ON APPEAL FROM QUEEN’S BENCH DIVISION, DIVISIONAL COURT
(LORD JUSTICE HOOPER & JUDGE MADISON)
Royal Courts of Justice
Strand, London, WC2A 2LL
Before:
LORD JUSTICE SEDLEY
LORD JUSTICE KEENE
and
LADY JUSTICE SMITH
Between:
(1) IZEGBU (2) OKORONKWO | Appellants |
- and - | |
THE LAW SOCIETY OF ENGLAND & WALES | Respondent |
(DAR Transcript of
WordWave International Limited
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Ms P Robertson QC & Ms K Watt (instructed by Messrs Russell Cooke) appeared on behalf of the First Appellant.
Mr M Beaumont (instructed by Mr Samuel Nwabueze Okoronkwo) appeared on behalf of the Second Appellant.
THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED
Judgment
Lord Justice Sedley:
Mr Nwabueze Okoronkwo, who is a member of Gray’s Inn, was seeking admission as a solicitor. Without obtaining admission, however, he set up a practice under the style of Alberts in Warner Street W1 in April 2003, using an admitted solicitor, Ms Izegbu, as a front. The fiction that she was employing him as consultant was exposed in disciplinary proceedings brought by the Law Society against the two of them in the Solicitors’ Disciplinary Tribunal. The tribunal found on very clear evidence that it was he who was employing her. There is no need to go into greater detail, which can be found in the findings of the SDT and is helpfully summarised in the judgment of the Divisional Court, Hooper LJ and Maddison J, [2008] EWHC 1043 (Admin) which it is now sought to challenge.
In both appeals to the High Court Ms Izegbu failed to appear and her appeal was dismissed. She was nevertheless given permission to appeal to this court. Mr Okoronkwo’s appeal to the High Court succeeded on three of the four counts that had been found proved against him. The Law Society was given permission to appeal against this decision. The fourth count was remitted by the Divisional Court for rehearing by a freshly constituted tribunal, but Mr Okoronkwo has sought permission to cross-appeal the order for remission.
These proceedings have begun to resemble Haydn’s Farewell Symphony, with issues and parties leaving the stage one by one until today a single party with a single application remains before us. The Law Society has abandoned its appeal. Ms Izegbu has once again failed to attend and has asked for leave to withdraw her appeal. All that remains is Mr Okoronkwo’s application for permission to cross-appeal and, if we grant it, the cross-appeal itself, since we have now heard full argument on both sides.
It is necessary to explain briefly how this has come about. The counts found proved against Mr Okoronkwo were:
“D2. That he entered into sham agreements under which he owned and controlled firms held out to the Law Society and the public as being firms of solicitors whereas the firms were owned and controlled by him, a non-solicitor.
D4. That he operated and received clients’ funds into purported solicitors’ clients accounts.
D5. That he attempted to mislead the Law Society by falsely representing that the Respondents Izegbu and Preedy were the principals and owners of the various practices named ‘Alberts’.
D8. That he knowingly made a false statement as to his professional record in order to procure a qualification from the Law Society.”
The provision under which the counts were laid was section 43 of the Solicitors Act 1974, the material part of which, as amended by the Access to Justice Act 1999, reads:
“ 43 (1) Where a person who is or was employed or remunerated by a solicitor in connection with his practice but is not himself a solicitor –
(a) has been convicted of a criminal offence which discloses such dishonesty that in the opinion of the Society it would be undesirable for him to be employed or remunerated by a solicitor in connection with his practice; or
(b) has, in the opinion of the Society, occasioned or been a party to, with or without the connivance of the solicitor by whom he is or was employed or remunerated, an act or default in relation to that solicitor ’s practice which involved conduct on his part of such a nature that in the opinion of the Society it would be undesirable for him to be employed or remunerated by a solicitor in connection with his practice,
the Society may either make, or make an application to the Tribunal for it to make, an order under subsection (2) with respect to him.”
(In its amended form the subsection probably qualifies for some award for the number of words in a single sentence.)
