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URL: http://www.bailii.org/ie/cases/IESC/2009/S41.html
Cite as: [2009] 2 ILRM 77, [2009] IESC 41

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Judgment Title: The Law Society -v- Carroll & anor

Neutral Citation: [2009] IESC 41

Supreme Court Record Number: 104/08

High Court Record Number: 2006 45 SA

Date of Delivery: 20 May 2009

Court: Supreme Court

Composition of Court: Geoghegan J., Finnegan J. Birmingham J.

Judgment by: Geoghegan J.

Status of Judgment: Approved


Judgments by	Result	Concurring
Geoghegan J.	Appeal dismissed - affirm High Court Order	Finnegan J. Birmingham J

Outcome: Dismiss

THE SUPREME COURT

Appeal No. 104/2008

Geoghegan J.
Finnegan J.
Birmingham J.

IN THE MATTER OF COLM CAROLL
AND HENRY COLLEY SOLICITORS

AND IN THE MATTER OF THE SOLICITORS
ACTS, 1954-2002

BETWEEN/

THE LAW SOCIETY OF IRELAND

Applicant/Appellant

and

COLM CARROLL AND HENRY COLLEY

Respondents/Respondents

JUDGMENT of Mr. Justice Geoghegan delivered the 20th day of May 2009

By formal application dated the 31st January, 2006, the Law Society of Ireland, being the appellant in these proceedings, applied to the Solicitors Disciplinary Tribunal (a statutory body) for an inquiry into the conduct of two solicitors being the above-named respondents who were in partnership under the style and title of Roger Greene & Sons practising in Bridge Street, Dublin. This formal application was made pursuant to section 7 of the Solicitors (Amendment) Act, 1960 (as substituted by section 17 of the Solicitors (Amendment) Act, 1994 and as amended by section 9 of the Solicitors (Amendment) Act, 2002). The conduct referred to related to matters disclosed in an accompanying grounding affidavit sworn by Mary Devereux, a chartered accountant employed in the Regulatory Department of the Law Society. In due course, I will be going into more detail, but at this stage it is sufficient to summarise the position by saying that the inquiry sought was granted and that at the hearing before the tribunal, gross misconduct was admitted by both solicitors through their respective counsel. I think it would be fair to say that the two respective counsel, the late Mr. James O’Driscoll, S.C. for Colm Carroll and Mr. Jack FitzGerald, S.C. for Henry Colley largely confined their submissions to what might accurately be described as a plea of mitigation with a view to persuading the tribunal not to recommend to the High Court the most severe available penalty namely, the striking of each solicitor off the roll of practitioners. In the event, the tribunal recommended severe sanctions on each of the two solicitors but decided not to recommend that they be struck off the roll. I should, perhaps, at this stage, make clear that under the relevant legislation and in order to conform with the constitution neither the Law Society itself nor the statutory tribunal under the Solicitors Acts have power themselves to order the striking off of a solicitor. In that regard the tribunal’s power is confined to recommending in its report to the High Court that that should be done.

In this particular case, the sanctions recommended by the tribunal to the High Court were as follows:

(a) Each solicitor to be suspended from practice for a period of twelve months.

(b) For a further period of three years that each solicitor not be permitted to practise as sole practitioner or as a partner in a solicitor’s practice but that they might be permitted only to practise as assistant solicitors under the direct control and supervision of another solicitor to be approved in advance by the Law Society.

(c) Each solicitor to pay a sum of €50,000 to the Compensation Fund of the Law Society.

(d) Each solicitor to pay 50 per cent of the costs of the Society to be taxed in default of agreement.

