Council of the Law Society of NSW v Yoon

The Law Society investigates Mr Yoon

1. The Law Society subsequently instigated an investigation of Mr Yoon's conduct in relation to these matters. The investigation was undertaken by Mr Peter Edwards, a Law Society investigator and it forms the basis of his written report dated 27 January 2016, which is Exhibit PE1 to his affidavit of 21 April 2017, which was admitted into evidence.

Allegations of breach of trust account requirements

1. Mr Edwards found that Mr Yoon's treatment of the proceeds of the recovery on behalf of KDIC breached trust account provisions of the LPA, in that: 1. Neither of Mr Yoon's practices had maintained a general trust account. 2. Between January and May 2015 amounts totalling $22,260 were paid by KDIC on account of Mr Yoon's costs and disbursements. Mr Edwards described the payments as being for "upfront costs". These amounts were paid to the law practice but Mr Edwards found that no proper accounting or any repayment had been made to the client. 3. Mr Yoon was the principal of El Khan Legal and the sole signatory for the NAB account. 4. However the NAB account was not a trust account, these moneys were trust moneys and had been mixed with other moneys 5. On 1 June 2015, the $398,286.59 which had been paid into court as described in [5], was paid by the Supreme Court into a different NAB account operated by Mr Yoon, which had an account number ending in 963.
2. For convenience of reference we shall adopt the Law Society's identification of the funds referred to in (2) and (5), totalling $420,546.59, collectively as "the Deposited Amounts".
3. Mr Edwards found that a result of the transactions described in (2) and (5) above: 1. trust money totalling $420,546.59 (that is the Deposited Amounts) in respect of the KDIC matters paid to Mr Yoon's practice had not been deposited to the relevant law practice trust account; 2. no trust records had been kept in relation to the receipt of those monies; 3. the funds, being trust money, had been intermixed with other monies 4. Mr Yoon had failed to hold the money exclusively for his client KDIC; and 5. the funds had subsequently been used by Mr Yoon for purposes other than those for which they had been received; namely for Mr Yoon's own purposes, including to ensure that he kept both his office accounts in credit balance and Mr Yoon had not repaid any of these monies to his former client KDIC; and 6. in the circumstances Mr Yoon had misappropriated these trust monies.

Allegations of breach of prohibition on contingency fee arrangements

1. Mr Edwards also found that in breach of section 325 of the LPA, Mr Yoon had entered into costs agreements with KDIC which made provision for his firm's fees to be calculated on a contingency basis.

Non-compliance with Section 370 Notice

1. Mr Edwards also reported that Mr Yoon had not complied with a notice sent to him by email on 23 December 2015, which was a notice under section 370 of the Legal Profession Uniform Law (NSW) No 16 a ("the Uniform Law"). For convenience we shall refer to that notice as "the Section 370 Notice". The Section 370 Notice required Mr Yoon to send Mr Edwards bank statements for the office bank accounts of the two legal practices on or before 30 December 2015. Mr Edwards reported that no response had been received to that notice and we understand that as at the final hearing date that remained the case.

The Law Society's case

1. The conclusions and findings by Mr Edwards' form the basis of the Law Society's application in these proceedings. However the Law Society's application did not include reference to Mr Edwards' finding that Mr Yoon had misled investigators and we understood that that charge was not pressed.
2. The Law Society claims that Mr Yoon is guilty of professional misconduct by reason of his actions as summarised above. The application alleges that Mr Yoon has: 1. breached section 254 of the LPA (certain trust money to be deposited in a general trust account); 2. breached section 255 of the LPA (holding, disbursing and accounting for trust money); 3. breached section 260 of the LPA (intermixing money); 4. breached section 264 of the LPA (keeping trust records) 5. breached section 325 of the LPA (the prohibition of contingency fees 6. misappropriated trust funds; and 7. failed to comply with a notice issued pursuant to section 370 of the Uniform Law.
3. For convenience of reference, we have set out the statutory provisions relevant to our determination of this matter in the Appendix to these reasons.

Representation of Mr Yoon and his absence from the final hearing

1. Although Mr Yoon had been represented by Ms Cameron of Tress Cox, Solicitors, at the first hearing day, 24 January 2018, he had appeared in person and unrepresented at the hearing on 13 April 2018. Mr Eardley of Counsel appeared for him at the hearing on 28 May 2018 and at a Directions Hearing before the Presiding Member on 6 June 2018. However Mr Yoon did not appear nor was he represented at the final hearing on 13 July 2018.

