England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2
		8th April 2008

1. LORD JUSTICE HOOPER: For the reasons which we will give a little later, I hope today, we take the view that the Tribunal failed, through no fault of their own, to consider whether the fourth proved allegation was an act in relation to the solicitors' practice. We take the view that Mr Cadman is right that the answer is not one which we can give. It is not clear that it is not an act in relation to the practice, nor is it clear that it is an act in relation to the practice. So we would be minded to remit it, but at this point Mr Beaumont wishes to raise what is in effect another ground of appeal in order to deter us from remitting it.
(Further submissions)
2. LORD JUSTICE HOOPER: The appellant, Samuel Nwabueze Okoronkwo, appeals the findings of a Solicitors' Disciplinary Tribunal dated 1st May 2007. We grant him the necessary extension of time. He is a barrister. He has applied to become a solicitor and his application is pending. The appellant faced a number of charges, some of which were found not proved. I shall refer only to those charges found proved.
3. For the sake of convenience, I shall renumber the charges which were found proved:

(1) that he entered into sham agreements under which he owned and controlled firms held out to the Law Society and the public as being firms of solicitors, whereas the firms were owned and controlled by him, a non-solicitor;

(2) that he operated and received clients' funds into purported solicitors' clients' accounts;

(3) that he attempted to mislead the Law Society by falsely representing that the respondents, Izegbu and Preedy, were the principals and owners of the various practices named Alberts;

(4) that he knowingly made a false statement as to his professional record in order to procure a qualification from the Law Society.

4. I take first of all a very discrete point about the fourth charge and the reference to "professional record". It is not clear to us why those words were used. It is however clear, when one looks at the statement pursuant to Rule 4(2) of the Solicitors (Disciplinary Proceedings) Rules 1994 (to be found at tab 2 of respondent's bundle A on this appeal at page 13) that the allegation against the appellant was that he stated that he was not subject to investigation by the Law Society. It is said in the statement that that was untrue. There was a further allegation that what he said was untrue in other respects, but for reasons which we do not understand the Tribunal did not consider that allegation.
5. In my view, notwithstanding the way that the charge was framed, it was clear to the appellant what was the case which he had to meet.
6. The appellant produced a number of grounds of appeal himself, attacking the various findings of fact that underlay the proved charges. At the beginning of this month he instructed Mr Marc Beaumont of counsel. Mr Beaumont drafted a completely new ground, raising an issue which had never been considered by the Tribunal. We said at the beginning of the hearing this morning that we wished to hear argument on this new ground first. It was agreed by Mr Cadman for the respondent that if this new ground was right, then the appeal had to be allowed in so far as charges 1 to 3 are concerned. At the conclusion of the hearing we announced our decision that the appeal succeeded on this new ground in so far as allegations 1 to 3 are concerned.
7. The Tribunal only had jurisdiction over the appellant if the requirements contained in the first two lines of section 43 of the Solicitors Act 1974 were satisfied. The Law Society cannot subject a person who is not a solicitor to disciplinary proceedings, unless he or she falls within section 43. That provides:

"Where a person who is or was employed or remunerated by a solicitor in connection with his practice but is not himself a solicitor — ..."

then if the provisions of either subsection (a) or subsection (b) are satisfied, the Tribunal may make an order with respect to him.

8. Among the orders that may be made is an order that a solicitor without the consent of the Law Society may not employ or remunerate the person concerned. The word "solicitor" is defined in section 87(1) as a "solicitor of the Supreme Court".
9. In so far as charges 1 to 3 are concerned, it was and is the respondent's case that the appellant was remunerated by a solicitor, namely a Ms Chinwe Bernadette Izegbu. She was a defendant in the proceedings. She had a number of findings made against her. The Tribunal ordered her to be struck off the roll. We are hearing her appeal on Thursday of this week.
10. We make it clear that at no stage did the Tribunal apply its mind to the issue upon which Mr Beaumont now relies.
11. The background to the charges is set out in paragraphs 5, 6 and 7 of the findings. In those paragraphs the Tribunal stated:

"5. Ms Izegbu was born in November 1965 and admitted as a solicitor on 3rd June 1996. Mr Preedy was born in January 1969 and admitted as a solicitor on 2nd November 1998. Mr Okoronkwo was born in October 1961 and called to the Bar in July 2002.

6. Ms Izegbu was a salaried partner in the firm of Jonathan & Co from 19th February 2003 until 14th April 2003. She had previously been an assistant solicitor with this firm. At the time Ms Izegbu became a partner with Jonathan & Co, the Law Society was conducting a forensic investigation into the firm. A Report was concluded on 20th May 2003 and deficiencies was found in the firm's books of account.

7. On 14th April 2003 Ms Izegbu set up practice purportedly as a sole principal but really in a form of partnership with Mr Okoronkwo under the style of Alberts Solicitors at 205 Wardour Street, London, W1. The firm of Jonathan & Co had previously carried on practice from this address. The terms under which Ms Izegbu joined the firm of Alberts were set out in a letter to her from Mr Okoronkwo dated 30th April 2003. This letter began '...I am pleased to offer you employment...' and went on to set out the usual terms under which an employer employs an employee. Mr Okoronkwo and Ms Izegbu also on 30th April 2003 set out the terms of their purported partnership in a document entitled 'Practising Arrangement'. This document provided that:-

'3. Mr Okoronkwo proposes to use his resources to set up a new law firm to be called Alberts Solicitors.

4. Miss Izegbu proposes to take employment with Alberts solicitors as a principal solicitor to fulfil the necessary requirements of the Law Society for law firm on terms annexed hereto.

5. Mr Okoronkwo will work as a consultant to the firm.

6. The firm shall appoint partners as necessary in the future in pursuance of its business objectives.'"

12. On 14th April 2003 the appellant, under the heading Alberts Solicitors of 205 Wardour Street, London, sent a letter to the Law Society which stated:

"SETTING UP IN PRACTICE

We write to notify you that we have recently set up in Practice at our above named address under the name of ALBERTS SOLICITORS.

