Council of the Law Society of NSW v Yang [2017] NSWCATOD 111 | Case summary

Background

By a decision of the Tribunal delivered on 29 March 2017, the Tribunal found the respondent's conduct in practising as a sole principal of Young's attorneys in the period from 3 December 2013 to 30 June 2015 without having in place professional indemnity insurance constituted professional misconduct: see Council of the Law Society of NSW v Seung Phil Yang: [2017] NSWCATOD 44.
The Tribunal is now required to determine the appropriate orders that should be made consequent upon the finding of professional misconduct against the respondent. The Tribunal has received both oral and written submissions from each party on this issue. The Tribunal considers that it is appropriate to have regard to the submissions made before it in the previous hearing, as it provides an insight into the order that will be made.
The respondent submitted before the previous hearing that he made a "genuine mistake" and thereafter "laboured under a misapprehension that the premium had been or would be paid by MPF", the insurer. The submission stated that when the respondent learnt the "true position" in September 2014, MPF was no longer offering finance and that there was the need for him to effect the insurance by himself. However there was an extensive delay thereafter as is acknowledged, essentially resulting from financial difficulties being experienced at that time by the respondent. The respondent does not dispute that irrespective of any mistake when he originally sought to take out the insurance, he knew that from 3 September 2014 until 13 March 2015, he did not effect the insurance which was outstanding for the previous year.
It is submitted that the respondent did not openly defy his obligations but rather he failed to fulfil his obligations because "he made a mistake, and was then dilatory in rectifying the problem".

Findings

The facts in this matter are in a small compass. Nevertheless they highlight the need by a practitioner to assiduously observe and comply with the requirements attaching to the privilege of a legal practitioner. Numerous authorities have referred to the principle that: "…non-compliance with an undertaking to a professional association is a more serious matter than non-compliance with an undertaking to a fellow practitioner": see: Council of the Law Society of New South Wales v Morgan [2015] NSWCATOD 71 at [81]) Further, where a condition attaching to the right of practise exist, the failure to comply with such condition raises a fundamental issue, namely whether the practitioner is a fit and proper person to remain on the Roll of solicitors.
In this instance the conduct of the respondent in failing, after September 2013, to effect the required insurance despite warnings from the Law Society that professional indemnity insurance remained outstanding, established professional misconduct. It could not be said that the respondent merely overlooked the requirement: as this was brought to his attention, but he took no action to rectify the deficiency. As has been held in Legal Services Commissioner v Piper [2006] NSWADT 12, the "highest priority" is required to be given to correspondence from the Law Society. For authority to similar effect, see Council of the Law Society of NSW v Kim [2012] NSWADT 45. In this decision the Tribunal at [33] said: With regard to the undertaking, some authorities in support of a finding of professional misconduct are The Council of the Law Society v Panopoulos [2010] NSW ADT 208…; Legal Services Commissioner v McCarthy unreported ADT 2 June 2008…; NSW Bar Association v Howen [2008] NSW ADT 148…; Law Society of NSW v Hinde [2005] NSW ADT 199…
In Kim at [34], the Tribunal said, inter alia: With regard to the breach of the condition of a Practising Certificate, such conduct was held to be professional misconduct in Council of the Law Society of NSW v Karam [2010) NSW ADT 170.
As the Tribunal has observed already in these proceedings, the requirement to effect professional indemnity insurance serves the important purpose of protecting the public. Without such insurance there is a potential exposure for a client of a solicitor. Accordingly, the requirement for insurance serves a highly important purpose: see Council of the New South Wales Bar Association v Perry [2007) NSW CA 111 where the Court of Appeal said: 20. The requirement to hold a current practising certificate serves important functions. The regime exists for the protection of the public: see Mee Ling v Law Society of New South Wales [1974) 1 NSWLR 490 at 497, 498.
The Tribunal is aware that no loss has occurred in this instance. However as was observed in Law Society of NSW v Moulton (1981) 2 NSWLR 736, the fact that a client "...suffers no loss is of little, if any relevance. If the acts or omissions of a solicitor constitute professional misconduct, they do so at the time when they occur." (At 740 C-D). See also: Bolster v Law Society of NSW (unreported, 20 September 1982) CA 233/1982.
These authorities emphasise the principle stated in Council of the NSW Bar Association v Costigan [2013) NSW SC339, where the Court observed that the "issue and existence of an annual practising certificate" should not be regarded as a mere formality nor as a device to raise revenue: rather, it is the protection of the public.
Section 562 of the Legal Profession Act 2004 (NSW) ("the Act"), which is agreed as being the relevant law applicable to these proceedings, provides the Tribunal with a wide range of measures that can be taken where default has been shown to exist in the nature of unsatisfactory professional conduct or professional misconduct. The measures range from removal from the local roll of solicitors to a reprimand.
The Tribunal is mindful of the matters raised by the respondent in answer to the claim. The Tribunal takes into consideration the fact that, whilst there was a breach of his undertaking to the Law Society and a failure to take out the insurance, there are matters which indicate that there was confusion existing in the mind of the respondent until September 2014.
Further, the Tribunal has been provided with a reference from a practising barrister, who has acted professionally for the respondent for more than five years and who speaks highly of the ability and respect which the respondent has for his profession. In addition, the Tribunal has received a reference from a colleague who departed Korea in 1976 with his family at the same time as did the respondent and his family. The referee speaks highly of the dedication of the respondent to the Korean Presbyterian Church, of which both referee and the respondent are members, and of the service which the respondent has provided to the Church.
The Tribunal's finding of professional misconduct results solely from the period in which the respondent practised without professional indemnity insurance, namely a period of 7 months. Whilst the finding of professional misconduct is only made following a serious breach of the standards, the Tribunal accepts that the breach occurred in confined circumstances. Further, there is no suggestion of dishonesty or untoward conduct on the part of the respondent. The respondent has practised as the principal of the firm from 7 April 2003, having been admitted to practise on 1 December 1995. But for these proceedings, the respondent has not come to notice for any other disciplinary matter.
The applicant seeks a reprimand, and an order that its costs to be paid. Section 60 of the Civil and Administrative Tribunal Act 2013 (No. 2) ("NCAT Act") contains the general provision for the award of costs in proceedings before it. Such provision is expanded by the provisions of cl 23 (1), Sch 5 of the NCAT Act, which provides: (1) Despite section 60 of this Act, the Tribunal must make orders requiring a respondent lawyer 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".
Taking all the circumstances the consideration, the Tribunal considers that a reprimand is appropriate. The Tribunal will order that the respondent pay the costs of the proceedings, since it is satisfied that no "exceptional circumstances exist" as provided by s 60. Such costs are agreed in the amount of $5750. The Tribunal is satisfied that such orders will serve as a reminder to the respondent that strict compliance with the requirements of the Law Society and of undertakings given to it is essential. As was observed by Street CJ in Ex parte Macauley (1930) 30 SR( NSW) 193: Unless the Court insists on a high standard of conduct on the part of solicitors - unless the Court punishes severely every lapse from the proper standard - the public will never be properly guarded and the profession will never retain the respect which it ought to have in the community.
It should be noted that the High Court of Australia in Ex parte Lenehan (1948) 77 CLR 403 at 421, 422 has qualified a such a principle insofar as it should be interpreted as meaning at a solicitor, struck off the roll for pecuniary dishonesty, could not be reinstated: however the High Court confirmed the great importance of the financial integrity of a practitioner. This issue does not arise in the matter now before the Tribunal.

Council of the Law Society of NSW v Yang

At a glance

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Judgment (4 paragraphs)

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Legislation Cited (3)

Cases Cited (6)

Cited By (2)