The Amended Reply and Mr Yoon's affidavit

1. Mr Yoon's case consisted of his amended reply filed on 12 June 2018 and his affidavit affirmed on 17 April 2018. We observe that that affidavit does not address directly many of the Law Society's assertions as summarised in the Particulars set out in the application. Rather, in respect of many of those assertions it appears to seek to provide an explanation or excuse for Mr Yoon's conduct, in particular by way of explaining his understanding of his relationship with KDIC and assertions as to that company's motives. The contentions and explanations in the affidavit primarily address the manner in which Mr Yoon was engaged by KDIC and in particular the agreement to enter a contingency fee arrangement. The alleged breaches of trust account requirements, including the charge of misappropriation of trust funds, are not directly denied or otherwise explained in the affidavit.
2. Mr Yoon's affidavit was admitted into evidence subject to several objections made by the Law Society. We upheld certain objections and as a result did not admit into evidence the following sections of the affidavit: 1. Paragraph 3, final sentence from "it was a good deal…" to "not successful". 2. Paragraph 4, lines 2 and three from "the reason.." to "..agreement because..". 3. Paragraph 11, fifth paragraph, first two sentences, from "This is because…" to " 3 June 2015". 4. Paragraph 11, fifth paragraph,, lines 7 to 9, from "If there is" to " the payment". 5. Paragraph 11, fifth paragraph, page 5, line 7 and 8, the entire sentence commencing: "It was laughable…" 6. Paragraph 11, fifth paragraph, page 5, final sentence commencing "If I had agreed…" 7. Paragraph 12 lines 6 and 7, the sentence commencing "If we had transferred…" 8. Paragraph 13 in its entirety other than the last sentence commencing "So they completed…" 9. Paragraph 14, line 8, from "Even if it is…" to the end of the paragraph. 10. Paragraph 15, line 4, the three sentences commencing "It was well known" and concluding with "empty-handed" (line 9).

Mr Yoon's case as presented in the amended reply and his affidavit

1. On the basis of Mr Yoon's amended reply and his affidavit, his position with respect to the Particulars in the Law Society's application is as follows (adopting the numbering of the Particulars): 1. He admits that between 26 March 2010 and 10 June 2015 he was the principal of El Khan Legal and that from 12 June 2015 he was the principal of Boep Jeong Pty Ltd. However he does not admit that neither of those firms maintained a general trust account. He provides no further detail, explanation or justification for that position. 2. He admits that he acted for KDIC in respect of registration and enforcement of the judgment obtained against the three judgment debtors. 3. He admits that he and KDIC entered into costs agreements in respect of those proceedings for each of the three judgment debtors and that the agreements were contrary to section 325 of the LPA, in that they specified that his fees were to be calculated on a contingency basis. 4. He admits that an amount for each of the three matters was paid to him on account of costs and disbursements and that those funds were deposited into the NAB Account on 9 and 13 January and 15 May 2015 respectively but asserts that the amount paid was $6000 per matter rather than $6100 as asserted by the Law Society. He admits that a further sum of $3960 was paid into the NAB Account on 27 January 2015. 5. He admits that $397,971.20 was paid into an account with the NAB with an account number ending in 963 operated by Boep Jeong. He appears not to respond specifically to the assertion that on 1 June 2015 a sum totalling $398,286.59 was paid by the Supreme Court into that account. 6. In his first Reply Mr Yoon admitted that having received the funds referred to in (4) and (5) he did not deposit those funds into a general trust account, he intermixed those funds with other monies and failed to hold the funds exclusively for his client and failed to keep trust records in relation to them. He says however that these funds were applied in payment of his fees which he was happy to have assessed by a costs assessor. In his Amended Reply, Mr Yoon does not admit any part of these allegations and says that the funds referred to were: "..applied in payment for (his) fess (sic) after there was an approval by the client before it was used." 1. He admits that Mr Edwards forwarded to him a notice issued under section 370 of the Uniform Law requiring production of documents on or before 30 December 2015 and that he did not comply with that notice.

