Defence found to be an abuse of process in the form of a collateral attack; Disciplinary ruling prima facie evidence in later civil trial

The latest Australian Law Journal has a critical note about Conlan v Simms [2006] EWHC 401 (Ch), in which an English High Court judge held that a ruling of the Solicitors Disciplinary Tribunal was prima facie evidence in a later civil trial that the solicitor had been struck off for dishonesty, watering down the proposition in Hollington v Hewthorn & Co. Ltd [1943] KB 587 that a criminal conviction was inadmissible in a civil trial of the same facts at issue in the criminal case.

In Conlan v Simms, a lawyer was considering going into partnership with another. He knew the other to be under investigation by legal regulators. What he did not know, and what he was not told, was that the other lawyer had in fact fraudulently promoted bogus schemes, as the investigators suspected. The Court found a duty of disclosure to a prospective partner, and found that the disciplinary tribunal’s findings were admissible as prima facie evidence in the claim for damages by the new partner for fraudulent misrepresentation by silence. In Hollington v Hewthorn, the Court refused to admit into evidence a conviction for careless driving at the time and place of the accident, even as prima facie evidence that the accident was caused by the convicted person’s negligent driving. I have reproduced the whole of the relevant passage from the new decision, (formatting altered).

“B. Relevance of SDT findings and decision of the Divisional Court

205 Mr Simms [the dishonest solicitor] argues that the findings in the [Solicitors Disciplinary Tribunal (“SDT”)] proceedings are inadmissible in principle. The defence put forward by Mr Conlon and Mr Harris [the new partners and the victims of the dishonesty] in the first action included a claim that Mr Simms did not come to the court with clean hands because of the matters with which he was charged by the Law Society by way of disciplinary offences. The decision of David Richards J that the findings in the SDT were not admissible is res judicata in this action. [This is a reference to an earlier civil proceeding brought by the dishonest solicitor against the new partner seeking specific performance of an agreement whereby he would step down only temporarily from the partnership pending the outcome of the investigation. The judge in that case followed Hollington v Hewthorn & Co Ltd in refusing to reopen argument following the disciplinary tribunal’s decision.]

206 Mr Simms says that since David Richards J’s judgment of March 22, 2004, Mr Conlon and Mr Harris have known that the findings of the SDT were not admissible and that if they wished to raise any specific allegations which were in any way founded on or connected with the SDT proceedings that they would need to make express allegations in this action so that the matter could be dealt with by way of defence, disclosure and witness statements on the details. It has been open to the claimants for over 18 months to plead specific allegations, require disclosure, call evidence and cross-examine on the relevant documents.

207 Accordingly, he says, neither the decision nor any of its findings or conclusions will be admissible at any trial: Three Rivers DC v Bank of England (No.3) [2001] UKHL 16, [2003] 2 AC 1; Secretary of State for Trade and Industry v Bairstow [2004] Ch 1. Hunter v Chief Constable of the West Midlands Police [1982] AC 529 is of no relevance to the present action. There has been no initiation of any proceedings by Mr Simms. This action is not intended to and does not have as its purpose the mounting of a collateral attack on the SDT or Administrative Court decisions.

208 Mr Simms argues that the cross-examination of him on the findings of the SDT has not proved anything other than Mr Simms has an explanation for the matters raised in cross-examination and does not accept the findings of the SDT. The cross-examination on the findings of the SDT (which were inadmissible), without any recourse to any documentation relevant to the issues upon which cross-examination occurred, does not prove anything.

209 The claimants say that they are not precluded by the judgment of David Richards J from relying on the findings of the SDT and the Divisional Court.

210 They argue that the order of a professional disciplinary committee is admissible as prima facie evidence of the fact that Mr Simms was struck from the Roll of Solicitors on the grounds of his dishonesty: Hill v Clifford [1907] 2 Ch 236. The court is entitled to reach its own view of the facts as found by the SDT/Divisional Court: Clifford v Timms [1908] AC 12. Although judicial findings made in a previous case are not admissible in later proceedings, the principle of abuse of process would prevent collateral attack on an earlier decision of a court of competent jurisdiction where re-litigation of the same issues would be manifestly unfair or would bring the administration of justice into disrepute: Secretary of State for Trade and Industry v Bairstow [2004] Ch 1. The principle of collateral attack is not applicable where the party seeking to make that attack is able by reference to new evidence to show why the earlier judgment should not stand: ibid at para. 30.

