind not just by this particular practitioner but from other practitioners whom it might be expected would be deterred from such conduct by the sanctions that are here proposed to be imposed.
3. This Court must insist on the maintenance of the highest standards of honesty and integrity in the performance of duties by legal practitioners.
4. Having regard to the findings of fact made by the Tribunal and to the material which was before the Tribunal and on which its decision was based, and noting that there has been no appeal from those findings, it is clear that Mr Yoon is not a fit and proper person to be an officer of the Supreme Court and that it is in the interest of the public and the administration of justice that his name be removed from the roll maintained by the Supreme Court and from the Australian Legal Profession Register.
5. There is no reason why costs should not follow the event.
6. The following orders should be made: 1. Order that the name of the respondent be removed from the roll kept by the Supreme Court of New South Wales and the Australian Legal Profession Register. 2. Order the respondent to pay the applicant's costs of these proceedings.

Amendments 15 July 2020 - [32] - s 322 amended to s 302 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: 15 July 2020