The Disciplinary Tribunal is a statutory body appointed pursuant to the provisions of section 6 of the Solicitors (Amendment) Act, 1960 as substituted by section 16 of the Solicitors (Amendment) Act, 1994 as further amended by section 8 of the Solicitors (Amendment) Act, 2002. The tribunal, as a whole, consists of not more than twenty persons from among practising solicitors of not less than ten years standing appointed for the purpose by the President of the High Court and not more than ten lay persons nominated by the Minister for Justice Equality and Law Reform. The section provides for the tribunal to sit in divisions, each of which must comprise three members, two of them from the solicitors appointed by the President of the High Court and the third from among the lay persons nominated by the Minister. The two solicitors who sat on the division which dealt with this inquiry were solicitors of very considerable seniority and experience. One of them, Mr. Frank Daly was a former President of the Law Society and the other, Mr. Ian Scott was a long-standing partner of the well-known solicitors firm of Arthur Cox. The relevant procedures, primarily contained in the 1960 Act but amended by the 1994 and 2002 Acts envisaged a report of the tribunal being brought before the High Court. Section 13 of the 1960 Act expressly provides that the jurisdiction vested in the High Court in relation to these procedures shall be exercised by the President of the High Court “or, if and wherever the President of the High Court so directs, by an ordinary judge of the High Court for the time being assigned in that behalf by the President of the High Court.” Over many years, the spirit of the intention behind that section has been followed and the solicitors’ matters are normally dealt with by the President of the High Court, but if for any particular reason the President is unable to deal with the matter, he delegates to another judge. In considering what the role of this court is on an appeal of this kind before it the express statutory function of the President of the High Court is of some relevance. In this particular case, the issues were dealt with by McKechnie J. as the judge nominated by the President. However, in so far as the President’s role is in any way relevant to the role of this court, the position can be no different in relation to an ordinary judge of the High Court by delegation of the President disposing of the matter. I will comment further on what I see as the significance of these provisions later in the judgment when I am considering what the role of this court is.

Returning to the actual history of the case, what happened was that the Law Society was dissatisfied with the recommendation of the Disciplinary Tribunal, the Law Society being of the view that the solicitors ought to have been struck off the roll and as a consequence it brought a motion on notice to the High Court seeking orders under section 8(1)(a) of the Solicitors (Amendment) Act, 1960 (as amended by substitution by section 18(1) of the Solicitors (Amendment) Act, 1994) striking the names of Colm Carroll and Henry Colley off the roll of solicitors. A motion was grounded by an affidavit of Joan O’Neill, solicitor employed in the Regulation Department of the Law Society. She stated that she was making the affidavit for the purposes of bringing the tribunal’s report which was dated the 6th October, 2006 (the hearing had taken place on the 28th September, 2006) before the High Court. She indicated that the purpose of the motion was also to seek the striking off order. Paragraph 7 of that affidavit read as follows:

“I say that I attended a meeting of the Regulation of Practice Committee on the 6th October, 2006 when the findings and recommendation of the tribunal were considered by the Committee. The Committee was unanimously of the view that the Society should apply to this Honourable Court for an order that the names of the respondents should be struck off the Roll of Solicitors. I beg to refer to a copy of the minute of the meeting of the Committee on the 6th October, 2006 which is a true and accurate account of what transpired at the meeting upon which marked with the letters ‘JON 2’ I have signed my name prior to swearing hereof.”

There are two observations I would like to make about the above procedure. First of all, it would seem doubtful that the form of the notice of motion which was brought was appropriate. Although the word “appeal” has not been used in it, the form of the motion is tantamount to a purported appeal from the recommendations of the tribunal and indeed the notice of motion itself, as distinct from the grounding affidavit, makes no reference to the bringing of the report to the High Court. The amended provisions of section 7 of the 1960 Act as provided for by section 9 of the 2002 Act with special reference to subsection (11)(b) would seem to be the only conceivable basis for such an appeal but arguably that provision does not cover sentence recommendations by the tribunal. However, no procedural objections were taken before this court and bearing in mind that the Law Society, when presenting its report to the High Court, has always been entitled to make submissions on the recommendations of the Disciplinary Tribunal any such irregularity (if it exists) does not in this case have any practical effect. The submissions on behalf of the Law Society before McKechnie J. should obviously be treated at any rate as the submissions of the Society in the process of presenting the tribunal’s report.

My second procedural observation causes me more concern. Paragraph 7 of the Law Society’s grounding affidavit which I have cited above was, in my view, inappropriate.