211 Accordingly, the claimants contend that they do not have to get within the two categories identified in Bairstow, because of the failure by Mr Simms to identify any new evidence which would change the aspect of the case: Phosphate Sewage Co Ltd v Molleson (1879) 4 App. Cas. 801, 814. Even if that is not so, it would be either manifestly unfair or bring the administration of justice into disrepute to require such re-litigation where nothing is produced to show that the earlier decision was wrongly made.

212 Before I come to my conclusions on this aspect, I should mention that the question of the role which the SDT findings and the Divisional Court decision were to play in this trial was not explored prior to trial, and it was rather faintly suggested by Mr Engelman on behalf of the claimants that I should decide it as a preliminary issue. I decided that that would not be an appropriate course without looking at the findings and the decision in detail, and considering the case as a whole. I was referred to many decisions on this aspect of the case, and I will deal with those which I consider most directly relevant. It is convenient to take them in chronological order.

213 In the proceedings which culminated in Hill v Clifford [1907] 2 Ch 236 and Clifford v Timms [1908] AC 12, five dentists carried on a partnership under agreements which provided that if any partner should be guilty of ‘professional misconduct’ the other partners would be at liberty to give notice in writing determining the partnership. The General Medical Council (‘GMC) acting under the powers of the Dentists Act 1878 made an order striking the Cliffords’ names off the register of dentists on the ground that they had been guilty of conduct which was infamous or disgraceful in any professional respect. Their partners gave notices determining the partnership, and the actions were brought to determine the validity of the notices. The misconduct consisted of employing unregistered assistants to attend to patients and perform operations, some of whom used the title of ‘Doctor’ and publishing advertising pamphlets which were alleged to be of an objectionable character.

214 The order of the GMC was tendered in evidence. Warrington J rejected it and decided the actions in favour of the Cliffords. An appeal was allowed: Hill v Clifford [1907] 2 Ch 236. Cozens-Hardy MR considered that the order was admissible as evidence of the existence of conduct which was ‘infamous or disgraceful in a professional respect.’ He said (at 245): ‘Unless and until evidence to the contrary was given, the orders suffice to prove that the Cliffords were guilty of statutory misconduct. No evidence was given by them to resist this prima facie evidence.’ He added that he doubted whether it was competent to any court to review a declaration by the GMC that an act of a particular kind was disgraceful conduct in a professional respect, even though it might be competent to review the decision that a certain individual had committed an act of that particular kind. He preferred to base his judgment on that general principle, although in the present case it might be sufficient to say that the respondents, by the mouth of their counsel speaking in their presence in the most formal manner, admitted that they had been found guilty of offences of professional misconduct and promised not to repeat them.

215 Sir Gorell Barnes P said (at 249) that it was not necessary to decide whether the proceedings in the GMC were admissible for the purpose of proving the fact of professional misconduct because the case might be disposed of upon the facts admitted or proved at the trial without using the report of the GMC. But he doubted whether the order of the GMC was conclusive evidence of the grounds on which the GMC had acted. It would not be necessary to decide whether the order was conclusive evidence even as against the defendants and to what extent it was conclusive. It would probably be sufficient to determine whether the order was admissible in evidence in the case, because no evidence was given in answer to the plaintiff’s case. It was admissible as evidence, and conclusive evidence, of the fact that the defendants’ names had been erased by order of the GMC. It might be admissible to show the grounds upon which it was made.

216 Then a much more difficult question arose as to whether the order would be admissible as evidence of the truth of the grounds upon which the decision was given. He had been unable to satisfy himself that the order in the present case could be tendered as evidence of the truth of the facts, especially when the report of the Committee was made upon evidence that was not taken on oath. But the order might be evidence that from the facts before them the Council had found that the defendants had been guilty of conduct which was infamous or disgraceful in a professional respect, and although the ordinary courts might be competent to consider whether the facts were true, it was doubtful whether it could be competent for the courts to hold that a special tribunal created by the Act had formed an erroneous opinion that the acts imputed to the defendants and proved amounted to such conduct. In the present case substantially the same facts which were before the GMC had been proved or admitted, and yet on the issue of professional misconduct the court was asked to say that those facts did not show professional misconduct. The order was clearly admissible to prove that the defendants’ names had been erased from the register. The course taken by the defendants was tantamount to a plea of guilty and they must be taken to have admitted the charges.

