Lu v Council of the Law Society of New South Wales

NCAT Occupational|2024-08-30

Principal judgment Parties: Jonathan Hai Song Lu (Applicant) Council of the Law Society of New South Wales (Respondent) Representation: Counsel: DA Lloyd SC and A Avery-Williams (Applicant) R Withana (Respondent)

Solicitors: RGSLAW (Applicant) EM McKenzie (Respondent) File Number(s): 2023/00425783 Publication restriction: Nil

Introduction and uncontroversial facts

The Applicant, a solicitor, has brought an application for administrative review of a decision published on 27 October 2023 by the Respondent in which the Respondent recorded that the Professional Conduct Committee of the Respondent had determined that the Applicant had engaged in unsatisfactory professional conduct because the Applicant had acted "in a conflict of interest in lending $300,000 to his client without the fully informed consent of the client." The Committee determined the complaint against the Applicant by making orders to the effect that the Applicant is reprimanded and further that the Applicant undertake and complete an ethics training course.
In the application for administrative review, the Applicant contended that the Respondent had wrongly concluded that the Applicant's conduct amounted to unsatisfactory professional conduct. The Applicant contended that the Respondent's conclusion that the Applicant ought to have advised the complainant (being the client to whom the loan of $300,000 was made) to obtain independent legal advice without considering that the advice could only be as to the terms of the loan, which terms were proposed by the complainant. Further, the Applicant contended that the Respondent misapplied the law in stating that the principle that there is no duty to inform the client of matters of which they already know had been recently overturned in circumstances where that principle had not been overturned.
At the hearing, the Applicant moved on the application lodged 24 November 2023 and tendered the affidavit of the Applicant sworn 26 February 2024 (marked Exhibit A). There was no objection to that affidavit, nor a requirement to cross-examine the Applicant.
In addition, the Applicant tendered a bundle of documents lodged pursuant to s 58 of the Administrative Decisions Review Act 1997 (NSW) (the ADR Act). That bundle was marked Exhibit B.
The Respondent tendered the following affidavits: 1. Affidavit of Ying Zhang affirmed 27 March 2024 - Exhibit 1. 2. Affidavit Ying Zang affirmed 8 April 2024 - marked Exhibit 2. 3. Affidavit of Valerie Griswold affirmed 6 March 2024 - Exhibit 3.
The Applicant did not require any of the deponents of the affidavits tendered by the Respondent to be cross-examined and, with one exception, there was no objection to any of those affidavits. The exception concerns paragraph 5 of Exhibit 3. At this stage we have not admitted into evidence or considered that paragraph.
It was agreed between the parties that we should determine whether the alleged conduct of the Applicant constituted unsatisfactory professional conduct, or not, by producing to the parties a draft decision and making the directions that are later described. This course was agreed to by us on the basis that if we were to find that the Applicant had engaged in unsatisfactory professional conduct the parties should have the opportunity to put forward submissions as to what orders we should make, and the nature of the orders may depend upon our reasons for our view as to the Applicant's conduct. On the other hand, if we were to find that the Applicant's conduct did not constitute unsatisfactory professional conduct, orders could then be made for the Respondent's internal decision to be set aside.