The real issues in the proceedings

1. The "guiding principle" which is set out in s 36 (1) of the Civil and Administrative Tribunal Act requires the facilitation of the just, quick and cheap resolution of the real issues in proceedings. The section imposes a duty on the parties to the proceedings and their respective legal representatives to cooperate with the Tribunal to give effect to the principle. Under s 36 (2), the Tribunal itself must seek to give effect to the guiding principle when it exercises any power under, or interprets any provision of, the Act or the procedural rules. Effectively, that requires us to identify at the outset the real issues in the proceedings.
2. On the basis of the pleadings, including the admissions made by Mr Yoon in his amended reply as noted at [19] above, it was clear that the real issues in these proceedings are these. 1. Was Mr Yoon's conduct as asserted by the Law Society? In particular: 1. Did he breach any of the trust account provisions of the LPA, namely sections 254, 255, 260 and 264 as alleged? 2. Did he breach section 325 of the LPA by entering into costs agreements with his client KDIC on a contingency basis, as alleged? 3. Did he misappropriate trust monies as alleged? 4. Did he fail to comply with the Section 370 Notice, as alleged? 1. Did Mr Yoon's conduct amount to professional misconduct? If it did not, did it amount to unsatisfactory professional conduct? 2. If Mr Yoon's conduct amounted to either professional misconduct or unsatisfactory professional conduct, is he unfit to practice so that we should make an order recommending that his name be removed from the roll, in accordance with s 302 (1) (f) of the Uniform Law? 3. What further or other orders, if any, should we make?

(a) Trust account provisions in sections 254, 255, 260 and 264 of the LPA

Section 254 (certain trust money to be deposited in a general trust account)

1. In his amended Reply, Mr Yoon does not admit the allegation that neither of his practices maintained a general trust account. However he has adduced no evidence to explain or support this pleading and there is no other evidence as to this.
2. There was substantial evidence adduced by the Law Society to support its contention that no general trust account had been maintained. Mr Edwards, the Law Society investigator, undertook a search of the Law Society records for both of Mr Yoon's law practices and found that neither of them had ever maintained a trust account. Mr Edwards indicated that that conclusion was supported by notes made by Mr Chandra Sivakumar, investigator, at the conclusion of his routine investigation of both practices on 1 October 2015 and Mr Edwards' subsequent discussion with Mr Yoon himself (Mr Edwards' affidavit exhibit PE1 at [16.1] and [16.3] (page 8).
3. We find Mr Edwards' evidence to be thorough, reliable and persuasive. There is nothing in Mr Yoon's affidavit which provides any basis of explanation for his failure to admit that a proper general trust account had not been maintained by either practice.
4. On that basis we are satisfied that Mr Yoon did not maintain a general trust account either of his practices.

Section 255 (holding, disbursing and accounting for trust money)

1. The Law Society contends that Mr Yoon breached this section by using the Deposited Amounts (as defined at [9] above), totalling $420,546.59, without the consent of his client and for purposes other than those of his client. In his amended reply Mr Yoon does not admit this allegation and says that the Deposited Amounts were: "..applied in payment for (his) fess (sic) after there was an approval by the client before it was used."
2. In his affidavit, particularly at [11], third paragraph, Mr Yoon contends that on or about 3 June 2015 a senior officer on behalf of KDIC agreed orally that he could receive the settlement funds in payment of his legal costs. That assertion is not supported by any other evidence. In its written submissions, at [53], the Law Society points out that Mr Yoon's contention in this regard is contradicted by account given of the matter by the KDIC senior officer referred to and by KDIC's complaint to the Law Society which gave rise to Mr Edwards' investigation and ultimately to these proceedings.
3. The Law Society also points out that in Mr Yoon's affidavit at [11] he admitted that he only sent KDIC in the invoice for his legal services in late 2016; that is, a substantial time after he had transferred the Deposited Amounts into the relevant accounts (being the NAB account in respect of the $22,260 and the account operated by El Khan Legal in respect of the $398,286.59).
4. We accept the Law Society's contentions in this regard. We find Mr Yoon's contentions and explanation to be unsupported and unpersuasive. We find that Mr Yoon breached section 255 in the manner contended by the Law Society and noted at [28] above.