217 Buckley LJ thought that the proceedings before the GMC had resulted in the order the effect of which was that Ruby Clifford had become incapable of being and acting as a partner. The order of GMC was admissible on the question that Clifford’s name had been erased from register. It was also admissible to show the grounds upon which his name was erased. That was not the same as saying that it was evidence that those grounds were truly alleged. The order could be tendered in evidence to show its own existence and to show the grounds on which it was made. The next question was whether it was admissible as evidence of the truth of the facts. It was no doubt not conclusive as to their truth, but it was admissible as evidence of their truth. It would have been open to assert and prove if he could that he had not been guilty of professional misconduct but he had adduced no evidence at all for that purpose.

218 There was therefore a majority (Cozens-Hardy MR and Buckley LJ) for the view that the order was prima facie evidence of the truth of the charges.

219 The House of Lords dismissed the appeal, but the decision was based on different grounds. Lord Loreburn LC said that it was not necessary to enter upon the legal question which had been discussed so much in the Court of Appeal. It was a matter of indifference whether the order made by the GMC should be admitted in evidence or be excluded. It was clear that the form of advertisements which were sanctioned amounted to professional misconduct.

220 This decision has rarely been cited or applied. In DPP v Head [1959] AC 83, 108-109, Lord Denning relied on the judgment of Cozens-Hardy MR to say that an order under the Mental Deficiency Act 1913 (that a person was a mental defective) was prima facie evidence (but not conclusive evidence) of the truth of the facts recited in it, and if uncontradicted, ought to be regarded as sufficient evidence. See also Novello & Co Ltd v Ernst Eulenberg [1950] 1 All ER 44; The European Gateway [1987] QB 206.

221 It was not cited in the well known (or notorious) case of Hollington v Hewthorn & Co. Ltd [1943] KB 587. The plaintiff sued as the administrator of the estate of his son who had died after the action was brought, and on his own behalf, claiming damages in respect of a collision which occurred between the plaintiff’s car and which was driven by his son and a car owned by Hewthorn & Co Ltd, and driven by Mr Poll. Because of the death of the son, the plaintiff was unable to adduce any direct evidence of the accident and he tendered in evidence, in addition to evidence as to the position and condition of the two vehicles (inter alia) a conviction of Mr Poll for careless driving at the time and place of the collision. For the plaintiff it was contended that he was entitled to put in the conviction, not as conclusive evidence, but prima facie evidence that the defendant was driving negligently. It was accepted that it would be open to the defendant to show if he could that he ought not to have been convicted or that the negligence of which he was convicted did not cause the accident.

222 It was held that the conviction was only proof that another court had considered that the defendant was guilty of careless driving. The court which has to try the claim for damages knows nothing of the evidence which was before the criminal court, and it could not know what arguments were addressed to it, or what influenced the court in arriving at its decision. The issue in the criminal proceedings was not identical with that raised in the claim for damages. Once the defendant challenged the propriety of the conviction, the court, in the subsequent trial, would have to retry the criminal case to find out what weight ought to be attached to the result. On the trial of the issue in the civil court, the opinion of the criminal court is irrelevant. Lord Goddard CJ said (at 596): “… it is relevancy that lies at the root of the objection to the admissibility of the evidence.”

223 In Hunter v Chief Constable of the West Midlands Police [1982] AC 529 the Birmingham Six sued the Chief Constables of the West Midlands and Lancashire Police and the Home Office for damages against the police for injuries caused by alleged assaults after they had been arrested following the explosions in Birmingham public houses in 1974. At their criminal trial, in the absence of the jury, Bridge J held that the prosecution had proved beyond reasonable doubt that the men had not been assaulted by the police and that their statements had been voluntary and should be admitted in evidence.

224 It was held that where a final decision had been made by a criminal court there was a general rule of public policy that the use of a civil action to initiate a collateral attack on the decision was an abuse of the process, and that the fresh evidence which the plaintiff sought to adduce in the civil action fell far short of satisfying the test to be applied in considering whether an exception to the general rule of public policy should be made.

