ANDREW JOHN BOLTON v Respondent (Appellant) [1993] EWCA Civ 32

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISIONAL COURT
[1993] EWCA Civ 32Case No No. OBCPF 93/Q178/DVenue No. OBCPF 93/Q178/D, Royal Courts of Justice,, Strand, London, WC2A 2LL. Monday,
Between
ANDREW JOHN BOLTONRespondent (Appellant)THE LAW SOCIETYAppellant (Respondent)
Before
The Master of the RollsSir Thomas BinghamLord Justice RoseLord Justice WaiteMR. M. KNOTT (instructed by Messrs. A.J. Bolton & Co, London E15) appeared on behalf of the Respondent.MR.C. FLINT (instructed by Messrs. Marsh, Ferriman & Cheale, West Sussex) appeared on behalf of the Appellant.Date 6 December 1993
[1]Monday, 6th December, 1993. THE MASTER OF THE ROLLS: This is an appeal by The Law Society against a decision of the Queen's Bench Divisional Court given on 7th July 1992. The Divisional Court then quashed an order of the Solicitors Disciplinary Tribunal that Mr, Andrew John Bolton be suspended from practice as a solicitor for two years and substituted an order that he be fined £3,000. The Law Society appeal against that decision with the leave of Leggatt LJ. It is said, so far as I know correctly, that there is no precedent for such an appeal by the Law Society.[2]Mr. Bolton is now aged 39. He was admitted as a solicitor in 1987 at the age of 33, having previously been employed in other occupations. On his admission he set up in practice in East London with one partner. The transaction that brought him to the attention of the Solicitors Complaints Bureau occurred in 1989-1990, not very long after his admission. This transaction concerned a house at 38 Studley Road, Forest Gate, London E7. The house had been bought by Mr. Bolton's wife with the assistance of a mortgage advance made by the Abbey National to her of some £91,000. Mrs. Bolton agreed to sell the lower ground floor flat in that house to her brother, Mr. Egwu, for £65,000. Mr, Bolton acted as solicitor in this transaction, apparently for his wife, his brother-in-law, and the Leeds and Holbeck Building Society, which was to advance £45,000 odd to assist Mr. Egwu to buy the flat upon the security of the flat. Mr. Bolton duly received a cheque for £45,000 from the Building Society. It was then his duty to hold that money in his client account until the conveyance of the lower ground floor flat was made to his brother-in-law and security documentation in favour of the Building Society was executed. He did not do that. Having received the cheque on 10th May 19 89 he started, as early as 16th May, disbursing that money. In just over a month he disbursed the whole sum, partly to mortgagees and partly to the Inland Revenue and, as to £25,000, to his wife. The brother-in-law never paid the £20,000 which was due from him in addition to the Building Society's advance or any part of it. The sale to the brother-in-law was never completed. The security documentation was never executed. The money received from the Building Society was disbursed without its receiving the security which was the condition of its making any advance.[3]None of this came to light until the Solicitors Complaints Bureau sent an investigation accountant to look at the books of the firm at the end of August 1990. The investigation accountant found an error in the book-keeping practice which was minor and irrelevant for present purposes. I shall henceforward ignore it. The accountant also learnt of this shortage on the client account which by then had existed un-rectified for a period of nearly sixteen months. The matter came to light during the visit although it was not shown in the firm's books relating to the client account.[4]When interviewed Mr. Bolton admitted, apparently without prevarication, that these payments had been made. He admitted that the monies received from the Building Society had been misused and acknowledged the shortage. That shortage was, however, made good very shortly thereafter in full on llth September 1990. That did, however, leave the Building Society-out of pocket so far as sixteen months' interest was concerned and it issued a writ for that sum which led to the entry of judgment in default for £9,000 odd on 7th January 1991. That judgment was satisfied.[5]Not long thereafter, on 16th January 1991, the Solicitors Complaints Bureau complained to the Solicitors Disciplinary Tribunal that Mr. Bolton had misapplied funds received for the purpose indicated. A hearing took place on 26th March 1991 at which Mr. Bolton represented himself and relied primarily upon an affidavit which he had sworn. The findings and order of the Tribunal were delivered on 23rd May 1991 and they follow the usual form. The facts were summarised and there followed a summary of the contentions made on behalf of the complaining party and on behalf of the respondent solicitor. There then followed the conclusions of the Tribunal. The conclusions of the Tribunal in this instance are of great importance and I should quote them in full. They read, after a reference to the subsidiary complaint about the book-keeping which I have already mentioned, in this way:
"However, the matter contained in allegation (b) was of a far more serious nature. It concerned the misuse of clients' moneys. In essence the respondent had paid money belonging to a client Building Society to his wife. That was wholly unacceptable. The respondent in anticipation of the completion of a conveyancing transaction took a deliberate risk and paid out moneys which were not available to him. The Tribunal accept that the respondent has put matters right to the extent of repaying the advance from Leeds & Holbeck Building Society. Interest and costs however remained outstanding. The conveyancing system in England and Wales depends to a very great extent upon building societies and other lending institutions being able to trust a solicitor to handle large sums of money properly and carefully. The payment out of moneys held on behalf of a client by a respondent to his wife would normally be regarded very seriously indeed. Indeed it would be unusual for a respondent in that position not to be struck off the Roll. The Tribunal are able to accept that this respondent is an honest man and he was not stealing clients' money in a premeditated fashion, he was naive and stupid and paid moneys out prematurely in anticipation of formal completion of a conveyancing transaction. He was caught out by a purchaser reneging. The Tribunal accept that the respondent's judgment might have been clouded by his relationship by marriage to that purchaser. It is because this respondent is young, relatively inexperienced, and apparently more experienced in assisting legally aided clients than dealing with conveyancing, that the Tribunal are able to consider that his behaviour was naive and foolish but did not represent a deliberate course of dishonest conduct. The Tribunal are therefore able to exercise leniency and not make a striking off order. However, they do regard the respondent's less than proper approach to the handling of clients' matters as a very serious matter indeed and they ORDER that the respondent ... be suspended from practice as a solicitor for the period of two years."
