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Principal lawyer reprimanded for $300k loan to client
A Sydney principal lawyer was reprimanded for loaning $300,000 to a client in an agreement that saw him pocket an additional $50,000.
Naomi Neilson
The client of Jonathan Hai Song Lu, principal of SHL and Associates, reportedly told him he would “make an easy $50,000” if he loaned her $300,000 so her company could demonstrate solvency in proceedings before the South Australian Supreme Court.
Later, the client said she did not have “enough money” and asked Lu to lend $300,000 because, “I know you solicitors all got money”.
After Lu said she was “embarrassing” him because he “emailed everyone” about the cheque, the client told him she would pay him back within days as she was “just waiting for money to arrive in Sydney from China”. She added she would pay $50,000 in interest.
The next morning, the client signed a loan agreement prepared by Lu.
The NSW Civil and Administrative Tribunal (NCAT) said it understood that while Lu received a bank cheque for $50,000 several days later, the $300,000 was not repaid until March 2019.
The Council of the NSW Law Society said that despite the client initiating the loan and signing the agreement, she could not have been expected to “appreciate fully” the legal implications of the transaction, particularly Lu’s ability to provide neutral advice.
“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,” NCAT said of the Law Society’s argument.
The tribunal accepted Lu was placed in a “position of conflict of interest” by entering the loan agreement with his client.
“As the respondent’s submissions state, at a bare minimum, the applicant should have recommended [the client] obtain independent legal advice,” the tribunal said.
Lu attempted to fight the finding he engaged in unsatisfactory professional conduct because he made “full disclosure” to the client of all the facts known to him about the transaction.
He added that even if she had received further advice or independent legal advice, the client was in a “predicament”, the money was in her benefit, and she would have still taken the loan.
The tribunal said independent legal advice “would or should have” advised the client about her company in relation to the proceedings could be compromised by the fact Lu had become a lender.
While it also acknowledged the loan agreement was entered into in circumstances where neither had much time to consider the client’s request, the tribunal said it still did not “excuse or diminish the significance of the applicant’s departure from his professional obligations”.
Lu was reprimanded and ordered to undertake ethics courses.
The case is Lu v Council of the Law Society of New South Wales [2025] NSWCATOD 11 (31 January 2025).
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