Section 260 (intermixing money)

1. The Law Society contends that Mr Yoon breached this section by intermixing the Deposited Amounts, which were trust monies, with other monies in his general accounts. In his amended reply Mr Yoon pleads to this allegation in the same way as for the allegation of breach of section 255. We accept the Law Society's contentions as summarised at [28] and [29]. They are equally applicable to this breach. Accordingly we find that Mr Yoon breached section 260 in the manner contended by the Law Society.

Section 264 (keeping trust records)

1. The Law Society contends that Mr Yoon breached this section because he failed to keep trust records in relation to the Deposited Amounts. That contention is supported by Mr Edwards' findings. Mr Yoon has provided no explanation for his failure to comply with the section, other than a general concession in the concluding paragraphs of his affidavit, particularly at [17] on page 8, that he lacks knowledge of how to manage the trust account. We find that Mr Yoon breached section 264 in the manner contended by the Law Society.

(b) Breach of section 325: contingency fees

1. In his amended reply Mr Yoon admits that each of the costs agreements which he entered into with KDIC breached section 325 in that they specified that his fees were to be calculated on a contingency basis. For completeness we note that in Mr Yoon's affidavit at [15] he indicates that he did not initiate entry into the costs agreements on this basis but rather KDIC had amended his standard cost agreements and suggested that the parties entered into such an agreement. The Law Society submitted that the issue of who proposed a contingency fee arrangement is irrelevant. We agree. We find that Mr Yoon breached section 325 in the manner contended by the Law Society.

(c) Misappropriation of trust monies

1. The Law Society's case is that Mr Yoon is guilty of misappropriation of trust monies because he used the Deposited Amounts for his own purposes without his client's authority. In his Amended Reply Mr Yoon makes the assertion which we have referred to at [29] above, to the effect that KDIC had provided oral approval for his use (that is his appropriation) of the monies. For the reasons discussed at [29] and [30] we accept the Law Society's contentions. We find Mr Yoon's contentions and explanation to be unpersuasive and we cannot be satisfied that KDIC approved Mr Yoon's use of the trust monies. We find that Mr Yoon misappropriated trust monies in the manner contended by the Law Society.

(d) Failure to comply with the Section 370 Notice

1. In his amended reply Mr Yoon admits that he failed to comply with the requirements of the notice issued pursuant to section 370 of the Uniform Law.

The nature of professional misconduct and relevant authorities

1. Professional misconduct is defined inclusively in section 297 of the Uniform Law. It includes: 1. unsatisfactory professional conduct which involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and 2. conduct of a lawyer which would justify a finding that he or she is not a fit and proper person to engage in legal practice (whether or not that conduct occurred in connection with the practice of law).
2. As confirmed recently in Legal Services Commissioner v Livers [2017] NSWCATOD 117 at [138], it is accepted that the Parliament, in formulating a statutory definition of professional misconduct, nevertheless intended to preserve the common law meaning of the term. The Tribunal in that case accepted that at common law professional misconduct was conduct that would be reasonably regarded as disgraceful or dishonourable by professional colleagues of good repute and competency. That is the test, commonly referred to as "the Allinson Test", which was propounded in Allinson v General Medical Council [1894] 1 QB 750 at 768. See also Prothonotary of the Supreme Court of NSW v McCaffery [2004] NSWCA 470; Hoile v Medical Board of South Australia [1960] HCA 30; (1960) 104 CLR 157.
3. Meagher JA set out the relevant principles concerning identification of professional misconduct, with particular reference to but not restricted to trust account obligations, in The Prothonotary of the Supreme Court of New South Wales v Dimetrious [2015] NSWCA 258, where he said, at [21]: "Legal practitioners are expected to act and must act with scrupulous honesty when discharging their obligations generally, and specifically with respect to the receipt and payment of monies on behalf of clients. There is an unqualified expectation that they adhere to those standards.
4. His Honour relied on the explanation provided by Ipp JA in Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32: "The trust and confidence which clients place in their solicitors are basic elements of the administration of justice in this country. Violations by legal practitioners of trust accounts betray that trust and harm the 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 accounts for their own benefit."
5. In this case the Law Society has sought a finding of professional misconduct. The views of the Law Society should, in such matters be given due and proper weight: see Re Clayton (1961) SR NSW 132.

