Simms v The Law Society [2005] EWHC 408 (Admin)

Case No CO/778/2004

[2005] EWHC 408 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

DIVISIONAL COURT

ON APPEAL FROM THE SOLICITORS DISCIPLINARY TRIBUNAL

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date Thursday 17 th March 2005

Before

LORD JUSTICE LATHAM

MR JUSTICE CURTIS

MR JUSTICE NEWMAN

Between

PAUL FRANCIS SIMMSAppellant

THE LAW SOCIETYRespondent

(Transcript of the Handed Down Judgment of

Smith Bernal Wordwave Limited, 190 Fleet Street

London EC4A 2AG

Tel No: 020 7421 4040, Fax No: 020 7831 8838

Official Shorthand Writers to the Court)

The Appellant Appeared in Person for in person

Timothy Dutton, QC & Richard Coleman (instructed by Russell-Cooke) for Respondent

Judgment

Introduction

[1]This is the judgment of the Court.

[2]On the 2nd February 2004 a Solicitors Disciplinary Tribunal constituted under the Solicitors Act 1974 (the Act) found, on an application duly made on behalf of the Office for the Supervision of Solicitors (the OSS) that the appellant had been guilty of conduct unbefitting a solicitor and ordered that he be struck off the Roll. He appeals against that order and against two interlocutory orders as of right pursuant to the Act. The two interlocutory orders related to costs. The first was an order that he pay the costs of a preliminary ruling that the OSS was entitled to use for the purpose of the proceedings documents which would otherwise be covered by legal professional privilege, and the second was an order that he pay the costs occasioned by the adjournment of the proceedings from the original hearing date of the 14th July 2003. He challenges the substantive decision of the Tribunal on three main grounds. First he submits that the decision was flawed by reason of procedural unfairness. Second, he submits that the tribunal was wrong to permit the OSS to rely on the documents which were otherwise subject to legal professional privilege. Thirdly, he submits, that, in any event the conclusions that the Tribunal reached in relation to the allegations made by the OSS were wrong. As the appeal is by way of re-hearing, we have considered with care all the material which was before the tribunal. We will deal separately with the orders as to costs, which raise discrete issues. Background.

[3]The appellant was born on the 16th May 1945 and was admitted as a solicitor on the 2nd March 1970. In September 1978 he joined Bower Cotton and Bower as their commercial partner and became senior partner of the firm, then called Bower Cotton in 1997. In 1999 Bower Cotton was made an offer to join another firm of solicitors, Birchams. All partners save for the appellant and Michael Conlon did so. The appellant and Michael Conlon thereafter practised together, and subsequently with others, as the Bower Cotton Partnership.

[4]In September 1998 the Monitoring and Investigating Unit (MIU) of the OSS commenced an inspection of the books of account of Bower Cotton. The concern was that the firm may have become involved in transactions of the sort about which the respondent had warned the profession in what has been described as a “Yellow Card” warning about banking instrument fraud in October 1997. This document warned solicitors that fraudulent investment schemes were on the increase, particularly schemes which were said to involve such things as “Prime Bank Guarantees” and “Prime Bank Letters of Credit”. The firm had received in excess of $50 million into its client bank account on behalf of clients and potential investors between December 1997 and September 1998. These were in relation to proposed schemes utilising an entity known as Hackar Funding Corporation NV in which the appellant had an interest. The MIU reported to the OSS in February 1999 recommending no further action provided that the firm was made aware of the respondent’s concern about the type of investment schemes in which Hackar had been engaged. As a result a letter was written to the firm setting out the concerns of the respondent as to this kind of activity. The appellant replied on the firm’s behalf on the 22nd April 1999, vehemently refuting any wrongdoing on the part of either him or the firm and denying that any of the schemes involved the hallmarks of fraudulent banking instrument transactions such as those referred to in the “Yellow Card” warning. In the letter, however, he said:

“We have decided that the amount of time involved in acting for parties to schemes of the type in the report is disproportionate to the reward and we will not accept instructions in respect of schemes involving the use of our client account for the proposed investment monies.”

[5]On the 15th November 1999, the OSS began a further inspection of the firm’s books of account. A report dated the 31st January 2002 stated that notwithstanding the appellant’s letter of the 22nd April 1999, the appellant had continued to be involved in the type of transaction which had given the respondent cause for concern. The appellant denied that he had breached the terms of the letter, or that any of the transactions that he had been engaged in after April 1999 were similar to those referred to in the first report. But on the 14th February 2002, the respondent’s Adjudication Panel resolved to intervene in the firm’s practice on the grounds that it had reason to suspect dishonesty in connection with the appellant’s practice as a solicitor. On the 27th February 2002, proceedings were commenced by the firm to have the intervention notice withdrawn. Those proceedings were stayed and then struck out following the decision of the Tribunal. The appellant is appealing to the Court of Appeal against that order..

The Disciplinary Proceedings

[6]The disciplinary proceedings were commenced by an application made on the 17th September 2002 by Ian Ryan, a partner in the firm of solicitors who brought the complaint, supported by a statement pursuant to Rule 4(2) of the Solicitors Disciplinary Proceedings Rules 1994, to which we will return later. This statement alleged:

“1. The respondent, Paul Francis Simms, has been guilty of conduct unbefitting a solicitor in each of the following respects: 1.1 He has been actively involved in making, promoting or facilitating bogus transactions which lacked an honest commercial purpose (contrary to Practice Rule 1) … 1.2 He has recommended that clients use purported business without having regard to what was in the client’s best interest, contrary to Practice Rule 1 and Section 4(1) of the Solicitors Introduction and Referral Code…. 1.3 He has acted for two or more clients when there was a conflict between their interests, (contrary to Practice Rule 1 and paragraph 15.03 of the Guide to the Professional Conduct of Solicitors)…. 1.4 He has failed to maintain procedures of internal reporting for the prevention or forestalling of money laundering in accordance with the Money Laundering Regulations (1993) (contrary to Practice Rule 1)… 1.5 He made deceitful misrepresentations to third parties, contrary to Practice Rule 1 and Principle 17.01 of the Guide to Professional Misconduct…. 1.6 He has acted in other miscellaneous transactions whose purpose he knew or suspected was illegal (contrary to Practice Rule 1)… 1.7 He has failed to comply with the Solicitor’s Separate Business Code in relation to BC Projects Ltd a company owned and controlled by the Bower Cotton Partnership, of which Mr Simms is a director in that he has not ensured: 1.7.1 That the name of his law practice did not have a substantial element in common with the name of a separate business. 1.7.2 That paper work and records relating to customers of the separate business were kept separate from the paperwork and records relating to clients of the firm; 1.7.3 That all clients were informed in writing of the Bower Cotton’s interest in the business and that, as customers of the separate business, they did not enjoy the statutory protections applying to clients of a solicitor (contrary to Section 4(2) of the Code.)…” 1.1 He has been actively involved in making, promoting or facilitating bogus transactions which lacked an honest commercial purpose (contrary to Practice Rule 1) … 1.2 He has recommended that clients use purported business without having regard to what was in the client’s best interest, contrary to Practice Rule 1 and Section 4(1) of the Solicitors Introduction and Referral Code…. 1.3 He has acted for two or more clients when there was a conflict between their interests, (contrary to Practice Rule 1 and paragraph 15.03 of the Guide to the Professional Conduct of Solicitors)…. 1.4 He has failed to maintain procedures of internal reporting for the prevention or forestalling of money laundering in accordance with the Money Laundering Regulations (1993) (contrary to Practice Rule 1)… 1.5 He made deceitful misrepresentations to third parties, contrary to Practice Rule 1 and Principle 17.01 of the Guide to Professional Misconduct…. 1.6 He has acted in other miscellaneous transactions whose purpose he knew or suspected was illegal (contrary to Practice Rule 1)… 1.7 He has failed to comply with the Solicitor’s Separate Business Code in relation to BC Projects Ltd a company owned and controlled by the Bower Cotton Partnership, of which Mr Simms is a director in that he has not ensured: 1.7.1 That the name of his law practice did not have a substantial element in common with the name of a separate business. 1.7.2 That paper work and records relating to customers of the separate business were kept separate from the paperwork and records relating to clients of the firm; 1.7.3 That all clients were informed in writing of the Bower Cotton’s interest in the business and that, as customers of the separate business, they did not enjoy the statutory protections applying to clients of a solicitor (contrary to Section 4(2) of the Code.)…”

[7]The statement then went on to set out in a total of 220 further paragraphs the summary of the facts upon which the allegations were based. Each of the allegations identified numbered paragraphs which related to that allegation. These referred to five bundles of documents which were served with the statement, and four witness statements, two of the appellant himself, one of a Mr Gould, and one of a Ms Norton, all of which had been served in the intervention proceedings. Mr Gould is a solicitor who described in his statement the nature of the documentation and the conclusions which he drew from the documents which he had been able to examine. Ms Norton was a forensic accountant who gave evidence of the conclusions that she reached from an examination of those same documents. The Rule 4 statement included the following paragraphs as part of the summary of the allegations:

“A substantial part of Mr Simms’ practice concerned pseudo-commercial activity of various kinds, including: 13.1 Bogus investment schemes promising fantastic returns (e.g. 70% per week); 13.2 Bogus project finance transactions, usually involving: 13.2.1 Ill defined and implausible infrastructure projects. 13.2.2 Funding proposals for the “projects” that lacked commercial reality – typically “reserving” money in an account say $10M, to generate a much larger sum, say $100M in a short period of time, although there were many variations on this basic model; 13.3 Many other fanciful transactions which lacked an honest commercial purpose (for example, attempts to sell bogus bonds (see paragraphs 171 to 192 below)) and transactions based on bogus documents see paragraphs 161 to 170 below which purport to authentic the existence of valuable property. 14. Despite being served by the Law Society with notice requiring delivery up of his practice documents pursuant to paragraph 9 of Schedule 1 to the Solicitors Act 1974, he has not made available all his practice files relating to the period 1996 to 1997. But since at least that time he had been involved in a very large number of purported transactions of the kind identified in paragraph 13 above. 15. Not a single one of the bogus “transactions” referred to in this statement was “successful”, i.e. no successful investment occurred nor was a genuine infrastructure project actually financed. 16. The compelling inference is that there was no honest commercial activity underling the proposition. They can only be understood as either: 16.1 An attempt to defraud an honest third party; or 16.2 Part of a scheme whose purpose was to launder the proceeds of crime by generating the appearance of commercial activity pursuant to which large sums of money may be circulated, or to which money generated from criminal activity may be attributed. 17. Mr Simms is a prominent member of a loose network of people (the principal members of which are listed in paragraph 129 below) who were involved in these bogus transactions and who refer the “business” to each other. Mr Simms’s place in the network is central, both in terms of the credibility he lends the transactions by reason of his position as a lawyer and in terms of the number of contacts he has in this field of dishonest activity. In many cases – for example GPR (paragraphs 35 to 55), HBM (paragraph 80 to 85) K State (paragraph 94 to 99) – he was effectively acting on both sides of the transaction – dealing both with the “investor” or the party who purports to need finance for a “project” and with the person who purports to have investment or the “project funding” as the case may be. 18. On intervening the Law Society’s agent Russell- Cooke, Solicitors, took possession of just over 800 files identified as being within Mr Simms’s practice. Following a preliminary examination, about 440 of these were identified as requiring further consideration. Of the 440, Mr Gould on behalf of the Law Society examined the files and identified about 120 that gave rise to serious concerns (see paragraph 8 of John Gould’s written statement dated 7th May 2002). His notes summarising the contents of these files are contained in four files: see JCG 4 to John Gould’s witness statement dated 7 May 2002. The vast majority of the 120 files which are the subject of these proceedings concern pseudo-commercial activity of the kind identified in paragraph 13 above. Other files concern other conduct unbefitting of a solicitor: see paragraph 202 to 210 below. 19. Aside from their lack of commercial reality, the suspect files exhibited a number of features that are consistent with them being concerned not with honest commercial transactions but with attempts to defraud and/or launder the proceeds of crime. 19.1 They are disjointed and in a state of disarray. Documents are often not in a chronological order. Documents are missing. It is often difficult to gain a clear idea of what files concern. A given file is often not dedicated to a single client, or a single transaction, but contains a morass of unrelated material. The Air Consult Limited file (which in the reference system used in the intervention proceedings is Reference 152) is an example. It apparently concerns both the sale of 2000 metro tonnes of gold (“IBRI” p 151-2) and various purported “projects” (“Construction of Hospitals”), (Yacht and Marinas, Tourist Developments and Schools) (“IBR 1” p 153). 19.2 “Transactions” do not follow a conventional pattern whereby the client instructs the solicitor in relation to a transaction, the solicitor then deals with the party on the opposing side at arms length, and the transaction moves forward, with evidence of the developing work – in progress – in negotiations until it reached completion. Rather the files are littered with fantastic purported investment schemes and projects appear from nowhere with none of the preliminary documentation expected in the context of multi-million – sometime - billion-dollar transactions, often mixed up with correspondence concerning equally fantastic schemes and projects. Such “transactions” and “projects” typically abruptly disappear without trace from the file. See for example the GPR Haryana Financing (“IPR2”) Oakland Resources Ltd (“IPR 3”); Oakland Recourses Btu (“IBR4”). There is no evidence that the work required by a competent solicitor and negotiator put together complicated deals involving huge sums of money. 19.3 The transactions despite their purported value, seldom contain any evidence of involvement by substantial banks or companies. Attempts to persuade such banks or companies to become involved usually end in failure – see the discussion concerning the warnings given by the Nat West and Barclays below. Much of the documentation sent to Mr Simms in relation to the “transactions” lacks the quality of serious business correspondence (usually containing internal inconsistencies, mistakes and things that do not make any sense) and gives off an amateurish “home-made” impression (for example the “Protocol” that Elite issues to prospective insurers at IPR 1” at p 154)…. 21. As regards the bogus project finance services, Mr Simms uses a company owned by the Bower Cotton Partnership called BCP Projects Ltd, although there is substantial confusion between his role as a solicitor and director of the company as a result of which allegations in paragraph 1.8 are made under the Solicitors Separate Businesses Code see below. The basic model is that Mr Simms acting sometimes as a solicitor and sometimes as a director of the company puts bogus project finance proposals to companies who need, or purport to need large sums of money to finance projects. In so doing, he is usually acting on behalf of the so called “funders” for example, Elite Engineering Ltd, with whom Mr Simms has a close relationship and who are said to have access to the funding, which is described by Mr Simms as “non-conventional”

. Mr Simms’s promotion of Elite is discussed at paragraphs 146 to 159 below. 22. The clients never received any money pursuant to the bogus project to finance arrangements …. ” 13.2.1 Ill defined and implausible infrastructure projects. 13.2.2 Funding proposals for the “projects” that lacked commercial reality – typically “reserving” money in an account say $10M, to generate a much larger sum, say $100M in a short period of time, although there were many variations on this basic model; 13.3 Many other fanciful transactions which lacked an honest commercial purpose (for example, attempts to sell bogus bonds (see paragraphs 171 to 192 below)) and transactions based on bogus documents see paragraphs 161 to 170 below which purport to authentic the existence of valuable property.