Since the facts which the Law Society had succeeded in proving against both respondents included clear evidence that Mr Okoronkwo had been running the practice and using Ms Izegbu simply as a front, section 43 was logically inoperative insofar as the counts alleged that Mr Okoronkwo was employed or remunerated by Ms Izegbu. They may well have disclosed something more serious, but that is not a matter for us today and was not a matter for the tribunal. The Law Society’s solicitor advocate nevertheless insisted that the relationship was converse of what he had succeeded in proving.
The Divisional Court accordingly allowed Mr Okoronkwo’s appeal on the first three counts on the ground that Mr Okoronkwo, as had been found by the SDT itself, had not been employed or remunerated by Ms Izegbu at all. However, because by the date material to the fourth count Mr Okoronkwo had been employed in the practice by a solicitor named Preedy, the Divisional Court took the view that count 4 did not suffer from this vice. They remitted it, however, for reconsideration by a freshly constituted tribunal, because while they saw the force in Mr Beaumont’s submission that “on the assumption, which is disputed, that the statement was knowingly false it was not an act or default in relation to the solicitor’s practice,” they did not accept that the only feasible outcome would have been in Mr Okoronkwo’s favour. I will come in a moment to Mr Beaumont’s grounds for submitting that this was wrong and that Mr Okoronkwo’s appeal on the fourth count ought likewise to have succeeded.
So far as Ms Izegbu is concerned, the Divisional Court’s reasons for declining to adjourn her appeal to the High Court and for proceeding in her absence are fully set out at [2008] EWHC Admin 1046 together with the court’s reasons for dismissing her appeal. Her grounds of appeal to this court are in essence that her appeal ought to have been adjourned. Given the Divisional Court’s carefully explained reasons for not adjourning, she may well have been fortunate to obtain permission to appeal at all. But today she has replicated her conduct below by again not appearing. By a series of e-mails she has pleaded ill health, but has supplied no medical evidence in support. She has also pleaded an inability to secure representation but without an adequate explanation of why this has proved impossible. Latterly she has asked to be allowed to withdraw her appeal.
Mr Okoronkwo’s case starts from the formulation of the charge against him:
“The allegations against Nwabueze Okoronkwo are that he, having been employed or remunerated by solicitors but not himself being a solicitor has been a party to acts or defaults in relation to a solicitor’s practice which involved conduct on his behalf such that it would be undesirable for him to be employed or remunerated by a solicitor in connection with that practice and in particular:
…….
That he knowingly made a false statement as to his professional record in order to procure a qualification from the Law Society.”
It is to be observed that in at least two respects, one of which (the phrase “a solicitor’s practice” where the act says “that solicitor’s practice”) is quite significant, the count fails accurately to replicate the statutory provision.
Mr Beaumont now advances three more substantial grounds which, he submits, are important points of principle or afford a compelling reason for this court to entertain a second appeal.
The first ground is that when asked by the chairman of the SDT whether dishonesty was being alleged against either respondent the solicitor advocate said no. This, Mr Beaumont submits, was tantamount to abandoning a count based explicitly, as the material one was, on knowingly making a false statement. His difficulty is that the charge not only was not abandoned, it was pressed; it was cross-examined to and it was found proved. Ms Patricia Robertson QC for the Law Society submits that the answer given by the advocate is explicable as a reference to the superadded factor of conscious impropriety made familiar by the Twinsectra case (Twinsectra Ltd v Yardley and Others [2002] UKHL 12). I am not convinced that this is necessarily so. But what I think is more to the point is that the answer was not treated by anyone -- the Law Society, the chairman or Mr Okoronkwo, appearing in person but a member of the Bar -- as decisive of anything in the case. If it has a bearing it is by way of mitigation should the count ultimately stand up.
