Share it

Can a professional or regulatory body suspend one of its members, when it had let him off at a first disciplinary hearing, but then found against him at a second?  That was the issue in Coke-Wallis, where the Supreme Court was asked by Mr Coke-Wallis, who had been found guilty of professional misconduct in Jersey, to consider whether, by virtue of the principles of autrefois acquit, res judicata and abuse of process, his second disciplinary hearing should be set aside and his membership of the Institute of Chartered Accountants restored.

In what can only be viewed as an application of technical rules over merits, the Supreme Court concluded that res judicata (in particular, issue estoppel) did apply, prompting Lord Collins to conclude (through what one imagines were gritted teeth): “the appeal should be allowed, even though that leads to the thoroughly undesirable result that for purely technical and wholly unmeritorious reasons the second tribunal’s decision that the [appellant] be excluded from membership of the Institute cannot stand”.

Background Facts

Mr Coke-Wallis is a chartered accountant and member of the Institute of Chartered Accountants in England and Wales (the “Institute”).  At the relevant time he was practising in Jersey, where, along with his wife, he was acting as director and shareholder of numerous trust companies carrying out financial services work.  In December 2002, Mr and Mrs Coke-Wallis were issued with a direction by the Jersey Financial Services Commission to wind up these companies, cease taking on new business in relation to them and to maintain all files and records at their offices.  However, later that month, the appellant was caught by the police attempting to board a ferry at St Helier bound for St Malo, in a car containing suitcases of client files, computer equipment, and materials relating to the affairs of the trust companies. The couple were both arrested and charged with failing to comply with the JFSC’s direction, and were convicted in September 2003.

The Investigation Committee of the Respondent Institute investigated the matter, and filed a complaint against Mr Coke-Wallis that his conviction in Jersey constituted an act or default liable to bring discredit upon himself, the Institute or the profession, contrary to the Institute’s Bye-laws.  This complaint was heard and dismissed by a disciplinary tribunal in April 2005 (the “First Complaint”), on the basis that the offence for which Mr Coke-Wallis was convicted in Jersey did not constitute an indictable offence in England & Wales.

A second complaint was then put forward by the Investigation Committee in March 2006, based on the appellant’s underlying conduct that had resulted in the conviction, rather than the conviction as an act in itself (the “Second Complaint”).  Before a second disciplinary tribunal (with a different composition), Mr Coke-Wallis argued that the Second Complaint was based on the same allegations as the First Complaint, and so should be summarily dismissed on the grounds of autrefois acquit, res judicata or abuse of process.  This argument failed, and Mr Coke-Wallis’ membership of the Institute was suspended.

Proceedings Below

In March 2007, the appellant applied for this decision to be judicially reviewed.  The application was dismissed both in the High Court and the Court of Appeal, with the CA (Sir Anthony May, President of the QBD, Arden and Jacob LJJ) concluding that bringing the Second Complaint had not been an abuse of process, since (in Sir Anthony May’s words) there was a “strong public interest in bringing professional disciplinary proceedings in order to maintain professional reputation and integrity both in individuals and in the profession as a whole”.

Supreme Court

The main issue for the Supreme Court (Lords Phillips, Rodger, Collins, Clarke and Dyson) to decide was whether the First and Second Complaints were based on the same grounds, such that the general principle that the same cause should not be brought against somebody twice (nemo debet bis vexari pro una et eadem causa) was engaged. Lord Clarke, giving the judgment of Court with which all the other Justices agreed, held that the basis of the Second Complaint was indeed the same as the First.  The fact of the conviction in Jersey, and the underlying conduct, amounted to the same thing: Mr Coke-Wallis had failed to comply with the JFSC’s direction, and this was a breach of the Institute’s Bye-laws.

His Lordship then considered the exact nature of the legal principles engaged by these circumstances.  Autrefois acquit was not relevant, since it has its place in criminal law rather than civil proceedings.  The relevant principle was its counterpart in civil law, res judicata, and in particular cause of action estoppel (ie the failure of an earlier action on its merits will prevent a further cause of action), which if founded, is an absolute bar.  After a thorough examination of case law on this issue, Lord Clarke held that cause of action estoppel could apply to successive disciplinary tribunal hearings, and that there were 6 constituent elements to such an estoppel (see paragraphs 34 to 43 of the judgment), all of which were satisfied in the circumstances of the case.  Accordingly, Lord Clarke concluded that he “would allow the appellant’s appeal on the basis that the first and second complaints relied upon the same conduct and that, once the first complaint was dismissed, it was contrary to the principles of res judicata to allow the Institute to proceed with the second complaint” (paragraph 51).

The issue of abuse of process was therefore academic, and no opinion was expressed on this point.

Comment

Aside from the colourful facts, and the detailed guidance on the application of res judicata in civil proceedings, the case is notable for the divergence of opinion between the Court of Appeal and the Supreme Court in respect of public interest as a ground for allowing or dismissing the appeal on a technicality.  The Court of Appeal was unanimous in its view that the public interest in maintaining high professional standards should override the technicality of res judicata.  The Supreme Court, however, felt constricted by the operation of law: Lord Clarke stated that whilst he could see the merits of introducing a public interest exception, “whether and in what circumstances to permit such as exception seems to me to be essentially a matter for Parliament and not for the courts” (see paragraph 49).

Thus, unless Parliament decides that it wishes to grant the Courts the right to override action estoppel where to do so is in the public interest, the message to all forms of tribunal is clear – get it right first time.  And thus Mr Coke-Wallis can continue to be a member of the Institute (“unfortunate” and “absurd” though this might be, in Lord Collins’ words): readers may feel that he is a lucky man.

Kathryn Noble is a trainee solicitor at Olswang LLP