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McMahon & Ors, Re Petition of [2002] ScotCS 36 (12th February, 2002)

SECOND DIVISION, INNER HOUSE, COURT OF SESSION

Lord Justice Clerk Lord MacLean Lord Caplan

P1091/00 P1128/00 P1125/00 OPINION OF THE COURT delivered by THE LORD JUSTICE CLERK in PETITIONS of (1) GERALD JOHN ROBERT McMAHON, (2) COLIN HARVEY McFADYEN and (3) LAWRENCE STRACHAN REW against A decision of the Scottish Solicitors' Discipline Tribunal in a complaint by the Council of the Law Society of Scotland against the petitioners dated 5 September 2000 and intimated to the petitioners on 26 October 2000 in terms of the Solicitors (Scotland) Act 1980, section 54(1) _______

 

 

Act: DS Williamson, WS, Sol-Adv; Brodies WS (for first petitioner)

Springham; Drummond Miller, WS (for second petitioner

Stewart QC, Wade; Aitken Nairn, WS (for third petitioner)

Alt: Dunlop; Balfour & Manson

12 February 2002

The Decision appealed against

1. The petitioners are solicitors. They appeal by way of petition against a decision of the Scottish Solicitors' Discipline Tribunal (the Tribunal) dated 5 September 2000. The respondents are the Council of the Law Society of Scotland.
2. On 29 March 1999 the respondents made a complaint to the Tribunal of numerous charges of professional misconduct against the petitioners.
3. The Tribunal held a hearing on 4 and 5 September 2000. The first and second petitioners were each represented by a solicitor. The third petitioner appeared on his own behalf. The parties adjusted pleadings and made up a record. Each of the petitioners entered into a joint minute with the respondents in which he admitted much of the factual material in the complaint. The respondents led evidence. The first and the second petitioners gave evidence on their own behalf, but the third petitioner did not.
4. The petitioners admitted most of the charges. In the case of the first and second petitioners there were significant questions of fact regarding an alleged breach of the Conflict of Interest Rules and an allegation of misappropriations in name of fees from the funds of a client company, Robbie Fowler Sports Promotions Ltd (referred to as Fowler Ltd). Otherwise, the main questions in the case concerned the degree of gravity of the petitioners' actings and the penalty that was appropriate in each case.
5. The decision of the Tribunal was in the form of findings in fact; findings on the question of professional misconduct in relation to each petitioner; the Order made in the light of those findings, and a Note setting out the Tribunal's reasons for its decision.
6. In view of the seriousness of this case, we quote the findings of misconduct in full.

"6. Having considered the foregoing circumstances, the Tribunal make the following findings of professional misconduct against the particular Respondents -

(1) Mr McMahon and Mr McFadyen in regard to the following breaches

of the Solicitors (Scotland) Accounts Rules 1995, 1996 and 1997 -

(a) Rule 4(1) of the 1995 Rules in respect of the shortage of funds

in the client bank account as at 29th February 1996.

(b) Rule 4(1) of the 1996 Rules in respect of the shortages of funds

in the client bank account as at 30th September 1996 and other occasions in or about that date, and as at 28th February and 30th May 1997.

(c) Rules 4(1) of the 1997 Rules in respect of the shortage of funds

in the client bank account as at 31st July 1998.

(d) Rule 6(1)(a) of the 1995 and 1997 Rules in respect of their

failure to obtain written authority to transfer funds from one client of the firm to another.

(e) Rule 6(1)(d) of the 1995, 1996 and 1997 Rules in respect of

their failure to render accounts to clients in respect of fees received by the firm.

(f) Rule 6(3) of the 1996 and 1997 Rules in respect of their failure

to specify on cheques drawn in favour of a bank or building society the name or the account number of the person whose account was to be credited.

(g) Rule 7(g) of the 1996 Rules in respect of their failure to narrate

in the client ledger - the payment of a deposit, the value of another property involved in the transaction, and other outlays.

(h) Rule 12(1) of the 1995, 1996 and 1997 Rules in respect of their

failure to ensure adequate narrative of entries and generally to keep properly written up records.

(i) Rule 12(3) of the 1995 and 1996 Rules in respect of their

failure to ensure that entries for clients were properly recorded in accordance with that Rule.

(j) Rule 12(4) of the 1995 Rules in respect of their failure to keep

properly written up books so as to balance the firm's books monthly.