The Facts

In the following paragraphs we set out the basic facts upon which the matters raised against the Applicant have been based.
Since February 2016, the Applicant practised on his own account as the principal of SHL and Associates. In 2018, the Applicant was acting for Ms Sally Zou and a company associated with her namely Aus Food Alliance Pty Ltd (Aus Food) in proceedings in the Supreme Court of South Australia. The proceedings had been brought by Torrens Valley Orchards Pty Ltd concerning an alleged failure to pay invoices for the supply of 32 tonnes of cherries. The Applicant also acted in related proceedings commenced by Aus Food against Torrens in which the claim was made that the cherries were not of merchantable quality.
The Applicant had met Ms Sally Zou in late 2012 when he was employed by a firm of solicitors and in his affidavit marked Exhibit A, the Applicant stated that Ms Zou had informed him that she was a businesswoman involved in buying and selling iron ore in China.
Exhibit A also describes other matters in which the Applicant acted for Ms Zou and one or more of her companies. The Applicant stated in his affidavit that he had formed the view that Ms Zou was an experienced and sophisticated businesswoman.
With respect to the litigation in South Australia concerning Aus Food involving the supply of a quantity of cherries, the affidavit of the Applicant stated that Aus Food was facing a winding up application. Senior and junior counsel had been briefed by the Applicant and there was also a local solicitor acting for Aus Food. Aus Food proposed to defend the winding up application on the basis that it was in fact solvent.
Exhibit A states that on 19 September 2018 the Applicant received advice from senior counsel in the form of an email, a copy of which is annexed to the affidavit and marked "A".
Senior counsel's email of 19 September 2018 appears to have been dispatched at 3:42 pm. It stated that the winding up application against Aus Food is to be listed for hearing "this Friday" [ie. 21 September 2018] and that it will be necessary for the company to be able to prove that it was then solvent. The email states that it is the intention of Ms Zou not to give evidence and that the report of a Mr Cooper expressing the opinion that Aus Food is solvent based on records of that company will be tendered in support of Aus Food. The email then deals with whether Mr Cooper's opinion will be admissible and whether another witness (Mr Wu) will be able to assist in providing admissible evidence.
Senior counsel's email then stated that the risk (although it is not expressly stated, we assume that the risk referred to is the risk that the court will wind up Aus Food against the arguments of senior counsel) could be lowered by "also making arrangements for Ms Zou to produce a bank cheque made out to the Suitor's Fund for the value of the disputed debt ($414,780.00) from a bank account (other than Aus Food's Westpac account, ie. an alternative account)." Senior counsel described such proposal as putting the company in a very strong position to be able to demonstrate solvency. This was "because the debt would not be considered in assessing the company's cash at bank position. The money would remain in the Suitor's Fund until the litigation about the fruit is resolved."
The final paragraph of the email stated that senior counsel was of the opinion that there was no prospect of the relevant judge allowing another adjournment and that the hearing on Friday will involve hearing argument about solvency.
The Applicant's affidavit states that he conveyed the advice from senior counsel to Ms Zou by email and that he received instructions from her to accept the advice. The affidavit then states that at 6:14 pm on Thursday 20 September, the Applicant emailed senior and junior counsel and the local solicitors advising them that Ms Zou will produce a bank cheque from Aus Food's St George account for the sum of $414,780 made out to the Suitor's Fund and that Mr Wu will be available "tomorrow at the hearing."
At 7:44 pm on Thursday, 20 September 2018, the Applicant sent an email to the Ms Zou confirming the hearing at 2:15 pm the following day in Adelaide and also confirming that Ms Zou will produce a bank cheque from Aus Food's St George Bank account for the sum of $414,780 made out to the Supreme Court of South Australia Suitor's Fund.
At paragraph 14 of Exhibit A, the Applicant sets out the effect of a conversation he had with Ms Zou on the night of 20 September 2018. Paragraph 14 reads as follows: That night, on 20 September 2018, I had a telephone conversation with Ms Zou in Mandarin. The effect of the conversation in English was as follows: Ms Zou: Lu solicitor, I may have an issue Me: What is that? Ms Zou: I don't think I have enough money in my bank account to pay to the suitor's fund tomorrow. Are you able to lend me some money just for a quick turnaround? Only for few days. Me: You are joking right? I already told counsel that you got the bank cheque made out the Suitors Fund for $414,780. Ms Zou: I need approximately $300,000 to make up the difference. Can you lend it to me? I can give you a lump sum interest of $50,000. Me: Jesus Christ. You are embarrassing me. I already emailed everyone that you would pay the sum into the Supreme Court. Ms Zou: Help me out. I know you solicitors all got money. Just prepare a contract and I will sign it. I will only need it for three or four days. I'm just waiting for my money to arrive in Sydney from China. You can make easy $50,000. Me: Okay I will help out. I will prepare the agreement and see you tomorrow in the morning. You need to thank me.
The Applicant's affidavit states that he prepared a loan agreement and met Ms Zou in Adelaide on the morning of 21 September 2018. The affidavit states that he showed the loan agreement to Ms Zou and that she signed it.
The affidavit further states that the Applicant saw Ms Zou read the agreement (which was in English) and that, to his knowledge, Ms Zou could read English and did so regularly in her business dealings in Australia. We note that a copy of the loan agreement was included in the bundle of s 58 documents.
The Applicant's affidavit states that after meeting Ms Zou (when she signed the loan agreement) he went to the ANZ Bank and organised a telegraphic transfer of $300,000 from his account to the account nominated by Ms Zou. The affidavit states that Ms Zou obtained a bank cheque for the sum of the debt claimed in the litigation and handed the bank cheque to the Applicant. He took the bank cheque to the court at 2:15 pm.
The affidavit states that the bank cheque was not banked and that during the course of the hearing the matter was settled on the basis that Ms Zou paid $398,888.88 of the amount claimed in the litigation.
Paragraph 23 of the Applicant's affidavit states that on 24 September 2018, Ms Zou handed the Applicant a bank cheque for the settlement sum ($398,888.88) in favour of Torrens Valley Orchards Pty Ltd, a bank cheque for $50,000 in favour of the Applicant and a company cheque in favour of the Applicant for $300,000. The affidavit records that the company cheque was not honoured.
We understand that the amount of $300,000 was not fully repaid by Ms Zou to the Applicant until March 2019.
From the bundle of documents provided under s 58 (Exhibit B) it is apparent that on 11 April 2019 a complaint was made by Ms Zou to the Respondent in relation to the Applicant's representation of her interests in the proceedings in the Supreme Court of South Australia. Her letter to the Office of the Legal Services Commissioner bearing the date stamp 11 April 2019 states that due to the "ill-advice" of the Applicant she had to "swallow the unsatisfactory settlement result". Ms Zou further alleged that the Applicant encouraged her to "enter the deal by lending me $300,000 on condition that I could pay him $50,000 as interest for three days".
It is appropriate to record that we do not accept the version of events concerning the making of the loan, as alleged by Ms Zou, and fully accept the version provided by the Applicant as recorded in his affidavit (Exhibit A).
The Respondent's determination of the complaint lodged by Mrs Zou was provided to the Applicant on 27 October 2023. Paragraph 56 of that determination (the Determination) listed matters described as not in dispute between the Applicant and Ms Zhou. One such matter, not in dispute was that Ms Zou put forward the terms that she was to repay the loan of $300,000 with an interest amount of $50,000 by 25 September 2018. The Determination states that Ms Zou was not advised to seek independent legal advice in entering into the loan agreement and that the Applicant did not advise Ms Zou on or facilitate access to alternative sources of funding. The Determination records that the Applicant did not inform Ms Zou that, in the circumstances, he would have a conflict of interest in lending the money to Ms Zhou. At [69] of the Determination, the Respondent stated that the Applicant "at the very minimum should have insisted upon and facilitated the client in obtaining independent legal advice. The emergency nature of the circumstances that led to the loan agreement between the parties are acknowledged but they are no excuse for absolving professional obligations of the [Applicant]".
At [107] of the Determination, the Respondent determined that the Applicant's conduct fell "short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer" and amounts to unsatisfactory professional conduct as defined in s 296 of the Legal Profession Uniform Law (NSW) (Uniform Law).
At [108] the determination records the fact that the committee made the orders that have been summarised earlier in this decision.

The nature of review proceedings

This is an application for administrative review conducted under the provisions of the Administrative Decisions Review Act 1997 (NSW) (the ADR Act), the Uniform Law and the Uniform Law Application Act 2014 (NSW) (the Application Act). The nature of such proceedings has recently been thoroughly explained in the decision of the Tribunal in Di Giovanni v Council of Law Society of New South Wales [2024] NSWCATOD 66. There is, in our view, no need to repeat what was said in Di Giovanni other than to acknowledge that we are in agreement with the principles described in that decision.
It is helpful to set out the provisions of ss 296 and 298 of the Uniform Law as they contain a definition of "unsatisfactory professional conduct" and a non-exhaustive list of conduct capable of constituting unsatisfactory professional conduct. These two sections provide: 296 Unsatisfactory professional conduct For the purposes of this Law, "unsatisfactory professional conduct" includes conduct of a lawyer 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 lawyer. 298 Conduct capable of constituting unsatisfactory professional conduct or professional misconduct Without limitation, the following conduct is capable of constituting unsatisfactory professional conduct or professional misconduct-- (a) conduct consisting of a contravention of this Law, whether or not-- (i) the contravention is an offence or punishable by way of a pecuniary penalty order; or (ii) the person has been convicted of an offence in relation to the contravention; or (iii) a pecuniary penalty order has been made against the person under Part 9.7 in relation to the contravention; (b) conduct consisting of a contravention of the Uniform Rules; (c) conduct involving contravention of the Legal Profession Uniform Law Act of this jurisdiction (other than this Law), whether or not the person has been convicted of an offence in relation to the contravention; (d) charging more than a fair and reasonable amount for legal costs in connection with the practice of law; (e) conduct in respect of which there is a conviction for-- (i) a serious offence; or (ii) a tax offence; or (iii) an offence involving dishonesty; (f) conduct as or in becoming an insolvent under administration; (g) conduct in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act; (h) conduct consisting of a failure to comply with the requirements of a notice under this Law or the Uniform Rules; (i) conduct in failing to comply with an order of the designated tribunal made under this Law or an order of a corresponding authority made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Law or a corresponding law); (j) conduct in failing to comply with a compensation order made under this Chapter.

