Coke-Wallis v Institute of Chartered Accountants In England and Wales

Mr Coke-Wallis, the appellant, is an accountant and a member of the Institute of Chartered Accountants in England and Wales. He formerly practised in Jersey. In 2002, he got into trouble with the Jersey Financial Services Commission, who, on 18^th December 2002, issued a direction to the effect that the trust companies with which he and his wife were concerned should cease to take on new trust business and that their affairs should be wound up. It also directed that no records or files in respect of the companies or any customers should be removed from the offices of the companies.

On 22^nd December 2002, the appellant was caught red handed in St Helier by Jersey police having checked his car onto the ferry for St Malo. In the car, the police discovered suitcases containing extensive documentary files relating to clients, computer equipment, network servers and back up tapes, including original trust deeds, trust and company documents, share certificates, company memoranda and articles and letters of wishes. The appellant was arrested and charged with failing to comply with the direction of 18^th December 2002. On 16^th September 2003, he was convicted in Jersey of failing to comply with the direction of the Jersey Financial Services Commission, contrary to Article 20(9) of the Financial Services (Jersey) Law 1998. He was sentenced on 22^nd October 2003. On 14^th January 2004, the Jersey Court of Appeal refused leave to appeal.

The Respondent Institute’s Disciplinary Bye-laws include the following:

“Liability of members and provisional members to disciplinary action

4(1) A member or provisional member shall be liable to disciplinary action under these bye-laws in any of the following cases, whether or not he was a member or provisional member at the time of the occurrence giving rise to that liability –

(a)

if in the course of carrying out professional work or otherwise he has committed any act or default likely to bring discredit on himself the Institute or the profession of accountancy;

(b)

…

Proof of certain matters

7(1) The fact that a member, member firm or provisional member has, before a court of competent jurisdiction, pleaded guilty to or been found guilty of an indictable offence (or has, before such a court, outside England and Wales, pleaded guilty to or been found guilty of an offence corresponding to one which is indictable in England and Wales) shall for the purposes of these bye-laws be conclusive evidence of the commission by him of such an act or default as is mentioned in bye-law 4(1)(a) or 5(1)(a), as the case may be.

7(2) …

7(3) A finding of fact –

(a)

…

(b)

in any civil or criminal proceedings before a court of competent jurisdiction in the United Kingdom or elsewhere;

…

shall for the purposes of these bye-laws be prima facie evidence of the facts found.”

It is evident that bye-law 7(1) does not itself comprise a discreditable act or default. It is a conclusive evidence provision by which discreditable conduct under bye-law 4(1)(a) may be conclusively proved.

On 2^nd November 2004, the Investigation Committee of the respondents preferred a formal complaint against the appellant which alleged discreditable conduct under bye-law 4(1)(a) in that he had been convicted upon indictment at the Royal Court of Jersey on 16^th September 2003 as I have indicated. I shall refer to this as “the conviction complaint”. It will be necessary to return to its detail later in this judgment. The conviction complaint was heard by a disciplinary tribunal on 19^th April 2005. The claimant did not attend and was not represented. The tribunal refused a written application made by him for an adjournment. The case was presented to the tribunal entirely as being based on the Jersey conviction. The tribunal were satisfied that he had been convicted on indictment in Jersey. But they were not satisfied that the offence of which he was convicted in Jersey corresponded with any indictable offence in England and Wales. They accordingly dismissed the complaint. The conviction complaint had proceeded on the apparently mistaken assumption that there was an offence in England and Wales corresponding with the offence of which the claimant had been convicted in Jersey.

On 7^th March 2006, the respondent’s Investigation Committee preferred a second complaint (“the conduct complaint”). This again alleged that the appellant was liable to disciplinary action under bye-law 4(1)(a) for discreditable conduct in attempting to remove from Jersey the documents and other things found in his car on 22^nd December 2002 in contravention of the direction of the Jersey Financial Services Commission.

On 7^th December 2006, a second Tribunal held a preliminary hearing to determine the appellant’s contention that the conduct complaint should be summarily dismissed, because it was the same or effectively the same as the conviction complaint which had been dismissed. It was agreed that the conduct complaint relied on the same nexus of facts as the conviction complaint. But the tribunal held in substance that the two complaints did not allege the same thing. The discreditable act for the purpose of the conviction complaint was the fact of the conviction: the discreditable act for the purpose of the conduct complaint was the underlying conduct. The tribunal held that the two complaints concerned “two wholly and substantively distinct bye-law 4(1)(a) acts”.

