R Hill v Institute of Chartered Accountants in England and Wales
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore:,Lord Justice Beatson,Lord Justice Underhill |
| Judgment Date | 22 May 2013 |
| Neutral Citation | [2013] EWCA Civ 555 |
| Docket Number | Case No: C1/2012/1824 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 May 2013 |
[2013] EWCA Civ 555
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
THE HONOURABLE MRS JUSTICE LANG DBE
[2012] EWHC 1731 (QB)
Royal Courts of Justice
Strand, London, WC2A 2LL
The Right Honourable Lord Justice Longmore
The Right Honourable Lord Justice Beatson
and
The Right Honourable Lord Justice Underhill
Case No: C1/2012/1824
Mr Kenneth Hamer (instructed by Cope's Solicitors) for the Appellant
Ms Catherine Callaghan (instructed by Bates Wells & Braithwaite London LLP) for the Respondent
Approved Judgment
Mr Nicholas Albert Hill is a chartered accountant who had the misfortune to become the defendant in disciplinary proceedings brought by his professional body the Institute of Chartered Accountants in England and Wales, ("the Institute"). The charge was that he had committed an act or default likely to bring discredit on himself, the Institute or the profession of accountancy. The particulars were (broadly) that, as the Finance Director of a company subsequently re-named as KPSS (UK) Ltd ("KPSS") and trustee of the KPSS pension scheme, he together with the managing director of KPSS, Mr Heal, incorporated a company of their own subsequently re-named as Park View Asset Management ("PVAM") of which Mr Hill was a director and shareholder. He then between November 2001 and November 2004 caused over £100,000 to be transferred from KPSS to PVAM. He also caused PVAM to buy premises at Faraday Close in Eastbourne which were occupied by KPSS and which were later sold for a profit of £145,000. He later caused PVAM to buy another property and office furniture which were leased to KPSS for well above the market rent. None of these transactions were disclosed in KPSS's accounts or to Deloitte's, the auditors of both KPSS and its pension scheme. The facts were largely undisputed and civil proceedings by KPSS were later settled for an undisclosed sum. Mr Hill's defence in the disciplinary proceedings brought in April 2009 was that he did not appreciate that there was anything wrong or unprofessional about these transactions.
In due course a hearing which was, in the end, to take 6 days began before a disciplinary tribunal consisting of Mr Harris FCA as Chairman, Mr Brooks FCA as the second professional member and Mr Mander as the requisite lay member. Mr Underhill acted as Legal Assessor; the Institute's advocate was Mr O'Fathaigh and Mr Hill's advocate was an experienced solicitor Mr Cope. No doubt the tribunal members had many professional commitments and it was impossible to sit for 6 consecutive days. They sat on 10 th and 11 th November 2009 and then adjourned to resume on 17 th and 18 th December 2009. By this time Mr Hill was being cross-examined. His evidence resumed on the next available date for hearing 27 th January 2010 and the final day was 8 th April 2010. The tribunal decided that Mr Hill was guilty of unprofessional conduct and that he was to be excluded from membership of the Institute. He was also fined £25,000 and required to pay costs of £32,000. An appeal to the relevant Appeal Committee was dismissed on 4 th February 2011 although the costs bill was reduced.
The reason why the case has now come to the Administrative Court and this court is that on Day 4 (18 th December 2009) Mr Mander had an appointment which meant that he could not sit longer than 5.00 p.m. on that day. At the beginning of the day the Chairman said that the hearing would have to conclude for the day at 5.00 p.m. and he explained at about 3.00 p.m. that the reason was that Mr Mander would have to leave at 5.00 p.m. It had been hoped that Mr Hill's cross-examination would have been finished by then but, as a result of a submission of no case to answer taking its time, Mr Hill was still giving evidence in chief at 3.00 p.m. when the following exchange occurred:-
"THE CHAIRMAN: I am sorry Mr Cope, could I just mention something; it is possible under the rules if everyone agrees that we could continue in Mr Mander's absence with just two members of the tribunal after he left at five.
MR COPE: Yes. I do not think you would need agreement to do that, you have a discretion to do that.
THE CHAIRMAN: Well I would like your agreement because if he got the transcript he would get the flavour of what has gone on.
MR COPE: Do I take it you will be ordering the transcript of the last two days?
THE CHAIRMAN: Yes, I can do.