(k) Rule 13 of the 1996 Rules in respect of their failure to carry out

a proper reconciliation of the client bank account.

(l) Rule 14 of the 1996 Rules in respect of their failure to carry out

a proper reconciliation of funds invested on behalf of clients.

(m) Rule 15 of the 1997 Rules by their failure to invest funds

lodged in the firm's bank account on behalf of clients in a separate interest bearing client account.

(n) Rule 16 of the 1996 and 1997 Rules by their failure to comply

with the Money Laundering Regulations.

(2) Mr McMahon and Mr McFadyen in respect of their failure to inform

Fowler Ltd of their intromissions with the funds received for that company and the position regarding the earning of interest on said funds.

(3) Mr McMahon in respect of his failure to stamp a Disposition and to

record the Disposition and Standard Security timeously.

(4) Mr McFadyen in respect of his failure to stamp a Disposition and to

record the Disposition and Standard Security timeously.

(5) Mr Rew in regard to the following breaches of the Solicitors (Scotland)

Accounts Rules 1997

(a) Rule 4(1) in respect of the shortage of funds in the client bank

account as at 3rd June and 31st July 1999.

(b) Rule 6(1)(d) in respect of his failure to render accounts to

clients in four separate matters where fees had been taken by him.

(c) Rule 6(1) by reason of withdrawing the sum of £11,200 from

the client bank account without the written authority of any client or any other valid reason.

(6) Mr Rew in respect of the following

(i) His failure to stamp a Disposition and to record the Disposition

and the relative Standard Security timeously.

(ii) His failure to implement an undertaking given by him to the

Law Society and to respond to the Law Society.

(iii) His failure to respond to the Law Society and to ensure that

there were adequate funds in his client bank account to enable him to make a payment to a beneficiary which he was obliged to make.

(iv) His failure to be candid with his client in relation to the extent

of a personal liability to a third party in circumstances where he was seeking financial assistance from his client with regard to payment.

(v) His failure to obtain the instructions of his client to make a

payment to a third party using funds belonging to his client.

(vi) His failure to complete an application form in connection with

a loan in which he had a direct interest prior to having his client sign the application form."

[7] Having heard the petitioners in mitigation, the Tribunal suspended both the first and the second petitioners for a period of five years; and ordered that the name of the third petitioner should be struck off the Roll of Solicitors in Scotland.

[8] The petitioners do not challenge the findings of misconduct, but each contends that the penalty imposed on him was excessive.

 

The statutory framework

7. Section 53 of the Solicitors (Scotland) Act 1980 (the 1980 Act) sets out the powers exerciseable by the Tribunal when they make a finding of professional misconduct. These include the power to order that the solicitor be struck off, or suspended, or censured or fined (s. 53(2)). In the last two cases, they may restrict the practising certificate (s. 53(5)). Section 54 provides a general and unfettered right of appeal to this court from a decision of the Tribunal. Section 55 confers on this court similar but not identical powers to those of the Tribunal. We need not quote these provisions.
8. In addition to the penalty of suspension under sections 53 and 55, there is also a power vested in the respondents to withdraw a solicitor's practising certificate, and therefore to suspend him from practice, under section 40(1) where, inter alia, he has been in breach of the Accounts Rules. This is a protective rather than a punitive measure. It may be followed in due course, as in this case, by disciplinary proceedings. The suspension may be terminated at any time if the solicitor satisfies the respondents that he is able and willing to comply with the Rules (s. 40(2)). The first and second petitioners were suspended under section 40 in this case. They applied under section 40(3) to have the suspensions terminated, but it appears that for various reasons their applications were not pursued to a conclusion. In due course their sequestrations gave further grounds for the suspension of their certificates (s. 18(1)).
9. Section 53 of the 1980 Act raises a practical question that has arisen in the present case. Section 53(6) provides as follows:

"(6) Where the Tribunal order that the name of a solicitor be struck off the roll, or that the solicitor be suspended from practice as a solicitor, ... the Tribunal may direct that the order shall take effect on the date on which it is intimated to the solicitor; and if any such direction is given the order shall take effect accordingly."

Section 53(7) provides as follows:

"(7) Where in relation to any such order as is mentioned in subsection (6) ... the Tribunal give a direction under subsection (6) ... and an appeal against the order is taken to the court under section 54, the order shall continue to have effect pending the determination or abandonment of the appeal unless, on an application under subsection (2) of section 54, the court otherwise directs."

