Donkin v Law Society
| Jurisdiction | England & Wales |
| Judge | Lord Justice Maurice Kay,Mr Justice Goldring |
| Judgment Date | 07 March 2007 |
| Neutral Citation | [2007] EWHC 414 (Admin) |
| Docket Number | Case No: CO/993/2006 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 07 March 2007 |
[2007] EWHC 414 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Lord Justice Maurice Kay and
Mr Justice Goldring
Case No: CO/993/2006
Miss Fenella Morris (instructed by Irwin Mitchell ) for the Appellant
Mr Geoffrey Williams QC and Mr Jonathan Goodwin (instructed by The Law Society ) for the Respondent
Hearing date : 16.02.2007
On 16 November 2005, following a two day hearing, the Solicitors' Disciplinary Tribunal ("the Tribunal") ordered that Adrian Gerard Donkin ("the appellant") be struck off the Roll of Solicitors. He now appeals to this court pursuant to section 49 of the Solicitors Act 1974. Before the Tribunal the appellant admitted that he was guilty of conduct unbefitting a solicitor. However, he denied that he had acted dishonestly. The allegations of unbefitting conduct were particularised as follows:
"(i) that he withdrew money from client account other than as permitted by Rule 22 of the Solicitors' Accounts Rules 1998;
(ii) that contrary to Rule 21 of the Solicitors' Accounts Rules he failed to ensure that money received from the Legal Services Commission in respect of disbursements was paid within 14 days of receipt, or in the alternative, transferred to a client account;
(iii) that he utilised clients' funds for his own purpose;
(iv) that he failed to remedy breaches of the Solicitors' Accounts Rules promptly upon discovery contrary to Rule 7;
(v) that he misappropriated clients' funds, which for the avoidance of doubt is an allegation of dishonesty;
(vi) that he acted and/or continued to act in circumstances where his own interests conflict with the interests of a client (s);
(vii) that he acted for the buyer, seller and lender in a conveyancing transaction contrary to Rule 6(2) of the Solicitors' Practice Rules 1990, or, in the alternative, that he acted for two or more clients when there was a conflict or significant risk of a conflict of interest between those clients, contrary to Principle 15.01;
(viii) that he failed to ensure that each office of his firm was properly and adequately supervised and managed by a person qualified to supervise, contrary to Rule 13 of the Solicitors' Practice Rules 1990;
(ix) by reason of [matters set out in a report by an officer of the Forensic Investigation Unit of the Law Society], he has acted contrary to Rule 1 of the Solicitors' Practice Rules 1990."
Only particular 5 was in dispute before the Tribunal.
The appellant was born in 1949 and was admitted as a solicitor in 1975. At the time of the alleged conduct he was practising on his own account as John Donkin & Co from offices in Gateshead. John Donkin was the father of the appellant. The appellant had practised for almost 30 years without attracting any concern about his integrity. It will become apparent that he was a solicitor of high repute. His difficulties began when he and his firm were defrauded by a dishonest partner. The allegation against the appellant of dishonest misappropriation of clients' funds related to three clients in respect of whom the appellant had taken money from client account in order to discharge liabilities of the practice. In each case the transaction was recorded in the accounts of the firm and the money was repaid with interest at the client account rate. The case for the appellant was and is that in each case the withdrawals were by way of authorised loans. He accepts that he was remiss in not ensuring that the clients in question had resort to independent advice and, in relation to two of the clients, he further accepts that he did not inform them of what he was doing.
The estate of Mrs W
Mrs W died on 20 December 1991. The appellant and his then partner were her executors. Over a period of time the appellant had withdrawn from the client account in two tranches a total of £73,500 which was used in the main to discharge the VAT liability of the practice. The appellant sought to rely on a letter that Mrs W had written to the appellant's father in January 1991. It was in the form of instructions for a will and included this passage:
"I know that my house will sell but I will want everything to go to my grandchildren. It might take a long time to finish off. In view of your many past kindnesses to me, you can be generous with your charges! You can do what you like with the money until it needs to be shared out."
The entitlements of the grandchildren did not vest until they were 21. The eldest grandchild did not attain that age until 15 January 2004. At the time when the appellant took the money from client account he did not write to the beneficiaries or their parents because he "did not see the need to".
The estate of Mr B
Mr B died on 19 May 2001. The appellant was his sole executor. On 7 November 2002 £32,249.46 was transferred from client account to the office bank account. It was used immediately to discharge a VAT liability in the same sum. The accounts of the practice show that on 22 July 2003 the money had been repaid with interest. So far as this transaction was concerned the appellant relied on a letter written to him by Mr B which was in these terms:
"Dear Mr Donkin
Following our recent meeting, and bearing in mind all your kindnesses to me over the years, I confirm that in view of all the difficulties caused to you by your ex-partner …, when you are dealing with the administration of my estate after my death, you may use the funds for your own purposes for so long as you need to, as long as you pay all of the legacies eventually."
There was evidence that the appellant and Mr B had become friends. There was also evidence that, at least by 7 March 2001, Mr B was resident in a 24hr-care nursing home suffering from a severe form of dementia. At the time of and during the period when the money was absent from client account, the appellant did not communicate with the beneficiaries or their representatives, feeling that it was unnecessary to do so.