The Applicant's submissions

In the following paragraphs we summarise the Applicant's written and oral submissions.
The Applicant drew attention to [24] of the decision in Di Giovanni and in particular to subparagraphs [11] and [12] of [24]. There the Tribunal stated that the first task of the Tribunal is to identify the decision to be reviewed and the statutory question it answers needs to be identified with some precision "for it marks the boundaries of the review": see Shi v Migration Agents Registration Authority (2008) 235 CLR 286; [2008] HCA 3 at [134]-[135]. Further, natural justice requires that the Applicant be advised in clear and precise terms, prior to the hearing, of the nature and the particulars of the case to be met: Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270. In Di Giovanni the Tribunal stated that this requirement is also embodied in s 299(2)(a) of the Uniform Law. Section 299 of the Uniform Law provides as follows: 299 Determination by local regulatory authority-unsatisfactory professional conduct (1) The designated local regulatory authority may, in relation to a disciplinary matter, find that the respondent lawyer or a legal practitioner associate of the respondent law practice has engaged in unsatisfactory professional conduct and may determine the disciplinary matter by making any of the following orders- (a) an order cautioning the respondent or a legal practitioner associate of the respondent law practice; (b) an order reprimanding the respondent or a legal practitioner associate of the respondent law practice; (c) an order requiring an apology from the respondent or a legal practitioner associate of the respondent law practice; (d) an order requiring the respondent or a legal practitioner associate of the respondent law practice to redo the work that is the subject of the complaint at no cost or to waive or reduce the fees for the work; (e) an order requiring- (i) the respondent lawyer; or (ii) the respondent law practice to arrange for a legal practitioner associate of the law practice- to undertake training, education or counselling or be supervised; (f) an order requiring the respondent or a legal practitioner associate of the respondent law practice to pay a fine of a specified amount (not exceeding $25 000) to the fund referred to in section 456; (g) an order recommending the imposition of a specified condition on the Australian practising certificate or Australian registration certificate of the respondent lawyer or a legal practitioner associate of the respondent law practice. (2) If the designated local regulatory authority proposes to determine a disciplinary matter under this section- (a) the designated local regulatory authority must provide the respondent or associate and the complainant with details of the proposed determination and invite them to make written submissions to the designated local regulatory authority within a specified period; and (b) the designated local regulatory authority must take into consideration any written submissions made to the designated local regulatory authority within the specified period, and may, but need not, consider submissions received afterwards; and (c) the designated local regulatory authority is not required to repeat the process if the designated local regulatory authority decides to make a determination in different terms after taking into account any written submissions received during the specified period; and (d) the rules of procedural fairness are not breached merely because no submissions are received within the specified period and the designated local regulatory authority makes a determination in relation to the complaint, even if submissions are received afterwards. (3) If the designated local regulatory authority determines a disciplinary matter under this section, no further action is to be taken under this Chapter with respect to the complaint. (4) If a complaint contains both a consumer matter and a disciplinary matter and the designated local regulatory authority has already made a determination of the consumer matter under section 290, the designated local regulatory authority may, in subsequently making a determination about the disciplinary matter, take into account the determination already made about the consumer matter, but not so as to make further orders under that section.
It is therefore critical to ensure that the particulars of the misconduct alleged against the Applicant are carefully drawn to avoid ambiguity: Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 419 at 166.
Here, the reasons of the Respondent as recorded in the Determination are critical from the perspective of ensuring natural justice. At paragraph 101 of the Determination, the Respondent stated that the decision to "loan" [sic] the Complainant the funds without the insistence that his client obtain independent legal advice showed a lack of concern for the Solicitors' Rules. At paragraph 102, the Determination stated that an "adequate response from a diligent lawyer would have been to insist that the Complainant obtain legal advice". At paragraph 103 of the Determination, the Respondent stated that there was no evidence to show that the Applicant "at the very minimum, warned the Complainant of the potential risks of the proposed course of action with respect to the Cherry Case".
In the written submissions the Applicant stated that the reference in the Determination of a "lack of concern" for the Solicitors' Rules appears to be a reference to rule 12.2, which prohibits a solicitor from doing anything "calculated to dispose a client or third party to confer on the solicitor, either directly or indirectly, any benefit in excess of the solicitor's fair and reasonable remuneration for legal services provided to the client". The Applicant noted that there was no finding of a breach of the Solicitors' Rules.
The Applicant's submissions drew attention to [80] of the Determination where the Respondent stated that the Applicant (in submissions to the Respondent) pointed to the "recently overturned legal principal [sic] that there is no duty to inform a client of matters which they already know": Shoal Bay Beach Constructions No 1 Pty Ltd v Mark Hickey and Ors [2023] NSWCA 23 at [84]- [90]. The Applicant's submissions state that the Respondent was mistaken in its understanding of the Shoal Bay judgment in that the principle (that there is no duty to inform a client of matters which they already knew) was not overturned.
