Scottish Court of Session Decisions

Firstly, that certain documents lodged by the pursuer and numbered 6/1 to 6/95 of process should be treated as incorporated in the pleadings, and should be referred to in the course of the debate.

Secondly, that copies should be held equivalent to principals.

"... I further confirm that I advised Mr. Hay that the hearing would be on Wednesday 20 September by first class mail on 21 August. Since that time I have sent him several faxes and left messages with his secretary to no avail."

The committee considered that each of these heads of complaint constituted a serious breach of professional conduct and that cumulatively, they warranted a severe disciplinary sanction ..."

"ICAS EXPELS UNTRUTHFUL ACCOUNTANT 14/12/2000

A chartered accountant who showed flagrant disregard for the truth and for professional integrity and conduct has been expelled from The Institute of Chartered Accountants of Scotland (ICAS). ICAS has expelled James Hay from the Institute and ordered him to pay costs of £5000.

Mr. Hay, who will no longer be able to use the designatory letters "CA" or use the title "Chartered Accountant", was found guilty of misconduct on nine separate charges concerning his role as director and owner of Riggertech Ltd.

The ICAS discipline committee investigated claims that Mr. Hay had made a number of false representations to a company and to government departments, had failed to disclose key facts regarding his relationship with a company associated with Riggertech Ltd. and had paid to himself monies which were due to be refunded to H.M. Customs & Excise.

David Brew, Chief Executive of ICAS comments: "The discipline committee had no hesitation in expelling Mr. Hay from the Institute. It deemed that, in the public interest, Mr. Hay should not be allowed to continue in membership."

David Brew, ICAS, 0131 347 1268

Gordon Robertson, FMS Public Relations, 0131 624 5035

Mr. Hay was tried, and acquitted of a number of charges involving breach of trust at Aberdeen [sic] High Court on 30 June 1998. However, in the course of his testimony to the court, he gave evidence which tended to show he had been guilty of professional misconduct in relation to some of his actions at the material time to which the charges had related.

The discipline committee found that Mr. Hay was guilty of professional misconduct in terms of Institute Rule 57A(1)(a) in relation to:

Mr. Hay, a non-practising member who had been employed in oil-related companies for some time, started up a small limited company called Riggertech Ltd. which he ran in his spare time from his home in Aberdeen. He had identified a market for second-hand oil-drilling equipment, hoping to buy it cheaply and sell it on quickly for a profit, or to act as an agent or broker in the sale of similar goods, being paid commission when a sale was achieved. The circumstances with which the Institute's disciplinary proceedings were concerned relate to a sale by a major company of sub-sea water injection units to Riggertech Ltd. which Mr. Hay told that company he could effect in the Middle East. He told it he would buy the goods but that it would have to await payment from another to which he would immediately re-sell the same goods. That second company was another small one, located in the Middle East (with which Mr. Hay had a connection) which in turn would sell the sub-sea units to an "end-user".

The purchase price that was eventually to be obtained by Riggertech Ltd. was substantial, about US $5.5m but it was never paid. Riggertech did, however, receive £519,000 from H.M. Customs & Excise in a VAT repayment he had claimed in contemplation of the sale abroad proceeding. The sale never happened and Mr. Hay left the country immediately prior to action being taken to recover the £519,000. He was tried on indictment but acquitted in 1998. Though the material events relate to the early 1990s, the Institute did not become involved till after the court proceedings were concluded.

Riggertech Ltd. had been trading for only a very short period when Mr. Hay contended to the interested parties (the owner/seller and H.M. Customs & Excise) that the Middle East contract was formed. On that assertion, Mr. Hay was able to apply for and receive into Riggertech Ltd.'s bank account a refund of VAT on the purchase price and received some £519,000 from H.M. Customs & Excise in August 1992. The price was never paid by the Middle East-based companies and there came a point (around November 1992) when the VAT Riggertech Ltd. had received was due to be repaid to H.M. Customs & Excise (because the sale had not proceeded). When H.M. Customs & Excise came to appreciate that the sum was not going to be repaid, Mr. Hay left the country and assigned his interest in Riggertech Ltd. to his father-in-law who in turn lost all the money in a failed business venture. On H.M. Custom & Excise's complaint, The Crown Office prosecuted Mr. Hay for a number of breaches of trust. He was acquitted by the jury.