Consideration

1. We have found that Mr Yoon engaged in conduct which breached important provisions of the LPA relating not only to trust accounts, but to the creation of contingency fee agreements. He has also been found to have failed to comply with a section 370 Notice. More significantly he has been found to have used the Deposited Amounts to his own advantage and for his own purposes rather than for the benefit of his client and those monies were not dealt with properly as trust monies. We are satisfied that his dealings with the Deposited Amounts constituted misappropriation of trust funds.
2. We have taken into account the assertion by Mr Yoon in his affidavit that he needs "to learn how to manage" trust accounts and we take that to involve an assertion that it was lack of knowledge and lack of experience rather than a conscious wish to misappropriate his client's monies which led to his conduct and in particular it misappropriation of trust funds. We note that Mr Yoon was admitted to practice on 7 December 2007, over 7 years before his conduct which is the subject of these proceedings. We therefore find this assertion unpersuasive.
3. We have concluded that Mr Yoon's conduct would be reasonably regarded as disgraceful or dishonourable by his professional colleagues of good repute and competency. That conclusion applies in particular, but not exclusively, to Mr Yoon's misappropriation of trust monies, particularly in the light of what Ipp JA in Barwick described as "the sacrosanct nature of trust accounts" and the very high standard underlined by Meagher JA in Dimetrious, as cited at [37] and [38].
4. We have also concluded that Mr Yoon's conduct involves such a substantial failure to reach or maintain a reasonable standard of competence and diligence as to constitute statutory professional misconduct within the meaning of s 297 (1) of the Uniform Law
5. It must follow that Mr Yoon is guilty of professional misconduct.

Fitness to practice: should a striking-off be recommended?

1. We commence by confirming that notwithstanding Mr Yoon's absence from the final hearing, he had been put on clear notice that we would at that hearing proceed to consider the issue of penalty, if we concluded that he was guilty of professional misconduct or unsatisfactory professional conduct. That was made clear in our directions issued on 29 May 2018.
2. Findings of professional misconduct having been made, we may, under s 302 of the Uniform Law make such orders as we think fit, including any one or more of the orders specified in that section. s302 (1) (f) permits us to make an order recommending that the name of the lawyer be removed from the roll
3. It is clear from the authorities that the ultimate issue, where an order for removal from the roll is contemplated, is whether the practitioner is shown not to be a fit and proper person to be an officer of the Supreme Court :A Solicitor v Law Society of New South Wales [2004] 216 CLR 253.
4. The principles guiding the Tribunal in determining whether a solicitor's name should be removed from the roll were summarised by Beazley JA (as she then was) in Law Society of NSW v Walsh [1997] NSWCA 185 at 224 as follows: 1. The Tribunal's power is discretionary; 2. Subject to considerations which would compel the Tribunal to impose a lesser penalty, the protective nature of the jurisdiction calls for the removal of a practitioner's name from the roll when the practitioner has been found not to be of good fame and character; 3. The substantive considerations which might compel a different course are ones which themselves are relevant to and enhance the essential nature of the Tribunal's jurisdiction, which is the protection of the public. An example is where the legal practitioner has reported the subject conduct to the Law Society or Bar Association. The relevance of mitigating conduct of that type is that it encourages practitioners guilty of misconduct to promptly report it. 4. In general, mitigating factors, such as evidence of a respected reputation, no previously found misconduct, or service to the profession "are of considerably less significance than in the criminal sentencing process". (Citing Law Society of NSW v Bannister [1993] 4 LPDR 24 at 13)
5. It is also clear that, in deciding that ultimate issue, we must proceed on the basis that disciplinary proceedings are concerned with protection of the public. In Walsh, Beazley JA went on to confirm that: "The Court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of solicitors."
6. In Dupal v Law Society of NSW [1990] NSWCA 56, a case involving misappropriation of monies entrusted to a solicitor, Kirby P noted at 57 that the normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the roll"
7. In the same decision, Handley JA said, at 68,: "This Court would be departing from a long course of authority if it were to allow the appeal and substitute a period of suspension for the order of the Tribunal removing the Appellant from the Roll. … Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public and in the handling of the matters entrusted to their charge. The maintenance of those standards and the public interest require, in my judgment, that this appeal be dismissed. It is well established that the jurisdiction being exercised in this case is not penal but disciplinary and that it must be exercised for the benefit of the public."