The Applicant's submissions deal with legal principles relevant to the question of whether the Applicant's conduct satisfied the statutory description of unsatisfactory professional conduct. The principles identified by the Applicant in his submissions may be summarised as follows: 1. The relationship of the solicitor to his client is a fiduciary relationship and involves fiduciary duties including the duty to avoid any arrangement where the solicitor's interests conflict with those of the client. The submissions refer to the judgment of Street CJ in Law Society of New South Wales v Harvey [1996] 2 NSWLR 154 at 170 where, in summary, the Chief Justice stated that where there is any conflict between the interests of the client and that of the solicitor, the duty of the solicitor is to act in "perfect good faith and to make full disclosure of his interest. It must be a conscientious disclosure of all material circumstances, and everything known to him relating to the proposed transaction which might influence the conduct of the client or anybody from whom he might seek advice." 2. The existence of an informed consent will go to negate what would otherwise be a breach of duty: Mualim v Dzelme [2021] NSWCA 199 at [111]. 3. What constitutes fully informed consent is a question of fact in all the circumstances of each case: Maguire v Makaronis (1997) 188 CLR 449 at 466. 4. The question is whether the client has been fully informed of his rights and all of the material facts and circumstances: Rahme v Benjamin and Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211 at [100]. 5. Consent can be established at different times and in different ways and sufficiency of disclosure can depend on the sophistication and intelligence of the person to whom disclosure must be made: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [107]. 6. In Mualim v Dzelme the Court of Appeal said that the position is accurately summarised by the authors of Meagher, Gummow and Lehane's Equity Doctrine and Remedies (5th ed), 215, LexisNexis Butterworths at [5]-[130]: "If a person occupying a fiduciary position wishes to enter into a transaction which would otherwise amount to a breach of duty, the fiduciary must, if liability is to be avoided, make full disclosure to the person to whom the duty is owed of all relevant facts known to the fiduciary, and that person must consent to the fiduciary's proposal. Consent need not be given expressly. What is required for a fully informed consent is a question of fact in all of the circumstances of each case and there is no precise formula which will determine in all cases if fully informed consent is been given. The circumstances of the case may call for independent and skilled advice from a third party." 1. In some cases independent advice may be necessary for the principal to be fully informed: Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 170-171. 2. Where there has been no insistence that the client have independent advice, the solicitor has a heavy burden to show that they have done everything in their power to protect the interests of their client and to ensure that the client is aware of every circumstance that is or might be relevant to their decision: Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 739F-740B.
The Applicant submitted that the crux of the Determination and the sole basis for finding that the Applicant had engaged in unsatisfactory professional conduct, was that the Applicant did not insist upon or facilitate the client obtaining independent legal advice. The Applicant submitted that in reaching that determination, the Respondent was obliged to consider whether Ms Zou had given her fully informed consent to the conflict of interest which arose between the Applicant and Ms Zou in all the circumstances of this case. The relevant circumstances were: 1. There was no dispute between the Applicant and Ms Zou that it was Ms Zou that had put forward the terms that she was to repay the $300,000 loan with interest in the sum of $50,000 by 25 September 2018. 2. Ms Zou was an experienced and sophisticated businesswoman engaged in a number of business enterprises in Australia and China. 3. Ms Zou could read English and read the loan agreement prepared by the Applicant before she signed it. 4. The terms of the loan agreement accorded precisely with the terms proposed by Ms Zou. 5. The funds were required urgently.
The Applicant submitted that independent legal advice could only have been given to Ms Zou about the terms of the loan agreement which were the very terms proposed by her. The solicitor giving independent legal advice to Ms Zou would not be under any duty to advise her about the matters which she already knew, namely the terms of the loan as proffered by her and obviously understood by her.
Further, where independent advice is required, it must be "meaningful". Accordingly, according to the Applicant's submissions, it follows that where advice would not be "meaningful", independent legal advice is not required. Independent legal advice in this case would not be meaningful because it could do no more than restate to Ms Zou the terms of the loan as proposed by her, an experienced and sophisticated businesswoman.
The Applicant submitted that his conduct did not amount to unsatisfactory professional conduct. Rather, where the terms of the loan were proposed by Ms Zou and those same terms were recorded in the written loan agreement, the Applicant must be said to have made full disclosure to Ms Zou of all the facts known to him about the transaction (namely that he would lend money to her and receive $50,000 in interest).
At the hearing in addition to the written submissions, oral submissions were made and they may be summarised thus: 1. The Applicant lent money to Ms Zou, not to the client company. The conflict alleged against the Applicant is recorded in the Determination as the loan by the Applicant to Ms Zou: see [98] of the Determination which concerns the position of lawyers making loans to clients. 2. In Union Fidelity Trustee Co of Australia v Gibson [1971] VR 573 the Supreme Court of Victoria relevantly stated that there is no rule of law that where a relationship of a certain kind exists (such as solicitor and client) the donor should have independent advice at the time of making the gift in order to rebut the presumption of undue influence. We interpose to record that that case concerned a gift of money and the question was whether the gift was the "pure, voluntary and well-understood "act of the donor. The Court said that the presence or absence of independent advice is of great influence in deciding this question. 3. A question arises as to whether it would have made any difference had the Applicant facilitated Ms Zou in obtaining independent legal advice. Similarly, the Applicant asked rhetorically what could the Applicant have said which Ms Zou did not already know? A relevant circumstance in relation to this question is the fact that Ms Zou was sophisticated and intelligent. 4. The Applicant's submissions took us to authorities for the principle that the Applicant had no obligation to inform Ms Zou of matters about which she was already aware. One case cited for that purpose was Shoal Bay Beach Constructions No 1 Pty Ltd v Mark Hickey and Ors [2023] NSWCA 23. We were taken to paragraphs [84] to [90]. We interpose here to say that those paragraphs appeared to concern the question of whether a solicitor has a duty to remind a client of advices previously given. We are of the view that that authority is not relevant to our determination of the issues before us because in this case there was no advice given by the Applicant in respect of the proposal for the Applicant to lend money to Ms Zou.
The Applicant submitted that Ms Zou was in a predicament, that the loan was for her benefit and that had the Applicant given further advice or had independent advice been obtained, we should infer that it would have made no difference - that is, Ms Zou would have nevertheless proceeded to borrow from the Applicant as she did.
The Applicant submitted that the orders of the Respondent ought be set aside and that the complaint be closed.

