R (on the application of Coke-Wallis) v Institute of Chartered Accountants in England and Wales

The appellant was a chartered accountant and a member of the respondent institute (“the Institute”), which was responsible for the regulation of chartered accountants including the appellant. At the relevant time he and his wife were directors and shareholders of a number of trust companies carrying out regulated financial services work in Jersey.

In 2002 the Jersey Financial Services Commission issued a direction (“the direction”) to the companies and their directors to cease to take on any new trust company business and to

commence an orderly winding up of the companies’ affairs. It also directed that “no records or files in respect of the companies or any customers shall be removed from the offices of the companies”.

In 2002 the appellant was stopped by the police and on examination of the car the police found suitcases containing files relating to clients, computer equipment, network servers and back up tapes. The documents included original trust deeds, trust and company documents, share certificates, company memoranda and articles, and letters of wishes. The appellant and his wife were arrested and charged with the offence of failing to comply with the direction. They  were both convicted of failing to comply with the direction, contrary to article 20(9) of the Financial Services (Jersey) Law 1998  (“the Jersey conviction”). Appellant was fined £7,500. The appellant and his wife unsuccessfully sought leave to appeal to the Jersey Court of Appeal against their convictions. Later in 2004 the Institute’s Investigation Committee preferred a complaint against the appellant  (“the first complaint”). That complaint was heard by a disciplinary committee (“the tribunal”) but was dismissed on the same day. In 2006 the Investigation Committee preferred a second complaint “the second complaint”.

The appellant argued that second complaint should be summarily dismissed on the ground that the same complaint had already been dismissed. The appellant’s case was that the first and second complaints made the same allegations and that the second complaint should be dismissed on the grounds of autrefois acquit or res judicata. The tribunal dismissed the application. Appellant then issued an application for judicial review was also dismissed. The Court of Appeal dismissed the appeal.

A disciplinary tribunal heard the complaint and found the complaint proved, ordered that the appellant be excluded from membership of the Institute and made an order for costs against him. Permission to appeal to the Supreme Court was granted and the sanctions imposed by the tribunal had been suspended pending the outcome of the appeal.

While comparing both the complaints, it held that the  substance of the underlying conduct was the same in the case of both complaints. They both set out in the course of their respective summaries the facts that led to the Jersey prosecution and conviction. Although the particulars on the face of the first complaint asserted the conviction and the summary referred to it, the summary concluded by stating the submission of the Investigation Committee to be that the conviction was conclusive evidence for the purposes of bye-law 7(1) of the commission by him of such an act as is mentioned in bye-law 4(1)(a). The act complained of was the failure to comply with the direction based on the removal of documents and the like by hiding them in the car and trying to take them off the island.

The question then was what was the legal effect of the conclusion that the second complaint was the same as the first. It was submitted on behalf of the appellant that the consequence was that the second complaint must be dismissed, either on the basis of autrefois acquit or on the basis of res judicata.

Whether the first decision was final and on the merits, it concluded that the question raised in both sets of proceedings was the same, it followed that it determined a question raised in the second proceedings. It held that it was both final and on the merits.

The Supreme Court also held that all the constituent elements of cause of action estoppel are established on the facts. The Supreme Court allowed 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.

The Supreme Court allowed the appeal on the ground that the second complaint made the same complaint as the first complaint and that the dismissal of the first complaint, which was a final determination of the first complaint on the merits, made that complaint res judicata such that the Institute was not entitled to make or proceed with the second  complaint.