[8]The statement submitted that a finding that Mr Simms had been guilty of conduct unbefitting a solicitor did not depend upon the tribunal finding that he knew that the transactions lacked genuine commercial purpose and acted dishonestly. The submission was that his conduct was unbefitting a solicitor whatever his true state of mind. However, the statement continued at paragraph 24:

“But the conclusion that Mr Simms knew or suspected that the transactions in which he was involved in were bogus, and that his involvement in those transactions was dishonest, is inescapable. Mr Simms’s knowledge of the true nature of the bogus transactions is to be inferred from the following facts, each of which is particularised in the paragraphs of the statement that follow. 24.1 That the transactions were not commercially feasible would be obvious to any solicitor (experienced or not) both at the outset, and certainly after the experience of their repeated failure. See e.g. “GPR” paragraphs 112 to 120, Hackar (paragraphs 56 to 65), IDI (paragraphs 66 to 68), “HBM” (paragraphs 80 to 85), the Maxhurst transactions (paragraph 86 to 93), “K State” (paragraphs 94 to 100) Euro-Hypotek (paragraphs 101 to 102). The “Old Masters” transactions (paragraphs 161 to 166), bogus gems and bogus bond transactions (paragraphs 167 to 192), the Old Kuwaiti Dinar transaction (paragraphs 192 to 194); 24.2 Mr Simms is intelligent and commercially sophisticated. This is indicted by the correspondence on the files. See for example the advice Mr Simms gave Mr Brown concerning the setting up of a trust to hold the CAMC Shares (IBR1 p 160-162) 24.3 Mr Simms has received and ignored repeated warnings in relation to these transactions from the Law Society, banks and parties with whom he has dealt: see paragraph 69-78, 112-126. 24.4 Mr Simms is not an occasional, passive participant, but actively promotes transactions (paragraphs 56 to 65, 146 to 159), makes his offices freely available to others in the “business” (paragraph 128) and is party to profit sharing arrangements in respect of them (paragraphs 130 to 141) 24.5 Mr Simms has made misrepresentations to third parties in the course of this business, in circumstances where he must have known the representation was untrue, or not cared as to the truth of it: see paragraphs 146 to 159. 24.6 Mr Simms has been involved in other transactions in which an honest solicitor would not be involved. See paragraphs 202 to 210. 25. The sheer scale of Mr Simms’s involvement in bogus transactions is such that it would not be practicable to give a detailed chronology of every such transaction. The particulars given in the statement are illustrative.”

[9]The Rule 4 statement and the documents to which it referred were considered by a Tribunal Member on the 16th October 2002, who certified that there was a prima facie case to answer. The documents were then served on the appellant who filed an 81 page detailed rebuttal of those allegations, drafted by, or with the help of, counsel. By then there had been substantial disclosure in the intervention proceedings, including delivery to the appellant in disc form of all the documents recovered from the appellant’s file relating to the suspect transactions. We understand that those relating to the sample transactions were subsequently collated into fifty-one lever arch files. Not surprisingly, bearing in mind the way in which the Rule 4 statement had been drafted, Mr Lomas QC who acted for the appellant from the autumn of 2002 until the adjournment of the proceedings in July 2003, requested the respondent to identify what transactions would be primarily addressed in support of the allegations. By a letter dated the 17th December 2002, the respondent’s solicitors sent the appellant a list of 18 sample transactions. In his skeleton argument for a directions hearing on the 17th February 2003, Mr Lomas said:

“Subject to the points below, this is a very helpful step towards limiting the scope of the evidence required to be dealt with at the hearing and should be adopted.”

[10]He requested that two further transactions should be added to that list, namely the Euro-Hypotek transaction which we have already referred to above, and a transaction which was known as “Oil from Iraq”. As a result when the tribunal gave directions on the 17th February 2003, those were formulated by reference to those twenty transactions. The relevant directions were:

“2. In relation to allegation 1.1 the parties will lead evidence to the 18 sample matters listed by the Society on the 17th December 2002 as well as (a) the oil from Iraq matter and (b) The Euro-Hypotek matter (The sample matters) ……. 12. The Law Society may not lead or cross-examine outside the agreed limits in (2) above without the leave of the tribunal and the respondent may if such leave is granted to prepare his response”

[11]Thereafter the respondent prepared a summary of each of the relevant transactions, as did the appellant, who provided a statement verifying the truth of his summaries. These summarise were then collated into Scott Schedule form for the use of the Tribunal. And the documentation was prepared on the basis that these twenty transactions would form the subject matter of the evidence to be led before the hearing which was fixed for the 14th July 2003. A further pre-trial review was fixed for the 1st July 2003.

[12]Shortly before the hearing of the pre-trial review the appellant intimated through counsel that he challenged the use of much of the documentary material contained in the files on the basis that it was material protected from disclosure by legal professional privilege. As a result, at the directions hearing, an order was made that this question should be dealt with as a preliminary issue. The tribunal heard the argument on what would have been the first three days of the substantive hearing that is the 14th, 15th and 16th July 2003.

[13]Meanwhile, the appellant was informed that his father, who lived in Cyprus, was dying. He accordingly left for Cyprus on or about the 8th July 2003, and remained in Cyprus until the 22nd July to arrange the funeral and to deal with other business matters. The appellant asked the respondent for an adjournment, of the trial, but this request was refused. On the 23rd July, the appellant applied to the tribunal for an adjournment which was granted. The hearing was fixed for the 17th November 2003.

[14]On the 10th July 2003, the Respondent had served its Outline Opening. The order made on the application relating to the material said to be protected from disclosure by legal professional privilege was that the respondent was entitled to make use of the material, but that the clients’ privilege would be protected by ensuring that their names were appropriately anonymised. The Outline Opening was accordingly redacted to reflect that order. It related to all eighteen sample matters which had been referred to in the order of the 17th February 2003, plus the oil from Iraq matter and the Euro-Hypotek matter, which the appellant had asked should be included. However, after the hearing had been adjourned, the respondent’s legal advisers reconsidered the matter and on the 29th July 2003 wrote to the appellant indicating that they would only open nine transactions orally and asked whether the appellant still wished to rely on the two additional matters. He did not reply, nor did he provide an outline opening, despite the order of the 17th February 2003 and these repeated requests until the 7th November 2003. This consisted of a detailed response to the outline opening of the respondent. He had by then dispensed with counsel and acted thereafter on his own.

[15]Approximately one week before the hearing counsel for the respondent supplied both the appellant and the tribunal with a suggested pre-trial reading list, inviting the Tribunal to read the Rule 4 Statement, the appellant’s detailed response to the Rule 4 Statement, the outline opening of the respondent, and the appellants detailed outline opening in response. It informed the tribunal of the 11 transactions which the respondent intended to open, and provided the witness statements referred to in the Rule 4 Statement. The respondent made his own observations to the Tribunal but made no objection to the suggested reading list, or the respondent’s proposal to restrict the matters to be led in evidence to the eleven which were now proposed. These eleven transactions were contained in eleven core bundles; and although counsel for the respondent indicated at the commencement of the hearing that he might wish to refer to other matters, the Tribunal ordered that the case be confined to those eleven matters.

The allegations of procedural unfairness

[16]The appellant submits that he was deprived a fair trial. This appeal, he submits, cannot cure the unfairness. His complaints fall essentially into three categories. First it is said that the Tribunal was not an independent and impartial tribunal. Second it is said that the case was presented unfairly and in a way which did not enable him to know precisely what case he had to answer. Third, it is said that there was procedural irregularity in that the Tribunal received inadmissible opinion evidence, in particular from Mr Gould and Ms Norton, and that he was prevented from cross-examining those two witnesses in the way that he wished.

[17]As to the first, the appellant in his original grounds of appeal asserted that the Tribunal was not an “independent and impartial tribunal” for the purposes of

Article 6 of the European Convention on Human Rights

. He has not pursued that in either his written or oral submissions before us. And this court has explained in Pine –v- Solicitor’s Disciplinary Tribunal (unreported) transcript 13 November 2000: CO/385-2000) how Solicitor’ Disciplinary Tribunals, by reason of their composition, constitution and responsibilities are independent of the respondent so as to comply with the provisions of the Convention. Before us, however, he has developed a detailed argument to the effect that the way in which the matter was presented to the Tribunal so prejudiced the Tribunal that it could no longer be properly described as impartial.

[18]He accepts, indeed submits that the test to be applied by this court in determining that question is that which is now set out in the speech of Lord Hope in Porter –v- Magill

[2002] 2AC 357

at page 494 paragraph 103. “The question is whether the fair-minded and the informed observer, having considered the facts, would conclude there was a real possibility that the Tribunal was biased.”

[19]He submits that the prejudice to him from the way in which the matter was presented by the respondent was overwhelming. In the first instance, the Rule 4 Statement contained allegations about thirty four matters apart from the eleven which were ultimately considered at the hearing. He submits that it was impossible for the Tribunal to put out of its mind the wide ranging nature of those allegations, particularly as the matters were set out in what he described as inappropriately derogatory language. He took particular exception to the repeated use of the word “bogus”. The summary of the allegations set out in paragraphs 6 and 7 above give a flavour of the way the case was presented. He submits that the Tribunal would have assumed that the clear allegations of dishonesty, fraud and illegality had been made on the basis of proper and adequate evidence, so that there would be a presumption in the minds of the members of the Tribunal that the allegations were true.

[20]These complaints are wholly without foundation. The Tribunal’s job was to determine, on the evidence before it, what matters had been established by the respondent to the appropriate standard of proof. The fact that the Rule 4 Statement was ultimately overtaken by the sensible solution of identifying the eleven transactions about which evidence was led was to the appellant’s advantage. The Tribunal directed itself impeccably in paragraph 7 of its findings in the following terms:

“The applicant put in evidence relating to nine transactions in support of the allegations and at the request of Mr Simms two other transactions were considered. At the commencement of the hearing the Tribunal ordered and the applicant agreed that his case be confined to the eleven matters documentation in respect of which was contained in the eleven core bundles and some additional relevant materials. The Tribunal did not consider any other material unless drawn to their attention during the proceedings.”

[21]Further, the appellant has been unable to point to any aspect of the findings which suggest that the Tribunal had in anyway been prejudiced by material other than that which they identified in that paragraph. The appellant submits that the orders for costs made by the Tribunal and the original disinclination by the Tribunal to adjourn the matter in July 2003 because of his absence in Cyprus show that they were biased against him. As to the orders for costs, that begs the question as to whether or not they were properly made. And, as will become apparent, we consider that there is no basis upon which those orders for costs can be criticised. As for the question of the adjournment, it is correct that the respondent was not prepared to agree to an adjournment. The Tribunal, however, ultimately granted an adjournment on the appellant’s application.

[22]Of greater importance in determining the extent to which it could properly be said that a fair minded and informed observer would conclude that there was a real possibility of bias is the way that the Tribunal dealt with the allegations made by the respondent. Although they found the vast majority proved, they were not satisfied that the respondent’s case had been made out in respect of an allegation of illegality in the oil from Iraq matter, and acquitted him of any wrong doing in relation to what was described as the Lottery matter. In our view, the allegation of impartiality or bias is unfounded.

[23]The second basis for the appellant’s allegations of unfairness relates in part to a matter to which we have already referred, that is the nature of the language used not only in the Rule 4 Statement, but also in respondent counsel’s written submissions, which again use robust language in setting out the respondent’s case. The pejorative words such as “bogus” he submits, made it difficult for him to understand the nature of the respondent’s case. He submits that the Rule 4 Statement and the written submission of counsel for the respondent did not adequately identify the case that he had to meet. And he complains that the findings of the Tribunal went outside the terms of the Rule 4 Statement, compounding the unfairness.

[24]In order to deal with this argument, it is first necessary to look at the relevant provision of Rule 4 of the Solicitors (Disciplinary Proceedings) Rules 1994, made under the Solicitors Act 1974. This rule applies inter alia, to applications to the Tribunal to strike the name of a solicitor of the Roll of Solicitors. Rule 4(2) provides:

“Statements. Applications made under this Rule shall be supported by a written statement setting out the allegations …. and setting out a summary of the facts in support of all applications.”

[25]In the present case, the allegations were set out in paragraph 1 in the terms we have already related in paragraph 6 above. Each particular allegation identified the paragraphs in the substantive part of the Statement which were to be relied on.

[26]The statement accordingly identified the matters which were said to support each of the allegations. Further it identified five bundles of documents and four witness statements to which reference was made in the statement and which set out the evidence upon which the respondent intended to rely.

[27]The purpose of the Rule 4(2) statement is clear. It is to identify for the applicant the nature of the charges that he has to face and provide enough information about the nature of the case which the respondent seeks to make against him for him to be able to defend himself. There was some debate before us as to whether it should be described as a pleading, or an indictment or charge sheet. Neither analogy is particularly helpful, save in so far as they share the same characteristic, which is to enable the person who is charged, or sued, to know what the case against him or her is. It is however pertinent to note that they are not documents which are either required to or intended to set out the evidence upon which they are based. The same applies to a Rule 4(2) Statement.

[28]In the present case, we have no doubt that the Rule 4(2) Statement properly identified the nature of the allegations that were being made. Paragraph 1, which we have set out above, makes clear the general nature of each of the allegations, and identifies what matters are to be relied upon in support of each of those allegations. The remainder of the statement included within it reference to the material and the evidence upon which the respondent intended to rely. It did so in a way which in our judgment could have left the appellant in no doubt as to the case that he had to meet. Indeed he has failed, in our view, to identify any allegation of substance which went outside the ambit of the Rule 4 statement and the evidence upon which it was based. The only significant departure from the Rule 4(2) Statement in its original form was an amendment to paragraph 1.3 to add as particulars paragraphs relating to the oil for Iraq matter. Although in one sense this is a new allegation, it did not arise out of any new material. The Tribunal clearly considered whether there was prejudice to the appellant and concluded that there was none. In our view the Tribunal was right.

[29]There is no doubt that the Rule 4(2) statement, and the written submissions on behalf of the respondent described the appellant’s activities in pejorative terms. The opening outline submissions for the respondent undoubtedly contained robust advocacy. But that did not render the proceedings unfair. The Tribunal’s task, as we have said before, was to determine whether or not the evidence justified the descriptions given to it by the advocate. Whether or not the statement and the outline opening submissions, and indeed closing submissions, would have been in the same terms in the hands of a different advocate is neither here nor there. It did not affect the fairness of the proceedings. It did not inhibit the appellant from putting forward his case.

[30]Turning then to the third basis for the appellant’s submission that the Tribunals findings were tainted by unfairness, this raises a number of separate procedural complaints. The first and most fundamental is that he complains that he was prevented from developing his cross-examination of Mr Gould and to some extent Miss Norton in the way in which he wished, and, he submits, was entitled to. Reading the transcripts, however, it is clear that the Tribunal chairman only intervened when the appellant sought to pursue matters other than the eleven which formed the agreed basis of the Tribunal’s deliberations. In the light of the procedural history to which we have referred, we consider that the Tribunal Chairman was right to restrict cross-examination as he did. At no stage prior to the hearing had Mr Lomas on behalf of the appellant, or the appellant himself, submitted to the tribunal that it was inappropriate to restrict the deliberations in that way. At the opening of the matter to the tribunal, the Tribunal firmly ruled that the issues were to be confined to the eleven sample transaction. Had the appellant been permitted to cross-examine outside those parameters, the respondent would undoubtedly have been entitled to have lead evidence as to those other matters which would have completely undermined the agreed structure of the proceedings.

[31]The appellant submits that the evidence of Mr Gould and Ms Norton was in any event largely inadmissible. Their statements were to some extent factual in that they exhibited and explained the documents, but also contained conclusions based upon opinion. The appellant submits that opinion evidence of the sort contained in those statements was inadmissible. Mr Gould in particular, he submits, was not a solicitor holding himself out as an expert in the sort of transactions about which the respondent made complaint. In those circumstances, his conclusions were not only valueless, but inadmissible as a matter of law.

[32]We reject these submissions. Mr Gould was a senior and experienced solicitor and was entitled to give evidence as to the proper conduct of a solicitor’s practice. The weight to be given to his opinion was a matter for the tribunal bearing in mind any arguments presented to it by the appellant. The same comment applies to Ms Norton, as a forensic accountant. The material that we have does not indicate that they strayed beyond their respective spheres of expertise. In any event, by Rule 30(iii) of the Solicitors (Disciplinary Proceedings) Rule 1994, the strict rules of evidence, do not, at the discretion of the tribunal, apply at any hearing.

[33]This leads into the next submission that the appellant made in relation to the hearing, namely that the Tribunal failed to treat it as a hearing which was in the nature of a trial of a criminal charge. He based his submission essentially on the statement by Lord Lowry in Langford –v- GMC

[1990] AC 13

at page 20, where he said, “The relevant legal principles were those applicable to a criminal trial.”

[34]But this phrase has to be read in its context. Lord Lowry was there dealing with the rules of admissibility in relation to similar fact evidence in a disciplinary hearing. Clearly the phrase is relevant. The allegations which were made in the present case were of the utmost seriousness. They alleged that the appellant was dishonest. It is only right, therefore, that the Tribunal should have approached the matter with the nature of those allegations well in mind. And it is trite law that in such circumstances, even if the proceedings are civil in character, findings of dishonesty should only be made when they are established to a high standard of proof. And therefore the constraints of a criminal trial need to borne in mind. But the fact remains that the proceedings are civil in character. This is made clear in Rule 16 of the Solicitors (Disciplinary Proceedings) Rules 1994, which apply the Civil Evidence Acts 1968 and 1972 to those proceedings. We can see nothing in the Tribunal’s decision which suggests that they failed to apply the appropriate standard of proof to the findings that it made.

