Bolton v The Law Society

CourtCourt of Appeal
Docket NumberNo. QBCPF 93/0178/D
JudgeTHE MASTER OF THE ROLLS, LORD JUSTICE ROSE, LORD JUSTICE WAITE
Judgment Date06 Dec 1993
JurisdictionEngland & Wales

[1993] EWCA Civ J1206-6

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISIONAL COURT

Before: The Master of the Rolls (Sir Thomas Bingham) Lord Justice Rose and Lord Justice Waite

No. QBCPF 93/0178/D

Andrew John Bolton
Respondent (Appellant)
and
The Law Society
Appellant (Respondent)

MR. M. KNOTT (instructed by Messrs. A.J. Bolton & Co, London E15) appeared on behalf of the Respondent.

MR. C. FLINT (instructed by Messrs. Marsh, Ferriman & Cheale, West Sussex) appeared on behalf of the Appellant.

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Monday, 6th December, 1993.

THE MASTER OF THE ROLLS
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THE MASTER OF THE ROLLSThis is an appeal by the Law Society against a decision of the Queen's Bench Divisional Court given on 7th July 1992. The Divisional Court then quashed an order of the Solicitors Disciplinary Tribunal that Mr. Andrew John Bolton be suspended from practice as a solicitor for two years and substituted an order that he be fined £3,000. The Law Society appeal against that decision with the leave of Leggatt LJ. It is said, so far as I know correctly, that there is no precedent for such an appeal by the Law Society.

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Mr. Bolton is now aged 39. He was admitted as a solicitor in 1987 at the age of 33, having previously been employed in other occupations. On his admission he set up in practice in East London with one partner. The transaction that brought him to the attention of the Solicitors Complaints Bureau occurred in 1989–1990, not very long after his admission. This transaction concerned a house at 38 Studley Road, Forest Gate, London E7. The house had been bought by Mr. Bolton's wife with the assistance of a mortgage advance made by the Abbey National to her of some £91,000. Mrs. Bolton agreed to sell the lower ground floor flat in that house to her brother, Mr. Egwu, for £65,000. Mr. Bolton acted as solicitor in this transaction, apparently for his wife, his brother-in-law, and the Leeds and Holbeck Building Society, which was to advance £45,000 odd to assist Mr. Egwu to buy the flat upon the security of the flat. Mr. Bolton duly received a cheque for £45,000 from the Building Society. It was then his duty to hold that money in his client account until the conveyance of the lower ground floor flat was made to his brother-in-law and security documentation in favour of the Building Society was executed. He did not do that. Having received the cheque on 10th May 1989 he started, as early as 16th May, disbursing that money. In just over a month he disbursed the whole sum, partly to mortgagees and partly to the Inland Revenue and, as to £25,000, to his wife. The brother-in-law never paid the £20,000 which was due from him in addition to the Building Society's advance or any part of it. The sale to the brother-in-law was never completed. The security documentation was never executed. The money received from the Building Society was disbursed without its receiving the security which was the condition of its making any advance. None of this came to light until the Solicitors Complaints Bureau sent an investigation accountant to look at the books of the firm at the end of August 1990. The investigation accountant found an error in the book-keeping practice which was minor and irrelevant for present purposes. I shall henceforward ignore it. The accountant also learnt of this shortage on the client account which by then had existed un-rectified for a period of nearly sixteen months. The matter came to light during the visit although it was not shown in the firm's books relating to the client account.

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When interviewed Mr. Bolton admitted, apparently without prevarication, that these payments had been made. He admitted that the monies received from the Building Society had been misused and acknowledged the shortage. That shortage was, however, made good very shortly thereafter in full on 11th September 1990. That did, however, leave the Building Society out of pocket so far as sixteen months' interest was concerned and it issued a writ for that sum which led to the entry of judgment in default for £9,000 odd on 7th January 1991. That judgment was satisfied.