We would be dealing with Corporate and Commercial Law work involving Litigation and Conveyancing. The Sole Principal of the firm would be our Ms Chinwe Izegbu (Roll Number 2304) who is now nearly 7 years p.q.e. It is hoped that additional Partners would shortly join the firm.

We would be obliged if you could please register our Practice and provide us with all relevant information in relation to Indemnity and other relevant factors, which must be taken into account in setting up the said Practice.

Thank you for your cooperation."

13. The Law Society then responded by a letter dated 23rd April 2003, asking a number of questions. The answer to that letter can be found at CB25. At paragraph 7, in response to the question "Full names and Law Society numbers of any solicitors to be employed by the new firm ...", the answer was:

"7. At present the firm employs the following lawyers,

(a) Miss Chinwe Bernadette Izegbu, a solicitor having Law Society Roll No. 2304. Her start date is 6th May 2003 and her status within the firm is Principal Solicitor.

(b) Mr Samuel Nwabueze Okoronkwo, a barrister having the Honourable Society of Gray's Inn No. 5948. His start date is 6th May 2003 and his status within the firm is Consultant."

14. Question 8 asked, "Please give full names and Law Society numbers and the exact commencement date for any partners joining the new firm and the exact date when ceased to be a partner with their previous firm." The reply to that question was:

"Save as stated at sub-paragraph 7(a) above no new partners have joined the firm. Miss Izegbu ceased to be a partner with her previous firm on 10th April 2003."

15. Notwithstanding what might be thought to be a considerable lack of clarity in the answers there given, the Law Society confirmed that the firm of Alberts Solicitors had been registered with the Law Society.
16. What the letter of 6th May 2003 did not do was to explain the precise position of Ms Izegbu in the light of the letter of 30th April, to which I have already referred. Paragraph 8 leaves the impression, it could be said, that somehow or other Ms Izegbu was in the position of a sole principal.
17. The arrangement between Ms Izegbu and the appellant did not last long. The explanation for that can be found in paragraphs 9, 10 and 11 of the findings of the Tribunal. In those paragraphs the Tribunal stated:

"9. The arrangement between Ms Izegbu and Mr Okoronkwo ended at the beginning of September 2003. Ms Izegbu left Alberts following a disagreement with Mr Okoronkwo. Ms Izegbu had discovered, while Mr Okoronkwo was away from the office on holiday at the end of August 2003, that Mr Okoronkwo proposed to bring another solicitor, Mr Al-S, into the practice on a salary significantly higher than her own. Ms Izegbu learned of Mr Al-S's proposed salary on finding a letter from Mr Okoronkwo to Mr Al-S dated 9th August 2003.

10. Ms Izegbu confronted Mr Okoronkwo about her discovery on 1st September 2003, his first day back in the office. Mr Okoronkwo did not want Ms Izegbu to leave the practice because she was at that tome its sole solicitor. Mr Okoronkwo offered Ms Izegbu, among other things, a pay rise and the outcome of their negotiations, which lasted all day, were jointly noted on a copy of Ms Izegbu's original letter of engagement dated 30th April 2003.

11. At the close of business on 1st September 2003 Mr Okoronkwo believed that he and Ms Izegbu had reached agreement as to terms on which Ms Izegbu would remain at Alberts. Ms Izegbu however later had second thoughts and that night she returned to the office and removed all the client files. Ms Izegbu on 2 September 2003 faxed a letter dated 29th August 2003 to The Law Society which read:-

'Dear Sirs

RETIRING FROM PRACTICE - ALBERTS SOLICITORS

Reference the above.

Please note that the Sole Principal in the above named firm has made a decision to retire from practice and accordingly, close the firm down.'

The Tribunal concludes that this letter was not sent to the Law Society earlier than 2nd September 2003 when Ms Izegbu faxed a copy to the Law Society's Customer Applications and Enquiry Team. Ms Izegbu requested confirmation of receipt and this was provided to her confirming 2nd September 2003."

18. I turn to the findings of fact. In paragraph 8, the Tribunal stated:

"In accordance with this Practising Arrangement [the letter of 30th April 2003], it was Mr Okoronkwo who provided the capital and he had the contractual right to appoint Partners. He was the lynchpin and driving force in the practice. He owned the lease on the Wardour Street premises and he opened the firm's bank account and he was sole signatory. The bank account initially was called 'S Okoronkwo t/a Albert Solicitors' but this was an acknowledged error on the bank's part. Mr Okoronkwo kept the files in his office. He was not a solicitor but the practice was effectively controlled by him and likewise he controlled Ms Izegbu's role in the firm."

The Tribunal made specific findings about charges 1, 2 and 3, as I have called them for convenience.

19. As to charge 1, namely that the appellant entered into sham agreements under which he owned and controlled firms held out to the Law Society and the public as being firms of solicitors, whereas the firms were owned and controlled by him, a non-solicitor, the Tribunal said this in paragraph 55:

"The Tribunal finds the allegation proved in relation to Mr Okoronkwo's arrangement with Ms Izegbu, although Mr Okoronkwo bore a lesser responsibility because he had relied upon Ms Izegbu's knowledge."

20. The Tribunal went on to find that the charge which had related also to an arrangement made by the appellant with a Mr Preedy had not been proved.
21. In so far as the second charge is concerned, namely that the appellant operated and received clients' funds, the Tribunal found:

"There was no designated bank account or indeed any proper accounts for Alberts. In the case of Mr O's monies [Mr O was a client], the Tribunal finds that these should have been paid into a client account and no such account existed. As such the Tribunal finds this proved."