The Society was perfectly justified in disagreeing with the tribunal’s findings and in setting about persuading the High Court to impose a different sanction, but I do not consider that behind the scenes discussions within a committee and particularly the strength of the viewpoint expressed should be disclosed to the court any more than discussions within, say, the Director of Public Prosecutions Office prior to a prosecution. This is not intended as a personal criticism of the deponent who was presumably acting under instructions. In the event, the Society’s case was forcefully presented before McKechnie J. who not only heard counsel for the Society appearing before him but had the benefit, as this court has had, of reading the transcript of what transpired before the tribunal. In the event, the High Court, for the reasons set out in an ex tempore judgment of McKechnie J. adopted the recommendation of the tribunal and made the precise order recommended by it. The Law Society has appealed that order to this court pursuant to section 12 of the 1960 Act as substituted by section 39 of the 1994 Act. As far as counsel was aware, this has never happened before. When I say that, I mean that there is no knowledge of an appeal having been brought before from the High Court to the Supreme Court by the Society against sanctions imposed by the High Court short of striking off a solicitor and requesting the Supreme Court to substitute an order striking a solicitor off the roll. That being so, it is incumbent on this court to consider very carefully what its role on such an appeal is. When I have outlined the facts and merits of the case, I will, in due course, return to that matter.

Following a random investigation by Ms. Mary Devereux (mentioned above) at the request of the Society, numerous complaints arose against the two respondent solicitors, all of a serious nature. These complaints involved (inter alia) mixing of personal and client accounts, operating undisclosed bank accounts in one instance under the name of a company and committing wholly irregular practices in relation to the requirements of the statutory regulations for the keeping of books and breaking numerous regulations. Those statutory regulations are an essential protection for the public but the respondents committed flagrant breaches of them. It seems clear that none of this was with a view to defrauding clients but was a deliberate and elaborate scheme of tax evasion. As Ms. Devereux gradually discovered irregularities and discrepancies, there was then deliberate obstruction by the respondents of her investigation through a combination of false information being given and non-disclosure of relevant bank accounts. There came a stage however when the respondents showed remorse and settled all outstanding issues with the Revenue Commissioners. There remained the issues with the Law Society and as a gesture of goodwill and with a view to allaying fears that the whole investigation, when completed, could result in the Law Society having to resort to its Compensation Fund, a sum of €600,000 was paid by the respondents to their solicitor, Mr. Sexton, on trust.

The investigation by Mary Devereux extended over a long period during which she made various interim reports and in the course of which applications were made to the President of the High Court for freezing orders and orders requiring compliance with the regulations. I do not find it necessary to lengthen this judgment by detailing all of these matters. It is sufficient to state that for a considerable time, Mary Devereux was obstructed in her attempts to arrive at the truth. During the latter stages of her investigations, however, the respondents effectively pleaded guilty, settled their affairs with the Revenue Commissioners and gave full, though somewhat slow, cooperation with Ms. Devereux. In fairness, a great deal of the slowness seems to have been due to problems of procuring the cooperation of Ulster Bank in arriving at a correct history of the accounts with that bank for the purposes of reconstructing the books. In her very full affidavit sworn the 31st January, 2006, Mary Devereux, in relation to her final report which is exhibited, summarised the main findings of that report. She said the following:

“The respondents’ solicitors had failed totally to comply with the Solicitors Accounts Regulations in respect of their accounting records up to and during the initial part of my investigations. Proper books of accounts had to be subsequently constructed by PKF Ryan, Glennon & Co. which had taken a year’s work. The apparent surplus on clients’ account was due to personal funds and fees due to the solicitors being left in clients’ accounts …

There was a deliberate system of total disregard for the Solicitors Accounts Regulations … The books of account and records which were prepared were a work of fiction and bore no reality to the actual transactions.

The respondents’ solicitors deliberately misled me your deponent during the investigation by falsifying the records of the practice in respect of fees ostensibly paid to barristers according to the books of account but which were in fact lodged to the Ulster Bank Deposit Account. I say that the obstruction of my investigation by the respondents’ solicitors continued until the Society obtained an order of the High Court against the respondents’ solicitors on the 10th May, 2004….