[35]The appellant sought to take the analogy with criminal proceedings as far as to complain that the Tribunal did not expressly deal with, and take into account, the fact that he was of good character. But this is a wholly inapt use of the analogy with criminal proceedings. It relates to the appropriate directions to be given to a jury, and not to the members of a professional disciplinary tribunal. In proceedings before such a tribunal, the good character of the professional person whose practice is under scrutiny, is essentially the starting point of the inquiry. In the present case, the appellant would not have been the senior partner of a well respected firm of solicitors if he had not been of good character. To require the Tribunal to remind itself of that fact would have been superfluous.

Legal Professional Privilege (“LPP”)

[36]As we have said shortly before the date fixed for the hearing on the 14th July 2003, notice was given that the appellant intended to assert a claim for LPP on behalf of his former clients. The Tribunal heard argument on the claim from counsel on the 14th 15th and 16th July and dismissed it. The reasons are dated 24th July 2003. The appellant now appeals that ruling.

[37]Counsel for the appellant informed the Tribunal that the claim was being advanced at a late stage because the law had been changed by a judgment in the Privy Council, given in a solicitor’s case from New Zealand, on 19th May 2003 (See B and Others v Auckland District Law Society and Another

[2003] 2 AC 736

), hereafter referred to, for convenience, as “the New Zealand case”.

[38]If correct, this contention would have far-reaching consequences for the Law Society when exercising its powers of intervention under the Solicitors Act 1974. Further, it would also mean that the decision of the Court of Appeal in Parry-Jones v Law Society

[1969] 1 Ch. 1

was no longer good law. Yet further it would mean that the Board of the Privy Council in the New Zealand case had disagreed with the judgment of the House of Lords in Regina (Morgan Grenfell & Co Ltd) v Special Commissioners of Income Tax and Another

[2003] AC 563

. This court is bound by the decision in Parry-Jones and the suggestion that it should be regarded as having been overruled, despite its boldness, and, as we have concluded, being obviously wrong, requires a little attention.

[39]The Privy Council concluded in the New Zealand case that the Law Practitioners Act 1982 in New Zealand did not expressly or by necessary implication override LPP. It reached that conclusion not by disagreeing with the Morgan Grenfell case, but by applying it (see

[2003] 2 AC 736

at G). The judgment contains invaluable guidance and illumination on the character of LPP, but it can only be treated as an authority in connection with the New Zealand legislation or identical legislation elsewhere. The Solicitors Act 1974 is not identical. Indeed, it contains significantly different provisions to which we will come.

[40]We are not to be taken as underestimating the illumination given to the law in connection with LPP by recent decisions, but we are entirely satisfied, like the Tribunal in the instant case, that this appeal falls to be determined by considering two issues. First, whether the case of Parry-Jones is still good law. Secondly, whether, in any event, the case falls within the exception recognised by the case of Cox v Railton 14 QBD 153. As to the first, the argument has drawn attention to the speech of Lord Hoffmann in Morgan Grenfell (see [2002] 2 WLR at page 1037, 1038 paragraphs 32 to 26) and the observation he there makes as to the rationale of the Parry-Jones decision. But since the argument has also focused upon the New Zealand case, our starting point must be the statutory scheme under the Solicitors Act 1974 (“the Act”).

The Statutory Scheme

[41]Section 35 of the Act confers powers enabling intervention “… in the circumstances specified in Part 1 of” Schedule 1 to the Act. The scheduled circumstances include circumstances of misconduct, including in particular “… where the Council have reason to suspect dishonesty on the part of … a solicitor”. In such circumstances the powers conferred by Part II of Schedule 1 can be exercised, including powers in connection with documents.

[42]Under paragraph 9 of Part II the powers in relation to documents can be exercised in two circumstances: (i) Where the powers are exercisable by virtue of paragraph 1 (for example, on grounds of dishonesty) notice can be given to the solicitor or his firm requiring the production or delivery to any person appointed by the Society at a time and place to be fixed by the Society:

“of all documents in the possession of the solicitor or his firm in connection with his practice or with any controlled trust”. (ii) Where they are exercisable by virtue of a complaint, a notice in like terms can be given for the production or delivery of all documents in the possession of the solicitor or his firm: “in connection with the trust or other matters to which the complaint relates (whether or not they relate also to other matters).”

[43]Any person having possession of any documents to which a notice refers who fails to comply with a requirement in the notice shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale (see paragraph 9(3)). We can pause at this stage to observe that the provisions under consideration in the New Zealand case were section 101 of the New Zealand Act and sections 126 and 127. The power to require the production or inspection by the District Council or Committee under section 101 were powers exercisable upon complaint. The Privy Council were not considering a power such as that contained under paragraph 9(1) in respect of intervention for dishonesty or other grounds of intervention. The only sanction provided for under section 101 of the New Zealand Act is in subsection (6) which does not provide for a penal sanction in the form of a criminal offence, but states:

“Every practitioner shall be guilty of misconduct in his professional capacity who, without lawful justification or excuse, refuses or fails to comply with any lawful requirement of a District Council or Committee under this section”

. Provisions under Schedule 1 to the Act which are not mirrored in the New Zealand legislation which was under consideration in the Privy Council, to which we draw attention, include paragraph 9(5) which provides for the High Court’s jurisdiction to make orders. On the application of the Society it can order a person to produce or deliver documents to any person appointed by the Law Society at such time and place as may be specified in the order, and authorise him to take possession of them on behalf of the Society. The Act does not impose any limitation on the power of the court to make such an order.

[44]Further, paragraph 9(5) of the Act enables an application by the Society to be made to the High Court where there is reason to suspect that documents, in relation to which the powers conferred by subparagraph (1) are exercisable, have come into the possession of some person other than the solicitor or firm. In those circumstances, the court may order that person to produce or deliver the documents. This power can be taken to extend to an order being made by the court which is directed to a client whose LPP may be in issue or may be affected by the delivery up of the documents.

[45]Further, pursuant to paragraph 9, the court has the power to hear applications in respect of documents produced or delivered, to hear applications and to make an order, if requested, for the disposal or destruction of documents.

[46]These provisions constitute a comprehensive regime governing the powers of the Society in connection with documents, which powers are exercisable upon intervention. The extent of the protection, which the regime provides, is contained in the supervisory powers of the High Court, which are not limited by reference to LPP.

[47]It should also be noticed that the powers under subparagraphs (2) to (12) of paragraph 9 of Schedule 1, together with the paragraphs (12) to (16) of that Schedule, apply in connection with powers conferred under section 44B of the Act, thus enabling the Council, when satisfied that it is necessary to do so for the purposes of investigating: “(a) whether there has been professional misconduct by a solicitor…”, to give notice requiring the production or delivery to any person appointed by the Society of all relevant documents in the possession of the solicitor or his firm. Thereby the Society is empowered to investigate misconduct by a solicitor arising out of an intervention and to have the equivalent powers to request documents in the course of its investigation.

[48]In our judgment the New Zealand case did not change the law in England and Wales. Apart from the distinctions which we have drawn between the two schemes, the case of Parry-Jones was cited in argument before the Board of the Privy Council (page 745 E-F) and was referred to in argument as an example of a situation where the Rules “.. included a power to override a claim of privilege”. As we have already observed, the Board of the Privy Council decided that the legislation in New Zealand did not override LPP. Further, Lord Hobhouse and Lord Scott were members of the Board in the New Zealand case and were members of the Committee of the House of Lords giving judgment in the earlier Morgan Grenfell case.

[49]Contrary to the appellant’s submission to the Tribunal and to this court, Parry-Jones was not overruled by the House of Lords. Lord Hoffmann stated the opposite (paragraph 32): “This is not to say that on its facts the Parry-Jones case was wrongly decided. But I think that the true justification for the decision was not that Mr Parry-Jones’ clients had no LPP, or that the clients’ LPP was not infringed. The Law Society were not entitled to use information disclosed by the solicitor for any purpose other than the investigation;…… In my opinion, this limited disclosure did not breach the clients’ LPP or, to the extent that it technically did, was authorised by the Law Society’s statutory powers”.

[50]The Tribunal, in this case, was significantly influenced by the speech of Lord Hoffmann. It gave careful consideration to the statutory scheme and concluded:(1) that LPP had not been lost by express words or necessary implication; and

(2) following Lord Hoffmann, concluded that: “If the disclosure of the document is not to be used ‘against the client’ or ‘to his prejudice’ and if steps can be taken to preserve the confidentiality of the document then … it is proper to allow” disclosure to the Tribunal (see paragraph (5) page 171 of the Ruling).

[51]It is unnecessary for us to consider whether or not Lord Hoffmann’s conclusion that the Law Society was authorised by statutory powers should be taken as a conclusion that LPP had been lost by express words or necessary implication and that, as a result, the Tribunal erred in its conclusion because we are satisfied that the Tribunal’s decision was right. Parry-Jones remains good law. This court is not concerned to engage in a debate which might be said to arise in connection with the underlying rationale advanced by Lord Hoffmann. Suffice it to say that Lord Hoffmann stated that the Law Society was “authorised by … statutory powers” to take possession of documents and, as a result, did not breach LPP.

[52]For completeness, we would add that since the intervention in this case was on grounds of suspected dishonesty, the exception recognised by the case of Cox v Railton 14 QBD 153, upheld in a line of cases including Ventouris v Mountain

[1995] 1 WLR 607

; Barclays Bank plc v Eustice

[1995] 1 WLR 1238

and notably R v Derby Magistrates’ Court ex p B

[1996] AC 487

, applied.

[53]We reject the appellant’s submission that because there was only an allegation of dishonesty, the exception did not come into play. The Law Society exercised its power to intervene and a member of the Tribunal certified that a prima facie case existed. That certificate, although challenged in the proceedings which the appellant commenced, has not been impugned because the challenge has, by consent, been stayed. For the above reasons, we reject the ground of appeal advanced in connection with LPP. We do however, propose to adopt the same practice as the Tribunal which is, in most instances, to use acronyms for people and companies, which reflects the fact that the documentation prima facie attracts privilege, and that should be respected so far as is possible. The facts

[54]It follows that we reject the appellant’s criticisms of the Tribunal’s findings on the basis that they were tainted by procedural unfairness and were based on documents protected from disclosure by reason of privilege. We accordingly turn to the facts. We remind ourselves, as we have already done, that the hearing before us is a rehearing, and not merely an appeal on a point of law. We are required to consider the facts and are free to disagree with the Tribunal on any view that it took as to the facts and the merits, although we accept that our role has been restricted to considering the evidence on paper and that we have not had the benefit of any oral evidence.

[55]But before turning to the facts themselves, it is necessary to consider what test is the appropriate test to apply when determining whether or not the appellant was in breach of his obligations as a solicitor. The main allegations against him, and are the ones which carried the sting in particular of dishonesty were those which alleged breaches of Rule 1 of the Solicitors Practice Rules 1990. This rule provides, so far as relevant, as follows:

“A solicitor shall not do anything in the course of practicing as a solicitor, or permit another person to do anything on his or her behalf, which compromises or impairs or is likely to compromise or impair any of the following: (a) the Solicitors independence or integrity; (c) the solicitors duty to act in the best interest of the clients; (d) the good repute of the solicitor or the solicitor’s profession; (e) the solicitors proper standard of work;”

[56]The allegations by the respondent of breaches by the appellant of this Rule lie at the heart of this case. Before the Tribunal it appeared as though there was a fundamental dispute between the appellant and the respondent about the nature of the obligations of a solicitor pursuant to this Rule. The nature of the dispute, and the conclusions of the Tribunal can be seen in the following paragraphs from the Tribunal’s findings:

“74. The Tribunal has considered Mr Simms submissions on these matters at paragraphs 5.6 to 5.9 of his closing submissions including the following: “The respondent’s contention is that there is no such thing as a “dishonest transaction” except in the obvious case of a conspiracy to rob a bank or something similar. Where the activity proposed is an investment activity and the investor is intending or hoping to augment his cash, he is clearly not acting dishonestly or unlawfully and he had a genuine commercial objective, namely to augment his cash. If the counter-party is competent and able to comply with his contractual obligations, then clearly the contract is not dishonest or unlawful. If the counter-party is honest but over-optimistic about his achievements and is unable to meet his achievements and is unable to meet his contractual commitments, there may be a civil liability but certainly no dishonesty and no illegality. If the counter-party was intending to be dishonest and was seeking a way to deprive the investor of his funds, then clearly the counter-party’s activities may be dishonest and illegal but that cannot impact either upon the investor or upon his legal advisor.” 75. In cases of professional misconduct, the behaviour of a solicitor is not only to be considered in the context of the legality or otherwise of the subject matter of the advice and assistance given. The Profession has a reputation to defend and maintain. A solicitor who involves himself in transactions which he knows or suspects or should have known or suspected could have involved illegality or impropriety or gives such transactions credibility cannot but appreciate that his behaviour will be perceived as affecting his integrity and trustworthiness and affect the integrity of the Profession. The duties of a lawyer as an officer of The Supreme Court are not simply owed to the client but also involve the respect which the Profession owes to the law itself and justice. This is why a lawyer is a member of a Profession which is or should be honourable. 76. The Tribunal therefore rejects the narrow analysis of the duty of a solicitor. A solicitor is independent of his client and having regard to his wider responsibilities and the need to maintain the Profession’s reputation, he must and should on occasion be prepared to say to his client “What you seek to do may be legal but I am not prepared to help you do it”

. This in the Tribunal’s view is clearly so where, or Mr Simms’ analysis, an “innocent” client is involving himself in a transaction which has the appearance of being one for which a lawful or honest explanation is not on the face of it the only and likely explanation. This view of a solicitor’s duty has existed long before it was given statutory back-up in certain contexts in Section 42 of the Access to Justice Act 1999. It is not enough for a solicitor to believe that funds coming into his hands are untainted by illegality, he also has a duty not to assist others who may directly or indirectly use such funds for purposes which the solicitors believes or an honest solicitor would believe, are illegal or improper. 77. A transaction, which on the face of it promises fantastic and incredible returns for no risk, does not have the quality of a likely lawful and honest transaction. A solicitor who does not establish the veracity of the transaction and those with whom he is dealing or who makes no proper enquiry or takes on trust extravagant and unlikely claims puts his and the Profession’s reputation for prudence, integrity, honesty and trustworthiness at risk. It should come as no surprise to him that his actions are brought into question. This seems to the Tribunal to derive all the more force if warnings are given as to the need for caution in relation to kinds of transactions and wording which in certain contexts may be regarded as suspicious and especially where specific warnings are given by responsible individuals in relation to transactions or persons.”

[57]At a later stage in the Tribunal’s consideration, dealing with a solicitor’s obligations in relation to monies in its client account, it said as follows, at paragraph 352:

“In the Tribunal’s view a solicitor who accepts money into his client account does not have only the very limited duty to safeguard the funds (as Mr Simms contended) but has wider duties to act so as to ensure that the funds entrusted to him will be used for proper purposes and not to facilitate improper or potentially fraudulent activities of third parties. This is because the involvement of the solicitor and the use of his client account may give spurious authenticity and respectability to dubious transactions. His involvement will thus affect his own and the Profession’s reputation for integrity, honesty and trustworthiness.”