22. In so far as charge 3 is concerned, namely that the appellant attempted to mislead the Law Society by making false representations, the Tribunal found in paragraph 58 that:

"For the reasons outlined earlier, the Tribunal finds the allegation proved as regards the relationship between Mr Okoronkwo and Ms Izegbu but not proved as regards Mr Okoronkwo and Mr Preedy."

23. It is also important in my view to recite three other paragraphs in the finding of the Tribunal. Those are three findings made in connection with Ms Izegbu. They are to be found in paragraphs 40, 41 and 42. In those paragraphs the Tribunal gives its reasons for finding proved two charges. One alleged that she had breached Rule 7 of the Solicitors' Practice Rules 1990, in that she had agreed to share professional fees other than as permitted by the Rule. The other charge read:

"That she had entered into a sham agreement under which she was held out as and purported to act as principal of a firm of solicitors by the name of 'Alberts' when the reality was that Alberts was an instrument by which a non-solicitor, Mr Okoronkwo, purported to practise as a solicitor and/or improperly controlled a solicitor's practice; ..."

24. As to those allegation, in paragraphs 40 to 42 and 63 the Tribunal stated as follows:

"40. Ms Izegbu knew from the outset that Mr Okoronkwo would control the firm. He owned the lease of the premises; could appoint partners; was responsible for the bank accounts and the administration of the practice. He could agree fees with clients (eg Mr O) and received clients' money. Ms Izegbu was an employee as was plain from the letter of engagement dated 30th April 2003. She was remunerated by Mr Okoronkwo under the PAYE system.

41. The Tribunal finds that, under the terms of the Practice Arrangement dated 30th April 2003, profits over and above Ms Izegbu's salary of £26,000 and bonus were to belong to Mr Okoronkwo. Mr Okoronkwo was not a qualified solicitor and as such the agreement to share professional fees was in breach of Rule 7 in force at the material time.

42. It could not be said on the facts as found that Ms Izegbu was the principal of the firm and Mr Okoronkwo, her employee. As has already been said, the Tribunal finds Ms Izegbu's evidence that she contacted the Law Society in April 2003 to ensure that she was not in breach of Rule 7 to be dishonest. The Tribunal finds as a fact that she did not speak to the Law Society at that time. Although she claims to have made a note of the telephone conversation, no note was ever produced.

...

63. So far as Mr Okoronkwo is concerned, the Tribunal finds that Mr Okoronkwo was the lynchpin and driving force in Alberts 1 and 2. He ran the practices and exercised considerable influence over both the Ms Izegbu and Mr Preedy as to the running of the firm. The Tribunal also regarded his lack of candour in making a false statement as to his professional record in his application for admission to the Roll as being serious and considered that it is in the public interest that it imposes on Mr Okoronkwo an order under Section 43."

25. It seems to me clear, in the light of those three paragraphs and in particular paragraph 42, that on the findings of the Tribunal the appellant was not remunerated by Ms Izegbu. He remunerated himself.
26. Mr Cadman was only able to deal with this argument late yesterday. He submits, perhaps somewhat plaintively, that the argument now being made was completely inconsistent with the appellant's case at the hearing. The appellant's case at the hearing was that the agreement incorporated in that letter dated 30th April with Ms Izegbu was not a sham, he was employed as a consultant by Alberts Solicitors, and the sole principal of Alberts Solicitors was Ms Izegbu. Thus, so the appellant was submitting to the Tribunal, everything was in order and, furthermore, he had done nothing wrong.
27. However, the findings of the Tribunal were entirely consistent with the case that the respondent was putting forward, namely that the agreement was a sham. It seems to me unfortunate that Mr Cadman did not appreciate the consequences of proving that the agreement was a sham in the way found by the Tribunal.
28. However, Mr Cadman did not "give up". He sought to persuade us that notwithstanding all of those findings, the appellant was in fact remunerated by Ms Izegbu.
29. What Mr Cadman relied upon was a number of invoices which can be found at his core bundle at CB-46 and onwards. The first is described as a fee note from Mr Samuel Okoronkwo of 205 Wardour Street, addressed to Chinwe Izegbu, Alberts Solicitors of 205 Wardour Street. It is dated 30th May 2003 and states, "For the professional services of Mr Samuel Okoronkwo for the month of May 2003" £4,580, to which a sum for VAT was added. The second one is dated 30th May and claims back some £14,000, including VAT, for the disbursement of staff costs, management charges, including rent, rates print post and admin costs, marketing, the use of computer systems, network, legal library and other facilities. The third, dated 30th June 2003, is in the same terms as the first one. The fourth, dated the same day, is in the same terms as the second one. The fifth one, dated 31st July, is in the same terms as the first one. There is another dated the same date in the same terms as the second one. One can find again further invoices dated 29th August 2003 to a similar effect. Mr Cadman submitted to us that these showed that the appellant was in fact being remunerated by Ms Izegbu.
30. Mr Cadman then took us to the transcript of the evidence given by the appellant. We were taken to the respondent's bundle F, transcripts, tab 3, page 47. Mr Cadman asked the appellant to look at these invoices and asked the question, "How were these monies paid to you?" The appellant replied, "They weren't exactly paid as such. These were invoices." Then there was an answer which is not easy to follow.
31. So Mr Cadman then said, "Looking at one of them [CB46], did you ever receive £4,580 plus VAT?" to which the appellant replied, "Not strictly, I didn't." Mr Cadman said, "I do not understand the answer." A short time later Mr Cadman asked, "Was this paid all or in part?" The answer was, "Not all, some of it." Mr Cadman said, "Well, since you were in control of the cheque book and the bank accounts, it must have been paid from there." To which the answer, at least as transcribed, is difficult to follow. Mr Cadman asked whether Ms Izegbu had seen these invoices, and again it is not easy to see what answer is being given.
32. The question that we have to resolve is whether or not those invoices are sufficient. In my view they are not. Accepting, as we have to, the findings of the Tribunal, those invoices were clearly sham invoices. At no point was it ever intended that Ms Izegbu would pay the consultancy fees to which those invoices related, or indeed the staff costs and management charges to which those other invoices referred. Whatever may have been the reason why they were prepared, they certainly in my view do not support the submission that Ms Izegbu was in fact remunerating the appellant. Even if one gave the invoices some credence, it was not Ms Izegbu who was making the payment, but the appellant. He was paying himself.
33. In view of the quite understandable failure on the part of the Tribunal to consider this important issue under section 43 now raised by Mr Beaumont, I have asked myself whether or not we should remit the matter. Mr Cadman rightly accepts that there is no point in remitting this matter to the Tribunal if the Tribunal could only find that the appellant was not remunerated by a solicitor of the Supreme Court. In my view, on the material that has been placed before us, which was material available to the Tribunal, no tribunal could properly find that the appellant was remunerated by Ms Izegbu, a solicitor of the Supreme Court.
34. The result may be seen to be unfortunate and perhaps reveal a hole in the legislation. But no doubt if the Law Society were to receive an application for any form of practising certificate, or equivalent document, which featured the name of the appellant, they would want to look at such an application very carefully.
35. That leaves the fourth allegation, namely that the appellant knowingly made a false statement as to his professional record in order to procure a qualification from the Law Society. As I have already indicated, in my view, in order to succeed on that charge, the respondent had to show that the appellant was himself subject to an investigation by the Law Society, that he knew that he was subject to that investigation and that the response that he gave in his application was untrue.
36. I interpose by mentioning one argument, if only to dismiss it, made by Mr Beaumont. Mr Beaumont said that in opening Mr Cadman had eschewed any argument about dishonesty. For my part, I do not understand quite why he did that, but what was clear to all concerned was that this charge required, if the Law Society were to succeed, proof to the relevant standard that he knew he was subject to an investigation and when he stated he was not he knew that to be untrue.
37. We have been taken to the relevant documents and to an answer given to an ambiguous question by the Chairman of the Tribunal (see page 107 of tab 3 of the grey transcripts bundle). To find these documents, I turn to the appeal bundle prepared by the appellant. I have to say that the bundles in this case have not been prepared in a manner which is helpful to the court.
38. The application for admission as a solicitor and for a practising certificate is to be found at page 64 of the appeal bundle. It gives the name of the appellant and his address as Alberts Solicitors in Wardour Street. The application asks this question:

"Are you currently subject to investigation by the Office for the Supervision of Solicitors or any other regulatory body?"

39. To this question the answer is "no". That is the question which is alleged to be knowingly false. Again, I have to turn back to section 43, which requires the Act or default to be in relation to the solicitors' practice. The section reads as follows:

"(1) Where a person who is or was employed or remunerated by a solicitor in connection with his practice but is not himself a solicitor —

(a) ...

(b) has, in the opinion of the Society, occasioned or been a party to, with or without the connivance of the solicitor by whom he is or was employed or remunerated, an act or default in relation to that solicitor's practice which involved conduct on his part of such a nature that in the opinion of the Society it would be undesirable for him to be employed or remunerated by a solicitor in connection with his practice,

the Society may either make, or make an application to the Tribunal for it to make, an order under subsection (2) with respect to him."

40. Mr Beaumont submits that on the assumption, which is disputed, that the statement was knowingly false, it was not an act or default in relation to the solicitors' practice.
41. Unfortunately, the Tribunal's findings, as Mr Cadman accepts, are not as clear on this allegation as they ought to be. The Tribunal said this:

"61. Mr Okoronkwo was clearly aware of the Law Society investigation and took an active part in the interviews and the investigation that was conducted by Messrs Smith and Clemo. The Tribunal finds that for him not to disclose this or at least refer to it was less than frank and open and as such finds this allegation proved."