[6]Three points stand out clearly from that paragraph.(1) The Tribunal accepted that Mr. Bolton was an honest man. The Tribunal found that he had not stolen clients' moneys in a premeditated fashion and that his actions did not represent a deliberate course of dishonest conduct.(2) The Tribunal considered that his conduct was wholly unacceptable and regarded this as a very serious matter indeed.(3) In the Tribunal's judgment such conduct would ordinarily merit striking off but the Tribunal felt able, on the facts of this case, to make the more lenient order of suspension.[7]I pause to observe that for my part I find no fault at all in the Disciplinary Tribunal's reasoning. Mr. Bolton's conduct, even if accepted as honest, represented a flagrant departure from the elementary rules which bind anyone, most of all a solicitor, holding a sum of money on behalf of someone else. The fact that a close family relationship was involved made it more, not less, necessary to act with scrupulous propriety. There were a number of mitigating factors upon which Mr. Bolton relied and it is plain that the Disciplinary Tribunal gave those the fullest weight but nothing could disguise the fact that Mr. Bolton's conduct was, indeed, as the Tribunal held, "wholly unacceptable".[8]Mr. Bolton appealed against the decision of the Tribunal. During the period of appeal the order for suspension was stayed. The Divisional Court, as I have said, gave its judgment on 7th July. At the very outset of its judgment the court stated the principle which has been derived from McCoan v General Medical Council [1964] 1 WLR 1107 , at 113. On that page the Judicial Committee of the Privy Council said:
"Their Lordships are of opinion that Lord Parker CJ may have gone too far in In re a Solicitor [1960] 2 QB 212 when he said that the appellate court would never differ from sentence in cases of professional misconduct, but their Lordships agree with Lord Goddard CJ in In re a Solicitor [1956] 1 WLR 1312 when he said that it would require a very strong case to interfere with sentence in such a case, because the Disciplinary Committee are the best possible people for weighing the seriousness of the professional misconduct."
[9]It is not, I think, necessary to explore the authorities which lead up to that statement of principle at any length since there is no controversy about the correctness of that principle which, for the last thirty years at least, has been very clearly understood and very regularly applied. In its judgment the Divisional Court said at page 5 A of the transcript that the misappropriation of money is a very serious matter. Later in the judgment at 9 C of the transcript the Divisional Court described the client account of a solicitor as "sacrosanct". With those expressions of opinion I respectfully agree. Any approach to a case such as this must start from recognition of that as a correct starting point. Why then did the Divisional Court disturb the decision of the Disciplinary Tribunal? There were, I think, four reasons which the Divisional Court gave in the course of its judgment. The first, set out in a number of places, most prominently at page 8 B of the transcript, is the finding of the Tribunal that there was no dishonesty in this case. That was a factor which the Divisional Court attached very great importance to. Secondly, the Divisional Court drew attention to its view that there was in practice not very much difference between an order of suspension and one of striking off. At page 8 C of the transcript the Divisional Court said this:
"One wonders whether there is much difference in practical effect between striking him off and suspending someone like this appellant for two years. What chance he would have of recovering a practice after two years if he were to be struck off the Roll and with the reputation of having been struck off seems to us to be negligible and probably non-existent in these times. We feel bound to differ with the approach of the Disciplinary Committee in that sense. They were it seems to us effectively, slowly but surely, striking him off although they did not go so far as to say so, obviously. To do that to someone who is regarded as an honest man makes us wonder what they would have done to a dishonest one in the circumstances."
