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Cite as: [2003] ScotCS 179
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Hunter, Re Petition for Judicial Review [2003] ScotCS 179 (25 June 2003)
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OUTER HOUSE, COURT OF SESSION |
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P338/01
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OPINION OF LORD EMSLIE in Petition of AUSTIN BROUGH HUNTER (AP) Petitioner; For Judicial Review of a decision of the Discipline Committee of the Institute of Chartered Accountants in Scotland, incorporated by Royal Charter and having its Headquarters at 27 Queen Street, Edinburgh
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Petitioner: D M Campbell; Lindsays WS (for Robert W Mercer, Paisley)
Respondents: Keen QC; Dundas & Wilson CS
25 June 2003
[1] The Petitioner is an individual who formerly carried on practice as a Chartered Accountant in Ayr. In these proceedings he seeks Judicial Review of a decision of the Discipline Committee of the Institute of Chartered Accountants in Scotland which was taken in his absence on 8 April 1998. The Respondents are the Institute and its Discipline Committee. The decision in question found the Petitioner guilty of professional misconduct on eight counts, and imposed penalties comprising expulsion from the Institute, censure, fines and costs. The Petitioner now seeks declarator of the invalidity of that decision, coupled with reduction of the decision in all its aspects. The First Order in the Petition was pronounced on 15 March 2001, and after sundry procedure a First Hearing has now taken place before me on 31 October and 1 November 2002 and 13 June 2003. The Respondents lodged no Answers at any stage of the proceedings, but they appeared in the Process from May 2001 onwards and were represented at the First Hearing by senior counsel. [2] In the debate before me, it was not suggested on the Petitioner's behalf that the decision complained of was wrong on its merits, nor that, if it were to be set aside and a fresh disciplinary hearing fixed, there would be any prospect of a different outcome. The argument for the Petitioner in October/November 2002 was (a) that the decision was ultra vires of the Discipline Committee because the Petitioner's membership of the Institute had already ceased by the date on which it was taken; (b) that in any event the decision was contrary to natural justice, the relevant hearing having proceeded in the Petitioner's absence; and (c) that the subsequent invalidation of the Petitioner's appeal, due to non-payment of the costs previously awarded against him, was also contrary to natural justice. Decree of declarator was sought on all three counts together with reduction of the Discipline Committee's decision. However, by the time of the continued First Hearing on 13 June 2003, counsel for the Petitioner intimated that he no longer insisted on heads (b) and (c) of the argument formerly advanced, and that Judicial Review of the decision was now sought on two grounds only. These were (1) the original argument to the effect that the Discipline Committee had no jurisdiction over the Petitioner when he was no longer a member of the Institute; and (2) a new argument to the effect that the Respondents were personally barred from proceeding with their disciplinary hearing on 8 April 1998 because, on 14 March of that year, their Chief Executive and Secretary had intimated in writing to the Petitioner that his membership of the Institute would terminate on 31 March if his annual subscription was not paid by that date. In these circumstances, I propose to say no more about the contentions on which the Petitioner no longer insists, and to concentrate instead on the two issues which now reflect his final position. [3] In developing his arguments, counsel for the Petitioner drew my attention to the Rules of the Institute which provide inter alia as follows:-"V. FEES AND SUBSCRIPTIONS
Payment
12(2) Annual subscriptions of members shall be due and payable on 1st January in each year....
Effect of non-payment of annual subscription
13(1) Any member who has failed to pay the annual subscription applicable to him by 31 March in the year in which it became due shall cease to be a member unless before that date the Council otherwise decides.
XI. COUNCIL AND COMMITTEES
Powers and Duties of Council
51(1) The Council shall manage and direct the affairs of the Institute and deliberate and advise on all matters affecting its interests.
(2) The Council shall appoint ...... Discipline, Investigation and Appeal Committees, all as hereinafter constituted, and a Finance and General Purposes Committee.
(3) The Council may also appoint other Committees.
(4) The Council may delegate to any Committees appointed by it any of its powers..........
XII. DISCIPLINE, INSOLVENCY, ETC
Liability to Disciplinary Action
57A A member...shall be liable to disciplinary action in accordance with this Chapter....