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Not long thereafter, on 16th January 1991, the Solicitors Complaints Bureau complained to the Solicitors Disciplinary Tribunal that Mr. Bolton had misapplied funds received for the purpose indicated. A hearing took place on 26th March 1991 at which Mr. Bolton represented himself and relied primarily upon an affidavit which he had sworn. The findings and order of the Tribunal were delivered on 23rd May 1991 and they follow the usual form. The facts were summarised and there followed a summary of the contentions made on behalf of the complaining party and on behalf of the respondent solicitor. There then followed the conclusions of the Tribunal. The conclusions of the Tribunal in this instance are of great importance and I should quote them in full. They read, after a reference to the subsidiary complaint about the book-keeping which I have already mentioned, in this way:

"However, the matter contained in allegation (b) was of a far more serious nature. It concerned the misuse of clients' moneys. In essence the respondent had paid money belonging to a client Building Society to his wife. That was wholly unacceptable. The respondent in anticipation of the completion of a conveyancing transaction took a deliberate risk and paid out moneys which were not available to him. The Tribunal accept that the respondent has put matters right to the extent of repaying the advance from Leeds & Holbeck Building Society. Interest and costs however remained outstanding. The conveyancing system in England and Wales depends to a very great extent upon building societies and other lending institutions being able to trust a solicitor to handle large sums of money properly and carefully. The payment out of moneys held on behalf of a client by a respondent to his wife would normally be regarded very seriously indeed. Indeed it would be unusual for a respondent in that position not to be struck off the Roll. The Tribunal are able to accept that this respondent is an honest man and he was not stealing clients' money in a premeditated fashion, he was naive and stupid and paid moneys out prematurely in anticipation of formal completion of a conveyancing transaction. He was caught out by a purchaser reneging. The Tribunal accept that the respondent's judgment might have been clouded by his relationship by marriage to that purchaser. It is because this respondent is young, relatively inexperienced, and apparently more experienced in assisting legally aided clients than dealing with conveyancing, that the Tribunal are able to consider that his behaviour was naive and foolish but did not represent a deliberate course of dishonest conduct. The Tribunal are therefore able to exercise leniency and not make a striking off order. However, they do regard the respondent's less than proper approach to the handling of clients' matters as a very serious matter indeed and they ORDER that the respondent … be suspended from practice as a solicitor for the period of two years."

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Three points stand out clearly from that paragraph. (1) The Tribunal accepted that Mr. Bolton was an honest man. The Tribunal found that he had not stolen clients' moneys in a premeditated fashion and that his actions did not represent a deliberate course of dishonest conduct. (2) The Tribunal considered that his conduct was wholly unacceptable and regarded this as a very serious matter indeed. (3) In the Tribunal's judgment such conduct would ordinarily merit striking off but the Tribunal felt able, on the facts of this case, to make the more lenient order of suspension.

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I pause to observe that for my part I find no fault at all in the Disciplinary Tribunal's reasoning. Mr. Bolton's conduct, even if accepted as honest, represented a flagrant departure from the elementary rules which bind anyone, most of all a solicitor, holding a sum of money on behalf of someone else. The fact that a close family relationship was involved made it more, not less, necessary to act with scrupulous propriety. There were a number of mitigating factors upon which

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Mr. Bolton relied and it is plain that the Disciplinary Tribunal gave those the fullest weight but nothing could disguise the fact that Mr. Bolton's conduct was, indeed, as the Tribunal held, "wholly unacceptable".

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Mr. Bolton appealed against the decision of the Tribunal. During the period of appeal the order for suspension was stayed. The Divisional Court, as I have said, gave its judgment on 7th July. At the very outset of its judgment the court stated the principle which has been derived from McCoan v General Medical Council [1964] 1 WLR 1107, at 113. On that page the Judicial Committee of the Privy Council said:

"Their Lordships are of opinion that Lord Parker CJ may have gone too far in In re a Solicitor [1960] 2 QB 212 when he said that the appellate court would never differ from sentence in cases of professional misconduct, but their Lordships agree with...

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