The appellant claimed judicial review of this preliminary decision. His claim was heard by Owen J, who gave his decision dismissing it on 6^th November 2008. His judgment may be found at [2008] EWHC 2690 Admin, and this may be referred to for greater detail than this judgment need contain.

The issues before the judge which remain relevant to this appeal were whether, as a matter of construction of the respondent’s bye-laws, the conviction complaint and the conduct complaint were the same or substantially the same; whether, if they were, the bringing of the conduct complaint offended principles of autrefois acquit or res judicata; and alternatively whether the bringing of the conduct complaint was an abuse of process in the light of the previously dismissed conviction complaint.

Owen J held that there was a distinction of substance between the conviction complaint and the conduct complaint. In simple terms, the one required proof of the conduct complained of, but the other did not. He held that the conviction was not itself the relevant act or default for the purpose of bye-law 4(1)(a); but that nevertheless there was a fine distinction between proof of a conviction of an offence sufficiently serious to be indictable where it was not necessary to prove the underlying conduct or make a judgment about it, and proof of conduct which upon consideration was judged to be discreditable within bye-law 4(1)(a). In the light of the judge’s finding on this first issue, the second issue did not arise.

As to abuse of process, the judge observed, with reference to Henderson v Henderson (1843) 3 Hare 100 and Johnson v Gore Wood [2002] 2 AC 1, that it was not necessarily abusive merely to litigate something which could have been litigated before. Whether or not it is an abuse depends on the facts of the case, and in the balance to be drawn between the public and private interests involved. Here there was an obvious reason why the conduct complaint had not been raised at the first hearing. There was a strong public interest in maintaining the standards and reputations of professions – see Bolton v The Law Society [1994] 1 WLR 512 and In the matter of a Solicitor CO 2504/2000, 20^th November 2000. The judge held that the public interest in allowing the conduct complaint to proceed was compelling and not outweighed by the appellant’s private interests. If the conduct complaint proceeded, he would have the opportunity to show that he was not guilty of any breach of a direction by the Jersey Financial Services Commission or that, if he was, it did not bring discredit on himself or the profession. It should perhaps in this context be said that, in the light of bye-law 7(3), the Jersey conviction and the proceedings including the findings of the Jersey Court of Appeal are prima facie evidence that the appellant was in breach of the direction. He has never yet attempted to prove otherwise. It would be surprising, to say the least, if what he appears to have done were not regarded as professionally discreditable.

The appellant appeals, with permission of Sullivan LJ, against Owen J’s decision dismissing his claim. The grounds of appeal are that the judge was wrong not to hold as a matter of construction of the bye-laws that the act or default alleged in the conviction complaint was the very same underlying conduct as that alleged in the conduct complaint; that the judge failed to consider and apply the Privy Council decision in Harry Lee Wee v Law Society of Singapore [1985] 1 WLR 362; that the judge was wrong to disregard findings of fact of the original (conviction complaint) tribunal; that the judge took too narrow a view of the public interest concentrating only on the interest of the profession; that the judge did not properly consider and apply Johnson v Gore Wood; and that he failed to extract from Henderson that the court will not allow litigation to be reopened where a party has failed to advance his full case on the first occasion through negligence, inadvertence or even accident. Mr Jones for the appellant further says that the judge failed to acknowledge his distinguishing of Law Society v Gilbert The Times, 12^th January 2001.

In my view, this appeal raises two main points: that is, first, whether by virtue of the first Tribunal dismissing the conviction complaint the principles of autrefois acquit or res judicata apply to the conduct complaint; and, second, if not, whether bringing the conduct complaint was an abuse. If the appellant succeeds on the first point, res judicata or autrefois acquit are an absolute bar to relitigation – see Bradford & Bingley v Seddon [1999] 1 WLR 1482 at 1490F. If the appellant does not succeed on the first point, the Court’s consideration of abuse of process imports a degree of discretionary judicial judgment.