The Discipline Committee
60(1)(a) On receipt of a formal complaint from the Investigation Committee.... the Discipline Committee shall as soon as practicable notify the member......(in this Chapter sometimes called "the defender") of the nature of the complaint and of the time and place fixed for the hearing. The Discipline Committee shall give the defender a reasonable opportunity of being heard before it and shall, if he so desires, permit him to be represented before it by counsel or by a solicitor or by a member of the Institute. If the defender does not attend the hearing fixed as aforesaid, then provided that the Discipline Committee is satisfied that notice of that hearing was given to the defender the Discipline Committee may proceed to hear the complaint in the absence of the defender.
(3)(a) if the Discipline Committee is of the opinion that the complaint has been proved in whole or in part, it shall make a finding to that effect: and in that event it may make one or more of the following decisions concerning the defender as it considers appropriate......
(A) if the defender is a member:-
(i) that he be expelled from the Institute;
(viii) that he be censured;
(xi) that he be required to pay the Institute as a penalty such sum as the Committee may determine.
Costs
62(1) any decision made under Rule 60(3)... may direct that the defender pay the Institute such sum as the Committee may determine."
"ANNUAL SUBSCRIPTION 1998
I refer to my letter of 27 October 1997 enclosing your Annual Return and Subscription Notice for 1998, and my subsequent letter of 4 February advising that payment should reach the Institute no later than 17 February 1998 to avoid removal from membership. According to our records, we have received no communication or payment from you and your subscription is now well overdue.
In accordance with the notice given in our letter of 27 October, procedures are now in motion to remove you from membership and this process will take effect on 31 March 1998 unless we receive payment from you by that date."
Thereafter, on 7 April 1998, the Petitioner's solicitors faxed a letter to the Respondents headed "AUSTIN BROUGH HUNTER; DISCIPLINE COMMITTEE - 8 APRIL 1998", and continuing as follows:-
"We refer to the above. We act for Austin Brough Hunter.
We are instructed by Mr Hunter that he is no longer a Member of the Institute and therefore he does not propose to attend the above hearing."
No specific response to that communication appears to have been forthcoming until after the Discipline Committee met on 8 April, as arranged, and the letter intimating the Committee's decision was sent out on the following day. That letter was in inter alia the following terms:-
"I write to inform you that at the meeting of the Discipline Committee held yesterday, the complaint against you served on you on 2 March 1998 was heard.
The Discipline Committee considered the content of the letter .... dated 7 April 1998 written by your solicitors, Messrs Craxton & Mercer, advising that you had instructed them that you are "no longer a Member of the Institute" and therefore that you did not intend to attend the above hearing. In the absence of any further explanation of that statement, the Committee assumed that you hold such a view due to the operation of Rule 13(1) and the fact that your annual subscription for 1998 remains unpaid. The Discipline Committee, having had regard to the Standing Orders of the Finance and General Purposes Committee of Council which retains in membership any member under investigation or discipline notwithstanding the non-payment of the annual subscription, was satisfied that, under the operation of those Standing Orders, you had been retained in membership by resolution of Council in terms of Rule 13(1), and were accordingly still a member of the Institute.
The Discipline Committee then had regard to Rule 60(1)(a) and, being satisfied that notice of the hearing had been given to you, resolved to proceed to hear the complaint in your absence."
That letter went on to set out in detail the Committee's decision on the merits of the complaint.