Respondent's Submissions

The Respondent's submissions took us to the judgment of the House of Lords in Boardman v Phipps [1967] 2 AC 46. The Respondent cited the judgment in Boardman v Phipps for the proposition that fiduciary duties require a level of proper conduct of a high and strict standard and, further, it is no defence to a fiduciary breach for the solicitor to maintain that he or she acted bona fides and that the client benefited from the breach.
The Appellant submitted that the judgment of Byrne J in Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 at [33] explained the necessary vigilance required by a solicitor about his/her duties in perceiving a conflict in the context of acting for two clients, but which is apposite to the solicitor/client relationship generally. His Honour said (in summary) that a client will often not recognise a conflict which is possible, pending or even then existing. It is the solicitor who should in the normal course be the first to apprehend this. The client relies upon the solicitor and the solicitor must be constantly vigilant and alert to perceive the possible emergence of a conflict of interest.
The Respondent submitted that it is a duty imposed upon solicitor as a fiduciary to not place him or herself in a position where there is or may be a conflict between duty as a solicitor to the client and his or her own personal interest in the same matter. Secondly, there is the duty of the solicitor not to profit from the fiduciary relationship.
The Respondent referred to the Applicant's submission concerning the meaning and effect of obtaining the informed consent of the client and submitted that such consent will not be free and informed if it is impeachable on equitable grounds, such as where the consent is given as a result of undue influence or unconscionable conduct. That is so because equitable principles about undue influence and unconscionable conduct are concerned with the quality of the consent or assent by the client: Maher v Honeysett and Maher Electrical Constructors Pty Ltd [2007] NSWSC 12 at [132].
The Respondent submitted that a relationship of confidence between two parties makes it reasonable to presume that a transaction between them for the benefit of the person in whom confidence is reposed was procured by some unconscientious use of power by that person over the other party. A relationship giving rise to fiduciary duties attracts the presumption as such relationships are characterised by trust and confidence.
The Respondent submitted that the solicitor-client relationship is a relationship where the presumption of undue influence attaches: Dowsett v Reid (1912) 15 CLR 695 at 707. It is not a relationship that naturally leads a client to confer a financial benefit to the solicitor: Yerkey v Jones (1939) 63 CLR 69 at 765. This explains why professional rules proscribe solicitors from doing anything to dispose the client to benefit them beyond the fair and reasonable remuneration for legal services provided to the client: Solicitors' Rules, r 12.2.
The Respondent submitted that Stivactas v Michaletos (No 2) [1993] NSW Conv R 55-683 at 59,908 is authority for the proposition that the dominance exercised by a solicitor over a client from undue influence can be subtle; the weaker party need not be under compulsion or duress from the stronger party and the stronger party may not be acting in bad faith or for an improper motive.
The Respondent's submissions state that the presumption can be rebutted by demonstrating that the transaction was the independent, well understood act of the person exercising free judgment. It must be shown that they knew and understood what they were doing and were acting independently of the influence of the other person: Johnson v Buttress (1936) 56 CLR 113 at 134. A person may understand what they are doing, but still be subject to the undue influence of another: Whereat v Duff [1972] 2 NSWLR 147 at 169A. Thus, the Respondent submitted the question is not whether the person knew what they were doing (such as by proposing the transaction themselves) but whether the intention to enter into the transaction is produced freely; a person with full capacity can form the intention to make an improvident bargain: Whereat v Duff at 169B, C.
In practical terms, the presumption will often be rebutted by evidence of independent legal advice before the transaction is entered into: Johnson v Buttress at 120. The absence of independent legal advice will be an important consideration in a court's assessment of whether the presumption has been rebutted and the transaction entered into by the genuine exercise of the client's will: Johnson v Buttress at 120.
The Respondent's submissions then turned to applying the principles stated above to the facts of this case. The Respondent submitted that the critical question in this case is whether the loan agreement between Ms Zou and the Applicant on the terms she proposed was entered into by Ms Zou with fully informed consent.
The Respondent submitted that, even accepting that Ms Zou was a sophisticated and experienced businesswoman and that she had initiated the loan idea and the proposed terms, those factors alone do not indicate that she gave informed consent. The Respondent submitted that Ms Zou cannot be expected to appreciate fully the legal implications of the transaction (especially in relation to the Applicant's ability to provide her with neutral advice) and possible alternatives to the course she was proposing.
The Respondent submitted that even without independent legal advice, at the bare minimum, the Applicant was at least obliged to disclose fully and candidly, and explain the conflict, or real possibility of conflict, with his duties as a fiduciary. Such advice and disclosure would, at the least, include that there is a risk of conflict with his duties as a solicitor to give independent and impartial advice to his client if he were to accede to her loan proposal in circumstances where he would take on a personal interest in the outcome of the litigation in the cherry case. Such matters were not canvassed in the conversation recorded in the Applicant's affidavit.
The Respondent submitted that the absence of independent legal advice is a powerful consideration against rebutting the presumption of undue influence that subsisted in the relationship between the Applicant and Ms Zou. Further, the circumstances and the context for Ms Zou proposing the loan indicate that the presumption has not been rebutted. The loan proposal and agreement was made in haste on the eve of the winding up hearing and in the context of Ms Zou's dependence on the Applicant for legal advice in respect of possible alternative courses of action and options if she was unable to secure the funds to pay into court. The Respondent submitted that Ms Zou was also dependent on the Applicant to be alive to potential conflicts of interest and to be advised of at least the potential risk involved in her solicitor entering into a loan transaction of the kind proposed for his ability to provide neutral advice to her. The Respondent submitted that the entry into the loan transaction by Ms Zou was not the independent well understood act of a person exercising free judgment.
The Respondent's submissions conclude by submitting that there was no error made by the Respondent in the Determination that the Applicant's conduct amounted to unsatisfactory professional conduct under s 296 of the Uniform Law.
Additionally, the Respondent accepted that the Determination had wrongly stated that the decision in Scholl Bay Beach Constructions had been overturned when in fact it had not been overturned.
However, the Respondent submitted that it did not misapply the law by not applying that decision. That case was concerned with the scope of a solicitor's tortious duty of care to advise a client in respect of matters the client already knows and those principles have no bearing on the question of a solicitor's duty derived from the principles of equity pertaining to the law of fiduciary duties and undue influence.
The Respondent submitted that this Tribunal should affirm the Respondent's determination and the orders made.

Applicant's Submissions in Reply

The thrust of the Applicant's submissions in reply were to the effect that the case against the Applicant had been expanded contrary to the principles of natural justice. In the Di Giovanni decision the Tribunal stated at [24(12)] that natural justice requires that the solicitor be advised in clear and precise terms, prior to the hearing, of the nature and the particulars of the case to be met: Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270.
The Applicant submitted that at [101] and [102] of the Determination the Respondent had found that the decision to lend funds to Ms Zou without the insistence that the client obtain independent legal advice showed a lack of concern for the Solicitors' Rules and that an adequate response from the diligent lawyer would have been to insist that Ms Zou obtain legal advice. However, the Respondent's case has been expanded to including an assertion that the Applicant has, by his actions in lending money to Ms Zou, taken a personal interest in the outcome of the litigation in the cherry case.
Further, the Respondent had submitted that Ms Zou was dependent on the Applicant for legal advice in respect of possible alternative courses of action and options if she was unable to secure the funds to pay into court for the purposes of defending the winding up application and that this submission is unfair to the Applicant because the Applicant was not prepared for the need to address and rebut other possible alternative courses of action now alluded to by the Respondent. The Applicant submitted that he is now required to address the speculations of the Respondent.
The Applicant further submitted that had Ms Zou received independent legal advice the result would have been no different and that we should draw the inference that such advice would have not altered her decision.