Miss B
Miss B's brother died on 21 August 1992, leaving his residuary estate to Miss B. For personal reasons, Miss B did not want the money left to her by her brother for her own use. It seems that Miss B, a capable and intelligent lady, was friendly with Mrs Porter, the appellant's office manager. Mrs Porter, without consulting the appellant, requested a short-term loan from Miss B's funds for office purposes. Miss B was happy to oblige and she signed a form of agreement, witnessed by Mrs Porter, agreeing to lend £25,000 to the practice for three months to be repaid with interest "at the standard rate payable by Barclays Bank plc". Mrs Porter did not ensure that Miss B took independent advice. The appellant never met Miss B. The accounts of the practice show that £25,000 was transferred from client account to office account on 26 March 2001 and that, in conjunction with £30,000 which had been transferred from the estate of Mrs W, it was used to fund a payment of £54,225.49 in respect of VAT liability. On 8 June 2001 the £25,000 was repaid and £95.72 in respect of interest was credited on the same date. Miss B continued in her desire not to use the money for her own purposes. She later donated it all to charity.
The findings of the Tribunal
The Tribunal found that the allegation of dishonesty in relation to the three matters was established. It is necessary to set out its findings in some detail:
"73. The Tribunal made its finding of dishonesty having applied the two-part test in Twinsectra Limited v Yardley [2002] UKHL 12; [2002] 2 All ER 377. The Tribunal was in no doubt that ordinary members of the solicitors' profession, and indeed members of the public, would be of the view that for a solicitor or executor to take money from a deceased's estate to bolster his office account and to enable office outgoings to be met without punctilious compliance with the rules of professional conduct relating to such transactions would be dishonest. In this particular case it stretches credibility too far to suggest that the letter written by Mrs W to the appellant's father saying that 'You can do what you like with the money until it needs to be shared out' gives authority to the appellant to treat that money as a loan. The letter appears on its face to authorise a wide choice of investment, but it does not authorise a loan to an executor. If the latter interpretation were to be placed on it, the letter could not be acted upon by an executor until he had ensured that Mrs W had taken independent advice. The appellant appeared not to have considered whether Mrs W's death revoked any authority she might have given. She had in any event made a subsequent will.
74. The Tribunal finds that the appellant decided he could safely use this money to tide him over and repay it without detection. He would rely on the letter if the loan were detected.
75. In the matter of the late Mr B there was doubt as to the mental capacity of Mr B for a period of time. The Tribunal does not believe that an honest solicitor/executor would construe a wide power to invest contained in a will to include a power to permit the executor to borrow estate monies. The appellant's explanation that it was an investment because interest was paid was unsatisfactory. The appellant told the Tribunal that he had paid only interest that would have been earned on general client account and not interest calculated at a normal commercial rate. There was a clear conflict here in his capacity as a borrower and his duty as executor and trustee. The appellant should not have acted upon the...
To continue reading
Request your trial
-
David Fenton Wingate v The Solicitors Regulation Authority
...or the sanction that must follow. This case is very different from R (Campbell) v GMC [2005] EWCA Civ 250; [2005] 1 WLR 3488 and Donkin v The Law Society [2007] EWHC 414 (Admin), upon which Ms Morris relies. The Solicitors Disciplinary Tribunal is not obliged to give itself a good characte......
-
Dr Olakunle Arowojolu v General Medical Council
...... WLR 103 at [23] per Lord Clarke of Stone-cum-Ebony JSC giving the majority judgment of the court; and R (Panjawani) v Royal Pharmaceutical Society of Great Britain [2002] EWHC 1127 (Admin) at [54] per Sedley LJ). …. [38] However, in my view, these authorities do not assist ... given to the Tribunal should mirror those which a judge would give to a jury in a criminal trial (eg, in relation to good character: see Donkin v The Law Society [2007] EWHC 414 , [25] where Maurice Kay LJ said that a Tribunal's failure in its reasons to attach weight to good character in ......
-
Dr Raisah Sawati v The General Medical Council
...approach to good character 53 The correct approach is set out in a series of regulatory appeal decisions. The Divisional Court in Donkin v Law Society [2007] EWHC 414 (Admin) held ‘cogent evidence of positive good character’ is relevant to consideration of dishonesty, although the weight t......
-
Bryant v Law Society
...applied by the Court of Appeal in Bultitude included the separate subjective element. 152 The same approach was followed recently in Donkin v The Law Society [2007] EWHC 414 (Admin), another case involving a finding of dishonesty against a solicitor. In Donkin it was common ground before th......
-
Lord Nicholls Rules OK?
...9 D v Law Society [2003] EWHC 408 (Admin); Bultitude v Law Society [2004] EWCA Civ 1853 (16 December 2004); Donkin v The Law Society [2007] EWHC 414 (Admin) (07 March 2007) 10 R v Ghosh [1982] qb 1053 The content of this article is intended to provide a general guide to the subject matter. ......
-
Legal Profession
...what he knows would offend the normally accepted standards of honest conduct: Twinsectra at [36]. See also Donkin v Law Society [2007] EWHC 414 (Admin). Further, he will not escape it by reason only that there is no personal benefit. See Constantinides v Law Society [2006] EWHC 725 (Admin).......