[5] Both of the arguments for the Petitioner were founded on Rule 13(1) of the Respondent's Rules, and on the letter from the Chief Executive and Secretary dated 14 March 1998. Counsel's primary position was that since the Petitioner's membership of the Institute had in fact ceased before the date of the hearing on 8 April 1998, the Discipline Committee had no jurisdiction over him at that date in terms of Rule 57A. On a proper construction of Rule 13(1), it was submitted, cessation of membership for non-payment of an annual subscription by 31 March in a given year was automatic "unless before that date the Council otherwise (decided)". Read along with Rule 12(2), that provision plainly envisaged a decision being taken by the Council which was both specific to the member concerned and also specific to the year in which the non-payment of subscription occurred. Nothing less than that could validly qualify under Rule 13(1), and in the present case there was no evidence of any such decision having been taken. The Guidelines tendered by the Respondents at the bar appeared irrelevant in this context, since (a) their content was only advisory; (b) they bore to have been promulgated as long ago as 1992; and (c) they did not bear to emanate from the Council. Accordingly, the Petitioner's membership of the Institute ceased automatically with effect from 31 March 1998, and the inevitable consequence of this was that the Discipline Committee had no jurisdiction over him when their purported hearing took place on 8 April. The decision reached on that date was thus ultra vires and should be reduced. [6] Failing that, however, Counsel submitted that the Respondents were personally barred, by the terms of the letter of 14 March 1998, from proceeding with any disciplinary hearing three weeks later. Applying the well-established principles discussed in Clyde & Edwards, Judicial Review, at paragraph 13.25, the Petitioner was reasonably entitled to take the letter of 14 March 1998 as superseding the letter sent by the same individual four days earlier; the subsequent correspondence and communications emanated from a lower level within the Institute and were therefore not of material significance; it was clear from his solicitor's letter of 7 April that the Petitioner had relied on Rule 13(1), and on the letter of 14 March 1998, in determining not to attend the hearing on the following day; and in all the circumstances he should be regarded as having suffered prejudice sufficient to render the Respondents personally barred from proceeding with any hearing at that time. [7] On the matter of delay, counsel for the Petitioner advised me that unsuccessful applications for legal aid were made by his client during the course of 1998, and again in November 1999, and that it was only a third application in February 2000 which was eventually granted in June of that year. Further time then elapsed on account of the Petitioner's sequestration, and of ongoing criminal proceedings, before the present petition was raised in March 2001. In such circumstances, he submitted that it would be inappropriate for the Court to hold the lapse of time against the Petitioner, especially in view of the essentially private nature of the dispute between him and the Respondents. [8] In reply, senior counsel for the Respondents contended that the Petitioner's primary and secondary arguments on the merits were both ill-founded, but went on to submit that the Petition should not be entertained at all on the ground that the Petitioner's three-year delay in bringing it was excessive. Although Judicial Review was a flexible remedy, it was nonetheless important that challenges to decisions and actions affecting public and private interests should be brought forward within a reasonably short time. A three-year delay was longer than had been permitted in any other reported case, and notwithstanding the alleged difficulties suggested by way of justification on the Petitioner's behalf the Court should reject this Petition on the ground that it came far too late. Moreover, it was submitted, the Petition should be rejected on the ground that the Petitioner did not, and could not, suggest that in the event of the decision complained of being reduced there was the slightest chance of any fresh disciplinary hearing reaching a different conclusion. The Petitioner was now serving a prison sentence, having pled guilty to criminal charges arising out of substantially the same matters as had resulted in his expulsion from the Institute, and it was inevitable that at any renewed hearing the Respondents' Discipline Committee would simply expel him again. [9] In challenging the Petitioner's primary argument on the construction of Rule 13(1), senior counsel submitted that there was nothing in the wording of the Rule to require any "decision" of the Council to be specific to an individual member or to a particular year. The Petitioner was seeking to read into the Rule words of restriction which were not there. It was sufficient for the purposes of the Rule that a relevant decision of the Council was in existence by the due date. That decision might legitimately relate to a class of members rather than to any individual, and might be designed to apply from year to year. So long as it was in place and capable of taking effect in relation to a given individual in a given year, it qualified under Rule 13(1). Notwithstanding the difficulties experienced by the Respondents in tracing relevant documentation since moving their principal offices, the factual position was now clear from the Affidavits lodged, as appointed by the Court at the time of the continuation of the First Hearing in November 2002. In particular, paragraph 3 of the Affidavit of Charles Edward Monaghan was in the following terms:-"I recall that the Finance and General Purposes Committee decided that Rule 13(1) should not apply to members under disciplinary proceedings. It would not be in the interests of ICAS to allow Members to evade disciplinary proceedings by failing to pay their subscriptions. Council also considered the matter in plenary session and agreed."