Consideration : stage 1

The nature and scope of these proceedings are subject to the principles set out in the Di Giovanni decision. In particular our task is to determine whether the Applicant engaged in unsatisfactory professional conduct and, if so, decide what protective order or orders (if any) are correct and preferable. In the course of so doing, we are required to identify the decision to be reviewed consistent with the principles in Shi as expressed by Keifel J (as her Honour then was).
Earlier, we recorded some aspects of the Determination and the key reasoning is worth repeating: 1. At [69] of the Determination the Respondent stated that the Applicant acted in a conflict of interest in lending $300,000 to his client without the fully informed consent of the client and that the Applicant "at the very minimum" should have insisted upon and facilitated the client in obtaining independent legal advice. 2. At [98] of the determination the Respondent extracted a portion of the view of the author Dal Pont to the effect that a lawyer who seeks to lend money to a client, prima facie, has a personal interest in the transaction that is potentially inconsistent with the client's interests. This principle continues at [100] of the Determination where the Respondent referred to the judgment in Break Fast Investments Ltd v Rigby Cooke Lawyers (a Firm) [2021] VSC 398 where the court dealt with what constitutes fully informed consent, and stated that such consent will require that an explanation has been given to the client of the risks to the client that it's lawyer may not act entirely in its interests if it continues to retain the lawyer.
It is clear, in our view, that the Determination was based not only upon the failure of the Applicant to recommend to the client that she obtain independent legal advice concerning the proposed loan but also that such advice would need to incorporate advice that the Applicant would be placed in the position of conflict with the possibility that he may not act entirely in the interests of the client.
Thus, the scope of the Determination goes beyond the finding by the Respondent that the Applicant did not recommend that Ms Zou obtain independent legal advice, but extends to the Determination that the loan placed the Applicant in a position of conflict and further that the consequences of such conflict upon the solicitor's duty to the client should have been part of the matters to be conveyed to the client in the context of her obtaining independent legal advice.
The facts giving rise to Ms Zou's proposal to borrow from the Applicant have been set out earlier in this decision and are taken from the Applicant's affidavit (Exhibit A). We accept the truth of the facts deposed by the Applicant. In particular, we accept the Applicant's account of the conversation he had with Ms Zou on the evening of 20 September 2018 and the circumstances concerning the signing of the loan agreement by Ms Zou the following morning. We also accept that Ms Zou was a sophisticated and experienced business woman who could read and understand English.
Clearly, in our view, the making of the loan by the Applicant caused the Applicant to be placed in a position of conflict of interest. Although the Applicant was responding to Ms Zou's request and facilitating a solution to the financial predicament she was then in in attempting to pay money into court, the Applicant was, in our view, placed in a position of conflict of interest. As the Respondent's submissions state, at a bare minimum, the Applicant should have recommended that Ms Zou obtain independent legal advice.
In our view the conflict of interest was not limited to the fact that the Applicant and Ms Zou had entered into a loan agreement but extended to the fact that the Applicant had a personal interest in the outcome of the litigation concerning the cherries to the extent of any adverse effect that the outcome of that litigation might impact upon the ability of Ms Zou to repay the Applicant.
Accordingly, we reject the Applicant's submission that the independent legal advice, had it been obtained, would have been limited to advising Ms Zou on the terms of the loan agreement and that, because she had proposed the terms recorded in the agreement, there was no likelihood of such independent legal advice causing Ms Zou to recant or take a different course. Independent legal advice would or should have touched upon the question of whether the Applicant's role as advisor to Ms Zou and her company in relation to the litigation could be compromised by the fact that he had become a lender to Ms Zou.
Here, the Applicant did not even raise the subject matter of the wisdom of Ms Zou obtaining independent advice and thus the Applicant has a heavy burden to show that he did everything in his power to protect the interests of the client and to ensure that the client was aware of every circumstance that is or might be relevant to the client's decisions in respect to the conduct of the litigation in South Australia): see Law Society of New South Wales v Moulton.
We agree with the Respondent's submissions that the Applicant had a duty as a fiduciary to not place himself in a position where there is or may be a conflict between his duty as a solicitor to Ms Zou and her companies, and his own personal interest in the same matter. In this case the conflict arose because of the agreement to lend money to Ms Zou. A further breach of the fiduciary duty occurred in that the solicitor derived a profit (namely the interest of $50,000) from the fiduciary relationship. It is in our view irrelevant to the question of whether the solicitor breached his duty that Ms Zou proposed the amount of interest.
We agree with the Respondent's submission that the fiduciary relationship between the Applicant and Ms Zou gives rise to a presumption that that relationship involved the characteristic that Ms Zou had confidence in the Applicant's advice and trusted his impartiality.
We are of the opinion that the Applicant's conduct in not recommending to Ms Zou that she obtain independent legal advice not only about the terms of the loan agreement, but also about the consequence of the loan agreement placing the Applicant in the position of conflict constitutes conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. In short, we are of the view that the Applicant's conduct satisfies the description contained in s 296 of the Uniform Law and that the Applicant's conduct is unsatisfactory professional conduct.
We are of the view that the error in the Determination to the effect that the Shoal Bay Beach Constructions case had been overruled is irrelevant to whether the Applicant contravened his obligations to Ms Zou. We are of the opinion that that case is concerned with whether a solicitor has a duty to remind a client of advice previously given, whereas in this case, the issue is whether the Applicant should have advised the client to obtain independent legal advice not only on the terms of the loan (being terms of which she was already aware) but of the consequences in terms of placing the Applicant in a position of conflict of interests.
It is necessary to say that we do not agree with the Applicant's submissions that the Respondent's case in the Tribunal goes beyond the limits of the Determination. Our reasons for that view have already been stated.
It is also necessary to say that we do not agree with the Applicant's submission that the conduct of the Applicant can not be described as substantial and that a finding that the Applicant engaged in unsatisfactory professional conduct is not warranted. A solicitor has fiduciary obligations to his or her clients and an important part of those obligations is the avoidance of being placed in a position of having a conflict of interests. We regard the Applicant's conduct as falling within the definition set out in s296 of the Uniform Law.
Accordingly, we affirm the Determination, insofar as it finds that the Applicant had engaged in unsatisfactory professional conduct in making the loan to Ms Zou.

Stage 2 - what protective orders should be made

As indicated in the Preface to this decision, we have received submissions firstly from the Applicant and subsequently from the Respondent on the question of what protective orders should be made in the light of our decision to affirm the determination of the Respondent that the Applicant had engaged in unsatisfactory professional conduct in making the loan to Ms Zou. We will summarise the parties' submissions (and further evidence) in the following paragraphs.

Applicant's Submissions and Evidence

In support of his submissions, the Applicant has filed and served a further affidavit dated 22 November 2024. The Respondent does not object to that affidavit being tendered. Relevantly, the affidavit of the Applicant states: 1. The Applicant considered that the position he found himself in on the evening of 20 September 2018 was highly unusual, that he had very limited opportunity to consider and reflect on the proper course of action and was concerned that the interests of his client would be materially affected by refusing to provide the assistance that she sought. 2. During the course of these proceedings, and in particular at the hearing, the Applicant has gained a deeper insight into the fiduciary obligations that a lawyer owes their clients. The Applicant stated that his understanding of the obligation of a fiduciary to seek informed consent where there may be a conflict is now significantly greater than it was before the hearing. 3. In 2015 the Applicant was reprimanded by the Office of the Legal Services Commissioner (the OLSC) following a complaint made against the Applicant by a client of Ren Zhou Lawyers. At the time the Applicant was a junior lawyer having been admitted to practice in 2010. The Applicant had been asked to give advice with respect to an immigration appeal which was unsuccessful. The client complained that an affidavit was false. The Applicant states in his current affidavit (the 22 November 2024 affidavit) that he had limited opportunity to provide submissions to the OLSC about the matter.
The Applicant's submissions are summarised in the following paragraphs.
In Law Society of New South Wales v Maharaj [2017] NSWCATOD 79 at [24] the Tribunal set out the principal considerations in respect of the appropriate protective orders to be made, although they do not constitute a closed list. Those considerations are: the gravity of the misconduct, the deterrent effect of any protective order on the further conduct of the practitioner, the deterrent effect of any protective order on the conduct of other practitioners and the enhancement of confidence of the public in the integrity of the profession.
The Applicant's submissions address the above considerations and the Applicant's position is that the appropriate protective orders in his case are that he be required to complete and undertake an ethics course, that he be cautioned and that the reasons and orders of the Tribunal not be published.
The Applicant submits that the gravity of the misconduct in this instance is at the lower end of the scale. The Applicant found himself in a highly unusual position late in the evening on 20 September 2018 when the terms of the loan were proposed by Ms Zou, she being an experienced and sophisticated businesswoman.
The Applicant had a very limited opportunity for considered reflection on the proper course, given the hearing was scheduled for the following day.
The Respondent did not point to any solicitors' rule or statutory provision or guideline which would have assisted the Applicant in his decision making. The "only breach alleged was a breach of fiduciary duty" which was a complex question. Further, the Applicant's client was considerably assisted by his conduct. That was her position at the time and she gave no evidence in the proceedings to the contrary. There is no evidence that the client would have in fact sought or obtained independent advice given the emergency nature of the circumstances. There is no suggestion that the Applicant did in fact act other than in the client's interests in entering into the loan proposed by her with the honest intention of assisting her. There is no suggestion of fraud or dishonesty or unfair dealing.
The Applicant's submissions state that there is no need for a reprimand to deter the Applicant from engaging in further conduct of this kind. The conduct was an isolated occasion which took place over six years ago. The Tribunal should accept that the Applicant's awareness of the obligations of a fiduciary to seek informed consent where there may be a conflict of interest is now significantly greater than it was before the complaint was made.
The appropriate primary protective order in this case would be to caution the Applicant. That course was open to the Respondent under s 299(1)(a) of the Uniform Law and is open to the Tribunal under s 314(2). The submissions state that there is no authority of which the Applicant is aware outlining the principled difference between circumstances warranting a reprimand and circumstances warranting a caution.
The Applicant's submissions state that the record of adverse findings against the Applicant is capable of being relevant. The Applicant draws to the attention of the Tribunal the that he was reprimanded in 2010 by the OLSC for recklessly drafting an affidavit which contained a false or misleading statement on a material matter.
The Applicant's submissions state that if the Tribunal is to accept the Applicant's submission that a caution is the appropriate primary protective order, it should follow that the Tribunal would not publish its reasons or the order. That appears to have expressly been the position under s 562(8) of the Legal Profession Act 2004 (NSW) and is implicitly the position under s 302 of the Uniform Law. The Applicant's submissions state that if the submission seeking non-publication is rejected and the Tribunal were to order a caution but publish its reasons, the publication of the reasons would be likely to have a significant deterrent effect on other practitioners.