[58]At one time, it seemed as though the appellant was intending to challenge the approach of the Tribunal described in these paragraphs. During the course of argument, however, it became clear that the appellant did not dispute the approach of the Tribunal in principle, but did not accept that the facts justified the Tribunal’s conclusions that he was in breach of the obligations so described. We consider that the Tribunal’s approach was entirely correct in the context of this case. The allegations Generally

The allegations

[59]We propose to consider the allegations and the way in which they were presented to the Tribunal, by dealing individually with those which formed the subject matter of the hearing. In doing so we have considered not only the material itself, but the analysis of that material in the opening and closing submissions of both the respondent and the appellant before the Tribunal, and the analysis provided for us of the evidence again by both the respondent and the appellant. Some of the transactions were extremely complex. The Tribunal’s task, and our task in turn, has not been made easier by the fact, as the Tribunal noted, that documentation was not in the form one would expect. The general flavour of the allegations has already been set out by us in paragraphs 6 and 7 above. It can be seen that a major thread running through a significant proportion of the allegations related to schemes which involved multimillion dollar transactions where the projected returns were way beyond what one would expect in ordinary financial investments. These were the transactions described by the respondent as “bogus”. The appellant vehemently objected to this description both before the Tribunal and before us. His submissions are that essentially neither the respondent nor the Tribunal understood the nature of the transactions which, although esoteric, and sophisticated, nonetheless were bona fide investment schemes known to a few who dealt in particular in the bond markets. Apart from his evidence, the only evidence which supported his claims came from a Mr Koffler. It seems to us that it would be helpful to set the scene relating to those transactions by reference to Mr Koffler’s evidence.

Mr Koffler & Elite Engineering Corporation Ltd

[60]Mr Koffler’s evidence was said by the appellant to be critical to his case. It was the evidence upon which he relied to support his assertion that the sort of high yield investment programmes which he accepts that he was introducing to clients and was providing documentation for were genuine and not bogus. Mr Koffler’s written statement set out his credentials as a Mortgage Banker (his description). He accepted that he was not accredited for the purposes of any securities trading in either the United States or the United Kingdom, but said that he was, and had for fifteen years or more, been involved in very high value investment transactions. The transactions which involved the appellant were carried out through the medium of a Gibraltar company, Elite Engineering Corporation Ltd (Elite) which had been incorporated on the 26th June 1997 with an authorised share capital of £2,000 of which one hundred £1 shares were issued, fifty to a Mr Binyon and fifty to Mr Foulkes. These were the only two directors of Elite. It was apparent that neither of these had had any active involvement in the running of the company, other than to sign letters drafted for them by Mr Koffler or the appellant. Mr Koffler’s claim to control of the company was based on his assertion that he was a trustee. His evidence was that Elite was a “humanitarian entity” for doing projects world- wide. He asserted that it would do its business by raising funds through the major banking institutions in London and New York. He said that the resources available to Elite in the autumn 1997 were over $500 million. In a letter, the appellant described Elite in the following terms:

“Elite Engineering Corporation Limited is currently involved with closing a major transaction involving US$ 1 billion and are preoccupied with that. They promise to revert to me not later than the beginning of next week in relation to detailed documentation. I will try in the meantime to obtain the term sheet from them so that the matter can proceed. As a matter of comfort, I have been supplied with documentation in relation to a major transaction concluded by Elite and which is currently in the course of implementation on the funding side. Under this major contract, Elite Engineering is providing funding at the rate of US$ 180M per month over a twelve month period.”

[61]Mr Koffler was asked to describe the sort of transaction he could arrange which could produce substantial returns for the investors, and how that could be achieved. His evidence was revealing. The relevant passage starts at page 20 of the transcript of the 24th November 2003. “A. Right. What we do is that amount of dollars (10M) is extremely small, very small, and in most cases difficult to handle. There are different types of transactions that one can get into if the provenance of the funds are proper, and the purpose of what the net revenues would be used for. So whether you get into ….. this can be done in numerous and different types of transactions, they can be contracted with different divisions, special service divisions of different banks, they can be done privately or as best efforts basis. There is …. you know, we could speak three to four weeks straight on this alone. Nonetheless, on those particular matters, one can get into transactions which …. there are a multitude of different financial instruments, issued by banks primarily, and during the buying of it at one price and the selling of it at another, where there are in that day…. you know, there might only be one to one and a half percent spread on a particular piece of paper because of the large contractual for obligation to buy more of it, then one can sell it to the Street, Wall Street, to security houses, because due to the different various treaties, they may not be able to …. It would be illegal for them to buy fresh cut paper. So if you have those spreads, you could do maybe four trades a day electronically, so you are trading four times a week, for given months. The banks and institutions we work with share in these spreads, and due to the sheer volume of it and security everything stays in one account. The numbers can grow quite large. Of course the supply of that particular type of paper will dictate how far that goes and also how much…. or what you are funding will also dictate that. Some of these projects can be contracted with the Fed System, and others can be done directly with banks or different designated traders that the banks have. Q. Is the key to making a spread the ability to purchase freshly issued bank paper at a discount? A. It is absolutely not important that you buy fresh cut, just that the paper that is available.”

[62]He then went on to explain that as a result of being able to trade up to four times a day, the overall percentage profit could, by “leverage”, become a profit over a relatively short space of time which might be considered way beyond the normal return which one would expect on investment capital. His evidence was that most of the trading would be in what he called medium term notes, which he asserted were a type of note issued by many banks, including the Bank of England and could be accessed on the Bank of England Web Site. He described a commitment to pay a return of 120-150% on an investment in such funds as being “not a problem”.

[63]Mr Koffler was unable to provide any evidence to support his contentions as to the assets available to Elite, save for vague assertions as to associated companies. He produced no evidence to substantiate his assertions that there had been any investment scheme of the type that he described let alone one which had been successful in producing any profits whatsoever. When cross examined by Mr Dutton on behalf of the respondent to the effect that the schemes that he described had been the subject of warnings both from the US Treasury and the Bank of England as being vehicles for potential fraud and that there were no legitimate transactions of the type that he described, Mr Koffler said that those warnings were published “to deter people from getting involved and creating a nuisance for themselves”. He was driven to accept that the appellant’s letter to which we have referred above describing Elite’s activities at the time was not correct.

[64]Before the Tribunal, and before us, the appellant has sought to portray the respondent and its witnesses as unsophisticated country bumpkins who simply did not understand the ways of high finance. The only evidence that he called to support his case as to the legitimacy of the sort of schemes in which he was involved, and which he did not consider gave rise to any legitimate concerns, was Mr Koffler. The Tribunal did not consider that Mr Koffler’s evidence was credible. Neither do we. The appellant’s reliance on Mr Koffler inevitably affected the Tribunal’s evaluation of the evidence of and the case presented by the appellant; and has inevitably affected ours.

The Bower Cotton Partnership

[65]Another aspect of the case which can usefully be dealt with before turning to the individual transactions is the involvement of the company known as BC Projects Ltd (BCP). This was a company set up by the Bower Cotton Partnership in 1995 and was described in the firm’s brochure in the following terms:

“BC Projects Ltd was formed in 1995 in response to our client’s business requirements. We could see that commercial skills and disciplines beyond our legal services were needed to secure the success of key international ventures … together with the international legal expertise with Bower Cotton Partnership, BC Projects Ltd provides a powerful and highly knowledgeable business resource to successfully progress your international objectives. In the best of traditions of service to clients Bower Cotton founded in 1818, continues to evolve its business to meet the changing needs of its clients.”

[66]Concern had been expressed by the respondent to the firm about the business name which was intended for this company. Section 4 of the Solicitor’s Separate Business Code 1994 provides that if a firm were to set up a separate business which would not be regulated by the respondent, the name of that business should have “no substantial element” in common with that of the firm. The original proposed name for the business had been Bower Cotton Projects Ltd. Correspondence ensued in the autumn of 1996. The result was the change of name to BC Projects Ltd, a decision which was clearly driven by the appellant as appears from a memo from him to his partners on the 4th November 1996. It is clear from that memo that the appellant was unsympathetic to the concerns of the respondent, and would have preferred to continue to use the original name, but was prepared to reduce it to the acronyms. But his view is trenchantly expressed in one sentence in which he said:

“There is no point in the project company if it does not have something in common with the firm.”

[67]The firm held 60% of the shares in BCP, with 20% being held by a Mr P Smith. However until it was struck off the register in January 2003, it appears that the company only ever issued two shares of £1 each, one of which was held by the appellant and one by Mr Smith.

[68]The appellant’s evidence was that the activities of BCP were entirely separate from and distinct from the firm. He claimed that from 1998, separate premises were taken in Stafford where the company’s files were maintained. Mr Smith ran the company. He, the appellant, was not concerned with the day to day business of the company but was non-executive chairman only involved from time to time in board meetings. The work was effectively done by Mr Smith.

[69]Mr Smith was called to give evidence. The Tribunal, having heard his evidence was satisfied that the material before it established that representations made as to Mr Smith’s expertise and experience had been prepared to put a considerable gloss on those. The documentation showed that the appellant was heavily involved in its activities and prepared a substantial proportion of the documentation, particularly in relation to the company’s involvement in the transactions involving Elite and entities which will be referred to as GPR, HBM, and K State. There was considerable confusion in the documentation as to whether or not it emanated from the firm on the one hand or the company on the other. The documentation generally emphasised the connection between BPC and the firm, and failed to explain to BCP’s customers that in dealing with BPC they would not be afforded the statutory protection afforded to the clients of a solicitor’s practice.

[70]It was in the light of these findings, that the Tribunal concluded that the appellant was in breach of his obligations under the Solicitor’s Separate Business Code and accordingly found him guilty of the particulars of conduct unbefitting a solicitor set out in paragraph 1.7 of the Rule 4(2) Statement, which we have set out in paragraph 5 above.

[71]We need say no more than that these findings were amply justified on the facts; we consider that there was a clear breach of the Code. The way in which BCP was used in the individual transactions will be seen when we deal with them. And we deal with these transactions in the order which they were dealt with by the Tribunal. The Transactions CAMC

The Transactions

[72]CAMC was a corporation whose business, according to the appellant, was operating an income deferral scheme for high earning executives in the United States of America. Although the appellant asserted that it was a perfectly proper method of tax reduction for executives, it would appear that the United States Internal Revenue Service regarded the programme as unlawful tax evasion. Be that as it may, the appellant was approached by Mr Brown of CAMC in January 1997, and entered into an agreement with him and CAMC “for the execution of your instructions to make investments”. The appellant did not consider that there was any basis for suspecting that Mr Brown was anything other than an honest and responsible businessman. However it should be noted that Mr Brown’s CV stated that he was “a seasoned professional in the use of international banking and finance to resolve domestic expansion; eliminate unnecessary taxation; and, the shielding of assets from law suits and predators.”

[73]It was clear to the appellant that the funds of CAMC were, in effect, clients’ funds in that they were funds invested with CAMC for a limited period. The appellant was told that under the agreements by which the funds were held, they were to be invested only in “easily liquid instruments such as certificates of deposit” in banks rated AA by Moodys, for a term of not more than one year and that the funds would always be secured. It follows that the appellant was aware at all times that the funds were held subject to conservative terms as to investment, akin to a trust.

[74]The relationship between the appellant and Mr Brown and CAMC lasted for about a year. During that time there were essentially three aspects of the way in which the appellant dealt with CAMC which the respondent contended amounted to breaches of Rule 1 of the Solicitor’s Practice Rules 1990. In the Rule 4(2) statement the respondent alleged that these supported allegation 1(1), namely that the appellant had been actively involved in making, promoting or facilitating bogus transactions which lacked an honest commercial purpose. During the course of the hearing before the Tribunal it sought to extend the case to allege that the evidence also supported allegations 1.3, 1.4 and 1.5. The Tribunal declined to permit the Rule 4(2) statement to be amended to include those allegations.

[75]In support of the respondent’s allegation, it relied, as we have said, on three matters; first was the appellant’s involvement in a joint venture between CAMC, Mr B, Mr S and Mr P; second was the way in which Mr Brown dealt with the funds of CAMC during the summer and autumn of 1997; and third were the circumstances surrounding the transfer of CAMC funds from the Bower Cotton clients account to Canada where they were lost. In relation to this latter transaction, Mr Brown pleaded guilty in the United States to an offence of fraud and was sentenced to a term of imprisonment.

[76]The Tribunal found the allegations proved in relation to the first and the third matters. The second was essentially background material with which to judge the appellant’s actions.

[77]In relation to the joint venture, the appellant drafted the joint venture agreement, and amongst other documents, two forms of client agreement, one in relation to CAMC, and the other in relation to Mr B, Mr S and Mr P. As the Tribunal found, the only inference that could properly be drawn was that the appellant was, therefore, in relation to the agreement, acting on behalf of all the signatories. The joint venture agreement provided that CAMC would deposit US $6M in the Bower Cotton client account and would authorise the transfer of that money to a client account in the firm in the name of the joint venture. US $3M would then be used in accordance with a trading agreement made between the joint venture and Mr H to enable Mr H to raise US $500M which would then be used for trading in securities in such a way as to produce within seventeen days US$25M. That would be received by the joint venture. US$6M would be repaid to CAMC; the next US$10M was to be dealt with at the direction of Mr S; CAMC would then receive the next US$9M and any remaining profit would be applied equally to CAMC and Mr S and Mr P.

[78]On the date that the joint venture agreement was sent by the appellant to Mr Brown, together with the other documents, it was said in his covering letter:

“I understand the funds to be invested are investments funds of CAMC and that you will need to make prudent decisions regarding the disposal of such funds so that the principal is not at risk.”

And “I am spending a fair amount of time in trying to assist in this transaction. The funds which will be remitted after bank charges are just less that $6M and the whole of those funds will require to be available for investment. I should therefore be grateful if you would remit to our bank at the same account the sum of $10,000 on account of costs.”

And

[79]The next day, the appellant noted in a letter to Mr Brown that the proposals in relation to the investment involved the bankers draft for the sum provided by the joint venture to be held by solicitors for Mr H which would appear to result in inadequate security for the protection of the underlying investment capital. A note made by the appellant of a meeting of the 24th January 1997 recorded that the appellant reminded Mr Brown that there was no security or collateral in the arrangement being made with Mr H, and that indemnities contained in the joint venture agreement from Mr B and Mr S were unlikely to be satisfactory. Mr Brown said that they accepted the risks which they were entitled to take with the funds under their control and proposed to do so.

[80]The joint venture provided a draft to Mr H of US$3M. It is unclear what happened thereafter, save that Mr H indicated that he would be unable to make the necessary investments. The money was returned to the joint venture account, and ultimately to CAMC.

[81]The appellant submitted to the Tribunal and submits to us that at no stage did he do anything wrong during the course of this transaction. He had no reason to doubt the bona fides of Mr Brown. There was nothing to suggest that there was anything unlawful about the provenance of the funds. He was entitled to take instructions from Mr Brown as to both the drafting of the agreements and the disposal of the money. He had made it clear in the client agreement that he and his firm could take no responsibility for any investment decision that might be made. In both the letters to which we have referred and in the meeting he gave appropriate warnings as to the fact that the funds once out of the account in the name of CAMC were effectively unsecured. Mr Brown considered that that was an acceptable commercial risk which he was entitled to take.

[82]The Tribunal considered that these explanations of his conduct wholly failed to grapple with he reality of the situation. The appellant was aware that the funds of CAMC were held, in effect, in trust. CAMC, and therefore Mr Brown, were not entitled to carry out any transaction which left the principal monies unsecured. The transaction that was proposed could not be described as an ordinary commercial transaction, but was, even if genuine, speculative and put the principal at risk because it was unsecured. The appellant had accepted instructions from all parties to the joint venture when there were clear conflicts of interest. He failed to advise Mr Brown and CAMC properly or at all as to the involvement of Mr B and Mr S and Mr P. There appeared to be little justification, looked at from the perspective of CAMC, whom he asserted to be his client, for the sort of rewards they were to obtain under the joint venture. There was, according to the Tribunal, no reasonable justification for the beneficial interest in CAMC’s funds being transferred to the joint venture or for the profit share proposed. There was nothing to suggest that indemnities contained within the joint venture would be sufficient protection for CAMC’s funds. The transaction had all the hallmarks of a bogus transaction. The fact that no money was ultimately lost did not detract from the fact that the appellant had essentially earned substantial sums of money from his involvement in drawing up the relevant agreements which, the Tribunal concluded, no honest solicitor would have allowed himself to become involved in.

[83]In our judgment, the Tribunal’s conclusions are fully justified on the facts. The most important feature of the appellant’s dealing with CAMC is that he knew at all times the constraints imposed upon CAMC and Mr Brown on the use of CAMC’s funds. The appellant was ready and willing to assist Mr Brown in what were clearly breaches of CAMC’s obligations to its investors.