If further supporting evidence was needed, this could be found in the Affidavit of Andrew Robin Buck which confirmed inter alia that the retention in membership of a member who was subject to investigation by the Institute's Legal Department ".....was certainly the policy of the Council on or before 31 March 1998." This Affidavit went on to record that the witness could not recall a single instance where a member had not been retained in membership while under investigation by the Legal Department. According to senior counsel, the earlier Guidelines were produced as illustrating the historical background to the Council's decision for the purposes of Rule 13(1), but what the Respondents now founded on was that decision, as described in the Affidavits, and not a mere adoption of the Guidelines. In any event, it was submitted, the Discipline Committee on 8 April 1998 had plainly addressed the question of the Petitioner's membership of the Institute, and had reached a determination on that matter. The Petitioner could only attack that determination on the ground of "Wednesbury unreasonableness", and even if he had attempted to do so he would have been bound to fail because the determination was not devoid of a rational basis.
[10] Turning to the Petitioner's allegation of personal bar, senior counsel for the Respondents began by contending that it came so late in the day that the Court should not entertain it as a potential ground for reduction. By reference to the well-known observations of the Lord President, Lord Rodger of Earlsferry, in King v East Ayrshire Council 1998 SC182, at page 196 B-F, he pointed out that the Petitioner had for more than five years been fully aware of all of the factors necessary for the argument now advanced; that there could be no adequate justification for a delay of that order; that in any event no Affidavits had been lodged to cover the critical issues of reliance and prejudice on which the argument depended; and that in all the circumstances, whatever view might be taken of the merits of the argument, it should not be allowed to affect the exercise of the Court's discretion vis-à-vis reduction. In any event, it was submitted, the argument was fundamentally unsound. The letter of 14 March 1998 was one of two received by the Petitioner from the Chief Executive and Secretary in the same week; the other one informed the Petitioner of the forthcoming disciplinary hearing, and intimated his interim suspension from membership of the Institute until that time; all subsequent correspondence and communications between the parties, including the Petitioner's solicitor's faxed letter of 7 April, proceed on the basis that the hearing would be going ahead on 8 April; and in the circumstances there could be no question of the Petitioner being entitled to rely on the letter of 10 March - as claimed in Article 5 of the Petition - as indicating "that there would not be a hearing of the complaint on 8 April 1998". The Petitioner had simply elected not to attend the hearing, rather than appear and argue the question of jurisdiction, and in the circumstances the Discipline Committee were entitled to proceed with the hearing in his absence in terms of Rule 60(1)(a). [11] Even if that were not so, the Petitioner was not in a position to demonstrate any prejudice or disadvantage flowing from his alleged reliance on the letter of 10 March 1998. Given the nature of the professional misconduct with which he was charged, the Discipline Committee would inevitably have expelled him from the Institute on 8 April 1998, whether he attended the hearing or not, and this again served to illustrate the futility of the present proceedings. [12] Having carefully considered the parties' competing submissions, I have reached the conclusion that on several grounds the application for Judicial Review must be refused. In the first place, I am not persuaded that any adequate justification has been put forward for the delay of nearly three years between the date of the decision complained of and the raising of the present proceedings. A decision of this kind is, as it seems to me, of considerable significance, not only to the Petitioner, but to the Respondents and their members and to the public at large who expect professional bodies to act promptly and effectively in disciplinary matters. Accordingly, I hold that any challenge by way of Judicial Review should have been taken within a reasonable time after 8 April 1998, and that the inordinate delay which has occurred is not satisfactorily explained by reference to the Petitioner's successive legal aid applications or by his later sequestration and prosecution. Notwithstanding insolvency and criminal proceedings, a Petition could have been brought at any stage, and sisted for legal aid purposes, but this step was never taken. Even when legal aid was ultimately granted in June 2000, it took a further nine months before the present Petition was raised, and in all the circumstances I can see no reason why the Court should show the indulgence which the Petitioner craves. [13] Secondly, it is hard to see any warrant for Judicial Review of the decision complained of where, even now, more than five years on, the Petitioner is not in a position to satisfy the Court that he was actively prejudiced by the decision to proceed with the hearing on 8 April 1998, or