Mr Beaumont’s second and stronger argument is that nothing, either in the count as laid or in the evidence, brings the alleged false statement, albeit it concerned Mr Okoronkwo’s professional record, into the ambit of section 43(1)(b). There are, as he points out, numerous ways in which a person employed by a solicitor can knowingly make false statements which have nothing whatever to do with the practice in which he or she is employed. The question is whether this was incontestably such a case or whether, as Ms Robertson submits, the evidence is capable of establishing a material connection. She points in this regard to two main things. One is the application form itself. Although it is an application for admission to the Roll, it adds a box for applicants who also want to acquire a practising certificate. Mr Okoronkwo filled this in, naming Alberts as the firm in which he proposed to practise and giving his position in this firm, once admitted, as a partner. The other is the formal practising arrangement between himself and Mr Preedy which links Mr Okoronkwo’s application for admission to the roll with his intended assumption of the role of principal in the firm of Alberts.
In my judgment, while Mr Okoronkwo has a good argument on this score, it is not unanswerable. Whether it is in the event answered is a question of fact for the tribunal on remission, because I accept Miss Robertson’s submission that there is material, the weight of which it is not for us to gauge, which is capable of establishing the necessary relationship between the false statement and the practice in which Mr Okoronkwo was employed when he made it. It will be necessary to bear in mind that the typical situation -- though not necessarily the only one -- to which this element of section 43(1) is directed is misconduct by a member of a solicitor’s staff in the course of his or her employment. The standard to which the case has to be proved, which is the criminal standard, will of course have a material bearing on this.
It is also the foundation of Mr Beaumont’s third ground, which is that the tribunal nowhere remind themselves that this is the standard that they are required to apply. The nearest they come to indicating that they have it in mind is a passing reference to one allegation not being “proved to the required standard” and in their use of “proved” or “not proved” on each count before them. While I agree that it would be very much better that the tribunal should spell out that they are applying the criminal standard, there is nothing in the terms or outcome of their decision to indicate that they have used a lesser standard. One would need to see at least some textual indication that an over-lax standard has been applied, and Mr Beaumont has been able to show us none.
In these circumstances I would refuse Mr Okoronkwo permission to cross-appeal. While none of his points is without substance, none is capable of being concluded in his favour at an appellate level. The first ground, though it is not too easy to discern what the dialogue about dishonesty amounted to, falls short of any express abandonment of the case on the fourth count. The second, for the reasons I have given, is fact-sensitive and needs to be properly tried out. The third is no more than equivocal. None either raises an important point of principle or otherwise requires this court’s attention.
I appreciate the very considerable burden a rehearing involves both emotionally and financially, but in my judgment the Divisional Court’s order is the only just solution. It may be, however, that the argument before us, and possibly even this judgment, will have helped to clarify what it is that the SDT needs to focus on and how sharp its focus needs to be, assuming that the matter is brought back before them.
I would therefore dismiss Ms Izegbu’s appeal upon her non-appearance and would refuse Mr Okoronkwo’s application for permission to cross-appeal.
Lord Justice Keene:
I agree. Amongst other matters, I agree that the evidence is capable of establishing that the applicant’s act was one “in relation to that solicitor’s practice,” in the words used in section 43(1). I would, however, not wish to express any view as to the strength of the applicant’s argument that in fact, when examined, his act was not one which had such a relation.
Lady Justice Smith:
I agree with both judgments and have nothing to add to the issue that has just been raised by my Lord, Keene LJ.
Order: Permission to cross-appeal refused
Appeal dismissed
Post-Judgment Discussion
LORD JUSTICE SEDLEY: Are there any applications?
MS ROBERTSON: Yes my Lord, in relation to the costs. Can I say straight away that unfortunately I can’t say from my side I am in a position to serve costs schedules on the other side. I appreciate that is something we should have done but the position is that the costs as between myself and the Law Society, Ms Watt has been (inaudible), have yet to be finally agreed, and so what I was going to invite the court to do is to simply order costs in favour of the Law Society with the amount to be assessed on the standard basis. Clearly what one hopes will happen is that they will (inaudible) me, instructions will be obtained which will enable a sensible agreement to be reached about what amount of costs should be payable rather than that going for assessment.
LORD JUSTICE SEDLEY: What is the excuse for the Law Society, of all litigants, not having its bill of costs on what was … It is perfectly true this was down for a day and a half
MS ROBERTSON: Yes
LORD JUSTICE SEDLEY: Is that the reason?