The leading authority on the principle of autrefois acquit is the House of Lords decision in Connelly v DPP [1964] AC 1254. A defendant was charged with murder, and on a separate indictment with robbery arising out of the same facts. When the Court of Appeal quashed his conviction on the murder indictment, the prosecution proceeded in a new trial on the robbery indictment and he was convicted. The House of Lords held that the plea of autrefois acquit did not apply. It is a plea which must be given a limited scope. Lord Morris of Borth-y-Gest considered that, on a plea of autrefois acquit, it must be considered whether the crime charged in the later indictment is the same, or in effect the same, as the crime charged in the former indictment; and it is immaterial that the facts under examination or the witnesses called in the later proceedings are the same as those in the earlier proceedings. Lord Devlin held that for the doctrine of autrefois acquit to apply the accused must have been put in peril for the same offence with which he was previously charged both in fact and law. The offence must be exactly the same in law because legal characteristics are precise and either they are the same or they are not.

Lord Morris set out, at pages 1305-6, nine principles to be derived from principle and authority. The second principle was that a man cannot be tried for a crime in respect of which he could on some previous indictment have been convicted. The fourth principle was that one test as to whether the rule applies is whether the evidence which is necessary to support the second indictment or whether the facts which constitute the second offence would have been sufficient to procure a legal conviction on the first indictment. As to this fourth principle, it is plain that in the present case the evidence and facts necessary to prove what was alleged in the conviction complaint would not establish what was alleged in the conduct complaint and vice versa. Proving the conviction would not in this case establish the conduct complaint. Proving the underlying conduct would not establish the conviction complaint.

As to Lord Morris’ second principle, it is necessary to look in some detail at the terms of the conviction complaint. This alleged that the appellant was liable to disciplinary action under bye-law 4(1)(a), the relevant part of which is quoted, in that he had been convicted on indictment at the Royal Court of Jersey of failing to comply with a direction of the Jersey Financial Services Commission. There was then a “Summary of the Complaint” which sets out in 11 paragraphs the summary facts leading up to the conviction and the conviction itself. The Investigation Committee’s submissions were recorded in the complaint which then rely, and rely only, on the conviction and the assertion that it was under bye-law 7(1) conclusive evidence. The Record of Decision of the first Tribunal of 19^th April 2005 found the facts substantially as recited in the Summary; expressed being satisfied that the appellant had been convicted on indictment in Jersey; noted that he had been caught by police removing documents and records from the jurisdiction of the Jersey authorities and that this was “not the sort of conduct that is to be expected of a member of this Institute”; but dismissed the complaint because they were not satisfied that any of the offences of which he had been convicted corresponded with offences under the English Financial Services and Markets Act 2000 which had been drawn to their attention. In my view, although the first Tribunal found as facts a summary of the facts underlying the conviction, the appellant could not have been found guilty of discreditable conduct upon the conviction complaint by proving these underlying facts. The only basis for conviction on this complaint was by proving the conviction. This was because the only particulars alleged in that complaint comprised the conviction, and because the Investigation Committee’s written submissions which formed part of the complaint, were limited to relying on the conviction. That complaint could not have been amended in the absence of the appellant, even if there was power to amend such a complaint, which is doubtful – see R(Gorlov) v Institute of Chartered Accountants of England and Wales [2001] EWHC Admin 220 at paragraph 19.

Thus, although it would remain to be considered on Lord Morris’ approach whether the matter charged in the conduct complaint was the same or in effect substantially the same as that charged in the conviction complaint, and whether the appellant would be prosecuted twice for the same matter, consideration of the two principles which I have so far addressed suggest that this is not a case of autrefois acquit.

Lord Devlin in Connelly had a tighter formulation. He said at page 1339 that, for the doctrine of autrefois acquit to apply, it is necessary that the accused should have been put in peril of conviction for the same offence as that with which he is then charged. The word “offence” embraces both the facts which constitute the crime and the legal characteristics which make it an offence. For the doctrine to apply, it must be the same offence both in fact and law. He added, with reference to Lord Morris’ view that offences which were substantially the same could be sufficient, that legal characteristics are precise things and are either the same or not. He inclined to favour keeping autrefois acquit within limits that are precise.

In so far as there is a difference of substance or emphasis between Lord Morris and Lord Devlin, the Criminal Division of this court held in R v Beedie [1998] QB 356 at 360-1 that the majority of the House of Lords in Connolly adhered to a narrow principle of autrefois acquit as identified by Lord Devlin. The majority considered that when a second indictment does not charge the same offence or offences as the first, judicial discretion should be exercised.