I think it is right that in the early sentences there the words "struck off" are used when "suspended" was the intended meaning.[11]The third reason given by the Divisional Court is that there is a disproportion between the findings of the Disciplinary Tribunal and the penalty exacted. The fourth reason is that the Divisional Court had seen testimonials which the Tribunal had not. These came, as the Divisional Court said, from a number of sources and the Divisional Court took the view that the Tribunal might very well have come to the same conclusion as the Divisional Court had it had access to that material. It is, indeed, true that the Divisional Court had much material supportive of Mr. Bolton which had not been before the Tribunal, although some testimonials were before it. Mr. Bolton said that he did not submit this material to the Tribunal because he expected another hearing at which his mitigation would be presented. For my part I find that a somewhat unconvincing submission since on his attendance before the Tribunal he was in effect pleading guilty. In any event, if he was in doubt as to the procedure he had only to ask.[12]Before returning to the facts of this case I think it may be worth saying something in more general terms about the principles which underlie cases such as this. The correct approach to questions of this kind has been laid down in a number of authorities, in particular a number of unreported decisions of Lord Donaldson of Lymington exercising the jurisdiction conferred on the Master of the Rolls by sections 13 and 49 of The Solicitors Act 1974. I do not think there is anything very surprising or very novel about the principles which emerge from those decisions but I attempt a summary of them, which cannot of course be exhaustive, in the hope that it may serve to make these principles better known and dispel any misunderstanding that there may be in any quarter.[13]It is required of lawyers practising in this country that they should discharge their professional duties with integrity, probity and complete trustworthiness- That requirement applies as much to barristers as it does to solicitors. If I make no further reference to barristers it is because this appeal concerns a solicitor, and where a client's moneys have been misappropriated the complaint is inevitably made against a solicitor, since solicitors receive and handle clients' moneys and barristers do not.[14]Any solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal. Lapses from the required high standard may, of course, take different forms and be of varying degrees. The most serious involves proven dishonesty, whether or not leading to criminal proceedings and criminal penalties. In such cases the Tribunal has almost invariably, no matter how strong the mitigation advanced for the solicitor, ordered that he be struck off the Roll of Solicitors. Only infrequently, particularly in recent years, has it been willing to order the restoration to the Roll of a solicitor against whom serious dishonesty had been established, even after a passage of years, and even where the solicitor had made every effort to re-establish himself and redeem his reputation. If a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity and trustworthiness, his lapse is less serious but it remains very serious indeed in a member of a profession whose reputation depends upon trust. A striking off order will not necessarily follow in such a case, but it may well. The decision whether to strike off or to suspend will often involve a fine and difficult exercise of judgment, to be made by the Tribunal as an informed and expert body on all the facts of the case. Only in a very unusual and venial case of this kind would the Tribunal be likely to regard as appropriate any order less severe than one of suspension.[15]It is important that there should be full understanding of the reasons why the Tribunal makes orders which might otherwise seem harsh. There is, in some of these orders, a punitive element: a penalty may be visited on a solicitor who has fallen below the standards required of his profession in order to punish him for what he has done and to deter any other solicitor tempted to behave in the same way. Those are traditional objects of punishment. But often the order is not punitive in intention. Particularly is this so where a criminal penalty has been imposed and satisfied. The solicitor has paid his debt to society. There is no need, and it would be unjust, to punish him again. In most cases the order of the Tribunal will be primarily directed to one or other or both of two other purposes. One is to be sure that the offender does not have the opportunity to repeat the offence. This purpose is achieved for a limited period by an order of suspension; plainly it is hoped that experience of suspension will make the offender meticulous in his future compliance with the required standards. The purpose is achieved for a longer period, and quite possibly indefinitely, by an order of striking off. The second purpose is the most fundamental of all: to maintain the reputation of the solicitors' profession as one in which every member, of whatever standing, may be trusted to the ends of the earth. To maintain this reputation and sustain public confidence in the integrity of the profession it is often necessary that those guilty of serious lapses are not only expelled but denied re-admission. If a member of the public sells his house, very often his largest asset, and entrusts the proceeds to his solicitor, pending re-investment in another house, he is ordinarily entitled to expect that the solicitor will be a person whose trustworthiness is not, and never has been, seriously in question. Otherwise, the whole profession, and the public as a whole, is injured. A profession's most valuable asset is its collective reputation and the confidence which that inspires.