Solicitors:
Mr L Pierotti (Applicant)
Thomas & Company (Respondent)
File Number(s): 1620124
[2]
Background
In an amended Application filed on 23 June 2016, the Council of the Law Society of New South Wales (the Council) alleged that Seung Phil Yang (the Solicitor) had engaged in professional misconduct or, alternatively unsatisfactory professional conduct. It sought orders that the Solicitor be reprimanded and that he pay its costs of and incidental to these proceedings.
The Solicitor was admitted to practise on 1 December 1995. From 7 April 2006 to 30 June 2013, he was a Principal of Youngs, Lawyers. From 1 July 2013 to 14 November 2013, he was a non-Principal Solicitor of Youngs, Lawyers.
On 1 July 2013, the Solicitor commenced employment with Leonard Legal, and he was issued with a Practising Certificate as a Non-Principal. However, on 4 December 2013, he applied to vary his Practising Certificate to that of a Principal Solicitor of Youngs, Lawyers until 30 June 2014. In this application the solicitor gave an undertaking in writing (hereafter referred to as "the undertaking") to "arrange professional indemnity insurance prior to practising on my own account"
By way of a letter dated 16 December 2013, Law Cover provided the Solicitor with details to enable him to apply for the required Professional Indemnity insurance ("insurance"). However, the Solicitor did not arrange the required insurance and he did not attempt to arrange this until 10 March 2014.
Pursuant to s 48 (13) (a) of the Legal Profession Act 2004 ("the Act"), the Solicitor's Application for Variation dated 4 December 2013 was deemed to have been refused as a result of his failure to comply with the pre-requisites for obtaining a Practising Certificate as a Principal. As a result, the Solicitor had a right to only practise as a non-Principal until 30 June 2014.
It follows that from 3 December 2013 to 30 June 2015, the Solicitor engaged in legal practice contrary to the conditions of his Practising Certificate. On 6 May 2014, the Law Society notified the Solicitor that he had failed to arrange the required professional indemnity insurance.
On 15 May 2014, the Solicitor applied for a Practising Certificate as a Principal for the year ending 30 June 2015.
In an email to the Law Society dated 29 May 2014, the solicitor stated that there had been an error in his application for Professional Indemnity Insurance in respect of the 2013/2014 and 2014/2015 years and he submitted certain documentation in support of that assertion.
On 29 July 2014, the Solicitor completed an application for Professional Indemnity Insurance for the 2014/2015 year. On 2 September 2014, Law Cover issued an invoice for the premium for the 2014/2015 year to the Solicitor.
By an email dated 3 September 2014, the Law Society reminded the Solicitor that it had been unable to issue him with a Practising Certificate as a Principal for the year ending 30 June 2015, because he had not provided evidence that he had obtained professional indemnity insurance. Shortly thereafter, payment was made by a financier for that year's premium, but the premium for the year ending 30 June 2014 was not paid.
On 3 October 2014, Law Cover reminded the solicitor that the premium for the year ending 30 June 2014 remained outstanding and this was not paid until about 13 March 2015.
On 2 March 2015, the Law Society issued the Solicitor a Practising Certificate as a Principal for the period ending 30 June 2015.
For these reasons, which the Solicitor does not dispute, it is apparent that during the period from 4 December 2013 to 30 June 2014, the Solicitor practised contrary to the conditions of his Practising Certificate. Further, as the solicitor had not applied for professional indemnity insurance before 10 March 2014 and he then failed to pay the premium until 13 March 2015, he breached his undertaking to the Law Society dated 4 December 2013.
[3]
Relevant Legislation
The Act was repealed effective from 1 July 2015, as a result of the Legal Profession Uniform Law Application Act 2015 ("the Uniform Law"). However, by virtue of the Savings and Transitional Provisions of the Uniform Law, the Act continues to apply to this matter. We have therefore considered the Solicitor's conduct under the relevant provisions of the Act.
[4]
Consideration
The issue for determination by this Tribunal at this stage is whether the Solicitor's conduct is properly characterised as professional misconduct, as defined in s 497 of the Act, or as unsatisfactory professional conduct, as defined in s 498 of the Act.
The Solicitor disputes that his conduct should be categorised as professional misconduct. He provided the following reasons for this view.
The Solicitor annexed correspondence between himself, the Law Society and Law Cover to his Affidavit sworn on 26 July 2016. This evidences that on 10 June 2013, he wrote to the Law Society advising it of his intention to close the Law Practice known as Youngs Attorneys from 30 June 2013. He requested its guidance regarding the closure of that practice.