The testimony of Mr. Hay to the court was, though, passed to the Institute. The Institute's investigation committee's disciplinary action was predicated largely on that testimony and a number of heads of complaint of misconduct were held made out by its discipline committee (its quasi-judicial forum). These were as follows:

"...That absolute privilege attaches to words spoken or written in the course of giving evidence in proceedings in a court of justice is a rule of law, based on public policy, that has been established since earliest times. That the like privilege extends to evidence given before tribunals which, although not courts of justice, nevertheless act in a manner similar to that in which courts of justice act, was established more than a hundred years ago by the decision of this House in Dawkins v Lord Rokeby ..."

"... provide examples of inquiries and tribunals which have been held to fall upon one or other side of a line which as Lord Atkin said in O'Connor v Waldron [1935] AC 76, 81 "is not capable of very precise limitation"...

No single touchstone emerges from the cases; but this is not surprising for the rule of law is one which involves the balancing of conflicting public policies, one general: that the law should provide a remedy to the citizen whose good name and reputation is traduced by malicious falsehoods uttered by another; the other particular: that witnesses before tribunals recognised by law should, in the words of the answer of the judges in Dawkins v Lord Rokeby, L.R. 7 HL 744, 753 "give their testimony free from any fear of being harassed by an action on an allegation, whether true or false, that they acted from malice ...

So, to decide whether a tribunal acts in a manner similar to courts of justice and thus is of such a kind as will attract absolute, as distinct from qualified, privilege for witnesses when they give testimony before it, one must consider firstly, under what authority the tribunal acts, secondly the nature of the question into which it is its duty to inquire; thirdly, the procedure adopted by it in carrying out the inquiry; and fourthly, the legal consequences of the conclusion reached by the tribunal as a result of the inquiry."

"The result of this examination of the nature of the tribunal before which Mr. Mackie gave the evidence on which Dr. Trapp seeks to raise his action in the instant case, is that it shared with courts of justice the following characteristics: (1) It was authorised by law; it was constituted pursuant to an Act of Parliament. (2) It was inquiring into an issue in dispute between adverse parties of a kind similar to issues that commonly fall to be decided by courts of justice. (3) The inquiry was held in public. (4) Decisions as to what oral evidence should be led and what documents should be tendered or their production called for by the adverse party were left to the contending parties. (5) Witnesses whom either of the adverse parties wished to call were compellable, under penal sanctions, to give oral evidence or to produce documents as havers; and were entitled to the same privilege to refuse to answer a question or to produce a document as would apply if the inquiry were a proceeding in a court of law. (6) The oral evidence was given upon oath; if it were false to the knowledge of the witness he would incur criminal liability for the offence of perjury. (7) Witnesses who gave oral testimony were subject to examination-in-chief and re-examination by the party calling them and to cross-examination by the adverse party, in accordance with the normal procedure of courts of law. (8) The adverse parties were entitled to be, and were in fact, represented by legally qualified advocates or solicitors and these were given the opportunity of addressing the tribunal on the evidence that had been led. (9) The opinion of the tribunal as reported to the Secretary of State, even though not of itself decisive of the issue in dispute between the adverse parties, would have a major influence upon his decision either to require the education committee to reconsider its resolution to dismiss Dr. Trapp, or to let the matter rest. (10) As a result of the report, either of the parties to the inquiry might be ordered by the Secretary of State to pay the whole or part of the expenses of appearing at the inquiry incurred by the adverse party; and such expenses would be recoverable in the same manner as expenses incurred in a civil action in a court of law.

My Lords, I am far from suggesting either that the presence of any one of these characteristics taken in isolation would suffice to attract absolute privilege for witnesses in respect of testimony given by them before a tribunal or that the absence of any one of these characteristics would be fatal to the existence of such absolute privilege ..."