42. There are a number of problems with that finding. The first relates to section 43. There is there no finding — and about this Mr Beaumont rightly complains — that this was in relation to the practice.
43. Mr Cadman accepts the Tribunal failed to do that. He submits, however, that there is evidence from which a tribunal could properly conclude that it was in relation to the practice. He relies on a reference given by Mr Preedy, which can be found in the appeal bundle at page 55. More particularly, he relies upon the application for a practising certificate, which states that the organisation for which the appellant seeks a practising certificate is Alberts Solicitors of 205 Wardour Street, London, and he describes himself as hoping to fill the position of partner. This document is dated 24th February 2004.
44. In my view, Mr Beaumont is right that the Tribunal has not made a finding that this was in relation to the practice. He submits that there could only be one answer, namely that it was not in relation to the practice. I disagree with that proposition. In my view this matter ought to be remitted to the Tribunal, in order to resolve the issue of whether or not it was in relation to the practice.
45. However, Mr Beaumont submits to us that there is another reason why there should be no remission. He submits that on the evidence available to the Tribunal, no tribunal could properly find that the answer which the appellant gave to the question in the application was false. He says that there is insufficient evidence to prove to the requisite standard that he was under investigation and, secondly, that he knew that he was under investigation.
46. As I have set out, the findings of the Tribunal make it clear that in the view of the Tribunal Mr Okoronkwo was clearly aware of the Law Society investigation, but they do not make it clear whether he was clearly aware of the Law Society investigation into him. If they had added those words, then there would have been little or nothing in Mr Beaumont's arguments.
47. I say that because Mr Cadman takes us through the investigations into the firm in September 2003 and the letters that were sent in December 2003. He submits that a reasonable inference can be drawn that Mr Okoronkwo knew perfectly well that he was being investigated as part and parcel of the investigation into what had happened with Ms Izegbu and what had subsequently happened with Mr Preedy and others.
48. In my view, there is evidence which would entitle a tribunal to reach the conclusion that this allegation was proved, but I do not take the view that there is only one answer. The Tribunal having failed to address its mind to the relevant questions, it seems to me that since we are remitting the matter on the question to which they did not direct their attention at all, namely the section 43 point, then it would be right to remit it for the Tribunal to give clear findings about whether there was an investigation into him and whether he knew about it. If there was an investigation into him, it may well be that the tribunal would have little difficulty in finding that he knew about it, but that is entirely a matter for it and it would be in my view for the tribunal to look at this matter afresh.
49. In all those circumstances, I would allow the appeal and quash the first three findings. As to the fourth finding, I would remit the matter back to the tribunal for further consideration. If my Lord agrees with my conclusions, then we can entertain arguments about whether it should be the same or some different tribunal.
50. MR JUSTICE MADDISON: I agree with my Lord, Lord Justice Hooper, that this appeal should be allowed, that the findings in respect of the first three allegations (originally allegations 15, 17 and 18) should be quashed and that the fourth allegation (originally allegation 21) should be remitted for further consideration by the Solicitors' Disciplinary Tribunal, and I agree for the reasons for which he has reached those conclusions.
51. LORD JUSTICE HOOPER: Where do we want to start? It should be the same tribunal. This is a proposition, not a statement. To have another tribunal start to understand all of this again, it is a tribunal which has had to cope with a lot of documentation, work its way, at least my tentative view is that it should be the same tribunal, if it can reasonably be arranged.
52. MR BEAUMONT: May I take instructions, my Lord?
53. LORD JUSTICE HOOPER: Yes, of course. (Pause)
54. MR BEAUMONT: My Lord, I am sorry to be awkward at this late hour, but the preference of my client, and indeed frankly my own, would be for a freshly constituted tribunal. Indeed in terms of the burden of material, I doubt very much whether on this sole point there would be the same burden of material.
55. LORD JUSTICE HOOPER: Thank you.
56. Mr Cadman, what do you say? First of all, is it practicable for us to order that it be heard by the same tribunal. If it is not practicable we will not waste our time doing it.
57. MR CADMAN: None of them have retired, so they are all still available.
58. LORD JUSTICE HOOPER: On the assumption that is practicable, what should we do?
59. MR CADMAN: I say there are practical difficulties in obtaining the same three members of the tribunal, in terms of timescales. The Law Society's position is neutral on it. It will in fact be a relatively — you have been burdened with a vast amount of paperwork. It will in fact I believe be quite a self-contained, small case to be presented because the relevant material --
60. LORD JUSTICE HOOPER: It could be reduced?
61. MR CADMAN: Absolutely. (The Bench conferred)
62. LORD JUSTICE HOOPER: You have persuaded us, Mr Beaumont. A freshly constituted tribunal, but on condition that you, between you, reduce the paperwork right down. It should be possible to have the decision and I leave it to you and whoever is presiding to work it out, but it must be possible to reduce the documentation right down.
63. MR BEAUMONT: Reduce, and perhaps also redact.
64. LORD JUSTICE HOOPER: That may be necessary, but that is a matter for you and the tribunal.
65. Yes, what else? The issue of costs.
66. MR BEAUMONT: My Lord, the appeal has succeeded, as your Lordship has held. In those circumstances, I ask for my costs of this appeal, which happily or unhappily do not include solicitors costs, merely my own fees. Then there is the question as to what happens with the costs below, which as far as my client is concerned saddled him with a costs order of £22,000. So I ask --
67. LORD JUSTICE HOOPER: When we quashed the findings, we really have to quash the costs order, do we not?
68. MR CADMAN: There is another point my learned friend has not addressed, which is that there is currently a section 43 order in force. You are allowing the appeal on 1 to 3 and remitting it on 4.
69. LORD JUSTICE HOOPER: Realistically speaking, the large measure of costs was devoted to presenting the whole case, not this very narrow point. Should we not quash the order? What are our powers?
70. MR BEAUMONT: The costs were apportioned before the STD, as I understand it. So the £22,000 was regarded as germane to the prosecution of my client.
71. LORD JUSTICE HOOPER: And you have --
72. MR BEAUMONT: The overall costs were something like £86,000.
73. LORD JUSTICE HOOPER: You largely succeeded, but not entirely in the sense that it has been remitted.
74. What do you say, Mr Cadman? First of all, do we have the power to quash the order of costs?
75. MR CADMAN: Yes, you do have the power to quash the order for costs. I refer you to one — there are certain factual matters which are unusual in this case, in the sense that it is now been remitted on the factual findings of the Tribunal (and I think this a relevant factor with regard to costs) which are contrary to the assertions made by the appellant at the Tribunal, because the circumstances were that his case at the Tribunal --
76. LORD JUSTICE HOOPER: Yes.
77. MR CADMAN: -- and it was his case on oath at the Tribunal that his role was not the role that the Tribunal have found, that then caused me difficulties in the terms of the employment or remuneration point. His case was not that. His case was that there was a genuine relationship and, of course, before you retired before lunch, one of the matters put to my learned friend specifically as to whether the matter could be remitted or not were the invoices, and the specific difficult question asked of my learned friend as to whether it was now accepted by the appellant that they were sham documents.
78. LORD JUSTICE HOOPER: Be careful, the answer is, "In the light of the findings, I have to accept that they were sham." That is all that Mr Beaumont.... He has been careful, because he was challenging the findings in other grounds of appeal.
79. MR CADMAN: The circumstances that we have are, first of all, in terms of the CPR Rules, you are entitled to bear in mind the conduct of the parties.
80. LORD JUSTICE HOOPER: Yes.