[16]Because orders made by the Tribunal are not primarily punitive, it follows that considerations which would ordinarily weigh in mitigation of punishment have less effect on the exercise of this jurisdiction than on the ordinary run of sentences imposed in criminal cases. It often happens that a solicitor appearing before the Tribunal can adduce a wealth of glowing tributes from his professional brethren. He can often show that for him and his family the consequences of striking off or suspension would be little short of tragic. Often he will say, convincingly, that he has learned his lesson and will not offend again. On applying for restoration after striking off, all these points may be made, and the former solicitor may also be able to point to real efforts made to re-establish himself and redeem bis reputation. All these matters are relevant and should be considered. But none of them touches the essential issue, which is the need to maintain among members of the public a well-founded confidence that any solicitor whom they instruct will be a person of unquestionable integrity, probity and trustworthiness. Thus it can never be an objection to an order of suspension in an appropriate case that the solicitor may be unable to re-establish his practice when the period of suspension is past. If that proves, or appears likely to be, so the consequence for the individual and his family may be deeply unfortunate and unintended. But it does not make suspension the wrong order if it is otherwise right. The reputation of the profession is more important than the fortunes of any individual member. Membership of a profession brings many benefits, but that is a part of the price.[17]I return then to consider the four reasons given by the Divisional Court for disturbing the order of the Tribunal. The first is the emphasis on the finding that Mr. Bolton had not been dishonest. I have already read in full the Tribunal's very carefully drafted conclusions. It has to be borne in mind that the Tribunal made its order very fully aware of the conclusion that it had reached concerning Mr. Bolton's honesty. It cannot sensibly be said to have overlooked its conclusions in that regard. So far as the difference between striking off and suspension are concerned, I find it difficult to think that the Divisional Court could have expected to bring more insight to bear on that quest ion than a Tribunal with a majority of practising solicitors among its members. The consequences of suspension would be something of which they would be vividly aware. Nonetheless, they concluded that suspension was the minimum sanction which they could impose in the present circumstances. Quite apart from that it is, of course, clear that there is a substantial difference between these two forms of order. At the end of a period of suspension a solicitor is able to seek employment, or seek to re-establish himself in partnership, perhaps subject to such conditions as the Law Society see fit to attach to his practising certificate. But that puts him in quite a different position from a solicitor who has been struck off, who cannot practice at all as a solicitor unless or until he is restored to the Roll.[18]So far as the finding of disproportion between the findings of the Tribunal and the penalty are concerned, I do not for my part understand how suspension can be said to be a disproportionate order in a case of conduct described, and rightly described, by the Tribunal, as "wholly unacceptable" and "very serious indeed".[19]In my judgment, the Divisional Court was doing, no doubt unwittingly, exactly what authority says the court should not do, namely substitute its own view on penalty for that of the professional Tribunal. It is true, as the Divisional Court found, that there was a good deal of material in the mitigation which it did have the opportunity to consider and the Tribunal did not. That cannot, however, be of more than limited weight for reasons that I have endeavoured to explain. It seems to me inconceivable that the Tribunal would have thought it appropriate to impose a fine even if all this material had been before it. In my judgment, therefore, the Divisional Court gave no good reasons for interfering with the decision of the Tribunal and acted contrary to settled principles in doing so. In the ordinary way I would without hesitation allow this appeal and restore the order of the Disciplinary Tribunal. In the present circumstances, however, a real question arises as to what should be done now, having regard to the time which has elapsed in the course of these proceedings, none of it due, I should say, to the Disciplinary Tribunal itself, or to either of: these parties. The fact, however, is that, as a result of the various stays that have been granted in the course of these proceedings, the order of suspension has never taken effect and it would, in my judgment, be oppressive to reinstate the Tribunal's order two-and-a-half years after the order was made, and sixteen months after the Divisional Court quashed it. The Law Society acknowledge the force of this contention and are more concerned in this appeal to allay misunderstanding and obtain a clear statement of practice and principle than to achieve the suspension of Mr. Bolton from practice. It was suggested that the Court might allow the appeal and award the Law Society their costs in the Divisional Court where both sides were ordered to bear their own costs. That is a possible course but to my mind a rather artificial and unattractive one. I have made clear that in my judgment the Divisional Court erred but since, in the circumstances, the penalty it imposed will not be quashed I decline to allow the appeal simply in order to disturb its order for costs. I would, therefore, dismiss the Law Society's appeal, making clear that in my opinion, on the quite exceptional facts of this case, the appeal was properly brought. I observe that the Law Society have achieved their substantial objective. I would not, however, wish to give the impression that appeals by the Law Society in situations of this kind should be other than quite exceptional.

LORD JUSTICE ROSE: I agree with the order proposed and I also agree with the reasons given by my Lord, the Master of the Rolls.

LORD JUSTICE WAITE: I also agree with the order proposed by the Master of the Rolls.

Order

Appeal dismissed. No order as to costs.

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