MS ROBERTSON: Well, the position is a little bit more complicated. If I could just frankly explain it, estimates were supplied, and those estimates were supplied quite some time ago …
LORD JUSTICE SEDLEY: To whom?
MS ROBERTSON: To the Law Society in relation to counsel’s fees, which is the part which is not yet finalised as between ourselves and the Law Society, and the position is that in relation to Ms Izegbu those estimates which were supplied, as I say, some time ago, assumed that something might emerge, that she might get representation, there might have to be some substantive point being taken. In short, there is an overestimate in her case and I don’t feel that I could put before the court that figure as a figure that should be assessed on a summary basis. On the other hand, in relation to Mr Okoronkwo there was a great deal of to-ing and fro-ing last week, which again had not been built into the estimate that was given to the Law Society, over matters such as the bundle. I understand that their decision-making process, which nowadays involves purchase orders that have to be submitted and put through a certain process, has not caught up with this
LORD JUSTICE SEDLEY: What we usually see is the bill that the solicitor intends to render to the client, whether or not the client expects to be paying it
MS ROBERTSON: Well, indeed …
LORD JUSTICE SEDLEY: And we tend to look rather askance at it when it’s submitted as the proper basis for inter partes assessment. Here, we do not even have that. I don’t think we can castigate you for not having a bill because this was down for a day and a half. It would have been nevertheless very helpful to have it
MS ROBERTSON: I appreciate that
LORD JUSTICE SEDLEY: First of all, as far as Ms Izegbu is concerned, you and your junior and solicitor here are here on both cases
MS ROBERTSON: Yes we are. We are here in any event, and I think what I am saying is that, although an estimate was put in, I wouldn’t feel that it was right to ask for a sum in that amount in her case, because in the event obviously the work that had to be done was relatively limited
LORD JUSTICE SEDLEY: Well, the view that we have provisionally formed in relation to Ms Izegbu is that, while it is a privilege to have you here, her case could not possibly have justified more than junior counsel …
MS ROBERTSON: No. Ordinarily that would obviously be right …
LORD JUSTICE SEDLEY: And she should not be liable for any costs that are based on anything more extravagant. And indeed I think in any case you wouldn’t be --
MS ROBERTSON: If I could clarify my proposal, and this is why I find myself slightly embarrassed because this has not been agreed as between ourselves and the Law Society, was that we would not, there would be no brief in relation to Ms Izegbu as such, simply a limited amount of time charge relating to … because we thought it would be helpful to the court to have a very brief skeleton to identify the issue, such as it was, in the prereading that you might find it helpful to do in relation to her and no more than that
LORD JUSTICE SEDLEY: Well your application is that there should be an order for costs …
MS ROBERTSON: An order for costs, and it would be a small amount, no doubt…
LORD JUSTICE SEDLEY: … to be assessed but to be assessed on the basis that one counsel, junior counsel, appeared
LADY JUSTICE SMITH: I think you are saying that you wouldn’t even ask …
MS ROBERTSON: I don’t think it would have to be anything (inaudible) because we would all have been here in any event.
LORD JUSTICE SEDLEY: Oh I see …
LORD JUSTICE KEENE: So no brief fees …
LADY JUSTICE SMITH: No brief fees.
MS ROBERTSON: No, that was my proposal
LORD JUSTICE SEDLEY: I am sorry, I misunderstood
MS ROBERTSON: And so why I say I find myself embarrassed is there was an estimate which assumed that there would be a brief of some description and comes up with a much larger figure, and I don’t think it would be right for me to put that before the court and say would you please make a summary assessment on that…
LADY JUSTICE SMITH: You are now saying that there won’t be a brief fee at all?
MS ROBERTSON: There won’t be a brief fee, there will be time charged for the time spent simply understanding …
LADY JUSTICE SMITH: For preparation
MS ROBERTSON: … and for preparing a short skeleton for the court
LADY JUSTICE SMITH: Right
LORD JUSTICE SEDLEY: So costs to be assessed for, shall I say for solicitor only?
MS ROBERTSON: No, Ms Watt also. Who prepared the skeleton in relation to …
LADY JUSTICE SMITH: For the preparatory work of junior counsel?