Paragraph 16 of Schedule 4 to the 1980 Act provides as follows:

"16. In the case of a decision by the Tribunal-

...

(b) ordering a solicitor to be suspended from practice; ...

on the expiration of the days of appeal if any without an appeal being lodged or, where an appeal has been lodged, if and as soon as the appeal is withdrawn or a decision by the court is given in terms of subparagraphs (a) to (h) or in the case of a decision of the Tribunal under section 53(6) ... which has not been varied or quashed by the court ... the clerk of the Tribunal shall immediately send to the Council a copy of the decision of the Tribunal certified by him and a copy of the decision by the court in any appeal, and the Council shall forthwith give effect to any order as to striking the solicitor off the roll ... and to any terms and conditions directed by the Tribunal under section 53(5); and in any other case shall cause a note of the effect of the decision to be entered against the name of the solicitor in the roll."

10. In this case the Tribunal in ordering the suspension of the first and second petitioners did not give a direction under section 53(6) (supra) that the suspension would take effect on the date of intimation. If they had done so, the suspensions would, by reason of section 53(7) (supra), have remained in force pending the appeal. Section 53(7) implies that in this case the suspensions, if affirmed, cannot begin until the date of the determination of the appeals, at which stage paragraph 16 of Schedule 4 will bring them into force. In the meantime, these petitioners have remained suspended under section 40 (supra).

 

 

The test to be applied by the court

11. In the past in appeals against sentence the court was reluctant to interfere with the sentence imposed by the Tribunal on the view that the Tribunal were best placed to assess the seriousness of the offence and to determine the appropriate penalty. The court therefore refrained from substituting its own views for those of the Tribunal (Sharp v. Law Society of Scotland 1984 SLT 313 at p. 319; McColl v. Law Society of Scotland 1987 SLT 524 at p. 528F-H; Smith and Barton, Procedures and Decisions of the Scottish Solicitors' Disciplinary Tribunal, p. 49; cf. Finegan v General Medical Council, [1987] 1 WLR 121, Lord Keith at p. 124) except where it considered that course to be obviously necessary (eg Docherty v Law Society of Scotland, 1968 SLT 133).
12. In the light of the decision of the Privy Council in Ghosh v. General Medical Council ([2001] 1 WLR 1915, at pp. 1922-1923) and the cases that have followed it (eg. Preiss v. General Dental Council [2001] 1 WLR 1926, at p. 1935; Gupta v. General Medical Council, unrepd., 21 December 2001), we must now apply a less rigorous test. We should simply look at the Tribunal's decision in the light of the whole circumstances of the case, always having due respect for the expertise of the Tribunal and giving to their decision such weight as we should think appropriate.
13. Those representing the petitioners invited us to follow this approach and counsel for the respondents accepted that we should do so. To confirm the point, counsel for the respondents, on instructions, repeated in terms the following concession made on behalf of the General Medical Council in Ghosh v. General Medical Council (supra):

"The Council conceded, and their Lordships accept, that it is open to them to consider all the matters raised by Dr. Ghosh in her appeal; to decide whether the sanction of erasure was appropriate and necessary in the public interest or was excessive and disproportionate; and in the latter event either to substitute some other penalty or to remit the case to the Committee for reconsideration". (at p. 1923, para. 34).

14. Nevertheless, in following this approach we think that it is good sense to keep in view the obvious reasons that have been repeated over the years for according respect to the views of specialist tribunals in appeals of this kind (cf. Bijl v General Medical Council, unrepd., 2 October 2001, and Evans v General Medical Council, unrepd., 1984, there quoted at paras. 2-3; Carroll v Council for Professions Supplementary to Medicine, unrepd., 6 November 2001). These are of some importance in this case, which relates to specialist matters of professional practice.