"Probable permanent unfitness" to practice

1. In New South Wales Bar Association v Cummins [2001] NSWCA 284 at [24], Spigelman CJ confirmed the principle which had been adopted by McHugh JA in the unreported decision of Prothonotary of the Supreme Court of NSW v Ritchard (Unreported, Court of Appeal NSW, 31 July 1987), to the following effect: "An order for the involuntary removal of the name of a practitioner from the Roll of solicitors is made only because the probability is that the solicitor is permanently unfit to practise. Unless the Court is persuaded that the probability exists, the proper order to make will usually be one of suspension or fine instead of removal."

Conclusions

1. We are satisfied on the basis of the evidence as analysed above that : 1. Mr Yoon's conduct was disgraceful and dishonourable to a degree requiring that his name be removed from the roll; 2. he has been shown not to be a fit and proper person to be an officer of the Supreme Court; 3. the factors outlined in the authorities extracted above and in particular our duty to protect the public require Mr Yoon's name to be removed from the roll; and 4. as at the date of this decision he appears in all probability to be permanently unfit to be allowed to practice.
2. However, we conclude with an observation based on Handley JA's remarks in Dupal, at 68. That is that the decision in Ex Parte Lenehan (1948) CLR 403 stands as continuing authority for the proposition that a strike off order is not final and is not, in the graphic language of James QC (as he then was), in Jauncey v Law Society (Court of Appeal, unreported, 1 February 1989) "a sentence of professional death". Although readmission is not common, there are instances of readmission to the roll on demonstration of a sufficient period of commendable conduct showing rehabilitation and fitness.

Other orders: costs

1. We were satisfied that there were no exceptional circumstances for the purposes of clause 23 (1) of Schedule 5 of the Civil and Administrative Tribunal Act and it must follow that Mr Yoon be ordered to pay the costs of the Law Society as agreed or assessed.
2. No other orders appeared appropriate.

Orders

1. The Tribunal finds Seog Won Yoon (the Respondent) guilty of professional misconduct and: 1. recommends 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. orders the Respondent to pay the Applicant's costs, as agreed or assessed.

Civil and Administrative Tribunal Act (No.2) 2013 (NSW 36 Guiding principle to be applied to practice and procedure 1. The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: 1. exercises any power given to it by this Act or the procedural rules, or 2. interprets any provision of this Act or the procedural rules.

Schedule 5. 23 Costs consequent of adverse conduct findings 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.

Legal Profession Act 2004 (NSW) 254 Certain trust money to be deposited in general trust account 1. Subject to section 258A, as soon as practicable after receiving trust money, a law practice must deposit the money in a general trust account of the practice unless: 1. the practice has a written direction by an appropriate person to deal with it otherwise than by depositing it in the account, or 2. the money is controlled money, or 3. the money is transit money, or 4. the money is the subject of a power given to the practice or an associate of the practice to deal with the money for or on behalf of another person. Maximum penalty: 100 penalty units. 1. Subject to section 258A, a law practice that has received money that is the subject of a written direction mentioned in subsection (1) (a) must deal with the money in accordance with the direction: 1. within the period (if any) specified in the direction, or 2. subject to paragraph (a), as soon as practicable after it is received. Maximum penalty: 100 penalty units. 1. The law practice must keep a written direction mentioned in subsection (1) (a) for the period prescribed by the regulations. Maximum penalty: 50 penalty units. 1. (Repealed) 2. A person is an appropriate person for the purposes of this section if the person is legally entitled to give the law practice directions in respect of dealings with the trust money. 255 Holding, disbursing and accounting for trust money 1. A law practice must: 1. hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and 2. disburse the trust money only in accordance with a direction given by the person. Maximum penalty: 50 penalty units. 1. Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law. 2. The law practice must account for the trust money as required by the regulations. Maximum penalty: 50 penalty units. 260 Intermixing money 1. A law practice must not, otherwise than as permitted by subsection (2), mix trust money with other money. Maximum penalty: 100 penalty units. 1. A law practice is permitted to mix trust money with other money to the extent only that is authorised by the Law Society Council and in accordance with any conditions imposed by the Law Society Council in relation to the authorisation. 264 Keeping trust records 1. A law practice must keep in permanent form trust records in relation to trust money received by the practice. Maximum penalty: 100 penalty units. 1. The law practice must keep the trust records: 1. in accordance with the regulations, and 2. in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person, and 3. in a way that enables the trust records to be conveniently and properly investigated or externally examined, and 4. for a period determined in accordance with the regulations. Maximum penalty: 100 penalty units. 325 Contingency fees are prohibited 1. A law practice must not enter into a costs agreement under which the amount payable to the law practice, or any part of that amount, is calculated by reference to: 1. (Repealed) 2. the amount of any award or settlement or the value of any property that may be recovered in any proceedings to which the agreement relates. Maximum penalty: 100 penalty units. 1. Subsection (1) does not apply to the extent that the costs agreement adopts an applicable fixed costs provision. 327 Certain costs agreements are void 1. A costs agreement that contravenes, or is entered into in contravention of, any provision of this Division is void. 2. Subject to this section and Division 11, legal costs under a void costs agreement are recoverable as set out in section 319 (1) (a) or (c) (On what basis are legal costs recoverable?). 3. However, a law practice is not entitled to recover any amount in excess of the amount that the law practice would have been entitled to recover if the costs agreement had not been void and must repay any excess amount received. (3A) A law practice that has entered into a costs agreement in contravention of section 324 (2)-(5) (Conditional costs agreements involving uplift fees) is not entitled to recover the whole or any part of the uplift fee and must repay any amount received in respect of the uplift fee to the person from whom it was received. 1. A law practice that has entered into a costs agreement in contravention of section 324 (1) (Conditional costs agreements involving uplift fees) or 325 (Contingency fees are prohibited) is not entitled to recover any amount in respect of the provision of legal services in the matter to which the costs agreement related and must repay any amount received in respect of those services to the person from whom it was received. 2. If a law practice does not repay an amount required by subsection (3) or (4) to be repaid, the person entitled to be repaid may recover the amount from the law practice as a debt in a court of competent jurisdiction.