Not only had the respondents’ solicitors failed to disclose the existence of the Ulster Bank Deposit Account to me your deponent and to their reporting accountants but a further undisclosed bank account in the name of a company, Folerick Holdings Limited, which had been struck off the Company’s Register, was being operated by the respondents’ solicitors. Substantial monies passed through this bank account which mostly constituted fees. Client funds were also transacted through this bank account as more particularly set out in my report at paragraph 2.8. Rent which the respondents’ solicitors paid to this company was claimed by them as an overhead while at the same time the respondents’ solicitors made no returns to the Revenue in respect of the rental income paid to this company. The respondents’ solicitors continued to operate this account after their attendance before the Compensation Fund Committee meeting on the 22nd October, 2003.”

That final report was considered by the Law Society Compensation Fund Committee who were, at all stages, monitoring the inquiry. On foot of it, the Committee was satisfied that it should refer the matter to the Disciplinary Tribunal but at the request of Mr. Sexton the sum of €600,000 already mentioned which was being held as security for any likely debt was permitted to be released.

The affidavit then went on to give some information about matters which arose since the referral to the tribunal. The deponent had become satisfied that all relevant barristers’ fees had in fact been paid and the monies due to them properly recorded and that there was no other outstanding liability of which the Society was aware.

Under the heading “Alleged Misconduct”, Ms. Devereux, in her affidavit, then listed a large number of matters. The first batch comprised the following:

“(a) Conducted a policy of deliberate non-compliance with the Solicitors Accounts Regulations No. 2 of 1984 and the Solicitors Accounts Regulations, 2001 and other legislation in respect of their handling of clients’ monies, fees and outlays.
(b) Conducted client transactions through bank accounts which were not designated client accounts.
(c) Concealed the existence of client accounts from both their reporting accountants and from the accountant appointed by the Society to investigate compliance with the Solicitors Accounts Regulations.
(d) Failed to make returns to the Revenue Commissioners in respect of payments of rental income to a company which had been struck off the Company’s Register, while claiming such payments as an overhead.
(e) Deliberately falsified their books of account to evade payment of tax.
(f) Deliberately tried to mislead the Society in producing fictitious books of account when a solicitor’s accounts regulations inspection was initiated in June, 2003.
(g) Provided false and misleading information in response to questions raised by the Society’s investigating accountant in a letter of the 22nd August, 2003 about barristers’ fees.
(h) Showed a blatant disregard for the Solicitors Accounts Regulations in having knowingly lodged clients’ monies to non-client bank accounts and in having maintained no record in books of account in respect of these transactions.
(i) Intermingled clients’ funds with fees and other monies in an account in the name of a company and which company had been struck off the Company’s Register and continued to do so after their attendance before the Compensation Fund Committee on the 22nd October, 2003.
(j) Lodged clients’ outlays to the office account and used these monies to fund office overheads and expenses.
(k) Seriously misled their own reporting accountants in the production of accounting records, which they knew to be inaccurate and which did not cover all their dealings with clients’ funds.”

The deponent then went on to set out specifically forty one different breaches of statutory regulations relating to solicitors’ accounts. Basically, they almost all relate in one way or another to the fundamental failure on the part of the respondents to keep proper books with the required entries and proper separation of the relevant accounts.

All of this material was before McKechnie J. in the High Court. Having heard submissions from Mr. Shane Murphy, S.C. for the Law Society of Ireland and the same two counsel the late Mr. James O’Driscoll, S.C. and Mr. Jack FitzGerald, S.C. for the respective respondents, he delivered himself of a careful ex tempore judgment to which I will now refer. The learned judge, after referring to the summary of the allegations made in Mary Devereux’s affidavit, made the following observation:

“It is sufficient to say that there have been multiple and extremely serious breaches of the Solicitors’ Regulations over a period of time with such breaches having been committed in many and diverse respects for which both of these solicitors are responsible.

For a substantial part of the investigation at least probably over its most difficult section, they were not only uncooperative but in fact were downright misleading to the Law Society. Whilst that position eventually changed and whilst an affidavit was sworn by or on behalf of both of them, nonetheless the initial and sustained reaction was one of, in effect, deceit. Moreover, attempts, as I have said, were made in a deliberate and sustained manner to hinder and frustrate the continuing investigation conducted by Ms. Devereux on behalf of the Law Society.

The actual charges in respect of which the matter came before the Disciplinary Tribunal numbered at least fifty and virtually all of them, apart from very few, can only be described as involving a series of orchestrated, intentional and conscious acts of misconduct spreading over a period of time. Therefore, on any reading or interpretation or on any view of these allegations, one could only describe them in the manner which I have.”