The approach to the assessment of professional misconduct

15. In the light of certain of the submissions made in mitigation in this case, which seem to us to request a quite inappropriate degree of leniency, we mention at the outset some general principles of professional conduct that, in our view, practitioners should bear in mind.
16. Membership of the legal profession is a privilege. Those who exercise that privilege undertake a duty throughout their professional lives to conduct their clients' affairs to their utmost ability and with complete honesty and integrity. Clients and colleagues should be able to expect these qualities of every solicitor as a matter of course. If the public is to give the profession its respect and trust, it must be assured that when solicitors fail in these duties, they will be suitably dealt with by the profession's disciplinary system.
17. In such cases the Tribunal's decision should be one that both vindicates the reputation of the profession and protects the public against the risk of repetition (cf. Bolton v Law Society, [1994] 1 WLR 512, Sir Thomas Bingham MR at pp. 518E-519B).
18. In many cases, the Tribunal may be justified in taking a lenient view of an isolated act of misconduct where it is venial in itself, or is explicable, if not excusable, on account of some misfortune or mitigating circumstance. More serious acts of misconduct give less scope for leniency. But where dishonesty with clients' money is involved, there can be few instances, if any, where leniency can be shown. A solicitor who has been guilty of such dishonesty has forfeited the respect and trust of the public and of his colleagues, and has disgraced his profession.
19. The Accounts Rules reinforce the duty of honesty in the handling of clients' money by requiring solicitors to keep clients' funds in a separate account (Solicitors Accounts Rules 1997, Rule 6). It is a fundamental principle of professional life that the client account is sacrosanct (Docherty v Law Society of Scotland, 1968 SLT 133, at p. 136; Bolton v Law Society, supra, at p. 517). There can be no situation in which that account can justifiably be in deficit. Isolated instances may occur where, through no fault of the solicitor, for example by some honest book-keeping error or perhaps a computing mishap, the Rules are breached. In such a case, the respondents no doubt deal with the matter with discretion and common sense. But where the client account is persistently and repeatedly in deficit, we find it difficult to see how the penalty can be anything less than suspension (cf. Docherty v Law Society of Scotland, supra; Bolton v Law Society, supra, at p. 518A); and where money is taken from the client account dishonestly, we find it difficult to see how the penalty can be anything other than striking off.

The history

20. In 1994 the first and the second petitioners began practice in partnership under the name of Messrs McMahon, McFadyen & Company at 53 Moss Street, Paisley.
21. By February 1996, if not before, the affairs of the firm were in disorder. The respondents carried out inspections of the firm's accounts in April and in November 1996. These inspections revealed a failure to keep proper books and records and repeated deficiencies in the client account.
22. In January 1997 the third petitioner entered employment with the firm as a consultant.
23. The respondents carried out further inspections in September 1997, November 1997 and September 1998. These showed up similar problems. As at 31 July 1998 there was a shortage in the client account of £12,494.98. By then the respondents had identified numerous irregularities in the firm's bookkeeping and accounting. After that the position steadily worsened.
24. On 15 October 1998 the first and second petitioners assumed the third petitioner as a salaried partner in the firm. On 5 November 1998 the respondents suspended the practising certificates of the first and second petitioners under section 40 of the 1980 Act.
25. Upon the suspension of these certificates, the third petitioner was left to run the firm on his own. From then until August 1999 the position of the business continued to deteriorate. By 3 June 1999 the deficit on the client account was £22,429.73 (Finding in fact 31). By 31 July 1999 it had risen to £51,416.53 (Finding in fact 32). Counsel for the respondents informed us, and counsel for this petitioner did not disagree, that at about this time the third petitioner agreed with the respondents to borrow £22,000 and to apply it to individual client ledgers. In the event, it seems, he simply put this sum into the client account. On 27 August 1999 the third petitioner's practising certificate was suspended under section 40. On that day he withdrew a substantial sum from the client account. We shall refer to this later. Thereafter a judicial factor was appointed to the firm and the estates of the first and second petitioners were sequestrated on 5 April 2000 and 11 November 1999 respectively.

The findings in relation to the first and second petitioners

26. The case against these petitioners fell under four main headings, namely (1) breaches of the Accounts Rules; (2) failure to record deeds; (3) failure to observe the Conflict of Interest Rules and (4) appropriation of a client's money to account of fees without proper authority.
27. The petitioners admitted professional misconduct in respect of the breaches of the Accounts Rules. The Tribunal found that there had been misconduct by each of them in relation to a failure to record a disposition and a standard security. The Tribunal acquitted the respondents in relation to the Conflict of Interest Rules.
28. The fourth allegation against these petitioners was the most serious of all. The essence of the allegation was that the first and second respondents had appropriated various sums from money held on behalf of the client to account of fees without the client's authority. The Tribunal found that in the short period between 24 August 1998 and 23 September 1998, these petitioners had made fourteen transfers totalling £62,172.04 from the client's funds to their office account, followed by three further transfers totalling £6638.75 in the period between 23 October 1998 and 2 November 1998, three days before they were suspended under section 40. These transfers were admitted. The Tribunal decided that it had not been proved that the transfers were made without authority. They considered that the evidence tended to indicate to the first petitioner that a director of the client in question, Mr George Scott, had acquiesced in the proposed level of fees. But the Tribunal found the first and second petitioners to have been guilty of professional misconduct for having failed to supply the client with proper information as to the financial aspects of the transaction in which it was concerned (Finding in fact 43; finding of misconduct (2)).