225 Lord Diplock said that the case was about abuse of the process of the court and concerned the inherent power “which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.” (page 536)

226 He said (at 541) that the abuse of process which the case exemplified was the initiating of proceedings in a court for the purpose of mounting a collateral attack upon a final decision which had been made by another court of competent jurisdiction in previous proceedings in which the plaintiff had had a full opportunity to contest the decision in the court by which it was made. The proper method of attacking the decision would have been an appeal against conviction. At page 452 he cited Stephenson v Garnett [1898] 1 QB 677, at 680-681, where A. L. Smith LJ said:

‘… the court ought to be slow to strike out a statement of claim or defence, and to dismiss an action as frivolous and vexatious, yet it ought to do so when, as here, it has been shewn that the identical question sought to be raised has already been decided by a competent court.’

227 No question arose in Hollington v Hewthorn of raising in a civil action the identical question which had already been decided in a criminal court of competent jurisdiction, and the case did not purport to be an authority on that subject: at 543. To allow a collateral attack the new evidence must satisfy the test in Phosphate Sewage Co Ltd v Molleson (1879) 4 App. Cas. 801, 814, namely that the new evidence must be such as “entirely changes the aspect of the case.”: [1982] AC at 545.

228 The effect of the actual decision was reversed by the Civil Evidence Act, section 11, which allows criminal convictions to be adduced in evidence in civil proceedings as prima facie evidence that the offence was committed: see also section 13, as amended (defamation cases: conviction conclusive evidence), and Police and Criminal Evidence Act 1984, sections 74 and 75 (admissibility of conviction of persons other than the accused).

229 In Hunter Lord Diplock said (at 541) that Hollington v Hewthorn was generally considered to have been wrongly decided. Hunter was an unsuccessful appeal from McIlkenney v Chief Constable of West Midlands [1980] QB 283, in which Lord Denning MR (who as A.T. Denning QC had appeared for the unsuccessful plaintiff in Hollington v Hewthorn) had said: “Beyond doubt, Hollington v Hewthorn was wrongly decided. It was done in ignorance of previous authorities. It was done per incuriam”: at 319). From the reference to ignorance of previous authorities, and from the dissenting judgment of Sir George Baker (at 342), it is clear that it had been argued that Hollington v Hewthorn was inconsistent with Hill v Clifford.

230 In Arthur J S Hall & Co v Simons [2002] 1 AC 615, 702, Lord Hoffmann said that Hollington v Hewthorn was generally thought to have taken the technicalities of the matter too far when it decided that the criminal conviction was no evidence whatever.

231 The decision in Hollington v Hewthorn was again recently described in R v Hayter [2005] UKHL 6, [2005] 2 All ER 209, at [72] by Lord Carswell as much-criticised, and (by implication) as irrational by Lord Steyn, at [21] when he described the statutory modification of the decision as marking an advance of the rationality of the law.

232 But Hollington v Hewthorn was followed in Secretary of State for Trade and Industry v Bairstow [2004] Ch 1, where the former managing director of a company brought wrongful dismissal proceedings against the company. Following a trial which lasted almost a year (from October 1997 to September 1998), the judge dismissed the claims in two judgments given in July and December 1999, and found that the director had been guilty of grave misconduct and neglect in the performance of his duty. An appeal against the decision was dismissed. The Secretary of State for Trade and Industry subsequently applied under section 8 of the Company Directors Disqualification Act 1986 for a disqualification order and sought to rely on the findings made in the wrongful dismissal proceedings.

233 Sir Andrew Morritt V-C, giving the judgment of the Court of Appeal, said that although Hollington v Hewthorn had been criticised by Lord Diplock in Hunter and by Lord Hoffmann in Arthur J S Hall & Co v Simons [2002] 1 AC 615, 702, it had been recognised as expressing the position at common law in several subsequent decisions: Savings and Investment Bank Ltd v Gasco Investments (Netherlands) BV [1984] 1 WLR 271; Hui Chi-ming v The Queen [1992] 1 AC 34 (P.C.); Land Securities plc v Westminster City Council [1993] 1 WLR 286; Symphony Group plc v Hodgson [1994] QB 179; Three Rivers District Council v Bank of England (No.3) [2003] 2 AC 1.