It is quite clear that the learned High Court judge fully appraised himself of what was involved and used strong language in expressing his abhorrence of what he learned. Furthermore, it is clear from a later part of his judgment dealing in the main with mitigation, he attached importance and significance to the fact that all outstanding taxes had been paid to the Revenue Commissioners and that from the evidence available before him, the respondents remained tax compliant. This is important because a solicitor who engages in tax evasion in connection with his practice is not merely committing a criminal offence in contravening statutory obligations, he is also acting unprofessionally.

I turn now to the factors which notwithstanding the serious view which McKechnie J. took of the conduct of the respondents, nevertheless persuaded him not to impose the ultimate sanction and instead to convert into a final order the recommendations of the Disciplinary Tribunal. The judge took into account both certain mitigating factors and the factual circumstances of the respondents. These were clearly both relevant considerations. Even after doing that, the learned High Court judge found it a difficult case. He made the observation:

“In so far as the future is concerned, I don’t believe that there is any likelihood of a repetition of these events, but notwithstanding all of these points, I have to say I find this a very difficult case. There is absolutely no question of I ameliorating the recommendations of the Disciplinary Tribunal. Under no circumstances would I think of reducing in any way their recommendations with the concern solely being in the opposite direction.”

It is clear, therefore, that the learned High Court judge’s decision was a finely balanced one. Indeed if he had decided that the respondents ought to be struck off the rolls, it is not easy to see how that decision could be overturned. But by the same token and for reasons upon which I will elaborate further in due course, this court, in my view, is confined to considering whether it was open to the learned High Court judge to take the view which he did.

To determine that issue, it is important to outline the factors which the judge did take into account. Broadly speaking these were as follows:

1. The ultimate full admissions of the allegations of misconduct with particular reference to the fact that these admissions were made a good deal earlier than the hearing before the Disciplinary Tribunal.

2. After the initial attempts to frustrate and deceive the Society the respondents made a decision that they would thereafter cooperate with the investigation and they engaged the assistance of professionals so as to unravel the events which had preceded the discovery of the misconduct charges in 2003.

3. They complied with the request to provide interim financial security which they did in the lodgement of €600,000.

4. They made full admissions to the tribunal.

5. They owned up to their motive for indulging in the “very grave practices” i.e. tax evasion but in that regard they made a full settlement with the Revenue Commissioners. As I have already mentioned, the judge was also satisfied that they had become and remained tax compliant.

6. Regard for the views of the Disciplinary Tribunal with special reference to the fact that the two solicitor members were very senior and experienced members of the profession, as already adverted to, together with the long history of both of them being involved with the Society and the solicitors’ profession. In this connection, the judge went out of his way however to make it clear that this was merely a factor which he took into account, it was not a question of deciding whether they were or were not “substantially wrong”.

7. The then position of the two respondents. As already mentioned, the judge’s belief that there was not any likelihood of a repetition of the events. He pointed out that Mr. Carroll was about 57 or 58 and that Mr. Colley was 51 or thereabouts. In this connection, the judge had been aware that Mr. Carroll had resigned from practice some considerable time before the hearing. Mr. Colley was continuing in practice.

8. What the judge regarded as “the most critical persuading factor” in his decision was that “no monies have ever been found wanting in terms of the solicitors being unable to meet their liabilities. In other words, clients were not left without funds.” Furthermore, the judge went on to point out that even though it was late in the day, barristers who were owed very substantial sums of money were paid and there was never a worry that the Compensation Fund would have to be called upon. He noted that the sum of €600,000 was released back some years ago and made it clear that if there had been any shortfall in the funds he would have struck both solicitors off. But he was satisfied there was not.

Whilst the learned High Court judge was obviously entitled to have regard to the fact that no monies were ever found wanting and he was entitled to attach considerable significance to this factor in what he regarded as a finely balanced case, it must be emphasized that it is certainly not the situation that if a solicitor ignores the accountancy regulations thereby putting in jeopardy the position of clients, that he can with any confidence expect to avoid the ultimate sanction, because by good fortune, on the relevant day no client or other person owed money by the practice is at an actual loss.