The findings in relation to the third petitioner

29. It will be apparent from the history that we have given that the third petitioner was foolish to enter into the partnership on any terms. In this case, he entered into it on the basis that he assumed unlimited liabilities in return for a salary. The invitation to be a partner in this case was, we think, an occasion for caution. When the third petitioner was assumed as a partner, the firm was already in a desperate financial position. The third petitioner was foolish either because he failed to make sufficient enquiry into the state of the firm or because he entered into the partnership with his eyes open. He was also foolish to attempt to keep the practice going when it should have been obvious that the sensible solution was to seek the appointment of a judicial factor.
30. Nevertheless, any sympathy that we might have for the third petitioner in these respects is tempered by the Tribunal's findings of misconduct on his part. We need not rehearse at length the circumstances of each instance; but we mention two to which the Tribunal gave particular weight.
31. The first relates to the affairs of Mr. and Mrs. John McIntyre. These are the findings of the Tribunal in the matter:

"(50) In or about May 1998 Mr Rew advised his clients Mr and Mrs MacIntyre that he was about to be sequestrated by the Inland Revenue. Mr Rew asked them to provide him with financial assistance in connection with meeting his indebtedness to Inland Revenue. He told them that a sum of £10,000 was required. Mr and Mrs McIntyre considered Mr Rew to be both their solicitor and personal friend. Mr Rew subsequently suggested to them that they should mortgage certain heritable property owned by them in Arran. Mr and Mrs McIntyre agreed to do so. In due course Mr Rew visited them at home and asked them to sign a blank application form in connection with a loan. They duly signed this form. Thereafter they received an offer of loan from the Bradford & Bingley Building Society. This narrated that a loan of £25,500 was being sought. They spoke to Mr Rew about the amount of the loan and he assured them that they had nothing to worry about. They were not at all concerned owing to their friendship with Mr Rew and they assumed that he would not intromit with these funds without first obtaining their instructions. Loan funds amounting to £25,000 were paid to the firm and the firm acted in the constitution of a Standard Security over said property. Sometime on or about 27th July 1998 the firm sent a cheque for £25,000 to Inland Revenue. Court proceedings had by that time been instituted against Mr Rew by Inland Revenue. The said sum of £25,000 was paid either to account or in satisfaction of Mr Rew's Income Tax liability. Said payment was made without either the knowledge or consent of Mr and Mrs McIntyre. Said payment was made at the request of Mr Rew with a view to avoiding sequestration. A Hearing in connection with the Petition for his sequestration was due to be heard in the Court of Session on 30th July 1998. Said proceedings were dismissed on or about 13th August 1998. By letter dated 18th September Mr Rew acknowledged receipt of a loan of £25,500 from Mr and Mrs McIntyre and undertook to make payment timeously of all mortgage payments due in terms of the Standard Security which they had granted over said property."

32. The other instance of misconduct relates to the third petitioner's actings at the time of his suspension. These are the findings of the Tribunal:

"(33) The decision to suspend Mr Rew's Practising Certificate was taken by the Council of the Law Society on 27th August 1999. On that day Mr Rew's solicitor, Mr James McCann was informed of this decision. Mr McCann advised Mr Rew of this decision. Mr Rew upon learning this, withdrew the sum of £11,200.00 in cash from the client bank account on the same day. Mr Rew knew that a shortage of funds existed in this account and that by withdrawing said sum he was creating a greater shortage. Said withdrawal was contrary to Rule 6(1) of said last mentioned Accounts Rules."