that there would be any prospect of a different outcome if, in the event of decree of reduction being pronounced, the matter were to be referred back to the Respondents' Discipline Committee for a fresh decision. As counsel appeared to accept on his behalf, the Petitioner is now serving a prison sentence in respect of substantially the same matters as were held to warrant his expulsion from the Institute, and against that background I am not persuaded that any practical advantage could accrue to the Petitioner from any decision in his favour in these proceedings. [14] Thirdly, I am not persuaded that there is any merit in the Petitioner's primary argument on the construction of Rule 13(1) of the Respondents' Rules. In my opinion, there is nothing in the structure or terminology of the Rule to require the word "decision" to be given the very restricted meaning for which the Petitioner contended. No doubt a decision specific to a given individual in a particular year would qualify; but so also, as it seems to me, would a timeous decision relative to an identified class and intended to apply from year to year. There are obvious practical advantages inherent in the latter construction, notably the avoidance of a multiplicity of decisions and the achievement of both certainty and consistency in the regulation of the Institute's affairs, and it is a well-established principle that, wherever possible, the Court should construe a document in the manner most closely according with practical common sense. I therefore reject the narrow construction of Rule 13(1) advanced on the Petitioner's behalf. So far as the factual position is concerned, with the benefit of the Affidavits which I called for at the time when the First Hearing was continued on 1 November 2002, I hold that a relevant decision for the purposes of Rule 13(1) was timeously taken by the Respondents' Finance and General Purposes Committee, and by the Council in plenary session, prior to 31 March 1998. This is explicitly narrated in paragraph 3 of the Affidavit of Charles Edward Monaghan, and confirmed in the second part of paragraph 3 of the Affidavit of Andrew Robin Buck. Counsel for the Petitioner very fairly accepted that such evidence was sufficient in law for present purposes, although in his submission "thin", and in my view these Affidavits enable me to proceed, with reasonable confidence, on the basis that, as at 31 March 1998, there was in force a decision of the Council which applied to the Petitioner and prevented his membership of the Institute from being terminated while disciplinary proceedings were still in progress. I should add, however, that if I had been against the Respondents on the issue of construction, or on the matter of fact addressed in the Affidavits, I would not have been prepared to sustain senior counsel's argument based on these questions having been the subject of a ruling by the Discipline Committee. In my opinion, if the Petitioner had truly been beyond the jurisdiction of that Committee, its decision would have been ulra vires whether it recognised that fact or not. [15] Fourthly, I am not prepared to sustain the Petitioner's subsidiary argument alleging personal bar against the Respondents. For one thing, following the decision of the Inner House in King, supra, I consider that this argument comes far too late in the day to form a proper ground for reduction of the decision complained of. It is now more than five years since the Petitioner had all the necessary materials in his possession to enable an argument based on personal bar to be advanced. It is well over two years since the present proceedings were commenced. And more than seven months have now elapsed since the parties' principal arguments were submitted in October and November 2002. No satisfactory explanation was offered on the Petitioner's behalf for delays of that order, and in all the circumstances I do not consider that it would be appropriate to allow such an apparent afterthought to affect the exercise of the Court's discretion on the manner of reduction of the decision of 8 April 1998. I am fortified in that view by the consideration that the Petitioner has in any event failed to make out the necessary constituents for an argument based on personal bar. In my judgment, it cannot sensibly be maintained on his behalf that he relied on the letter of 14 March 1998 as showing that no hearing would go ahead on 8 April. Such a contention simply ignores the subsequent correspondence and communications between the parties from 1 April onwards, including the faxed letter of 7 April 1998 from the Petitioner's own solicitors which expressly referred to the hearing fixed for the following day, and merely intimated that the Petitioner would not be attending. Moreover, for the reasons already discussed earlier in this Opinion, I am not persuaded that the Petitioner is in a position to demonstrate any prejudice arising from his non-attendance at the hearing in question. To sustain the personal bar argument would be an empty and sterile gesture in circumstances where there is no reason to believe that a fresh hearing before the Respondents' Discipline Committee would have any prospect of producing a different outcome. [16] For all of these reasons, I repel the pleas in law for the Petitioner and refuse to grant the amended remedies which he seeks.