9. The judge noted that a certain time had passed in particular between the decision of the tribunal and the hearing in the High Court and that in that time Mr. Colley had been continuing practising with a practising certificate.

10. Finally, the judge said the following:

“The ultimate test is whether or not, I feel, that if this court were to impose by way of final order and sanction the recommendations of the Disciplinary Tribunal, would that be sufficient in terms of maintaining public confidence in the solicitors’ profession as well as doing justice to the solicitors in question and also upholding the good name of the Law Society. I think on balance it would.”

Those are the facts. I return now to the question of what is the role of this court on the appeal. I am satisfied the test is the simple one which I suggested. As in any appeal to the Supreme Court including factual matters, the key question is whether as a matter of law it was open to the judge of the High Court to arrive at the decision made by him or her. In my view, it is all the more important to maintain this principle in relation to solicitors’ matters for the resolution of which the Oireachtas specially provided for a qualified disciplinary tribunal and an ultimate decision of the High Court with the express intent that that decision would normally be made by the President of the High Court himself or herself. If, however, the President, as he or she is entitled to do, assigns a different judge, that judge in every way must stand in the same position as the President as far as dealing with the case is concerned. Indeed under the provisions of section 12 of the Solicitors (Amendment) Act, 1960, as originally enacted, an order of the High Court under section 8 (which would include an order striking the name of a solicitor off the roll) was declared to be “final and not appealable”. However, subsection 2 of that section permitted an appeal by leave of the High Court “on a specified question of law”. The right of appeal was broadened by section 39 of the Solicitors (Amendment) Act, 1994 in which there is a new section 12 of the 1960 Act substituted and which reads as follows:

“The Society or the solicitor concerned may appeal to the Supreme Court against an order of the High Court made under section 8(1) (as substituted by the Solicitors (Amendment) Act, 1994) or section 9 or 10 (as amended by the Solicitors (Amendment) Act, 1994) of this Act within a period of 21 days beginning on the date of the order, and unless the High Court or the Supreme Court otherwise orders, the order of the High Court shall have effect pending the determination of such appeal.”

In my view, the effect of that section is that there is no longer a necessity to get permission from the High Court to appeal nor does the appeal have to be confined to a specified question of law. But there is nothing in the wording of that section which broadens the role of the Supreme Court over and above any ordinary appeal. Supreme Court judges, therefore, cannot simply substitute their own views for the views of the President of the High Court or the delegated judge, such as Mr. Justice McKechnie, in this case. The decision of the High Court can only be reversed if as a matter of law it was clearly incorrect. This would, of course, as usual include the situation where even though there might have been no particular question of law involved as such, a decision of the High Court was one which it was not open to the judge to make on the basis of the evidence.

In this case, the learned High Court judge has given a closely reasoned judgment albeit an ex tempore one in which in my view, he has considered all the relevant points. Towards the end of his judgment, he said the following:

“The ultimate test is whether or not, I feel, that if this court were to impose by way of final order and sanction the recommendations of the Disciplinary Tribunal, would that be sufficient in terms of maintaining public confidence in the solicitor profession as well as doing justice to the solicitors in question and also upholding the good name of the Law Society. I think on balance it would.”

Something which I have not mentioned so far is that McKechnie J. expressly concurred with the view of Morris J. in an unreported judgment in Burke v. Burke delivered the 12th October, 1999 agreeing with a passage from a judgment of Sir John Donaldson M.R. in the English Court of Appeal but not with that judge’s addendum to it. The passage in question was:

“The striking off of a solicitor can have a punitive element, it can have an element of protection for the public but it always has an element of protecting the good name of the solicitor profession and the good name of the profession must be paramount.”

The addendum, however, was that if by the application of those principles, some injustice should be unavoidable and thus sustained that that matter must regretfully be accepted. It is clearly the law in this jurisdiction therefore that in considering the question of striking a solicitor off the roll, there must be put into the balance, among the other factors, any question of real potential injustice being caused to the solicitor in question.

Taking into account all the principles which the learned High Court judge seems to have applied, I take the view that the decision which he made was open to him to make. Accordingly, I would dismiss the appeal.

The Law Society v. Carroll & anor.