 

 

The submissions on penalty

The first and second petitioners

33. The solicitor advocate for the first petitioner and counsel for the second petitioner submitted that in relation to the breaches of the Accounts Rules there had been no finding of dishonesty or of personal gain.
34. As to the first petitioner's failure to record deeds, the client had failed to put him in funds in the two months between the settlement of the transaction and the suspension of his practising certificate. The Tribunal had erred in saying that the first petitioner must accept "continuing responsibility" for the transaction throughout the whole period of about a year before the deeds were recorded, for most of which he was under suspension.
35. No detailed submission was made on behalf of the second petitioner in relation to his failure to record deeds in the transaction in which he was concerned. It was suggested that the failure was relatively minor.
36. As to the fees transaction, it was suggested that the Tribunal misdirected themselves in holding that these petitioners were "culpable" in taking the payments to their office account (Note, p. 31). The point in issue was whether they had had authority to do so and they had been acquitted on that point. The misconduct found by the Tribunal was plainly less serious than that which had been charged. The Tribunal misdirected themselves in saying that these petitioners' "cavalier" attitude towards clients' monies was also reflected in their repeated drawing of monies from the account held for the client without reporting that to the client. That was inconsistent with the finding that they had not taken the money without authority.
37. As to penalty, it was submitted that the Tribunal had erred in law because, in imposing suspension for five years, they overlooked the fact that these petitioners had by then been under suspension since 5 November 1998. The Tribunal had accordingly caused these petitioners to suffer a suspension that would last for nearly seven years.
38. On the whole matter the submission for these petitioners was that the Tribunal had given insufficient consideration to the question whether the protection of the public required that they should be suspended. The penalty was excessive. We should substitute the penalty of a restriction on their practising certificates for a suitable period of years; failing which, we should modify the length of the suspension to take account of (a) the fact that the petitioners had been suspended under section 40 since 5 November 1998 and (b) the fact that by reason of their having appealed to this court the suspension imposed by the Tribunal would not begin to run until the date of our Interlocutor disposing of the appeal.

The third petitioner

39. Counsel for the third petitioner submitted that the Tribunal had misdirected themselves by having regard to irrelevant material and by leaving out of account relevant material. He also argued that the penalty of striking off was not justified for the protection of the public and the maintenance of professional standards.
40. The essence of the findings in relation to Mr and Mrs McIntyre was that the petitioner was uncandid with them rather than deceitful. They were not concerned when the truth came to their notice (Finding in fact 50, supra).
41. The failure to account to a beneficiary (Finding in fact 49) and to record deeds (Finding in fact 35) occurred before the petitioner had become a partner. He had inherited the problem. The failure to record the deeds resulted from the fact that the business had run out of credit and could not meet the recording dues from its own resources.
42. Counsel put before us various mitigating factors relating to the personal circumstances of this petitioner. The petitioner had been suspended under section 40 since August 1999. His wife and son had to work to support the family. Their only asset, their house, was subject to a 95% mortgage and was subject to an inhibition. The petitioner was now employed outside the profession and was earning £12,000 pa.
43. The petitioner had been induced to accept the partnership on the representation by the other petitioners that the Law Society had got its arithmetic wrong and that this would be proved in due course by the firm's accountants. The respondents should have applied for the appointment of a judicial factor long before they did. The petitioner had borrowed £22,000 from two other clients to put into the clients' account.
44. Counsel submitted that since the petitioner had only one marketable skill, namely his profession; since he had no previous record of misconduct in many years in the profession; since it was difficult to comprehend how he had ever got involved in this fiasco, and since on a proper view of the matter the first and second petitioners were more culpable than he, it was appropriate that he should suffer at worst a suspension of his certificate and that, if a suspension were substituted, a period of no more than two years with effect from 5 September 2000 would be appropriate.

 

 

 

Decision

The first and second petitioners

Accounts Rules

45. We cannot accept the submission for the petitioners on this point. These petitioners pled guilty to no fewer than 29 contraventions of the Accounts Rules over a period of about two and a half years (Findings in fact 3-30). Some of these contraventions involved a number of individual breaches (eg Findings in fact 5 and 30). These were serious breaches persisted in over a considerable period of time in the face of repeated inspections by the respondents' auditors.
46. These contraventions were serious per se. Since they involved deficiencies in the client account, the Tribunal were justified in taking a serious view, as we do.

Failure to record deeds

47. We do not accept the submissions made in mitigation on this point. It is accepted by these petitioners that when a transaction of this kind is settled, the solicitor for the purchaser has a professional responsibility promptly to record the disposition and the standard security, and to do so out of his own funds if necessary. As we read the Decision, the Tribunal did not suggest that the first petitioner committed any act of misconduct during the period of his suspension. The essence of the finding of misconduct is that both petitioners had ample time in which to record the deeds before they were suspended. Their failure to do so was in each case prejudicial to the interests of the client and of the standard security holder and in our opinion constituted serious misconduct.