Respondent's Submissions and Evidence

Following receipt of the Applicant's submissions the Respondent has filed and served an affidavit and submissions. The affidavit is the affidavit of Samantha Gulliver affirmed 3 December 2024. The Tribunal has not received any communication from the Applicant objecting to the Gulliver affidavit.
The Gulliver affidavit sets out and annexes correspondence between the OLSC and the Applicant in the period from 17 October 2014 to 14 August 2015. The last letter from the OLSC dated 14 August 2015 sets out the final conclusions of the OLSC and states that the Commissioner reprimands the Applicant in respect of material found to be false and misleading in an affidavit tendered in the Federal Magistrates Court. Other allegations are dismissed.
The following paragraphs summarise the Respondent's submissions.
The Tribunal's jurisdiction in the present case is engaged by s 314(1)(b) of the Uniform Law that relevantly provides for a lawyer the subject of a complaint to seek a review by the Tribunal of a determination made under s 299 of the Uniform Law by the relevant local regulatory authority (in this case the Professional Conduct Committee (PCC) acting on delegation from the Respondent). By s 299(2) in such a review the Tribunal "may make any order it considers appropriate on the appeal or review". The scope of that power is read with, and limited by, the power to make the orders in s 299(1). That is so because the Tribunal in an appeal or review under s 314(1) is standing "in the shoes of the original decision maker" and in so doing should consider itself "as though it were performing the function of that administrator in accordance with the law as applied to that person": Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at [135]; Di Giovanni v Council of the Law Society of New South Wales [2024] NSWCATAP 66 at [24].
The Respondent's submissions state that the Tribunal should affirm the orders made by the PCC (with one modification to be explained later) under s 299(1)(b) and (e) reprimand the Applicant and order that he undertake and complete ethics training within six months from the date of the determination of the PCC.
The modification to the affirmation of the PCC's orders is that it will be necessary to allow the Respondent six months from the publication of the Tribunal's decision to undertake and complete ethics training. The Respondent has undertaken to the Applicant not to enforce the existing order concerning ethics training pending the outcome of these proceedings.
The Respondent's submissions state that the purpose of the disciplinary process undertaken by the PCC and therefore the Tribunal's review of the decision under s 314, is not to punish the practitioner but to protect the public: De Giovanni at [24]. Although protective in purpose, protective orders may have a punitive effect: Bar Association (NSW) v Evatt (1968) 117 CLR 177 at 183.
In seeking to persuade the Tribunal to affirm the protective orders made by PCC the Respondent's submissions refer to the following conclusions we reached in the draft decision published to the parties, namely the following: 1. The making of a loan by the Applicant caused him to be placed in a position of conflict of interest with his client [74] of our decision. 2. As a bare minimum the Applicant should have recommended his client obtain independent legal advice [74]. 3. The Applicant did not even raise the wisdom of his client obtaining independent legal advice, and thus the Applicant had a heavy burden to show that he did everything in his power to protect his client's interest to ensure that the client was aware of every circumstance relevant to her decision regarding the conduct of the winding up litigation [77]. 4. The Applicant had a duty as a fiduciary to not place himself in a position where there is or may be a conflict between his duty as a solicitor to the client and her companies and his own personal interest, which conflict arose because of his agreement to lend his client money [78]. 5. A further breach of fiduciary duty occurred in that the solicitor derived a profit by way of the interest payment from the fiduciary relationship and it is irrelevant that the client proposed the interest amount [78]. 6. The Applicant's failure to recommend that the client obtain independent legal advice not only about the terms of the agreement, but also its consequences placed him in a position of conflict and constitutes conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer [80]. 7. The Applicant's conduct in agreeing to make a loan to his client with interest without the client's fully informed consent to the transaction amounts to unsatisfactory professional conduct [84].
The Respondent submitted that fiduciary duties are instrumental in protecting clients and maintaining the public perception of integrity of the profession and are therefore paramount obligations: Law Society of New South Wales v Harvey (1976) 2 NSWLR 154 at 170A.
The Respondent submitted that the seriousness of the Applicant's conduct by acting contrary to his fiduciary duties is aggravated by his apparent lack of (complete) awareness, before the draft reasons were issued, of the scope of his obligation to obtain the informed consent of a client where there is a risk of a conflict of interest arising. It may be accepted that the Applicant has, by reason of these proceedings, now gained a greater awareness of the ambit of his obligations to his client as a fiduciary, in particular with respect to the need for a client's informed consent. The need for informed consent where a solicitor may be at risk of being in breach of his fiduciary duties to his/her client is not some esoteric or difficult area of law. It is a general principle applicable to one of the most fundamental relationships a solicitor has in his or her professional capacity. It is a general principle that a solicitor, such as the Applicant, who has been in practice for over 20 years should know.
The Respondent submitted that the Tribunal should be circumspect in accepting that the appropriate protective order in this case is a caution for five reasons.
The first reason is that, although the Applicant was in a difficult position when resisting adverse findings and also demonstrating insight, the Applicant is not in the position of a usual practitioner who is forced to defend himself in disciplinary proceedings in the Tribunal brought by the regulator where he or she is the Respondent. The only reason the Applicant is in the position of "defending" himself in this case is because he exercised his right under s 314(1) of the Uniform Law to review the determination of the PCC. He could have accepted that determination, but chose not to do so. It may be inferred that it was not until the receipt of the draft reasons (or at the least during the hearing on 30 August 2024) that he came to a late realisation of the wrongfulness of the conduct.
The second reason is that the Applicant's conduct is to be viewed against the backdrop of his disciplinary history: Legal Practitioners Conduct Board v Kerin (2006) 246 LSJS 371 at [25]; Council of the New South Wales Bar Association v de Robillard (2023) NSWCATOD 75 at [386]. That history shows that the current conduct, although isolated insofar as the particular type of conduct is concerned (ie. breach of fiduciary duties and acting in conflict of client's interests) is not isolated conduct with respect to failing to comply with his professional obligations. The other conduct, which occurred early in the Applicant's career as a solicitor involved being reprimanded for recklessly drafting an affidavit containing a false or misleading statement on a material matter: see the Griswold affidavit. The Respondent submits that the reprimand for that conduct did not have a sufficiently chastening impact on the Applicant to ensure that he was more attentive of his professional obligations thereafter. The Applicant states in his affidavit that he had a "limited opportunity to provide submissions to the OLSC" and appears to downplay that finding because of the purported procedural unfairness by the OLSC towards him. In truth, the evidence indicates that the Applicant was given seven opportunities over the course of approximately 10 months to make submissions to the OLSC, which he did: Gulliver affidavit at [3] to [13].
The third reason is that the objective of protecting the public and the integrity of the profession requires a protective order that is commensurate with the seriousness of the conduct. A reprimand is a "serious matter": Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 157; is a "significant admonition" of misconduct: Legal Profession Complaints Committee v Detata [2012] WASCA 214 at [42]; is "not a slap on the wrist": Legal Services Commissioner v Sapountzis [2010] VCAT 1124 at [24]. The Respondent submits that the seriousness of the conduct in the present case warrants a reprimand and that a caution would not be adequate to mark the appropriate admonition for the wrongdoing.
The fourth reason is that this case involves the application of a solicitor's fiduciary duties central to which is the duty to avoid a conflict of interest with, and not to profit from, a client in the course of acting for them. A reprimand is important from the point of view of general deterrence in that it signals to the profession the importance of such duties and the strictness with which they are applied. Given the strictness of fiduciary duties, their breach in the context of professional discipline should involve a commensurate sanction to deter others from contemplating even the possibility of allowing other interests to prevail over those of the client and to have regard to the steps necessary to avoid acting in conflict with those duties.
The present case is instructive. The Applicant was in an invidious position where he was faced with the loan proposal from his client and he wanted to assist her in urgent circumstances. He did assist her. Yet his position as a solicitor who had fiduciary duties required that he obtain her informed consent to act contrary to his fiduciary obligations. It is no defence that he acted bona fides and that the client benefited from the breach: Boardman v Phipps [1967] 2 AC 46. For the purpose of generally deterrence, the circumstances of this case warrant the Tribunal affirming the PCC's protective orders.
The fifth reason is that given the importance of the strict application of fiduciary duties in maintaining public perception of the integrity of the profession central to which is the strictness with which the duties are applied a reprimand is proportionate to the importance of those duties.
The orders made by the PCC reprimanding the Applicant and requiring that he undertake ethics training were appropriate.
The Respondent's submissions go on to deal with the Applicant's submission seeking to have the Tribunal's reasons published only to the parties and not generally. The Respondent submits that there is no power in the Tribunal to determine not to publish its reasons and orders. However, there is a power under s 64(1) of the NCAT Act to make orders prohibiting or restricting disclosure and/or publication of information of the kind described in that section if it is satisfied that it is "desirable" to "by reason of the confidential nature of any evidence or matter or for any other reason" to do so. The Respondent submits that the powers in s 64 do not include power to decide to prohibit or restrict the publication of the Tribunal's reasons or orders.
The Respondent's submissions state that if the Tribunal were to vary the orders of the PCC and make an order that the Applicant be cautioned, then the Respondent would in those circumstances not oppose an order which would prohibit the disclosure of information that would identify the Applicant. As we are of the opinion that a caution is inappropriate (and that the appropriate order is that the Applicant be reprimanded) we will not proceed any further with describing the Respondent's submission in relation to this issue.
In summary, the Respondent submitted that the Tribunal should affirm the orders of the PCC including the order that the Applicant undertake an ethics training course within six months of the publication of this decision