MS ROBERTSON: Yes
LORD JUSTICE KEENE: But nothing in respect of yourself, Ms Robertson, at all?
MS ROBERTSON: Well, in practice I did overlook what Ms Watt did. If anybody thinks that was inappropriate, then make the order simply in relation to junior counsel, I am not going to argue for my corner on that …
LORD JUSTICE SEDLEY: So costs to be assessed for solicitor and preparatory work of junior counsel?
MS ROBERTSON: Yes. I am happy with that.
LORD JUSTICE SEDLEY: Yes, you may have that order, Ms Robertson
MS ROBERTSON: Thank you. And then secondly, in relation to Mr Okoronkwo, again I would ask for an order that the costs be assessed, and I obviously hope that it will be possible to avoid actually having to go through an assessment on that.
LORD JUSTICE SEDLEY: Well, we are concerned about this because, while it is true that Mr Okoronkwo has tried and failed today for permission to appeal, there are two aspects that I think make me worry whether he ought to be paying for it. One is that, were it not for the fact that his application was made by way of attempted cross-appeal, he would have been here ex parte and would not have incurred any opposing side’s costs. The other is that although he has not succeeded in oversetting the order for remission, and the order for remission is still there, it would be a considerable misfortune if he faced a ruinous bill of costs here and then succeeded before the tribunal.
MS ROBERTSON: My Lord, I hear what your Lordship says on that. I think what I would say is this: that we took the unusual course of putting in a skeleton on the permission point in the hope of heading off -- everybody being here today -- on the basis that actually these were points which, so far as the substance in them, there were points to be taken in front of the SDT, and this was, if you like, an unnecessary outing on the way to the SDT, and the right way to handle it would be to simply go to the SDT and …
LORD JUSTICE SEDLEY: We had not expected to hear counsel on the other side on the application for permission to appeal, because this was not the sort of case in which one would have invited them to attend. Any attempts on your part would have been voluntary; and in fact the reason you were involved at all was that you had an appeal at some stage on its feet which you have abandoned…
MS ROBERTSON: And because this was listed with the appeal to follow if permission was given …
LORD JUSTICE SEDLEY: Well that’s true …
MS ROBERTSON: … and so we certainly understood…
LORD JUSTICE KEENE: Is that right?
MS ROBERTSON: Well, that was my … certainly was always my understanding, clearly. Sorry, we perhaps have been at cross-purposes because that is the basis on which we are here, so we had perhaps hoped that the court would deal with it on paper and that there wouldn’t be…
LORD JUSTICE KEENE: Is that Mummery LJ’s second order …?
LORD JUSTICE SEDLEY: No. The listing office at some stage … I think I knew that it was to be listed in this form, although it is quite true Mr Beaumont wasn’t consulted about it. Whether he would have objected. I don’t know. With hindsight he would have done …
LORD JUSTICE KEENE: Well, it’s a hypothetical question …
LORD JUSTICE SEDLEY: Yes.
MS ROBERTSON: So in practice, obviously, although we could have not put in a separate skeleton for permission, we had thought that perhaps the court might be able to deal with it on paper and a hearing might be avoided by that route. In the event what happened is we understood ourselves to be here to argue the appeal, in any event, if permission was given.
LORD JUSTICE SEDLEY: Yes, I follow that.
LADY JUSTICE SMITH: What about respondents? (Inaudible)
LORD JUSTICE SEDLEY: Mr Beaumont, what we are minded to do, I think, is to make the Law Society’s costs of today, so far as they affect your client, costs in the disciplinary proceedings.
MR BEAUMONT: My Lord, I couldn’t quarrel with that, and my only slight concern is whether you have power to do it.
MS ROBERTSON: Yes.
LORD JUSTICE SEDLEY: Well, we think and hope we do.
MS ROBERTSON: I think the same concern is being expressed behind me and I am not sure myself …
LORD JUSTICE SEDLEY: The other thing we can do is reserve the costs to ourselves.
MR BEAUMONT: Yes.
LORD JUSTICE SEDLEY: … or to one member of this court if need be, to abide the outcome of the disciplinary proceedings.