[84]During the remainder of the year it is apparent that Mr Brown was seeking other means of investing the CAMC funds. These amounted ultimately to US$8M. They accumulated in the CAMC client account with the Bower Cotton, but, on Mr Brown’s instructions, were then converted into a bank draft which he then hawked round a number of financial institutions. This caused some concern. Barclays Bank to whom the appellant gave instructions that the draft should be drawn, drew their concerns to the attention of the appellant. As a result he wrote to Mr Brown on the 14th May 1997 as follows:

“Barclays Bank was somewhat surprised to have heard from two other banks in respect of the bankers draft of US$8M that they issued. They apparently heard from banks abroad indicating that their draft had been presented to those banks and they had become worried about transactions in relation to CAMC. They have asked me to obtain some corporate information on the CAMC Group.”

[85]The appellant wrote a reassuring letter to Barclay’s Bank on the 22nd May 1997 describing CAMC as Tax Advisors. It was then decided that rather than holding the monies in the Bower Cotton client account, a United Kingdom Company should be formed, CAMCEL. Its registered office was that of Bower Cotton. With the support of the appellant, an account was opened at the Natwest Bank. The account was controlled solely by Mr Brown. The appellant had supported the application to open the account by representing that Mr Brown had been known to the firm for eight to nine months and he saw no reason why he should not be a responsible officer of the company and signatory of the account. The way the account was operated, however, gave rise to concerns from Natwest who suspected money laundering, and expressed their concerns to the appellant.

[86]The tribunal made no finding that the appellant was guilty of any breach of the Solicitors Practice Rules, but it clearly considered that the appellant’s continued involvement with Mr Brown in the light of what had happened in January was inappropriate. So do we.

[87]The end of the story in relation to CAMC came after the funds then held by another firm of solicitors Beattie and Co on behalf of CAMC were frozen in November 1997 by the police who suspected unlawful activity. The appellant was instructed by Mr Brown to obtain release of the funds. In support of the application to this end, he swore an affidavit in which deposed that the funds were held by CAMC under asset management agreements which referred to the intention that the funds would never be unsecured, that the origin of the funds derived from individual trusts and retirement funds and that the original termination date under the asset management agreement had passed in relation to a significant part of the funds. The court ordered that the funds be released to the appellant’s client account to remain there until the 5th December to allow the police to make further enquiries and a further application if thought fit.

[88]Mr Brown, as soon as the money was available started making plans for further investment. He told the appellant that he was considering investing in a “three day programme which would pay us US$14M plus the return of our US$6M principal at the end of trading.” The appellant urged caution in letters of the 2nd and 3rd December:

“As these funds will be watched as a result of recent events …. I suggest that nothing proceeds until we have seen totally watertight documentation with which we are well satisfied.”

And “You certainly do not wish to have another abortive situation.”

[89]On the 8th December 1997 the appellant received documents from Mr Brown in the US relating to a new proposal which involved an investment contract between CAMCEL and a company called Excel, described as “a West Indies offshore pure trust organisation with US-Canadian representative offices in Canada and a contact mailing address in the USA.” The contract provided for the placement of CAMCEL’s US$6M into a “high yield investment programme to yield profits by leverage of the said deposit up to US$200M”. CAMCEL was to receive 45% of the profits, Excel 45% with 10% to Excel as administrators. The documents contained language which is unclear, uncommercial, and difficult to understand. Coupled with the predicted profits, it had all the hallmarks of a bogus transaction. It clearly provided no security for the CAMCEL funds and would, if put into effect, be a clear breach of CAMC’s obligations to its investors.

[90]The appellant expressed concern to Mr Brown about the proposed transaction, in particular making it clear that the funds were essentially being made available to Excel, with no security whatsoever.

[91]On the morning of the 9th December there was a flurry of faxes between the appellant and Mr Brown. First there was a fax giving instruction for immediate transfer of funds of the sum of US$6M to be sent to the “Client Trust Account of PL Avocats” in Quebec for credit to “EM Ltd in trust for CAMCEL”. Shortly thereafter the appellant received a further fax which included a letter from the firm of Avocats Periard Ledoux purporting to give information about Excel. This contained some curious information as to the relationship between the firm and Excel. It said:

“We stand ready with legal assistance for them (Excel) under sole instructions from Excel on any transaction per long standing agreements between Excel and our firm. There should be no communication with us without the expressed written consent of Excel. However if issued such instructions we shall comply. One understanding that we are instructed to give you is that we shall follow the instructions of Excel to transfer any funds received into the Trust Account at any time, including the deposit.”

[92]This underlined the fact that funds transferred to that firm would be held by the firm solely to the order of Excel. At the same time, the appellant received a fax from Mr Brown reiterating his instructions to transfer the funds. It continued:

“As you know we are already in default on our client obligations. Whilst we are in a position to return principal to each ….. it seems prudent to take steps to assure the various companies and persons will not be sued for the failure to meet the original deadline. For that reason I have asked DH, Attorney here in the US, to prepare a release and waiver for each client which must be executed prior to any return of capital. As that will take some time I decided that there is time to enter this investment which promises to pay out profits before the end of the month in an amount which will alleviate the whole problem…. If this investment does not perform then it was no more than a good thought. However if this investment is successful then we have “saved the bacon”

. As a further consideration along the line, as your client, it may be vital that no one learn whether or not the funds remain in your possession. Or, if you must reveal that they have been transferred the destination and purpose not be disclosed in the slightest – until this investment performs.”

[93]A matter of minutes after the timing of the fax from Mr Brown, the appellant replied making it plain that he had received and read the information relating to Excel from Periard Ledoux. He reiterated the fact that the result of transferring the funds would be that the funds we would be entrusted to Excel and not the solicitors, and asked again for instructions regarding the funds. He received a reply some forty minutes later from Mr Brown who asserted that the decision to go ahead, and his instructions to wire the funds, were based on the fact that he had not heard or received anything from the appellant, and then continued:

“If I am understanding it in an overall manner what you are saying that this is not a tight enough agreement for us to safely move ahead then I retract my request for the immediate transfer of funds to EM. Please hold the funds on a call-account basis for the moment.”

[94]This produced the surprising response from the appellant that, having been given instructions to transfer the money, he had done so that morning. The appellant continued:

“Clearly the responsibility for the investment and whether or not it is successful shall remain entirely with you as I have not been privy to any of the due diligence”

[95]Not surprisingly the Tribunal found these faxes somewhat curious. The money had not, apparently, been transferred when the appellant sent his previous fax. Nonetheless he gave instructions for the money to be transferred. And, as we have already said, it was lost. The appellant would appear to have either completely lost sight of, or simply ignored, the fact that CAMC was his client, not Mr Brown. There is no doubt that the Tribunal’s conclusions in respect of these transactions were fully justified.

The Elite Transactions

[96]As we have already stated, these transactions are inevitably coloured by the fact that Elite was effectively the creature of Mr Koffler about whose evidence we have commented in paragraphs 60 to 64 above. As is the case with many of the transactions which we will deal with hereafter, the evidence is complex and not always coherent. It is not always easy to determine from the documentation the timing of relevant events, or the way in which some of the transactions fit together. Nonetheless, there is sufficient material for a clear assessment to be made of the appellant’s activities in relation to the three matters about which the respondent complains, namely the transactions involving GPR, HBM and K State. GPR

[97]GPR is a substantial Indian company for whom the appellant had apparently acted for many years. In that capacity he had got to know its former chairman, Mr G very well. He was keen on a project known as the H Project, although his sons, who effectively controlled the company at the time, were not so enthusiastic. The appellant, in order to help Mr G with this project, put him in touch with a company called Oakland Resources Ltd (Oakland), which was a Gibraltar Company, originally controlled by Mr Ky and in which the appellant had an interest through a company owned by an off-shore trust formed by his mother for the family. It was proposed that Oakland would seek funds for the project and that BCP would effectively act as the managers. To this end, the appellant, drafted a letter written on BCP letterhead and signed by Mr Peter Smith on the 23rd April 1997, setting out its proposals. It should be noted that there was no evidence that the appellant disclosed his interest in Oakland at any stage.

[98]The venture required a funding of £106M. During the summer, BCP were seeking to be appointed to carry out a feasibility study and indeed a brief would appear to have been prepared on its behalf. This included the involvement of Oakland who had, it was said “Significant, banking, legal corporate and Power Industry expertise”. It was intended that Oakland would take a 26% equity stake in the joint venture. For whatever reason it would appear that by September, these proposals had come to nothing; the appellant described them in a letter of the 12th September as the “Oakland fiasco”. However, Mr Koffler and Elite then came into the picture. Mr Koffler introduced himself on the 15th September 1997 to the appellant in a letter in which he said that Elite and its affiliated companies:

“Had continually demonstrated their capacity to finance viable projects in excess of US$100M and that Elite owned and controlled several subsidiary companies with combined bank and institutional cash deposits in excess of US$10M presently owned additional income and producing assets in excess of $500M.”

[99]The letter allegedly came from a company called North American Fiduciary Services in which it said that it was “the auditor” of Elite’s “financial transaction activities”. It was clear that Elite was intended to take the place of Oakland as the provider of finance. The appellant then made enquiries about Elite. The extent of those enquiries is unclear. He subsequently asserted that a search showed that Elite had an issued share capital of £750,000. The Tribunal rejected this evidence. Even Mr Koffler accepted that at no time did Elite have any issued share capital of more than £100.

[100]Notwithstanding what should quite clearly have been doubts about the financial standing of Elite, the appellant was pressing GPR to produce US$6M which would be used by Elite to procure the issue of a bank guarantee to support the necessary bond to underpin the financing of the project. The Tribunal found that the appellant could not have had any reasonable expectation that Elite would have been able to produce a guarantee of US$280M which he was asserting was the necessary precondition for the obtaining of a bond. Nonetheless, he was, as we have said, pressing for US$6M from GPR. The only inference which could properly be drawn was that the appellant was seeking to persuade GPR to hand substantial sums of money to Elite on the basis of unrealistic proposals for investment which Elite could then use for its own purposes, even if ultimately intending to return the principal.

[101]Elite had been introduced to the appellant by a Mrs Alianza and a Mr Ammermam. In a letter to the appellant on the 24th September 1997, Mrs Alianza said that Mr Koffler’s suggestion was that one way the matter might be progressed would be for the proposal GPR to retain an English law firm to act as escrow agent or trustee, with the monies being held by the law firm if the Bond was not successfully issued. Mr Koffler suggested that that law firm write a letter to indicate that the directors and owners of Elite were long-term clients of the law firm and were known to them as reputable business people of the highest ethics. That of itself should have alerted the appellant to the fact that Mr Koffler was not a reputable person “of the highest ethics”. He should also have been under no illusion that he could properly deal with Elite as a result of the way in which the matter thereafter proceeded.

[102]Once it was made clear by GPR that it was not intending to put US$6M in the hands of either the appellant or Elite, Mr Smith of BCP interested a company, EGT which was part of the GEC Alsthom group to see if it would be prepared to help on the basis that it would be involved in the project. The proposal was still on the basis that Elite would be able to provide the relevant guarantee once a sum of US$10M was sent to Elite. That sum was to be used by Elite, as the appellant put it in his summary “on a leveraged basis”. The documentation was seen by the Natwest Bank which, in a letter of the 30th October 1997 made it plain that it considered that the wording of the documentation gave rise to a suspicion of fraud.

[103]It would appear that it was at this time, whether or not because of the attitude of the Natwest Bank, that EGT was no longer interested in the transaction. The appellant suggests that this was really over difficulties in relation to a SWIFT transfer. Be that as it may, the appellant continued to seek way of progressing the proposal with the assistance of Elite. In the course of further negotiations, he wrote a letter to GPR’s Indian lawyer saying:

“As matter of comfort, I have been supplied with documentation in relation to a major transaction concluded by Elite which is currently in the course of implementation on the funding side. Under this major contract Elite Engineering is providing funding at the rate of US$180M per month over a twelve month period. ”

[104]The Tribunal came to the conclusion that there was no evidence to suggest that the appellant had any basis in fact for making such an assertion. Its conclusion, overall, was that the evidence established breaches of the appellant’s duties as a solicitor justifying allegations 1.1, 1.2, 1.3 and 1.5.

[105]We reject the appellant’s submissions that all the proposals were proper attempts to provide funding for GPR. If the intent was to help GPR, as his main client, the appellant was bound to have drawn GPR’s attention to the extraordinary nature of the proposals made by Elite, and the warning from the Natwest Bank. As we have already indicated, the proposals involved making available a substantial sum of money to Elite to use in schemes which it should have been clear were unrealistic. The fact that Elite may not have made any charges, highlights the fact that the proposals were to give them control of substantial funds. Even if it was hoped, or even expected, that those funds could be returned intact, the Tribunal was right to conclude, in effect, that the appellant was prepared to mislead his client in order to enable Elite to obtain those funds. We therefore agree with the Tribunal HBM

[106]The involvement of HBM continues the saga of GPR in the sense that it was a manufacturer of machinery which the appellant was able to persuade Mr G of GPR could be a supplier of equipment to his H Project. HBM had been introduced to the appellant by Mr Peter Smith of BCP. It was a former East German manufacturing company which had been acquired by a Singaporean company headed by Dr B. It is clear that the company was in financial difficulties, although the appellant has always asserted that it had substantial assets. It was clearly, however, in need of cash.

[107]The appellant sought to interest Dr B in a scheme whereby funding of some US$40M might be available to HBM if it was able to provide a US$10M deposit. This would appear to have been in the context of the proposal that HPM, might supply some equipment to the H Project. Accordingly a Memorandum of Understanding drafted by the appellant was signed on the 18th March 1999 which gives the impression that HBM was capable of carrying out a vast engineering project when in fact HBM was a medium sized engineering company in East Germany in financial difficulties. The appellant explains this on the basis that the expertise for the purposes of carrying out the project was to be provided by BCP.

[108]The MOU purported to provide for a contract in the sum of US$119M between GPR and HBM for the total turnkey responsibility for the project, and on the basis that funds would be provided by an unspecified funding party and GPR. Under the memorandum HBM was to provide US$10M deposit within fourteen days which was thereafter to be utilised to raise a private placement bond. Both the appellant’s firm and BCP were to receive fees. This particular agreement could not be put into effect because HBM were either unwilling or unable to provide the sum of US$10M.

[109]Thereafter the appellant was clearly involved over a substantial period of time in seeking to raise funds on various proposals involving HBM. In October 1999 he wrote to a bank in West Germany giving an optimistic view of HBM’s business and prospects – “significant business in India, Ghana and elsewhere” and saying that HBM’s twelve hectare plant was valued on a “replacement value basis DM51.906M”. The significant business in India, Ghana and elsewhere would appear to be based upon hopes for business and not actual business, as the whole problems of HBM’s liquidity was because of its inability to sell its machinery.

[110]It was in these circumstances that Elite became involved. In a letter to Mrs Alianza and Mr Ammerman on the 8th November 1999, the appellant proposed what was described as the HBM/H project with details seemingly similar to the memorandum of understanding in March which had been overtaken by events. In that letter he said “It is clear we have been given the “all clear” to assist HBM and its parent company BG in all their future operations”. The appellant accepts that the intention was that HBM, and in particular its assets, could be used as a basis for a high yield investment scheme.

[111]The position of HBM was by then so difficult that it was prepared to consider a joint venture agreement proposed by Elite and apparently recommended by the appellant which would have given Mr Koffler control over what were thought to be in effect mortgage documents relating to the assets of HBM. The draft agreement drafted by the appellant gave Mr Koffler as “sole trustee” sweeping powers over the assets of HBM.

[112]Dr B on behalf of HBM was prepared to give authority to Mr Koffler in the terms of the draft. Further a joint venture agreement again drafted by the appellant was signed by Dr B, not in the terms of the original draft but asserting that Elite was based in England, reciting that Elite had agreed “in principle” with an insurance company for a credit facility by way of a deposit to HBM to enable Elite to enter into a suitable investment programme for the joint venture to generate the required funding, that Elite was prepared “in principle”, subject to validation by BCP, and acceptance by Elite, to arrange funding of projects which were required and engines manufactured by HBM to a total project value of US$300M. HBM was to “support the facilitating of credit by Elite for the purpose of enabling Elite to facilitate funding the project” and appointed Elite irrevocable “sole trustee” of the forms of mortgage, known as Grundschildbriefs. The agreement was to be subject to English law.