From 1 July 2013 until approximately November 2013, the Solicitor practised as an Employed Solicitor with Leonard Legal.
On 16 December 2013, after the Solicitor lodged his Application for variation of his Practising Certificate with the Law Society, Law Cover wrote to him advising him that once he had completed his proposal online a quotation for the professional indemnity insurance would be issued to him.
On 10 March 2014, Law Cover issued a tax invoice to the Solicitor in respect of "Compulsory PII Premium" in the amount of $3,967.30. In his Affidavit he deposed that when he filled out an online Application Form for insurance for the 2013/2014 practise years he mistakenly ticked the box indicating that the payment of the premium would be "paid by others". In fact, he meant to indicate that the premium would be paid by "a premium funder".
On 6 May 2014, Ms Borg of the Law Society wrote to the Solicitor advising him that the requirements for variation of his Practising Certificate for the 2013/2014 year had not been finalised. She warned him that unless the matter was finalised by 31 May 2014, the matter might be referred for action.
The Solicitor deposed that until he received Ms Borg's letter he was unaware that he had not obtained Professional Indemnity Insurance for the year ending 30 June 2014 and that on previous occasions when he held a Principal's Practising Certificate his insurance premiums were paid by a Premium Funder. He said that he had assumed, incorrectly, that a Premium Funder would also meet this premium and that the premium (in the sum of $3967.30) had been paid. He stated that it was not until 28 May 2014, when he made enquiries with Law Cover, that he discovered that he had selected the incorrect payment option in the online application.
The Solicitor's evidence is that on 28 May 2014, he telephoned Macquarie ("Macquarie") and applied for financing, and he was informed that it would finance the 2013/2014 premium. He has annexed a copy of his email to that Finance Company, in which he stated relevantly:
As discussed today, I attach a copy of the invoice for the 2013/14 PII premium. At the time, I thought I'd opted for funding through Pacific Premium but I am now advised that I'd picked the "Other" option. I confirm that this premium will be added to my 2014/15 premium.
On 28 May 2014, that Macquarie sent an email to the Solicitor, in which it stated relevantly:
Thank you Philip, I will hold onto this until I get the confirm premiums for this year and generate a quote for you to include both the premiums.
On 29 May 2014, the Solicitor sent an email to Ms Borg of the Law Society in response to her letter dated 6 May 2014, in which he asserted his 'error' in selecting the wrong option for payment of the premium invoice.
On 29 July 2014, the Solicitor completed a Law Cover Online Application for Professional Indemnity Insurance for the 2014/2015 year, in which he indicated that Macquarie would be paying the premium.
On 3 September 2014, the Solicitor received an invoice from Law Cover dated 2 September 2014 (in respect of the premium for the 2014/2015 year) in the amount of $2,650.73. On the same day, Ms Borg reminded him that she had not received confirmation that he had obtained Professional Indemnity Insurance and the Solicitor responded by providing her with a copy of the invoice from Macquarie that referred to the payment of the premium for both the 2013/2014 and 2014/2015 years.
On 8 September 2014, the Solicitor received a Premium Finance Loan Details Form from Macquarie, which appears to detail loan repayments. However, the document itself is undated and it does not indicate when the Solicitor applied for that loan.
The Solicitor's evidence is that on 9 September 2014, he telephoned Macquarie Pacific Finance and allegedly told one of its officers that there was no record of payment arrangements for the 2013/2014 year's premium, but there were payment instalment provisions for the 2014/2015 year's premium. He said that he was advised to try Hunter Premium Funding Limited and Rivwest Finance Limited as Macquarie did not fund premiums for previous years.
The Solicitor's evidence is that he contacted Hunter Premium Funding Limited, Rivwest Finance Limited and Capital Finance on 10 February 2015, but he was unable to secure finance for the 2013/2014 year's premium. It was not until 13 March 2015 that he paid that premium ($3,957.30).
On 13 March 2015, the Solicitor wrote to Law Cover and stated:
I have paid the premium for my 2013/14 professional indemnity insurance in full. Please you have written confirmation that despite what has happened retrospective cover is given for my practice for the period from December 2013 to 30 June 2014.
The Solicitor was advised of the current complaints by way of an email dated 29 January 2015. However, it was not until 16 March 2015, that Law Cover advised him that the premium for the 2013/2014 year had been paid.
[5]
Characterisation of the Solicitor's Conduct
The Tribunal is disturbed by certain aspects of the Solicitor's explanation for non-payment of the premiums for the required Professional Indemnity Insurance.