In my judgment, applying Lord Devlin’s principle in the present case, the conduct complaint did not charge the same offence as the conviction offence. Both complaints were admittedly brought under the same bye-law and arose out of the same nexus of fact. But the discreditable conduct alleged in the first indictment was being convicted on indictment. This was both conclusive evidence of discreditable conduct but also comprised the discreditable conduct. The discreditable conduct alleged in the conduct complaint was attempting to ship forbidden documents etc. out of Jersey. The facts relied on were not the same, nor were the legal characteristics, because what was alleged under the umbrella of discreditable conduct was not the same offence. As Owen J correctly observed, the mere fact of conviction on indictment would have constituted discreditable conduct without proof or consideration of the underlying conduct. That by itself is sufficient to show that the principle of autrefois acquit did not apply. The conclusion is strengthened by the facts that the appellant was not, as I have shown, at peril of conviction for the underlying conduct upon the conviction complaint, and that the facts necessary to establish the conduct complaint would not have established the conviction complaint and vice versa. I would reject Mr Jones’ submission that the conviction complaint alleged and alleged only the underlying conduct, and that reliance on the conviction was no more than an evidential short cut to establishing the conduct. I would reject also his submission that the “act or default” for the purpose of the conviction complaint was the same underlying conduct as that for the conduct complaint. The fact that the first Tribunal made findings of fact which would have been relevant to establish the conduct complaint is immaterial because those facts would not and did not establish the conviction complaint.

The Privy Council decision in the Harry Lee Wee case concerned proceedings against a solicitor under section 84 of the Singapore Legal Profession Act 1970. The section provided for disciplinary measures for due cause, which might be shown by proof of a criminal offence implying a defect of character which made the solicitor unfit for his profession, or if he had been guilty of grossly improper conduct in the discharge of his professional duty. There was a difference, therefore, from the present case in that a conviction implying unfitness was a free standing ground for a disciplinary finding, whereas here it is conclusive evidence of discreditable conduct. The case concerned misappropriation of client funds by a legal assistant which the solicitor did not report. In November 1978, the solicitor was convicted of offences of accepting restitution of property in consideration of concealing criminal offences. In December 1978, a disciplinary committee was appointed to consider whether the solicitor’s conduct amounted to grossly improper conduct within s. 84(2)(b) of the 1970 statute. In January 1981, a second disciplinary committee was appointed to consider his convictions. Based on the findings of the first committee, the High Court ordered his suspension for 2 years from 27^th August 1981. On the previous day, the second committee had made its findings based on his convictions. Based on these findings, the High Court ordered his suspension from practice for a further two years from 31^st January 1984, after he had resumed practice from his first suspension. It was held by the Privy Council that both disciplinary proceedings resulted from the same conduct and that, although the two proceedings for professional misconduct came within separate provisions of the 1970 statute, there was insufficient distinction between the two to justify separate disciplinary proceedings. The second disciplinary proceedings were an abuse which the court could restrain and the second order for suspension was set aside.

The solicitor had relied on the principle of autrefois convict or on the closely analogous principle that the unnecessary duplication of proceedings was an abuse of process – see the opinion of Lord Bridge of Harwich at 364 G-H. Lord Bridge said at page 368F that the doctrine of autrefois convict and acquit applies to disciplinary proceedings under a statutory code by which any profession is governed. He referred to Connelly and quoted from the part of the opinion of Lord Morris of Borth-y-Gest, to which I have referred earlier in this judgment, and which Lord Bridge said was apt, suitably modified for professional disciplinary proceedings, to apply to the circumstances of the case before the Board. He further cited Lord Morris in Connelly for the proposition that, for the doctrine of autrefois to apply, it is necessary that the accused should have been put in peril of conviction for the same offence as that with which he is then charged. I have shown that this is not so in the present appeal. Lord Bridge then observed that, if the facts in the Harry Lee Wee case could not be brought within Lord Devlin’s strict test, they were certainly covered by his alternative approach of abuse of process. It was accordingly held that bringing the conviction proceedings against the solicitor following the delay proceedings was an abuse of the disciplinary process. The decision therefore being based on abuse of process, this authority does not support the submission that the principle of autrefois acquit should apply in the present case. As to abuse, which I consider at greater length below, there is the obvious point that, in the Harry Lee Wee case, the solicitor had already been punished under the first disciplinary proceedings, and punishing him again under the second proceedings was a plain candidate for abuse. It is a decision on its own facts. Mr Jones is able to rely on it generally, so far as it goes, in support of his abuse argument. But his submissions relating to autrefois acquit and convict miss the point that the Harry Lee Wee case was not decided on those principles.