[113]The accompanying joint venture agreement, although as we have said not in the same terms as originally proposed by Elite, contained some extraordinary wording particularly in relation to confidentiality. As the Tribunal identified, a particular clause which should have raised serious doubts about the proposed activities of Elite was in the following terms:

“[HBM] to leave all dealings with the insurance company and the bank to Elite exclusively and not to interfere in any way with the arrangements established by Elite with the insurance company and the bank and hereby agrees that in the event of HBM intentional or demonstrable unauthorised disclosure or use of confidential information or context, Elite shall immediately be relieved of its obligations to make funding payments to HBM and funding payments already received shall be converted automatically into loans from Elite to HBM repayable with interest at 1% over LIBOR by ten equal half-yearly instalments over a five year period and HBM shall be liable for the costs incurred by Elite in arranging the insurance and all reasonable legal fees and attorney costs incurred in documenting and proceeding with this agreement along with the receipt of anticipated benefits from undertaking this joint venture.”

[114]It is clear from manuscript notes that during the drafting of this agreement, the appellant took instructions from either Elite or Mrs Alianza. The Tribunal found, and we agree, that the evidence established clearly that HBM was a client of the appellant for the purposes of all the material transactions up to this date, and had clearly relied upon him to advise them in relation to documentation. Not only did he at no stage provide any advice as to the extraordinary nature of the transactions proposed, but it is clear that he was acting in the interests of Elite, whether or not formally instructed as its solicitor. No substantial funding was ever forthcoming. HBM, through Dr B, made repeated requests for funding; the documents show that the appellant in turn repeatedly urged patience on the basis that finance would shortly be available. At one time the appellant said that documents were all in place or had been signed for a remittance of US$3M which was to be released to HBM. But there was no evidence that this was true, and he had no basis upon which he could rely on any assurance given by Mr Koffler.

[115]The appellant, however, states that although there was no substantial sum made available as envisaged by the joint venture and accompanying documentation Elite did provide $US750,000 in March 2000 as an interim measure. This would appear to be reference to a payment which Elite was prepared to make to fund the purchase of one of HBMs engines. This was purchased under the name of Power Resources Corporation Ltd, a company whose registered office was that of Bower Cotton. There is no doubt that this sum was indeed paid. But the provenance of the money is opaque, as are the precise circumstances surrounding various payments made into and out of the Bower Cotton client account at that time.

[116]The Tribunal concluded that as a result the allegations 1.1, 1.2, 1.3, and 1.5 were proved in relation to these transactions. We agree. We reject the appellant’s account which is to the effect that all he was intending to do was to provide some assistance, through in effect BCP to HBM to manage the H Project and to provide funding which would enable that project and indeed the HBM business to become viable. The repeated attempts to raise funds in unusual ways, and the level of documentation prepared by the appellant makes it abundantly plain, as we have said, that he was acting on behalf of HBM, but failed to act in its interests. That can only be on the basis that the various funding schemes were devised essentially in order to be able to use assets of HBM for the purposes of others, including Elite.

K State

[117]An established client of Bower Cotton, Mr L, became the governor of the K State. In that capacity he approached the appellant in the first instance about a gas pipeline project. This ultimately became a proposal for a power plant, which would require anything between US$110 and US$170M. The appellant, writing on the firm’s notepaper, indicated that “Mr Peter Smith, as an expert in the field of power stations” had recommended HBM as the providers of the power plant. In October 2000, the appellant again writing on behalf of the firm, said that if K State could put up US$100M “with our project company during the period of the project, we should then be able to arrange the total equity”. It was further proposed that BCP would carry out the feasibility study.

[118]BCP was appointed to carry that out for a fee which was ultimately reduced from US$260,00 to US$200,000. As far as the funding was concerned, the appellant pressed for US$10M on the 27th February 2001, on the basis that this would be utilised to provide a return of 50% over the period of one year and a further 50% for the second year, even though work on the feasibility study was not commenced until the 19th March. On the same day he wrote to Mrs Alianza and Mr Ammerman to say that he had told Mr L that he could obtain a return of 100 to 120% on a sum of US$10M. In other words the appellant was suggesting that the money should be made available for investment before there was any commitment to the Power project. Further, he gave no indication to Mr L or K State of how the US$10M would be invested nor did he advise them as to the likelihood that such returns could be achieved. It is abundantly plain from the documents that the money was intended for Elite.

[119]Subsequently the estimated costs of the first phase of the project was reduced to US$110M. The first indication of how the financial structure was to be put together is in an undated document which indicated that BCP, or what are described as “overseas investors” would have a 50% equity, K State would have a 30% equity and a company Power Resources Corporation NV which was formed as we understand it for the purposes of this venture was to have 20% of the equity. The proposal was that the State would place US$22M on deposit for a period of three years, which would be placed in an account designated by BCP and held on a basis that the funds or their cash equivalent were kept secure and unencumbered throughout the deposit period. The proposal anticipated a 30% return on the deposit within thirty days of the end of each twelve month period. There is no explanation as to how that would have been achieved.

[120]The project report was dated July 2001. In September 2001, Power Resources Corporation Limited wrote to Mr L urging payment by the State to Bower Cotton’s Client account of US$20M “preferably before the end of September 2001”. This letter stated that payment of the deposit would result in a 20% stake. Shortly thereafter the appellant pressed for the payment of the deposit and the sum of US$100,000 due to BCP; this request was repeated by Peter Smith of BCP on the 24th September. The demand was repeated once again by the appellant, this time writing on behalf of Power Resources Corporation NV.

[121]In October 2001, an agreement prepared by the appellant was executed between Power Resources Corporation NV, Elite, and T Ltd, a company incorporated in the Isle of Man. This recited that the deposit of US$20M was to be lodged with Bower Cotton to enable Elite to arrange funding for the plant forty-five days after the deposit. Elite was to fund the project “by way of equity” as to 80%, 20% was to be provided by the K State. The agreement said that all material decisions were to be taken by an executive committee consisting of representatives of Elite and T Ltd with effective control resting with Elite as the majority shareholder. K State was not a party to that agreement.

[122]Further documentation was then created between Elite and Power Resources Corporation NV, which referred to another company called Power Funding Corporation Ltd in which Elite had established a controlling interest. The first operative clause of this agreement provided that Elite would procure the establishment of a deposit account in the name of Power Funding Corporation Ltd which was to be controlled by the appellant and Elite. Once the US$20M had been paid into Bower Cotton’s client account this was to be transferred to Power Funding Corporation to be held “in escrow by BCP”. Elite was in effect to secure this by a promissory note to Power Resources Corporation NV for US$20M payable 36 months after the receipt of the deposit. Elite was then to pay various sums said to produce US$115.5M over three years. It is plain from the structure of this documentation that if put into effect, the deposit of US$20M provided by K State would have ended up under the control of Mr Koffler in exchange for Elite’s promissory note. There is no way in which these transactions set out in documentation prepared by the appellant could be said to have been in the interests of K State.

[123]The only document prepared for K State was one prepared by the appellant and dated 17th October 2002 which effectively confirmed that the proposal was that K State would provide US$20M which was to be paid into BCPs account. BCP is defined as Bower Cotton Partnership. This sum was then to be transferred to Elite. Power Resources Corporation NV was to issue a promissory note to K State for the deposit sum. All these transactions were overtaken by the intervention of the respondent.

[124]The Tribunal concluded that these facts supported the allegations in 1.1, 1.2, 1.3 and 1.5 beyond reasonable doubt. We consider that those conclusions of the Tribunal are amply supported by the evidence. We do not consider that the appellant’s account that these proposals were transparent and realistic business proposals to assist in the proposed project can be accepted. The recital of the facts is in our view sufficient explanation of our conclusion. Further, it is accepted by the appellant that a payment of $20,000 was made by BCP to Mr L. It was made in cash and it came from the Bower Cotton client account. It was effectively money derived from K State and has the appearance of a corrupt payment. The Tribunal found, as is inherent in the previous paragraph, that K State was a client of the appellant. We consider that the evidence fully justifies that conclusion. In those circumstances the payment of $20,000 could only have been made honestly if the appellant had established by appropriate enquiries with K State that it was proper to make the payment. He did not.

Maxhurst

[125]Under this heading are grouped a number of transactions involving companies controlled by Dr A, in particular Maxhurst an Irish Company, and another company known as Transamerica. Four witnesses were called who gave oral evidence for the respondent in relation to these matters, a Mr Srimal, Chairman of an Indian Company, ACE, Mr Babu, a director of another Indian company, Tirven, a Mr Bustaffa, who was a director of an Italian company and a Mr Economou, who had a drapers business in Athens. The one thing all had in common was the fact that their businesses were in financial difficulties and were seeking substantial funding. They were all introduced to the appellant, by or with the assistance, of Mr Solaraj, who was a client of the appellant. The evidence of all four witnesses satisfied the Tribunal that they and their businesses became clients of the appellant; the appellant accepted that ACE and Tirven were his clients, but denied that Mr Bustaffa or Mr Economou ever were. The arrangements, which so far as ACE and Tirven were concerned were complex, involved the payment of substantial introduction fees, not, it should be said to the appellant; as far as ACE and Tirven were concerned, these introduction fees were ultimately recovered. But neither Mr Bustaffa or Mr Economou have recovered theirs, despite litigation, and have lost between them in excess of US$350,000.

[126]As far as ACE and Tirven were concerned, it would appear that proposals for financial support were made in the early part of 2000. ACE was looking for US$33M and Tirven US$30M. A number of draft agreements were prepared by the appellant. In the first instance, the proposals involved the use of a Bahamian company, PU. The structure involved an agreement between PU and BCP which provided for PU in return for a 1% fee arranging a loan of US$37.5M for a period of 360 days at an interest rate of ⅞% above LIBOR. This was subsequently amended to substitute US$30M for the amount of the loan and ultimately substituting Maxhurst for BCP. In an agreement between BCP and Mr Srimal BCP agreed to arrange for Maxhurst to procure a Canadian Bank to accept deposit of the loan and to arrange an insurance policy in favour of the Canadian Bank which would enable the money to be used “unencumbered on a reserved basis for a private placement investment.” In return Maxhurst would provide US$45M to Mr Srimal for a period of 360 days on Mr Srimal paying the initial insurance premium of US$50,000. In addition Mr Srimal was to deposit US$360,000 with BCP to cover legal fees of US$10,000, the insurance premium of US$50,000 and an arrangement fee of US$300,000.

[127]By April it was apparent that ACE could not fund the whole of the arrangement fee. Mr Babu was then persuaded to join the transaction on behalf of Tirven. The documents by April had included in the arrangements a company known as Imperial, and Oakland, which was a company in which the appellant had an interest. These arrangements also involved profit shares being payable to Vinton Investments Ltd a company in which Mr Solaraj had an interest, and Cline Ltd, another company in which the appellant had an interest. The appellant at no stage disclosed the interests that he had in those companies.

[128]The agreement with Tirven for the raising of US$30M carried a 2% success fee payable to BCP “for making the necessary arrangements”. The whole basis of these arrangements would appear to be that the loans obtained on the strength of the insurance would somehow be used to generate sufficient monies both to repay the loans and provide the necessary profit for ACE and Tirven. The appellant clearly encouraged Mr Srimal and Mr Babu to enter into these arrangements even though, the Tribunal found, any honest solicitor acting in the interests of Mr Srimal and Mr Babu and their companies would have advised them not involve themselves in these extraordinary transactions.

[129]It soon became apparent that the arrangements could not be put into practice. So that in May 2000, the arrangements were changed again so as to substitute Transamerican for Imperial. It was proposed that on the payment of US$300,000 to PU US$30M would be raised as previously envisaged. In letters dated the 4th May 2000 to Mr Srimal and Mr Babu, the appellant said this about risk. To Mr Srimal:

“The same risks apply as before, namely the risk of PU not performing but Mr Sh and W have assured us that everything would take place and it appears to be at least one precedent for this occurring. It would be surprising if they were prepared to damage their reputations by not performing. The second risk is as to the use by Transamerican of the funds. However, by imposing upon Transamerican the obligation to pay the interest and to secure the repayment of the funds, we have imposed obligations which would make no sense unless they intend to perform. However, obviously I cannot guarantee their performance.”

[130]Very similar wording was used in the letter to Mr Babu. As there were no warranties or guarantees for the performance of PU or Transamerica, and no evidence of substantial funds being available to either of those entities, to suggest that these were in some way adequate warnings of the risks involved in the investment, as the appellant does, is surprising. Ultimately, the agreement was that Maxhurst would obtain the necessary funding. This was on the basis that the two companies would provide promissory notes for the required sums, repayment of which would be the subject of a warranty guarantee or insurance. It was explained, as before, that the transaction would work by reason of the fact that the sum lent on the strength of the guarantee or insurance would be utilised to obtain funds to invest in such away as to produce enough money to enable the promissory note to be withdrawn before maturity. On the strength of these proposals ACE and Tirven paid the US$300,000 and the sum required for the credit insurance or warranty. However the appellant then sought to obtain a further US$5,000 said to be for the insurance premium, and stated that if ACE was unable to make the payment, there would be a success fee to BCP of 10%. The Tribunal found that this was an attempt by the appellant to obtain an additional 10% in circumstances were there was no evidence that the further premium was indeed ever required.

[131]A further twist to the story which casts doubt on the appellant’s credibility was that in a letter of the 5th June from the appellant to PU, he asserted that the loan that was being sought for ACE was “under WHO schemes and also to assist in funding a Power Plant project H in India”. The Tribunal concluded that this statement was pure invention. Likewise, we can see no basis for this statement in any of the evidence. And the appellant has not sought to justify it.

[132]On the 7th June the appellant wrote a letter on behalf of Mr Srimal in order to pacify his bankers. The letter gave the impression that funding was in place and would shortly be made available. That was despite the fact that he had no evidence to suggest that Maxhurst was capable of making any of the arrangements which were required, and that the insurance guarantee or warranty which was required to underpin the arrangements was a document which post-dated the letter, namely 12th June 2000 and purported to come from an organisation known as Aegon, in terms which should have alerted any competent solicitor to the fact that it was unlikely to be worth the paper that it was written on. Correspondence about this time suggests that, as the Tribunal found, the appellant was in effect acting on behalf of Dr A, that is on behalf of Transamerica and Maxhurst.

[133]These convoluted arrangements were all orchestrated, so far as can be gleaned from the papers, by the appellant, who prepared all the relevant documentations. There is no evidence of the involvement of any legal advisor for any of the other parties to them. The Tribunal concluded that the appellant was essentially seeking to act on behalf of all those involved. The conflicts of interest were clear. He failed to give the advice that an honest solicitor would have given if he were acting for Mr Srimal and Mr Babu and their companies. The proposals all have the hallmarks of attempts to obtain monies which could be used to obtain benefits for entities other than the companies of Mr Srimal and Mr Babu. He failed to provide any protection for them from default on the part of any of the other parties. He accepted that he had come to the conclusion afterwards that Mr Sh who was the person behind PU, and Dr A, the person behind Transamerica and Maxhurst, were crooks and liars. The only good news was that the US$300,000 was paid back when the deals failed to materialise in June, although the appellant retained sums for his charges.

[134]As far as Mr Bustaffa was concerned, he was introduced to the appellant at or about the beginning of September 2000. As we have already said, he was seeking funds for his company which was in financial difficulties. The arrangement proposed by the appellant which resulted in an agreement drafted by him was that on Mr Bustaffa’s company paying an arrangement fee of US$225,000 to Maxhurst, this would in turn be paid to a company called Forty Four Fifty Eight which would then obtain and allocate US$15M to an account in a bank in Montreal. This would then be used by a company known as Hackar for investment. Hackar was a company of which the appellant was the sole individual director and in which he had an interest, which he at no stage disclosed to Mr Bustaffa. Mr Bustaffa’s company then paid the fee in accordance with the terms of the agreement, but the money was never recovered.

[135]The Tribunal concluded that Mr Bustaffa was the victim of an advanced fee fraud. It also concluded that, as before, the appellant drafted the agreement on behalf of Dr A and Maxhurst, but assumed the duties of a solicitor to Mr Bustaffa and his company. It described Mr Bustaffa as an unsophisticated witness who was clearly out of his depth in his dealing with the appellant. It accepted his evidence. We consider that the Tribunal’s conclusions were fully justified.