Firstly, we note that there is no dispute that in the online Application that he lodged with Law Cover on 10 March 2014, he stated that the premium was to be paid by way of "Finance and re-pay by instalments using a premium funder". However, there is no evidence that he made any arrangements with any Financier to pay the premium at that time.
Secondly, there was a significant delay from 16 December 2013 (when the Solicitor received the Law Cover Login ID and password to enable him to complete the online insurance proposal) until 10 March 2014 (when the application was lodged). That is a delay of almost 3 months and the Solicitor has not provided any explanation for this delay.
Thirdly, the Solicitor was notified by Ms Borg on 6 May 2014, that he had not satisfied the requirements for variation of his 2013/2014 Practising Certificate, due to his failure to arrange Professional Indemnity Insurance with Law Cover. However, he took no action to rectify this until 28 May 2014, at which time he asked Law Cover why the premium had not been paid. This is a delay of 3 weeks for which there is no explanation from the Solicitor.
It appears that the Solicitor made no attempt to make payment of the premium of which he was notified on 10 March 2014 ($3,967.30) until 28 May 2014. He then contacted Macquarie, but there is no evidence before us of any application that the solicitor completed with any finance company for payment of the premiums for the 2013/2014 and 2014/2015 years.
During the course of the hearing, the Solicitor gave oral evidence and he was cross-examined on behalf of the Law Society and was also questioned by the Tribunal. He acknowledged that he was suffering from some financial difficulties when the premiums became due and that he was not in a financial position to pay them himself. He said that for cultural reasons he did not wish to suffer the embarrassment of asking his family for financial assistance. He acknowledged that he understood the purpose of the required insurance and that because he had practised without it he had placed his clients at potential risk.
Because of the discrepancies in the evidence concerning the source of funding to meet the 2013/2014 year's premium, the Tribunal is not satisfied that the Solicitor had in place any arrangements for the payment of that premium. While he completed the wrong payment option in the online application form, it is not necessary for the Tribunal to determine whether this was a deliberate act that was designed to postpone payment of the premium because of the Solicitor's acknowledged financial problems or simply a mistake. Either way, the Solicitor failed to comply with his undertaking to the Law Society.
In our view, there is no excuse for the solicitor's failure to honour his undertaking to the Law Society, especially given his concession that he was aware that he was exposing his clients to potential risks because of his failure to secure Professional Indemnity Insurance. He acknowledged that he understood the purpose of such insurance, namely to protect the clients and that in the absence of such insurance his clients were exposed to risk.
The Tribunal has considered the decision of the Court of Appeal in Bechara v Legal Services Commissioner [2010] NSW CA 369 at [44], in which the Court held that there are no fixed categories of professional misconduct and that much depends on whether the conduct falls outside "generally accepted standard[s] of common decency and common fairness". The Tribunal is not prepared to find that the Solicitor's conduct in failing to arrange PII insurance can be attributed to "a mistake".
In Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563, Rich J said inter alia:
The particular transaction the subject of the charge must be judged as a whole and the conclusion whether it betokened unfitness to be held out by the court as a member of a profession in whom confidence could be placed, or on the other hand, although a lapse from propriety, was not inconsistent with general professional fitness and the habitual adherence to moral standards, was to be reached by a general survey of the whole transaction.
Section 496 of the Act defines unsatisfactory professional conduct as follows:
"Unsatisfactory professional conduct" includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
However, s 497 of the Act defines professional misconduct relevantly as follows:
For the purposes of this act: "professional misconduct" includes:
(i) unsatisfactory professional conduct of an Australian legal practitioner where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and
(ii) conduct of an Australian legal practitioner whether occurring in connection with the practice of law occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.
We have considered numerous authorities that are relevant to the determination of this issue, including Council of the New South Wales Bar Association v Sahade [2007] NSW CA 145 at [54]; Council of the Law Society of New South Wales v Kim [2012] NSWADT 45; Council of the Law Society of New South Wales v Morgan [2015] NSWCATOD 7; Mee Ling v Law Society of New South Wales [1974] 1 NSWLR 490; and, most-recently, Council of the Law Society of NSW v Carney [2016] NSWCATOD 103.
In applying the principles arising from these authorities to the current matter, we are satisfied that the Solicitor's conduct is properly characterised as professional misconduct as defined in s 497 of the Act. He engaged in unsatisfactory professional conduct of an Australian legal practitioner where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence and this conduct continued over an extended period of time.
[6]
Findings and Orders
We find that the Solicitor is guilty of professional misconduct.
The proceedings are adjourned to enable a hearing to be held in relation to relation to the issues of penalty and costs.
[7]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 29 March 2017