The modern leading authority on abuse of process in this field is Johnson v Gore Wood, to which the judge referred. In that case the plaintiff and one of his companies each had a claim against solicitors arising out of a property transaction. The company brought proceedings which were eventually compromised. The plaintiff then for the first time brought proceedings for his own claim, although this had been discussed between the solicitors during the progress of the company’s claim. The House of Lords held that there was a public interest in the finality of litigation and in a defendant not being vexed twice in the same matter; but that whether an action was an abuse of process as offending against the public interest should be judged broadly on the merits taking account of all public and private interests involved and all the facts of the case, the crucial question being whether the plaintiff was in all the circumstances misusing or abusing the process of the court.

Lord Bingham of Cornhill explained at page 23 that the form of abuse relied on has been taken to be the law described by Sir James Wigram V-C in Henderson at pages 114-115 in the famous passage which states that the court requires parties to litigation to bring forward their whole case, and will not permit the same parties to open the same subject of litigation in subsequent proceedings which was not brought forward in the first proceedings only because they have, from negligence, inadvertence or even accident, omitted part of their case. Lord Bingham reviewed a series of more recent cases and then said at page 31:

“But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.”

Lords Goff of Chieveley, Cooke of Thorndon and Hutton agreed with Lord Bingham and Lord Millett gave a concurring opinion. In my judgment, the passage which I have quoted from Lord Bingham’s opinion is of general application and does not support Mr Jones’ submission, with reference to In the matter of a solicitor CO/2504/2000 at paragraph 18, that you need to find special circumstances to avoid what should otherwise be a finding of abuse.

In the present case, Mr Jones submits that the judge gave undue weight to the respondent’s interest in maintaining the integrity of the profession and little or no weight to the applicant’s interest in the finality of litigation. He submits that the judge overlooked the point to be derived from Henderson that inadvertence or mistake cannot avoid the obligation to bring proceedings once and for all. The first Tribunal made findings of fact which should not be disregarded and which show that the full conduct complaint could have been advanced before the first Tribunal. Mr Jones argues that the facts in Johnson v Gore Wood, where there was held to be no abuse, are far removed from those in the present case. Apart from all else, the plaintiffs were different.

Applying the principles in Johnson v Gore Wood, I do not consider that the bringing of the second conduct complaint was an abuse and I would uphold the judge in this respect. Just as there is a strong public interest in the finality of litigation, including disciplinary proceedings, so there is a strong public interest in bringing professional disciplinary proceedings in order to maintain professional reputation and integrity both in individuals and in the profession as a whole. The first proceedings did not proceed to any adjudication on the merits – compare R (Redgrave) v Commissioner of Police [2003] 1 WLR 1136, where discharge of a defendant police officer under section 6 of the Magistrates’ Courts Act 1980 for want of sufficient evidence was held to be no bar to subsequent disciplinary proceedings against him. The discharge under s.6 did not amount to an acquittal. Although it is of course both regrettable and relevant that the respondents inadvertently overlooked that there was no corresponding indictable offence in England and Wales with that of which the appellant was convicted in Jersey, it was an error of process and not the omission of part of a broader case. In my view, the broad based merits judgment should not see the bringing of the conduct complaint as an abuse. The case of Harry Lee Wee is not analogous, if only because in that case the solicitor had already served his punishment under the first proceedings. Here the first proceedings failed on an evidential technicality without an adjudication on the merits. The appellant has never yet sought to rebut the factual case against him, although he will have the opportunity to do so in opposition to the second conduct complaint. He seeks to derive a benefit enabling him to remain a member of the Institute from a technical error of the respondents. It is not, in my view, in the public interest that this technicality should prevail. I agree with Mr Beloff QC for the respondents that there is nothing unfair, unjust or oppressive in bringing the second conduct complaint, and that there is a compelling public interest in doing so.

For these reasons, I would dismiss this appeal.