Consideration of Stage 2 - protective orders

We have considered the submissions of the parties. We are in agreement with the submissions of the Respondent and do not accept the proposal of the Applicant that the appropriate, or the correct and preferable, decision is that that the Applicant be cautioned. Our reasons are consistent with and in agreement with the submissions of the Respondent which we have summarised earlier.
The starting point is to acknowledge that the purpose of protective orders is not to punish the practitioner but it is to protect the public: De Giovanni at [24].
In our view the Applicant did not appreciate the nature and extent of his fiduciary duty to the client and, as recorded in our decision in respect of stage 1, the Applicant breached his fiduciary duty to the client, being a duty that is fundamental to the solicitor-client relationship As the Respondent's submissions state, fiduciary duties are instrumental in protecting clients and maintaining the public confidence in the integrity of the profession. They are therefore paramount obligations: Law Society of New South Wales v Harvey at 170A.
Although it is acknowledged that the circumstances in which the Applicant found himself in were unusual and that he had little time in which to consider and reflect upon the client's request, those circumstances do not, in our view, excuse or diminish the significance of the Applicant's departure from his professional obligations.
As the Respondent's submissions state, the Applicant's prior conduct is relevant when considering the appropriate protective orders. We agree with the Respondent's submission that the reprimand for prior conduct involving the reckless drafting of an affidavit appears not to have had a sufficiently chastening impact on the Applicant and indeed the Applicant appears to harbour the view that he was not treated fairly by the OLSC. The affidavit of Ms Gulliver appears to us to reveal that the Applicant had an ample opportunity to correspond with and to make submissions to the OLSC.
We are of the view that the appropriate order is that the Applicant be reprimanded. It is also appropriate that the order requiring the Applicant to undertake an ethics training course accompany the reprimand. Therefore, we will affirm the orders of the PCC. In coming to this conclusion, we have had regard to the purposes of the orders as explained in the following paragraph.
The purposes of protective orders have been stated earlier and include acting as a deterrent to the Applicant. Another purpose is to make orders which act as a deterrent to other solicitors and a further purpose is to maintain the confidence of the public in the integrity of the profession. In our view these three purposes require that the Applicant receive a reprimand and that a caution would not be an appropriate mark of our view of the Applicant's conduct. Consistently with these purposes in mind the orders should be made public. Nor do we think it would be consistent with the purpose of the orders being a deterrent to the Applicant if we were to anonymise the identity of the Applicant.
We note that the Respondent does not seek costs. In the light of our decision there is no basis for the Applicant to have a costs order in his favour.
Accordingly, we make the following orders: 1. The decision of the Council of the Law Society of New South Wales finding that the Applicant engaged in unsatisfactory professional conduct is affirmed. 2. The Applicant is reprimanded. 3. The Applicant is ordered to undertake and complete an ethics training course approved by the Respondent within the period of six months from the publication of these orders.

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: 31 January 2025

Legal Profession Act 2004(NSW)

Uniform Law Application Act 2014(NSW)

(2019) 100 NSWLR 550

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