Legal Profession Uniform Law (NSW), No 16a 297 Professional misconduct 1. For the purposes of this Law, professional misconduct includes - 1. unsatisfactory professional conduct of a lawyer, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and 2. conduct of a lawyer whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice. 302 Determination by designated tribunal - disciplinary matters 1. If, after it has completed a hearing under this Part into the conduct of a respondent lawyer, the designated tribunal finds that the lawyer is guilty of unsatisfactory professional conduct or professional misconduct, the designated tribunal may make any orders that it thinks fit, including any of the orders that a local regulatory authority can make under section 299 in relation to a lawyer and any one or more of the following - 1. an order that the lawyer do or refrain from doing something in connection with the practice of law; 2. an order that the lawyer cease to accept instructions as a public notary in relation to notarial services; 3. an order that the lawyer's practice be managed for a specified period in a specified way or subject to specified conditions; 4. an order that the lawyer's practice be subject to periodic inspection by a specified person for a specified period; 5. an order that the lawyer seek advice in relation to the management of the lawyer's practice from a specified person; 6. an order recommending that the name of the lawyer be removed from a roll kept by a Supreme Court, a register of lawyers kept under jurisdictional legislation or the Australian Legal Profession Register; 7. an order directing that a specified condition be imposed on the Australian practising certificate or Australian registration certificate of the lawyer; 8. an order directing that the lawyer's Australian practising certificate or Australian registration certificate be suspended for a specified period or cancelled; 9. an order directing that an Australian practising certificate or Australian registration certificate not be granted to the lawyer before the end of a specified period; 10. an order that the lawyer not apply for an Australian practising certificate or Australian registration certificate before the end of a specified period; 11. a compensation order against the lawyer in accordance with Part 5.5; 12. an order that the lawyer pay a fine of a specified amount not exceeding $100 000 if the lawyer is found guilty of professional misconduct. 370 Requirements - trust records examinations, trust records investigations and compliance audits 1. For the purpose of carrying out a trust records examination, trust records investigation or compliance audit in relation to a law practice, an investigator may, on production of evidence of his or her appointment for inspection, require the law practice or any person who has or had control of documents relating to the affairs of the law practice to give the investigator either or both of the following - 1. access to the documents relating to the affairs of the law practice the investigator reasonably requires; 2. information relating to the affairs of the law practice the investigator reasonably requires (verified by statutory declaration if the requirement so states). 1. A person who is subject to a requirement under subsection (1) must comply with the requirement. Civil penalty: 50 penalty units. 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 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: 20 February 2019