234 It was held that the decision was not limited to criminal proceedings. Accordingly the factual findings and conclusions in the employment proceedings were not admissible as evidence of the facts found in those proceedings.

The cases established the following propositions.

First, a collateral attack on an earlier decision of a court of competent jurisdiction might be but was not necessarily an abuse of the process.

Second, if the earlier decision was that of a court exercising a civil jurisdiction then it was binding on the parties to that action, and their privies in any later civil proceedings.

Third, if the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it would only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be re-litigated or (ii) to permit such re-litigation would bring the administration of justice into disrepute.

235 On the facts it was held that it would not be manifestly unfair to either party for the Secretary of State to be required to prove his case. Nor would re-litigation bring the administration of justice into disrepute, because the allegations made by the Secretary of State were serious, and they had to be proved to the satisfaction of the court hearing the application for a disqualification order by legally admissible evidence.

236 My conclusions on this aspect of the case are these. First, I am in no sense precluded by the decision of David Richards J from deciding the question of the admissibility of the findings of the SDT and the Divisional Court. What he said was obiter and tentatively expressed, and is not res judicata as between the parties.

237 Second, Hill v Clifford (having been affirmed on different grounds by the House of Lords) is not binding authority, and its value as persuasive authority is limited by the effect of Hollington v Hewthorn. The majority decision of the Court of Appeal in Hill v Clifford accords with common sense. I consider that it does support the view that the order of the SDT is evidence of the fact that Mr Simms was struck from the Roll of Solicitors on the grounds of dishonesty. But as regards the truth of the findings themselves, in relation to the potential admissibility of the decision of the Divisional Court in the present case it is difficult to reconcile Hill v Clifford with Hollington v Hewthorn, and it would be odd if the findings of the SDT had greater evidential value than the decision of the Divisional Court. Third, it is plain (if authority were needed for such an obvious point) from Clifford v Timms [1908] AC 12, the court is entitled to reach its own view of the facts as found by the SDT/Divisional Court, provided that the facts are properly proved in accordance with procedural fairness.

238 Fourth, even where judicial findings made in a previous case were not admissible in later proceedings, and even where the earlier decision was not res judicata between the parties, the principle of abuse of process would prevent collateral attack (by a defendant as well as a claimant) on an earlier decision of a court of competent jurisdiction if re-litigation of the same issues would be manifestly unfair or would bring the administration of justice into disrepute: Hunter v Chief Constable of the West Midlands Police [1982] AC 529; Secretary of State for Trade and Industry v Bairstow [2004] Ch 1. Fifth, the principle preventing collateral attack is not applicable where the party seeking to make that attack is able by reference to new evidence to show new evidence which entirely changes the aspect of the case: Hunter v Chief Constable of the West Midlands Police [1982] AC 529, 545, and Secretary of State for Trade and Industry v Bairstow [2004] Ch. 1, 14, applying Phosphate Sewage Co Ltd v Molleson (1879) 4 App. Cas. 801, 814.

239 In the present case I am satisfied that all three conditions are satisfied. First, it would be unfair to require Mr Conlon and Mr Harris to prove dishonesty in numerous transactions to which they were not parties and in relation to which the only contemporary evidence which they have is contained in the material annexed to the Law Society’s complaint. Second, and connected with the first point, it would bring the administration of justice into disrepute if, after a hearing before the SDT lasting several weeks, and a full appeal before the Divisional Court, Mr Simms could, in the absence of substantial fresh evidence, challenge those findings.

240 Nor would it be unfair to Mr Simms. Mr Simms has known since these proceedings were commenced that the claimants were relying on the findings of the SDT and the Divisional Court and all he has done is to deny their admissibility. Mr Simms did not seek to put in any fresh material in relation to any of the allegations of the SDT/Divisional Court before the court in these proceedings, and he accepted in cross-examination that all the submissions and materials he wished to deploy before the SDT and the Divisional Court were deployed, save for evidence that was not called by him for reasons that were not fully explained, and he accepted that he had no new material that would satisfy the Ladd v Marshall test to put before the Divisional Court and that he had made no such application to the Divisional Court.”

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