[136]As far as Mr Economou was concerned, a very similar transaction was arranged whereby his company was to pay US$150,000 as an arrangement fee. US$100,000 was paid to a Dutch Law Firm to hold until successful completion of Maxhurst’s obligations. The appellant himself retained US$50,000 for payment to others, but did not disclose this to Mr Economou. When the transaction did not proceed and Mr Economou instructed other English solicitors, the appellant denied that he had represented Maxhurst and asserted that the full sum of US$150,000 had been paid to the Dutch Lawyers. This was untrue. Ultimately he agreed to release the US$50,000 that he had retained less his legal fees.

[137]All these transactions involving Maxhurst have to be seen in the light of the fact that even at the end of 2000 and the beginning of 2001, the appellant still had a close relationship with Maxhurst. An agreement which was drafted in February 2001 between Maxhurst and Cline Ltd, the company in which the appellant had an interest, makes it plain that it was intended that there should be an ongoing commercial relationship between the two companies essentially as joint venture partners involving participants in high yield investment schemes. The funding was to be obtained for the clients introduced by Cline, effectively by the appellant and Solaraj. This agreement clearly underlines and supports the conclusions of the Tribunal as to the relationship between the appellant and Dr A at the relevant time. It is true that in May 2001 the appellant commenced proceedings against Dr A and Maxhurst accusing them of fraud on behalf of ACE, Tirven Bustaffa and Economou. But it is unclear how much of each of those entities knew about the extent of those proceedings.

[138]The Tribunal’s conclusions overall were, having heard the evidence, that the appellant had not acted honestly in relation to the transactions involving Maxhurst and that accordingly allegations1.1 and

1.2 were substantiated. Having considered the evidence ourselves, we have come to the same conclusion as the Tribunal.

Hackar

[139]These were the transactions which gave rise to the first inquiry into the appellant’s activities. Hackar was a company incorporated in Curacao of which the appellant was managing director. It was used in conjunction with a company Nikea, also incorporated in Curacao, which was controlled by Mr W and Mr N for the purposes of investment schemes involving Mr W, Mr N and a Mr P. The shareholders in Hackar were originally proposed to be a company controlled by Mr N’s family trust, the company belonging to a family trust of which the appellant and his family were beneficiaries and companies controlled by Mr P. Ultimately, it appears as though the shareholding representing the appellant’s interest was held by Cline Ltd, a company which as we have already said was controlled by a family trust in which the appellant was interested. At all relevant times, the appellant was an authorised signatory of Hackar.

[140]The company was not in fact not incorporated until February 1998. But in the autumn of 1997, there were discussions between the various parties which make it plain that the proposal was that there should be a joint venture between them, and that Bower Cotton would deal with the paperwork. The proposal was that they would seek funds from third parties which would then be invested, according to the appellant’s evidence, in medium term notes or similar securities, in other words the sort of proposal which has been described as a high yield investment scheme. The funds were to be paid into the Bower Cotton client account. A total of US$46M passed through the Bower Cotton client account as a result, which was what led to the concern expressed by the respondent after the investigation in 1998. It is true to say that all these funds were reimbursed to the investors, so that there was no loss of capital. Equally, there is no evidence that any investment took place, let alone any successful investment.

[141]The proposals were sold to potential investors on the basis of proposals which were set out a letter on Bower Cotton note paper, signed by the appellant. The letter contained the following paragraph:

“As you are aware, we are holding funds on your behalf. We are not acting as investment advisors but have been asked to advise on the contractual documentation on various possible investments had been put before us from time to time we have advised as to their adequacy (sic).”

[142]The letter went on to describe what was at that stage proposed which was:

“There would then be a private placement commercial contract. It is proposed at present to group the funds of various prospective investors together in which case there may be a private placement contract between the investors and the company constituted for the purpose of being the intermediary which would then enter into the private placement commercial contract with the trader. If this route is pursued it is proposed, at present, that I should be appointed the signatory for this intermediary company. Ignoring the intermediary company for the purpose of analysing the private placement contract the investor is the buyer and the trader is the seller. I would prefer a direct contract between the investor and the trader.”

[143]The letter then goes on to describe the proposed contract as being one of twenty-seven weeks for the purchase and buy back of medium term notes. That would be intended to trade in amounts of $US100M, and the intention was to trade within eight international banking hours with a return on each trade of 10%. The appellant expressed concern about some of the documentation. As far as the trader was concerned, he was described as being known to and recommended by Mr P. After stating that the success of the enterprise depended upon the trader, the appellant continued:

“Although we are not advising on this matter as investment advisors, we are holding your funds and would not wish them committed to any transaction of which you were not fully aware and in respect of which you had not given your written consent.”

[144]In a letter to Mr Z in June 1998, again on Bower Cotton paper, acknowledging that he had funds of his on deposit, the appellant stated that he was anticipating finalising arrangements with the “commitment holder and his bankers” who was intending to deal at the level of US$100M per trade. He described how it was intended to move the money to Hackar which would then appoint bankers in Switzerland in return for a bank guarantee. He was therefore asking for Mr Z’s consent to move the funds to a client account in the name of Hackar on those terms. Shortly thereafter the appellant wrote to Mr Z stating that Bower Cotton had not been involved except to assist him by preserving his funds in their client account pending placement.

[145]On the 23rd June 1998, a document was created by the appellant directed to “the programme manager/facilitators” at Hackar, the first paragraph of which reads as follows:

“I, Paul Simms, as authorised signatory do hereby confirm that we have requested of you and your associates specific confidential information and documentation regarding a account available High Yield MTN “Buy for/sell Contract” to serve for interests, purposes and understandings only, and not for further distribution. We are hereby agreeing to keep all information received by you as strictly confidential and proprietary.”

[146]Thereafter a contract was entered into between Mr Z and Hackar dated the 24th June 1998 and between Hackar and GFL, who is described as “placement agent” having as its office the appellant’s office; a further contract was between Hackar described as “investor” and GFL described as “facilitator”. The first two agreements were curious in the sense that they used the sort of terminology about which the respondent had been warned in the Yellow Card. The third agreement was a profit sharing agreement between Hackar and GFL which made it plain that Hackar had a substantial financial interest in any transactions that might take place. Mr Z was then informed that the contract between Hackar and the trading party was in place and continued:

“Obviously neither this firm nor Hackar can guarantee the performance by the trading party.”

[147]Mr Z did not receive the anticipated profits. That is not surprising as there is no evidence that any transactions by way of investment in fact took place. Mr Z pressed for his money; and in September, the appellant, writing on behalf of Bower Cotton said that things had not progressed and that if matters had not been resolved satisfactorily the following week it would be best to call matters to a halt and for the funds to be returned. Not surprisingly, Mr Z was worried that the delay was the precursor to the funds being lost. He threatened to call in the Fraud Squad. The appellant prevaricated over the next few weeks trying to encourage Mr Z to leave the money where it was. But ultimately it was returned in mid November, but without any profit. Mr Z’s company then indicated that they were going to institute proceedings in conjunction with another investor. The letter threatening proceedings included the following:

“I am needless to say appalled by the continuation of a succession of lies and broken promises and regardless of any action that may be taken by Messrs W and N we, G, will ensure unless payment is immediately forthcoming that these trader will be finished in this business. By this I mean that their names would be given to our Money Laundering Reporting and Compliance Officer Forensic Accountants who will no doubt communicate direct with the US Federal Reserve.”

[148]The appellant was able to stave off the threatened litigation by payment of the interest which was due on the funds that had been retained.

[149]Other investors had similar stories. The proposals at all times had the air of unreality and promised remarkable returns. Perhaps the most significant feature, however, was the fact that at no stage did the appellant disclose his interest in Hackar so as to make it clear that he, through the medium of the joint venture agreement, had an interest in the transactions.

[150]The Tribunal found that the appellant owed the duties of a solicitor to the investors by reason of the way in which the proposals were dealt with. It rejected the view that the appellant was merely accepting money into his client account on behalf of the investors and therefore only owed a duty to maintain those funds in his account to the order of the investor. It concluded that the circumstances showed that he was holding himself out as the person protecting their interest in relation to the documentation and contractual arrangements and in any event, as a solicitor having accepted money into his client account had wider duties to act so as to ensure that the funds entrusted to him would used for proper purposes and would not be used to facilitate improper or potentially illegal or fraudulent activities with third parties.

[151]It concluded that throughout the period in question, the appellant was hoping that the monies that had been provided by investors would at least produce some returns which could then be shared amongst both the investors and the joint venture partners, that is Hackar and the appellant’s associates. It concluded that the proposed investments all had the hallmarks of dishonest ventures, and that the investors should have been so advised. They should certainly have been informed of the appellant’s interest in the transactions through Hackar. As a result, they found allegations 1.1 and 1.3 proved beyond reasonable doubt.

[152]The appellant sought to persuade us, as he had the Tribunal, that he acted throughout perfectly honestly. He had no reason to doubt the honesty of the investors. His obligation in those circumstances was merely to hold their money, as he did, to their order. He was not responsible for giving any investment advice, as he had made plain in the documentation. It was no part of his duties to ensure that the investment, accordingly, was successful. He denied that he owed the duties of a solicitor to the investors because of the restricted nature of his involvement in the transactions. He was, accordingly, under no obligation to disclose any personal interest in those transactions.

[153]We have no doubt that the Tribunal was correct. The fact that the monies were ultimately returned to the investors does not detract from the clear breaches of the appellant’s obligations as a solicitor, which we consider the Tribunal rightly held he owed to the investors. It may well be that he had hopes that somehow or other some money might be made from the substantial deposits made by the investors, which ultimately he was able to control through his position as a signatory for Hackar. But that did not absolve him from advising the investors that the investments as proposed did not have the hallmarks of genuine honest transactions.

IDI(L) and Dr MM

(L) and Dr MM

[154]These transactions fall into a slightly different category from those which we have dealt with before, although there are similarities. Dr MM would appear to have been introduced to the appellant in late 1997 or early 1998. He came with an apparently impressive CV. Indeed, his CV, if it was to be believed, might have caused the appellant to wonder why it was that he was being asked, as undoubtedly he was, to act as Dr MMs solicitor in the transactions in question. Dr MM purported to act on behalf of an off-shore company in Labuan, Malaysia, and two companies W Corporation and WW International which were Dr MM’s own companies. Dr MM asserted that he had US$122M available in cash plus properties in the Channel Islands, assets worth US$230M in the United States, that he had invested US$460M buying options and promissory notes, and had in mind an investment which would pay a return of 800 to 900% per annum.

[155]IDI(L) had, according to Dr MM entered into four contracts relating to a pipeline and storage project for oil terminals of a state oil company for a total of US$381M. He supported his authority to act on behalf of IDI(L) with a copy of his appointment as an alternative director to a Mr H who gave him wide powers to act as Director of IDI(L). US$20.1M was transferred to the Bower Cotton client account from a Luxembourg bank which was said to be as to US$20M for investment and US$100,000 for W Corporation. This was apparently intended to enable IDI(L) to obtain further funding to augment the monies available for the pipeline storage project. The documents indicate that within a short time Mr P (who had been involved in the Hackar transactions) and the appellant were considering some form of transaction involving high yield investment schemes.

[156]The appellant asserted that he had been assured by Dr MM that IDI(L) was bona fide. It was said to be a wholly owned subsidiary of a company in which a substantial public company engaged in major infrastructure projects had a 49% interest. The appellant was not however able to show what company it was a subsidiary of, nor identify the substantial public company which held the 49% interest. Nor was he able to show how it was that Dr MM had been authorised by them to utilise through IDI(L) the US$20.1M in the way that he represented.

[157]The first transaction which was proposed was the purchase in the United Kingdom of buildings and other property rights to a development project on the Thames near Pimlico. It is entirely unclear whether the purchase was intended to be on behalf of IDI(L) or Dr MM and his companies. For the work he did, the appellant charged Dr MM fees. At some point Dr MM asserted that the funds were in fact his.

[158]During the course of the negotiations, Natwest Bank warned the appellant about the possibility of fraud. The relevant manager in a letter of the 8th May 1998 said:

“I apologise for the delay in responding to your letter dated 1 May. However when this matter first came to my attention – your letter of the 24 April – I telephoned to suggest caution be exercised in the surrounding circumstances here i.e. “One year negotiable bank undertaking” etc, are typical of cases in which fraud has arisen. I am not suggesting that fraud does feature in this particular transaction. I am simply saying that the matter requires the fullest investigation and understanding. From a banking point of view, Natwest is not prepared to become involved in an undertaking in any shape or form, and therefore I regret that we cannot accept the instructions contained in your letter of 1 May.”

[159]The clear concern expressed by Natwest as to the transaction proposed on behalf of Dr MM were replicated later in the summer. Dr MM placed US$4M with a Trinidadian company for the purposes of a “private treaty participation agreement” which had all the hallmarks of the high yield investment projects which we have already commented on, which was intended to provide a return of 125% on each programme entry contract which is for a period of one month. These funds were frozen, according to the Trinidadian company following a FBI investigation. The appellant was then instructed to obtain an injunction releasing the monies and accordingly instructed, in turn a lawyer in the United States, a Mr Hiller. Mr Hiller asked a number of pertinent questions which would be necessary for the purposes of providing evidence for the court which could support the application. He asked for:

“Certificate with some kind of government stamp evidence in IDI as a corporation. More objective proof that IDI is a legitimate corporation. Objective evidence regarding actual construction of the pipeline in Indonesia. Evidence that IDI and not a just rogue employee (perhaps Dr M) agreed to place the US$4M of the US$20M with SICC. Steve has in the back of his mind that maybe this transaction is like the guy in Japan who thought he would invest somebody else’s money on his own and make a big killing for his employer. Evidence of why IDI placed this money with SICC instead of Paine Webber or some other easily recognisable investment company. It is pretty difficult to make a 10% return on your money so how did IDI think or become convinced that it was going to make 125% return on its money? Steve wants to make sure that this really wasn’t just some grand money laundering scheme. How did IDI find out about SICC in the first place and what investigating did IDI do to check out SICC?”

[160]Not surprisingly the appellant was unable to give much comfort to Mr Hiller. Indeed in a letter of the 17th August 1998, detailing how the SICC transaction was supposed proceed, he described precisely the sort of transaction Mr Koffler described, which we have already commented upon. Perhaps not surprisingly the letter ended:

“It was not impossible for SICC to produce the return that they have agreed to do. What has gone wrong is that they appear not to have produced any return at all.”

[161]Despite what should have been apparent to the appellant by then, namely that Dr MM was not to be trusted, in August 1998 he made it plain that he was still prepared to assist Dr MM to raise funds, and said in a letter of the 26th August 1998:

“If funding is arranged in the way we have discussed through my connections there will be an arrangement of 1% of the funds which are made available.”

[162]A transaction which was floated was one which involved a joint venture between Dr MM and a Mr F who wanted to finance an “oil mill” in Russia. The proposal was that Mr F, through a company A, would provide US$5M which would then be paid into the Bower cotton client account. This would be used by unidentified “funders” for the raising of a bond which would produce US$45M 45 days after the closure of the bond offering. This is clearly as unrealistic as any of the other proposals; and like all the others, proved stillborn.

[163]The appellant continued to act for Dr MM. At Christmas 1998 Dr MM informed the appellant that he had two bank guarantees from the Bank of Negara of US$50M each. By a letter dated the 3rd January 1999, the appellant informed Dr MM that:

“There have been incidents of fraudulent bank guarantees from Bank Negara. The director and managing director who have signed the bank guarantees that you have for US$50M each have both been dismissed…. That itself does not make them fraudulent but to have any other bank take them seriously from the point of view of giving a line of credit, your guarantees would need to be confirmed for payment and validity by the London branch or confirmed by a first class European or US bank for payment….”

[164]Against the background that we have described, it is extraordinary that the appellant considered that he could continue to act in this way for Dr MM. It is true that this letter gives Dr MM a warning about the fact that, as was the case, bank guarantees from the Bank of Negara had been forged. To that extent, the letter gives Dr MM an appropriate warning as to the validity of the ones that he held. But in view of the history of Dr MM’s relationship with the appellant, it is inconceivable that had the appellant been acting as an honest solicitor, he would not have appreciated that Dr MM was asking him to be involved in another dishonest transaction. The evidence, in our view, supports the Tribunal’s conclusions that the allegations in 1.1 were fully made out. The appellant was clearly willing to act on behalf of a man the provenance of whose funds and instructions were open to the most serious doubt, without making the sort of enquiries an honest solicitor could and should have made. The questions raised by Mr Hiller were ones which should have been raised by the appellant when first instructed. They were not. The most charitable inference that can be drawn is that he was prepared to turn a blind eye to any possibility of dishonesty or other illegalities on Dr MM’s part. The provenance of the US$20M remained, and remains unknown. We reject entirely the appellant’s evidence that he was entitled to rely on Dr MM’s CV and that all he was doing was acting in accordance with the instructions of his client.