LORD JUSTICE KEENE: And the other risk, of course, about the initial idea my Lord was putting forward is of course that the disciplinary committee might not get to a final conclusion.
LORD JUSTICE SEDLEY: In which case we would have made a rod for everybody’s back by making costs ride on it.
MR BEAUMONT: The contingency would be twofold: a) that there are further proceedings and b) that they are resolved in favour of the Law Society.
LORD JUSTICE SEDLEY: Well, what do you think, Ms Robertson?
MS ROBERTSON: Well my Lord, at the risk of repeating myself I would say that if one separates out the question as to what the final outcome is that the SDT is one thing but whether it was appropriate to bring the appeal is another, and the fact is that you have found that there wasn’t a point of principle which is what we were trying to persuade my learned friend’s client of with our skeleton argument on the permission point, and one should have gone directly to the SDT missing out this stage and avoiding, for all parties, these costs.
LORD JUSTICE SEDLEY: On the other hand there is a good deal to suggest that if you hadn’t appealed Mr Okoronkwo would not have tried to cross-appeal.
MS ROBERTSON: Well, except that he had been put on notice of our intention to withdraw our appeal before his respondent’s notice was served on us …
LORD JUSTICE SEDLEY: (Inaudible)
MS ROBERTSON: … and so there was a decision evidently on his part.
LORD JUSTICE SEDLEY: Couldn’t get on the escalator.
LORD JUSTICE KEENE: Had he actually been given notice before …?
MS ROBERTSON: Yes, I mean, the order of events was that he was told we intended to withdraw our appeal, the next day issued his respondent’s notice in this court, then it was served on us after we had in the meantime served on the court our withdrawal is my understanding of the order of events. So, of course, I am sure the thought processes which led to his respondent’s notice would have started in train but the actual following through of launching a cross-appeal followed afterwards.
LORD JUSTICE SEDLEY: So it’s more freestanding than I suggested.
MR BEAUMONT: It wasn’t that clear cut at all. In fact, all we had was a very short email from Mr Cadman to me and, having consulted my client, we weren’t satisfied, I am afraid, that we were able to proceed on the basis that that preliminary indication of the Law Society being minded to withdraw was sufficient for us to be content that we could simply sit back and do nothing, bearing in mind we were subject to a time limit and, indeed, as I recall, the work on the respondent’s notice had either been done or was being done literally as at the moment of which we were told that they were minded to withdraw their appeal. So …
LORD JUSTICE KEENE: Was that the precise terminology, “minded to withdraw”?
MR BEAUMONT: No, that’s my description of the message I received (inaudible). But our position was that, unless and until the indication as to withdraw was emphatic and unequivocal, we should carry on.
LORD JUSTICE SEDLEY: Well yes, I can see that, but what does it say, Ms Robertson:?
MS ROBERTSON: Sorry, I am just trying to read through an email string. What I can see is an email from Mr Cadman, sitting behind me, to Mr Beaumont, saying that it would be inappropriate to incur any further costs at this stage in the light of the indication I have given …
LORD JUSTICE SEDLEY: So the indication was before that.
MS ROBERTSON: I am just looking to see where the indication actually is. Ah no, I think this is the wording my learned friend had in mind -- at the bottom of that string I see on 8 September “I received notification from my clients for considering withdrawing this appeal. I suggest no further work is undertaken. I will be in a position to confirm the position within the next seven days…
LORD JUSTICE SEDLEY: What we propose to do is to reserve the costs of today because we are not happy in the present inchoate situation that it is fair to say where they should fall. At the same time we don’t want to make or create a problem for the parties, and for the tribunal if it goes back to the tribunal. So the costs of today will be reserved; they will be reserved to me. If necessary, I will sit with other members of the court if I cannot dispose of whatever application is made in due course -- meaning, as far as one can see at present, when the remitted hearing is either determined or abandoned.
MS ROBERTSON: And presumably, my Lord, that is an application which might appropriately be dealt with on paper, for example?
LORD JUSTICE SEDLEY: I would expect it to be dealt with in written submissions, please. If we need a hearing either you or I will say so. Right, well thank you all very much, I am most grateful.