The fees transaction

48. Even though the most serious aspect of the fourth allegation was removed from the case, the petitioners' failure to inform the client that sums totalling nearly £69,000 had been taken to account of fees (Findings in fact 43 and 46; para. 6(2), p. 21; and Note pp. 31 and 36) plainly constituted serious misconduct. Read in context, the culpability to which the Tribunal referred was the culpability involved in failing to inform the client that the series of payments had been taken (Note, pp. 31and 36). The sums involved in this case were substantial by any standard. A client is entitled to be kept informed of any transaction of such significance. Not to inform the client that such sums have been debited cannot be condoned.

Conclusion

49. Although there was no finding of dishonesty in relation to these petitioners, the misconduct of which they were convicted was serious in every respect. We do not accept that the Tribunal failed to consider the question of the protection of the public. They carefully considered the option of restricting the petitioners' certificates (Note, p. 35-36). They did so at the invitation of those representing them; but when the public interest was taken into account (Ghosh, supra), that was not a realistic option in the circumstances of this case.
50. We can see no justification for reducing the sentence of the Tribunal. In our view these petitioners were fortunate not to suffer more severe penalties.

Effective date

51. We do not accept the submission that the Tribunal misdirected itself in relation to the length of the suspension. It is clear from the Decision, read as a whole, that the Tribunal were well aware that the practising certificates had been withdrawn in 1998. The solicitor advocate for the first petitioner specifically reminded them of that (Note, p. 35) and they refer to the point in finding in fact (2), which we need not quote. We infer that they had this finding in mind when they decided that if the suspension imposed by them was to run from the date of their Decision, five years was the appropriate period for that suspension to run.
52. Nevertheless, we think it right to take into account the fact that, by reason of the appeal, the suspension will not begin to run until the date of our Interlocutor. If a period of five years suspension were now to run from that date, these petitioners would in effect be penalised for having exercised their rights of appeal. The respondents concurred in that view.
53. We shall therefore allow the appeals to the limited extent of directing that the period of five years will run from 5 September 2000, the date of the Tribunal's decision.

The third petitioner

54. We do not accept the submission made to us that this petitioner's actings were less culpable than those of the first and second petitioners. In our judgment, the two instances to which we have specifically referred demonstrate not merely incompetence but dishonesty. The findings in fact establish that this petitioner was deceitful towards Mr. and Mrs. McIntyre in circumstances where, by reason of the Accounts Rules, he ought not to have been borrowing money from them at all. They were plainly deceived about the amount of the loan for which they were to apply, and they were deceived when they were told that they had nothing to worry about. Moreover, this petitioner paid the loan money to the Revenue without their knowledge or consent. Counsel submitted that if there was deception, it had no practical effect because the clients completed the security documents in the knowledge of the true amount of the security. Therefore it was irrelevant for the Tribunal to take this into account. We do not accept this submission. The misconduct in this case is not to be judged by the result but by an objective assessment of the actings of the petitioner.
55. As to the failure to account to a beneficiary and the delay in the recording of deeds, the petitioner admitted misconduct and does not challenge the findings of the Tribunal. We see no reason to differ from the view of the Tribunal as to the seriousness of these matters.
56. As to the withdrawal of money from the clients' account, counsel argued that this was charged and proved as a breach of Rule 6(1) of the Accounts Rules (Finding of misconduct 5(c)). For the Tribunal to return to that transaction as one of "a number of other matters" (Note, p. 37) on which they relied was to invoke the same offence twice. We do not accept this submission. While some breaches of the Account Rules may be formal only, others may involve dishonesty. Having found, in terms of the petitioner's own admissions, that this transaction was a breach of Rule 6(1), the Tribunal were entitled to go on to comment on the circumstances in which the breach occurred. The findings show that as soon as the petitioner learned that his practising certificate had been suspended, he withdrew £11,200 in cash from the client account. He did so in the knowledge that there was already a deficiency in the account. This was simply a dishonest appropriation of clients' money which made the breach of Rule 6(1) a grave one. We regard this as disgraceful conduct.
57. In these circumstances, in our view, the sentence of the Tribunal was correct and appropriate.

Interlocutor

58. In the case of the first and second petitioners we shall allow the appeals to the limited extent that we have described. In the case of the third petitioner we shall refuse the appeal.