WC Ltd & Mr TK

[165]The transactions under this heading fall essentially into two parts. The first involve historic Federal Reserve Bearer Bonds said to have been recovered from US military planes that crashed in 1948. The face value of the bonds was said to be US$937 trillion. The second relates to documents described as “Silk Notes” with an apparent face value of US$3,863 billion. Mr TK was involved, to a greater or lesser extent, in both aspects.

[166]In the first instance, the appellant was instructed by Mr LB of WC on the 8th May 2001, on the recommendation of Mr TK. The police had raided the offices of WC and taken into custody the Federal Reserve Bonds. WC instructed the appellant to seek their recovery, on the basis that WC were holding them on behalf of third parties. The application made on WC’s behalf by the appellant was unsuccessful. The judge was clearly unimpressed by the assertion that the bonds had the provenance and value attributed to them.

[167]Thereafter, there is no doubt that the appellant took steps which, on the face of them, were intended to assist in authenticating the bonds. A report was produced from the University of Barcelona the conclusion of which was:

“There is no sign of any kind of fraudulent manipulation in any of the three documents analysed. We have found in all of them security measures normally used in the manufacturing of paper money.”

[168]However, there was clear concern over the authenticity of those bonds. Mr H, who had accompanied Mr LB when instructing the appellant, had signed certificates of authenticity. He was, however arrested in May 2001 on suspicion of fraud in relation to that authentication. And indeed Mr LB was also arrested, later in the year on the 2nd October 2001. As far as the case against Mr H was concerned, it was based on the fact that bonds that he had authenticated, had been constructed with technology that was not available at the time that they purported to have come into being.

[169]The appellant has always maintained that his activities in relation to the Federal Reserve Bonds were simply done on instructions from WC and a Mr LB in their own defence and in order to assert the validity of the bonds if they could. He did no more, he has submitted, than act as any solicitor would in the circumstances.

[170]However, by the end of September 2001, the picture became more complicated by instructions received by the appellant in relation to the “silk notes”, about which the appellant and Mr TK had a meeting on the 28th September 2001. It is clear that Mr TK was anxious to use these “silk notes” as the basis for “a private placement programme”, in other words a high yield investment project.

[171]At about the same time, on the 9th October 2001, Mr TK signed a document which clearly related to the Federal Reserve Bonds, asserting that these were to be used for the purposes of establishing a foundation which the appellant would help to organise which would fund humanitarian and ethical projects. This document, which was on the appellant’s file, referred to proposals for utilising funds in excess of US$23 Billions. This should have alerted the appellant to question the honesty of the intentions of Mr TK and those dealing with the bonds and the notes.

[172]On the 19th November 2001, the appellant downloaded and read a US publication about historical bond fraud. This document described how historical bonds, that may once have been valid obligations with American entities, but were now worthless as securities, were being used extensively to perpetrate fraud. The document indicated that those involved in such frauds frequently asserted that they would be used in high yield investment trading programmes and that the proceeds would be used for humanitarian purposes or infrastructure developments. This again was material which should have put the appellant on inquiry as to the activities of those who were instructing him. This should have been doubly the case in relation to Mr TK and Mr LB, because in June 2001, Mr LB had said to the appellant in a letter, “importantly please do not use Mr TK’s name in any context as he has produced documentation which if known may well jeopardise any future deal he may negotiate.”

[173]Despite these indicia, the appellant continued to accept instructions from Mr LB, WC and Mr TK. In the appellant’s files were documents relating to a company NR which would appear to be the company which had either custody or ownership of the “Silk Notes”. A corporate resolution of NR dated 11th January 2002 recorded that NR was prepared to present its notes for “a private placement programme” and Mr TK would effectively be authorised to negotiate such a programme. A certificate of authentication dated the 23rd January 2002 was obtained purporting to be a certificate of WC signed by Mr H which certified that he had no reason to believe that the document, that is the “Silk Note” was anything other than genuine.

[174]The appellant on the 28th January 2002 was prepared to sign a form of safekeeping receipt to which he attached the certificate of authentication. And by letter dated the 12th February 2002, to Mr BS, he enclosed the note which had been the subject of certification by Mr H and indicated that he held ten similar notes which would be forwarded to him, or the account of NR, when instructed. This was clearly in pursuance of the high yield investment project envisaged in the resolution of the 11th January 2002.

[175]Thereafter matters were overtaken by the respondent’s intervention. The Tribunal concluded that the appellant’s activities in relation to the “Silk Notes” supported allegation 1.1. The duties which the appellant owed in these transactions were identified by the Tribunal at paragraph 438 as follows: “In principle, it is not improper for a solicitor to accept instructions to act where the instructions or subject matter are implausible or unusual. However a solicitor who accepts such instructions cannot turn a blind eye to the possibility that by doing so he may be being used for further dishonest fraudulent or illegal transaction. It is therefore incumbent on him to establish the bona fides of those with whom he is dealing. For example if a solicitor is presented with financial instruments which he knows are or may be fraudulent or some asset which he reasonably would suspect is stolen or fake, it is relevant to establish how or in what circumstances the client came into possession of the asset or has the authority he claims to give instructions. He must be alive to the risk that by carrying out the instructions which on the face of it are proper the solicitor may lend his name to assist and give respectability to the bogus, dishonest or illegal. The more implausible the more need for caution and proper inquiry.

[176]It would appear that this broad statement of principle was used by the Tribunal to come to the conclusion that in relation to WC and Mr LB, that is the Federal Reserve Bonds, he was in breach of his duty. But it has to be said that the Tribunal’s conclusions in this respect are not clear. For our part, we consider that in this context, the appropriate duty is best described as follows. A solicitor shall not so act as to further a transaction which he knows or suspects to be bogus dishonest or illegal. In so far as he takes any part in it, he colours the transaction with his authority as a solicitor and thereby gives it authenticity. In our judgment, the facts that we have related do not justify the conclusion that the appellant so acted in relation to the Federal Reserve Bonds, but they fully justify the Tribunal’s conclusion as to a breach of his duties as a solicitor in relation to the “Silk Notes”.

The Lottery

[177]The original allegations against the appellant included allegations in relation to instructions that he accepted to act for a syndicate which was claiming a Lottery win. And it was suggested that this was cover for some form of money laundering or some other dishonest scheme. The Tribunal concluded that there was no sufficient evidence to justify that allegation. We agree. That does not mean, as the Appellant sought to argue, that the allegation was improper. There were aspects of the transaction which rightly raised questions in the minds of those investigating these matters.

Oil from Iraq

[178]The original allegation in relation to this transaction was that the appellant had participated in a transaction whose purpose he knew or suspected was illegal. The Rule 4 statement was amended to add allegation 1.3, namely that he acted in a transaction in which he had a conflict of interest. As far as the former is concerned, the Tribunal found that allegation unproved. As far as the latter is concerned, the Tribunal found it proved; and the appellant submits not only that that finding was wrong, but that the Rule 4 statement should not have been amended to include it.

[179]The circumstances were that the appellant got to know M, who was a Bangladeshi religious leader, a former Cabinet Minister and Newspaper proprietor. He was to be awarded an oil allocation from the UN Oil Quota to be sold by Iraq for services that he had rendered to the regime. He had no experience in the oil industry and sought the appellant’s advice. The appellant had come into contact with him in his capacity as chairman and director of Charlton plc, a company on whose behalf the appellant acted in matters in particular in the Middle East, and in Bangladesh in the form of its subsidiary Charlton Industries.

[180]The package which the appellant put together was, putting it simply, that a joint venture would be formed between M and Charlton which then contracted for the sale of the oil to L Oil Company, a company which was in the same group of companies as L Company of which the appellant was a director.

[181]There was no evidence that the appellant disclosed his interest in L Company, or indeed in full and proper terms bearing in mind that M was his client, of his interest in Charlton, although that might have been apparent to M. The obvious conflicts of interest were compounded by the fact that when the funds were ultimately distributed, Charlton paid a significant proportion to a company already referred to in this judgment, Cline Ltd. And in correspondence, it is plain that the appellant was on occasions defending his interests, through Charlton, as a party to the joint venture rather than the interests of M.

[182]In our judgment, these conflicts of interest are self-evident, and should have been self-evident to the appellant at all material times. There was no prejudice to him in the late amendment. The fact is that his breach of duty in this regard was one which could only be cured by the clearest and most unambiguous declaration of interest, coupled with advice to the effect that M should obtain his own separate advice in relation in particular to the joint venture agreement. In these circumstances, in our judgment the Tribunal’s conclusions were fully justified. Euro Hypotek

[183]The final transaction relates to instructions received by the appellant in June 2001 to act on behalf of Euro Hypotek KB in the purchase of two guarantees which had been offered to it, worth US$400M and US$200M. The purchase was to be at 88% of the face value; and the sale was to be at 90% of the face value. The appellant advised that this was a perfectly proper transaction if the guarantees were valid.

[184]The appellant drafted two agreements, one in relation to each of the guarantees in which it is clear that the purpose of obtaining the guarantees was to set up a “bank credit facility” which would be used for the purposes of a “reserved funds investment programme”, in other words a high yield investment programme. The agreements made provision for the need to investigate the authenticity of the documents.

[185]The Bank guarantees purported to emanate from ABM Amro Bank in the Netherlands. The guarantees contained terminology which on its face should have altered the appellant to the fact that they were of doubtful authenticity. They do not identify any third party obligation which is guaranteed. They were said to be “confirmed” guarantees but did not identify the confirming institution, and were said to be “transferable and divisible” which is curious wording in the context of bank guarantees purporting to be demand bonds.

[186]The respondent submitted to the Tribunal that all these matters made it clear that these documents should not form the basis of any agreement or transaction until any doubts to their authenticity had been resolved. As they appeared to come from a reputable bank a single enquiry would have established the truth. The respondent itself made such an enquiry by letter date 28th November 2003. The Bank replied:

“We are not aware as a result of our investigations of the Instrument of Guarantee sent under cover of your above letter being issues by ABM Amro Bank MV Amsterdam. We would advise that neither Mr Frederic Van Muller nor Mr Edward Aletha are officers of this bank.”

[187]In these circumstances the Tribunal concluded that the appellant had been prepared to lend himself to transactions which raised at the very least the suspicion of dishonesty without making the appropriate enquiries and that accordingly allegation 1.1 was established in this respect. We entirely agree.

Conclusions

[188]For the reasons we have given, we therefore dismiss this appeal. We consider that the respondent has established breaches of allegations 1.1, 1.2, 1.3, 1.5, and 1.7. The most serious finding of the Tribunal was, of course, that the appellant was dishonest. We agree with the Tribunal that the pattern of behaviour by the appellant establishes that he was not merely foolish and credulous. He was prepared on occasion dishonestly to mislead in relation to the purpose of various transactions and indeed in failing to disclose his receipt of $50,000 in one instance. Accordingly we agree that his activities were, unfortunately, properly described as dishonest. That being the case, the order that the appellant by struck off the Roll is inevitable.

Costs

[189]The discrete issues in relation to costs arise out of two orders made by the Tribunal. The first order was a general order as to costs ordering that the appellant pay 90% of the respondent’s costs. The second related to the costs of the adjournment in July 2003 which, the appellant asserts, was occasioned by no fault of his but by the death of his father. As to the first, he submits that it was wrong for him to be ordered to pay any costs in relation to the issue as to legal professional privilege. He submits that the main argument was as to whether or not legal professional privilege applied; and on that issue he won. Accordingly, even though the material was ultimately before the Tribunal and considered by it, as we have done, it was wrong in principle for him to have been required to pay the costs. In our judgment, the real issue between the parties was as to whether or not the Tribunal should be entitled to see and rely on the documents in relation to which privilege was claimed. On that, the respondents succeeded. In those circumstances the Tribunal’s order was entirely appropriate.

[190]As to the second, the appellant submits that it would be wrong for him to be required to meet any costs in relation to the adjournment which was no fault of his. In our judgment this looks at the matter from the wrong perspective. The reason that the respondent is entitled to its costs is that the appellant committed breaches of his obligations as a solicitor, accepting that the adjournment was no fault of the appellant, neither was it the fault of the respondent. In those circumstances there is no reason why the respondent should be deprived of the costs of doing what it was required to do in the exercise of its functions. Accordingly there are no grounds for interfering with either of the orders for costs made by the Tribunal.191. Now, Mr Simms and Mr Coleman, may I apologise, Newman J is ill today, and therefore he cannot be here. It follows that, unless parties are agreed about orders for now, it is inappropriate for me to deal by myself with the dispute of issues as to costs and the application for leave to appeal. I am sorry, Mr Simms. I do not know what either of your positions are, but I suppose if you consented to my dealing with them, then that might resolve the matter. But you might feel that that is an inappropriate thing for a Divisional Court to do.

192. I am afraid we were unaware until this morning that Newman J was ill, so that is why we could not give any forewarning. Mr Simms, I do not think that, other than the need to come back on another day, it actually causes any practical problems for you?

193. MR SIMMS: No, my Lord. It may be because I have not had a detailed opportunity of responding in kind to the skeleton argument I received yesterday afternoon that it might help the court and also shorten the amount of time spent on the issue of costs if I actually address that in writing beforehand.

194. LORD JUSTICE LATHAM: Absolutely. I cannot, to be quite honest, remember what the rules are about applications for leave to appeal, but I do not think that you are precluded from making an application direct to the Court of Appeal.

195. MR SIMMS: That is right, my Lord, I think that is probably the --

196. LORD JUSTICE LATHAM: So, if you wanted to, you could go directly to the Court of Appeal on that application. That is probably right, is it not, Mr Coleman?

197. MR COLEMAN: My Lord, yes, indeed it has to go to the Court of Appeal because it would be a second appeal under part 52.

198. LORD JUSTICE LATHAM: Yes, so that aspect of the case does not concern the court. That is all I was concerned about; whether it would cause you any injustice or delay which was inappropriate.

199. MR SIMMS: No, my Lord.

200. LORD JUSTICE LATHAM: So it is only the costs and the fact that we have to come back for a second bite of the cherry over costs. One way of dealing with it would undoubtedly be, if you so desired or were so willing, for you to put it in your skeleton --

201. MR COLEMAN: Yes, my Lord.

202. LORD JUSTICE LATHAM: You have not done a detailed -- you have done a reply, but not a detailed reply. You have replied in letter form, I know, to the solicitors.

203. MR SIMMS: But not to the skeleton. That was before the skeleton arrived, so I was merely responding to a simple letter about costs.

204. LORD JUSTICE LATHAM: So you could put your arguments in reply form.

205. MR SIMMS: Very shortly, because obviously I --

206. LORD JUSTICE LATHAM: Absolutely, and then Mr Coleman could just respond quickly. I am not suggesting that you would necessarily want to have it done in writing but, with agreement between the two of you, it could be dealt with in writing so as to avoid the need for people to attend. But that is a suggestion and is no more than that.

207. MR SIMMS: I would have no objection, my Lord.

208. LORD JUSTICE LATHAM: You have no objection. Then, you see, the three of us can consider it and it does not matter where we are, because you know Curtis J is in Chester at the moment. We could then give you our written decision in relation to costs without the need for attendance.

209. MR COLEMAN: My Lord, can I take instructions on that question?

210. LORD JUSTICE LATHAM: Absolutely. (Pause).

211. MR COLEMAN: My Lord, yes, we are happy for it to be dealt with on paper.

212. LORD JUSTICE LATHAM: Well, it seems to me sensible for it to be dealt with in that way because it will undoubtedly save time, and it will save costs.

213. MR COLEMAN: I think you must be right, my Lord.

214. LORD JUSTICE LATHAM: Thank you all very much for your help in steering this through a rather large and tumbled sea.

215. MR SIMMS: Thank you, my Lord.