MR COPE: I think on that basis if there is to be a transcript I would certainly have no objection to Mr Mander leaving at five.
THE CHAIRMAN: Yes, we will have a transcript. Do you have any objection Mr O'Fathaigh.
MR O'FATHAIGH: No. I think what you are suggesting is that you continue after five and Mr Mander has the benefit of a transcript and you will then meet again and confer and then give your decision?
THE CHAIRMAN: Well we will try and see how far we get.
MR O'FATHAIGH: Are we going to try and finish Mr Hill today so when we meet next time it will just be legal submissions and decision time?
THE CHAIRMAN: If that is possible."
By the time 5.00 p.m. arrived evidence in chief had finished and cross-examination had begun. After Mr Hill had explained that, while he realised with hindsight and his lately acquired knowledge of the law that he had acted wrongly, he did not realise he was acting wrongly at the time, Mr Mander prepared to leave and this exchange took place:-
"MR O'FATHAIGH: If the transcript could be marked that Mr Mander is leaving and the Committee Administrator is leaving and I will wait and then begin again.
THE CHAIRMAN: Shall we just take a short adjournment.
MR COPE: Do I take it that Mr Mander does not have any further questions of Mr Hill.
MR MANDER: Not at this stage, no.
MR COPE: It may be on the next occasion his evidence will have been completed and there might not be a further opportunity. If Mr Mander does have other questions then we could recall Mr Hill
THE CHAIRMAN: Indeed. We will just have a brief adjournment.
(Adjournment for a short time)
(The hearing continued without Mr Mander)"
At about 6.30 p.m. the cross-examination concluded and the legal assessor asked a few questions after which the Chairman said:-
"THE CHAIRMAN: Well we are going to have to adjourn now. We have got some questions. On the next occasion there will be re-examination and then we will put our questions and I think Mr Mander may have some other questions and then we will hear closing arguments."
The hearing was then adjourned to a date which was later fixed to be 27 th January 2010.
On that date the hearing resumed. Mr Hill gave further evidence in chief and was further cross-examined on new documents which had emerged during the adjournment some of which were, rather reluctantly, admitted by the Tribunal. The tribunal members then asked various questions. Another witness was recalled to deal with the new documents. The tribunal then adjourned for lunch and resumed at 1.30 p.m. Mr O'Fathaigh then made oral closing submissions. Mr Cope made his closing submissions by way of a written document. The tribunal then retired from 2.13 p.m. to 4.45 p.m. but were unable to announce a decision that day. The hearing was therefore adjourned until 12 th February 2010. On that day the Tribunal announced their decision that the charge was proved. They heard submissions on costs, and a formal record of their decision resulting in Mr Hill's exclusion from the Institute together with the reasons was signed by the Chairman on 28 th May 2010.
It is now said that, despite Mr Cope's agreement to the way matters proceeded, there was in fact no power on the part of the disciplinary tribunal to permit one of its members to depart during the hearing and then take part in the remainder of the hearing. It is also said that there was a breach of the rule of natural justice that "he who decides must hear" and that that breach was not waived. All proceedings after 5.00 p.m. on 18 th December 2009 were therefore a nullity including the decision of the tribunal that the charge was proved. Lang J held that there was power for the tribunal to allow Mr Mander to leave and later return after he had read a transcript of the part of the hearing which he did not attend. She held, however, that there had been a breach of the rules of natural justice; but she concluded that the breach had been waived by Mr Cope's agreement to the procedure which was voluntary, informed and unequivocal. There is now an appeal to this court.
Powers of the Tribunal
The Institute was constituted by Royal Charter granted on 11 th May 1880 and by Supplemental Charter granted on 21 st December 1948. Its stated objects include the maintenance of "high standards of practice and professional conduct by all its members" (Article 1(a)(iv)). The Institute is empowered under the Charter to make bye-laws and regulations, including in relation to discipline provided always that "no such regulations shall" be in any way inconsistent with the express provisions of the Charter or the bye-laws (para 16 of the Supplemental Charter). The Institute is managed by its Council. The Council has made Disciplinary Bye-laws ("the Bye-laws") which govern the exercise of the Institute's disciplinary functions in relation to its members. The Bye-laws provide for the appointment and constitution of an Investigation Committee, a Disciplinary Committee and an Appeal Committee.
Bye-law 19 makes provision for the appointment and constitution of a Tribunal of...
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