81. MR CADMAN: In terms of regulatory authorities, the decision is Baxendale-Walker, the Court of Appeal decision, which I have here, which deals with the issue of costs order made against regulatory authorities. The situation there, and there are two matters I wish to take you to on the jurisdictional point. First of all is on the costs with regard to costs orders involving regulatory authorities. The decision of Moses LJ in the Administrative Court, upheld in the Court of Appeal — I will hand the judgment up, it is at paragraph 29. He is saying, "Absent dishonesty or a lack of good faith, a costs order should not be made against ... a regulator unless there is good reason to do so."
82. MR BEAUMONT: Could my learned friend --
83. MR CADMAN: Let me just....
84. LORD JUSTICE HOOPER: Can we divide the issues up. The first issue we need to resolve is whether we should quash the costs order of £28,000. Let us do that first.
85. MR BEAUMONT: £22,000.
86. LORD JUSTICE HOOPER: That is an order against the appellant. You say we should quash it.
87. MR CADMAN: I say you should not. On that point the Solicitors' Tribunal has under its powers the power to make a costs order against a respondent even if the allegations against that respondent are not proved. It is power 20. It is an unusual provision, because of course in most jurisdictions costs generally follow the issue, but here is a situation specifically under Rule 22 that even if a section 43 order is not made, the Tribunal have a power to make it. So the submissions of the Law Society would have been: the respondent comes to the Tribunal and says that, "The Law Society case is wrong, I was not controlling the practice." The findings then go against his assertion, but what the Tribunal should then have done, and perhaps I did not spot the point and Mr Beaumont obviously did, was that then it causes the difficulty, having found against the respondent, against his case at the Tribunal, that there is a situation where I would say they would have been perfectly entitled to come to that finding. He put the Law Society, because of the assertions he was making, to a five-day hearing, at which point his assertions were disbelieved with regard to Izegbu. In those circumstances, I would at that stage be making the application for the costs order to remain.
88. LORD JUSTICE HOOPER: Thank you.
89. MR CADMAN: Therefore I would --
90. LORD JUSTICE HOOPER: Let us just split them up. £28,000, you say, no, it must go as all the findings have been quashed.
91. MR BEAUMONT: £22,000. Would your Lordship like me to answer that submission or not?
92. LORD JUSTICE HOOPER: If you wish to, yes.
93. MR BEAUMONT: Simply this. My learned friend is in a position akin to being in a glass house and throwing stones, because this was always a very unusual case. It involved the Solicitors' Disciplinary Tribunal prosecuting a barrister, under the only available statutory basis for doing so. It was incumbent on the Law Society to ensure that their case satisfied this very specific jurisdiction, and that their evidence supported the ingredients of the statutory power that gave them the only possible power they could exercise. They had no other power that they can exercise as against my client, other than one conferred by Parliament. That is what they signally failed to do.
94. It is unfortunate that it was not until I came into the case that that was revealed. But in my submission the prosecutors — I do not wish to be personal about it — are under a very special responsibility, exercising punitive powers against a party who in all other respects would not be subject to their scheme of regulation in any event. It was incumbent upon them to get it right and they failed. They got it wrong and really, in my respectful submission, they should be more contrite and apologetic. To turn round and make a submission that for some other technical reason the whole exercise was justified, or the ends justified the means or the means justified the ends (I am not sure which) is quite irregular, in my respectful submission.
95. LORD JUSTICE HOOPER: Thank you.
96. Anything you want to say in reply, just dealing with the one point.
97. MR CADMAN: Just dealing with one point. We are now just purely discussing the costs at the tribunal.
98. LORD JUSTICE HOOPER: That is all we are talking about.
99. MR CADMAN: All I would say is that at the end of the Tribunal proceedings, if they had addressed their minds to the points you have, having had a situation where the invoices are clearly false invoices. The author of those invoices is Mr Okoronkwo. He gave evidence on oath that he had been paid with regard to certain of those invoices. He has written to the Law Society on Alberts notepaper before Alberts could have existed, which is a matter which we have raised before. He has written a letter to the Law Society saying he is an employee of the practice. All these are his own generated documents, his own material, which enabled a section 43 order to be made. Lastly, the headed notepaper shows him as a consultant of the practice. These are all self-generated issues which the Law Society properly presented to the Tribunal. The issue being, of course, that under cross-examination, the way the evidence was presented, the Law Society disbelieved his own documents and the situation there is in those circumstances the costs order should stand.
100. LORD JUSTICE HOOPER: We will retire.
101. MR CADMAN: I do not know whether you wish the actual rule or not?
102. LORD JUSTICE HOOPER: Yes.
103. MR CADMAN: I have highlighted 22.
104. LORD JUSTICE HOOPER: Thank you.
(Short adjournment)
105. LORD JUSTICE HOOPER: We deal first of all with the application made by the appellant that the order for costs against the appellant made by the Tribunal should be quashed.
106. As the judgments of the court make clear, this prosecution was fundamentally flawed in presenting a case against the appellant which, if true, brought it outside the terms of section 43. We have considered whether we should reduce the amount of costs, having regard to Rule 22, to which our attention has been drawn, and to the fact that we are remitting the case back to the Tribunal in respect of the fourth charge.
107. In our view the proper order to make in this case is to quash the whole of the costs order made against the appellant.
108. We now then will hear argument upon the costs of the appeal.
109. Mr Beaumont, your difficulty there is that it was only yesterday that this point was taken. Now, speaking for myself, I can see you are entitled to the costs of today.
110. MR BEAUMONT: Yes.
111. LORD JUSTICE HOOPER: But I have difficulty in seeing that you are entitled to the costs of anything up till today.
112. MR BEAUMONT: Yes, I see that. That must be right, actually. I did not complete my written work until I think it was Saturday. Although I emailed I think late on Saturday to my learned friend, I know he understandably had other engagements, therefore Monday morning was the first time at which he could realistically have considered the point. I do not think it was raised in correspondence. May I just check, please? (Pause)
113. No, we did not. Yes, I have to accept that proposition.
114. LORD JUSTICE HOOPER: I thought you would.
115. Now, Mr Cadman, the costs of today. I mean, you should have conceded this case yesterday. I have to say that when I read Mr Beaumont's skeleton argument, I thought, "How on earth is Mr Cadman going to get out of this one?"
116. MR CADMAN: The difficulty.... What I had of course was a situation where I was relying on Mr Okoronkwo's own material.
117. LORD JUSTICE HOOPER: Was...?
118. MR CADMAN: I was relying on Mr Okoronkwo's own material.
119. LORD JUSTICE HOOPER: But you could not do that. Your case was that he was lying, and you proved he was.
120. MR CADMAN: Yes, unfortunately I successfully proved to the Tribunal's satisfaction that he was lying. But the difficulty in terms of the material was the material seemed to suggest from his own evidence, which was a discrete point, that he raised these invoices and that he was paid from the solicitors' practice, through which the money came. So the situation was that it was perfectly proper in the Law Society's submission, and therefore does not fall within the Baxendale-Walker exception, which is the general rule being that costs should not be ordered against a regulator, for perfectly properly-brought proceedings, where the evidence on the face of it showed Mr Okoronkwo's improper involvement in the two solicitors' practices.
121. LORD JUSTICE HOOPER: Do you want to show us the decision of Moses LJ which you say has been approved?
122. MR CADMAN: Yes, I have copies here. (Handed)
123. The particular paragraph to which I draw your attention is paragraph 29. This is the Court of Appeal judgment, which is approving the decision of Moses LJ with regard to costs. The quote from Moses LJ is at paragraph 29, which is specifically approved in the judgment. It is the issue of the role of a regulator not being the same as any other litigant. Before the quote:

"Moses LJ approached the problem on the basis that it was not in dispute that in bringing the proceedings against the appellant the Law Society was acting as a disciplinary body, or regulator, taking proceedings in the public interest in the exercise of its public function. Accordingly, he concluded that the principles relating to costs differed from those which applied in ordinary civil litigation. He continued:

'Absent dishonesty or a lack of good faith, a costs order should not be made against such a regulator unless there is good reason to do so. That reason must be more than that the other party had succeeded. In considering an award of costs against a public regulator the court must consider on the one hand the financial prejudice to the particular complainant, weighed against the need to encourage public bodies to exercise their public function of making reasonable and sound decisions without fear of exposure to undue financial prejudice, if the decision is successfully challenged.'"

124. That then follows the argument. In paragraph 40 the court confirms:

"40. In our judgment, in agreement with Moses LJ, the Tribunal misdirected itself ..."

Then the next but one sentence:

"This overlooked not only the public obligation of the Law Society, as we have analysed it, but the additional fact that the appellant brought the proceedings in relation to both allegations on himself."

125. It would be those assertions that would be made (a) that the Law Society being a regulator, bringing the allegations in good faith, and that the appellant in these proceedings brought the proceedings on himself. He brought them on himself by the manner in which he defended the proceedings, the assertions he made and the false documents he presented.
126. LORD JUSTICE HOOPER: Of course, this might well be true if the appellant was a solicitor, but he is not. He is not a solicitor, he is a layperson who you have chosen to bring before the Tribunal. It turned out to be you should not have done.
127. MR CADMAN: The difficulty would have been in some circumstances, if the appellant had been more believed on evidence, a section 43 order may well have been made, which is the odd situation that the Law Society finds itself in, where as you correctly identified there may well be a lacuna in the law which may be overcome by the Legal Services Act when those parts come into force, (inaudible) business structures.
128. I do not think I can press the matter any further.
129. LORD JUSTICE HOOPER: Yes, thank you very much.
130. What would you like to say, Mr Beaumont?
131. MR BEAUMONT: Simply fastening upon the quotation at paragraph 29, one notes that the public body, the regulator, must exercise its public function reasonably and soundly or its function of making "reasonable and sound decisions without fear of exposure ..." As I understand it, the argument is whether the Law Society should have resisted the appeal in the face of my written argument. In my respectful submission, it follows from your Lordships' judgment that was not a reasonable or a sound decision. So even applying this criterion, there is no refuge of some higher sense of public responsibility beneath which the Law Society can, upon my application for costs, successfully shelter.
132. LORD JUSTICE HOOPER: Thank you very much.
133. Anything more you want to say, Mr Cadman? (The Bench conferred)
134. You can have your costs of today. What are your costs? We will summarily assess them now.
135. MR BEAUMONT: I handed in a schedule that we took the liberty, I hope not presumptuously, of preparing.
136. LORD JUSTICE HOOPER: It does not include any preparation, it is just the costs of today.
137. MR BEAUMONT: Yes. Query would that include the written argument as well?
138. LORD JUSTICE HOOPER: No, just the costs of today.
139. MR BEAUMONT: The brief fee was agreed in the third sum set out in the draft fee note, which is attached.
140. LORD JUSTICE HOOPER: Have you seen that, Mr Cadman?
141. MR CADMAN: I have seen it, yes.
142. LORD JUSTICE HOOPER: Yes.
143. MR BEAUMONT: I have handed it in actually, two copies, we prepared a schedule and the fee note was bought up to date, unfortunately it does not bear my Chambers' letterhead, because I could not get back to my usual location in the time available.
144. LORD JUSTICE HOOPER: How does this work? Because he is a member of the Bar, you can do it directly?
145. MR BEAUMONT: It is not a public access case. I verified this yesterday, actually, just to double-check that my understanding is correct. He is a member of the Bar and he is entitled to instruct another barrister directly. As I understand, it falls under the regime of direct professional access, so we do not need an instructing solicitor.
146. LORD JUSTICE HOOPER: You must sign this.
147. MR BEAUMONT: Well --
148. LORD JUSTICE HOOPER: Because you are saying that the costs do not exceed the costs which Mr Okoronkwo is liable to pay.
149. MR BEAUMONT: No, they do not. You will not there is another figure --
150. LORD JUSTICE HOOPER: But you have not signed that, though.
151. MR BEAUMONT: My Lord, I do not know if I am allowed to sign that.
152. LORD JUSTICE HOOPER: But you have no solicitors.
153. MR BEAUMONT: I have not, but this form actually has come under scrutiny. I speak as a member of the Access to the Bar Committee. It is not a form actually designed for the Bar at all, which is why I always, in cases like this, enclose a fee note. You will see the first page is quite clearly not applicable to barristers, and it is only a small box on the second page which applies to barristers. I am rather reluctant to sign something that is intended to solicitors, simply on the basis that I am not sure we are supposed to do it.
154. LORD JUSTICE HOOPER: But applying the ordinary rules, we can make no order of costs against the Law Society unless Mr Okoronkwo is liable to pay --
155. MR BEAUMONT: He is and he has.
156. LORD JUSTICE HOOPER: -- that fee to you. Where is your letter of engagement?
157. MR BEAUMONT: Curiously enough, we do not need to prepare letters of engagement or client care letters in a case like this, only in public access cases. It is perhaps an anomaly. The reason I enquired yesterday was to ask specifically that question: do I need to issue a client care letter, because I had not had time to think along those lines. I do a lot of public access work, where we raise client care letters all the time. I was not sure into which this category case fell. Apparently, I do not need to raise a client care letter. The fee note is — I can assure your Lordship that these are the fees I require and that we agreed. The minus figure is actually the balance over. Everything was paid in advance and the £1,500 plus VAT was paid in the anticipation of a possible refresher fee. So that falls to be repaid if there is no further day.
158. LORD JUSTICE HOOPER: It has been what?
159. MR BEAUMONT: The £1,762.25, in fact it should be £1,762.50, falls to be repaid if there is no second day. But as a precaution I asked my client to place me in funds for a refresher fee, because I had a feeling this case might go beyond one day. So that falls to be repaid.
160. LORD JUSTICE HOOPER: Has he paid this?
161. MR BEAUMONT: He has paid everything. He has paid everything.
162. LORD JUSTICE HOOPER: You are telling us that the appellant has paid --
163. MR BEAUMONT: He has, yes.
164. LORD JUSTICE HOOPER: -- the total sum on the second page?
165. MR BEAUMONT: No, I think he has paid more than that. He has paid — do you see where it says "Cq"?
166. LORD JUSTICE HOOPER: I put it another way, he has paid you more than £5,250?
167. MR BEAUMONT: He certainly has.
168. LORD JUSTICE HOOPER: You give us that undertaking?
169. MR BEAUMONT: Yes.
170. LORD JUSTICE HOOPER: Thank you.
171. Mr Cadman, what about that? It seems to satisfy the rules that you are not to allowed to take from a --
172. MR CADMAN: No, it seems to be that, from the fee note, below Sunday the 30th and 5th April makes reference to two cheques received. I obviously take that at its face value.
173. LORD JUSTICE HOOPER: What do you say about the figure which it would be — if we were minded to make a figure, and we will consider it in a moment, would be the figure of £5,250. What do you say about that?
174. MR CADMAN: I have only just received this. It was not served on me before two hours ago. I have not seen it. I will leave it to you to assess it. I think the matter should --
175. LORD JUSTICE HOOPER: Do you want more time?
176. MR CADMAN: I do not think having more time would help me at all.
177. LORD JUSTICE HOOPER: All right. We will retire. Thank you.
(Short adjournment)
178. LORD JUSTICE HOOPER: We have borne in mind the decision in Baxendale-Walker v Law Society, which of course concerns solicitors. In paragraph 29 Moses LJ says that a costs order should not be made against a regulator unless there is good reason to do so. In this case, of course, the person concerned is not a member of the profession. He is, for these purposes, a member of the general public.
179. We take the view, given the very late reliance upon the arguments which have in large measure succeeded, that the costs should reflect the costs of today. Mr Beaumont has satisfied us that he has already received from the client that amount of money. In those circumstances, we do not require him to sign the box on page 2.
180. Mr Cadman, albeit he has only just seen these figures, does not wish to adjourn the matter and is content, sensibly if we may say so, to leave the matter to us. We make an award of costs in the sum of £5,250.
181. MR BEAUMONT: Thank you. Would it be plus VAT?
182. LORD JUSTICE HOOPER: Plus VAT.
183. MR BEAUMONT: There is one other small point, my Lord, we were discussing this a moment ago, and that is the formal quashing, if required, of the section 43 order itself.
184. LORD JUSTICE HOOPER: No, the order stays in place because it is going back now to be considered. We do not quash that order.
185. No?
186. MR BEAUMONT: My Lord, I would have thought the order goes and that the very question for the Tribunal is whether another such order should be made, based only on allegation 4.
187. LORD JUSTICE HOOPER: What do you say, Mr Cadman?
188. MR CADMAN: I would think it to be right that the section 43 order has to be quashed at this stage.
189. LORD JUSTICE HOOPER: Thank you, Mr Cadman, for all your help. Would you please, the two of you now, draw up the order before you leave here this evening, notwithstanding it is quarter to six, draw up an agreed order with all those terms. All right?
190. MR BEAUMONT: My Lord, thank you very much for sitting so late.
191. MR CADMAN: Until Thursday.
192. MR BEAUMONT: One more thing. Do I take it Mr Okoronkwo's attendance at the other appeal is....?
193. LORD JUSTICE HOOPER: Not required.
194. MR BEAUMONT: Not required.
195. LORD JUSTICE HOOPER: He can attend if he wishes to do so.
196. Another thing that crossed my mind, would you tell Ms Izegbu the outcome of this appeal or would someone write a letter to her or email her?
197. MR CADMAN: I have had no communication from Ms Izegbu since October of last year, directly. I will get a letter out.
198. LORD JUSTICE HOOPER: Thank you.