DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

Transcription

1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mr Jonathan Martin Stephen Heard on: 5 August 2015 Location: Chartered Institute of Arbitrators, 12 Bloomsbury Square, London WC1A 2LP Committee: Mr John Crawley (Chairman), Mr Robert Clarke (Accountant) and Ms Helen Kitchen (Lay) Legal Adviser: Mr Iain Ross Persons present and capacity: Mr Alex Mills (Case Presenter on behalf of ACCA) Mr Imran Alli (Committee Officer) Observers: Mr Nigel Bremner (Regulatory Board Member) PRELIMINARY APPLICATIONS/SERVICE OF PAPERS 1. ACCA was represented by Mr Alex Mills (Counsel). Mr Stephen was not present and was not represented. The Committee had a bundle of documents numbered pages 1-41, and a separate service bundle numbered 1-9. The Committee also received a copy of an from ACCA to Mr Stephen dated 3 March 2015 providing Mr Stephen with a copy of the hearing documents. PROCEEDING IN ABSENCE 2. Mr Mills applied for the hearing to proceed in Mr Stephen s absence.

2 3. The Committee was satisfied that notice of the hearing had been sent to Mr Stephen by post and by on 3 March 2015 and noted that Mr Stephen had indicated his willingness to accept service of documents by . Accordingly the Committee was satisfied that notice of the hearing had been served in accordance with the rules. 4. The Committee received and accepted the advice of the Legal Advisor that the Committee could proceed in Mr Stephen s absence, if having had regard to the factors detailed in the case of R v Hayward and having exercised the utmost care and caution, it determined that it was appropriate to do so. 5. The Committee had regard to the contents of two s from Mr Stephen to ACCA dated 14 October 2014 in which he sought to resign his ACCA membership and regarded his membership as terminated. 6. The Committee was satisfied that Mr Stephen had voluntarily absented himself and that an adjournment would serve no useful purpose. In the circumstances, the Committee determined that it was in Mr Stephen s interests and in the public interest for the hearing to proceed in his absence. ALLEGATIONS/BRIEF BACKGROUND Allegation 1 Pursuant to bye-law 8(a)(viii), Mr Stephen is liable to disciplinary action by reason of his failure to satisfy a judgment debt in the sum of 15, in favour of Company A on 02 November 2012, without reasonable excuse, for a period of two months. Allegation 2 Pursuant to bye-law 8(a)(viii), Mr Stephen is liable to disciplinary action by reason of his failure to satisfy a judgment debt in the sum of 24, in favour of Company B on 02 November 2012, without reasonable excuse, for a period of two months.

3 7. Mr Stephen became an ACCA member on 24 September 2003 and Fellow on 24 September Mr Stephen was one of two directors of Company C, whose sole purpose was the running of a music and arts festival in Guernsey. 8. On 19 March 2013, Company D, a debt collection agency, lodged information with ACCA regarding Company C having two Royal Court judgments in Guernsey, one having been awarded against Mr Stephen and Company C jointly. A copy of a judgment of the Royal Court of Guernsey obtained by ACCA confirmed there was a judgment dated 2 November 2012 jointly against Company C and Mr Stephen in the sum of 15, in favour of Company A. 9. According to a contemporaneous file record made by the investigating officer in a lengthy telephone call on 14 February 2014, Mr Stephen informed ACCA that the judgment debt in favour of Company A was not his, he did not agree with it and would not be settling it now or in the future. 10. The file record of the call of 14 February also records that Mr Stephen confirmed the existence of a further judgment debt against Company C and Mr Stephen jointly. A copy of a judgement of the Royal Court of Guernsey obtained by ACCA confirmed there was default judgement dated 23 November 2012 jointly against Company C and Mr Stephen in the sum of 24, in favour of Company B. 11. Mr Stephen added that Company C has no connection to an accountancy practice and also referred to the Company A matter, in particular, having nothing to do with an accountancy practice. 12. In an dated 18 March 2014 responding to ACCA s requests for further information, Mr Stephen reiterated his position, stating: As for the judgment debts, I do not accept these and will not be making payment of any amounts under any circumstances whatsoever. In a further of 11 August 2014 Mr Stephen said he regarded the amounts owing as insignificant when viewed against the turnover of Company C. He went on to observe that he considers himself an extremely competent accountant and that Company

4 C, of which he was a director had no connection to the accountancy profession whatsoever. 13. With regard to the judgment in favour of Company A, Mr Stephen forwarded to ACCA a copy of a letter dated 31 October 2012 he had submitted to the Royal Court of Guernsey in which, inter alia, he stated that With regard to the purported Guarantee, it is up to the court to determine whether this is in fact legally binding. However, for the record, I do not accept that I gave any personal guarantee in respect of the debt. DECISION ON FACTS/ALLEGATIONS AND REASONS 14. The Committee heard submissions from Mr Mills who referred it to the evidence in the bundle relied on by the ACCA in respect of both Allegations. 15. The Committee had regard to the existence of the judgment debts in relation to both Company A and Company B in which Company C and Mr Stephen were ordered to pay the amounts set out in Allegations 1 and Mr Stephen in his responses to ACCA s enquiries has clearly set out that he regards the reporting of the judgment debts to ACCA by Company D as vindictive but he has not sought to deny that the judgement debts are outstanding; he remains adamant that he will not settle them and that he sees no connection between his involvement in and handling of this matter and his practising as an accountant. 17. Taking all of the evidence into account, the Committee was satisfied that Mr Stephen has failed to satisfy both judgment debts as set out in Allegation 1 and Allegation 2 without reasonable excuse for a period of two months. The Committee was clear that Mr Stephen, in disowning his liability under the guarantees for the judgment debts, has simply declined to be bound by the judgements of the court on these matters, in particular having accepted (in his letter of 31 October 2012) that it was indeed a matter for the court to determine. Such a stance does not provide any reasonable excuse for failing to satisfy the debts for a period of two months or at all. Accordingly the Committee has found Allegations 1 and 2 proved.

5 SANCTION AND REASONS 18. The Committee took into account the Guidance for Disciplinary Sanctions. 19. As noted above, Mr Stephen has not sought to deny the existence of the judgment debts against him personally and he has stated his determination not to settle them. 20. The Committee was satisfied that Mr Stephen s conduct in refusing to abide by the ruling of the court as to his liability and as a result refusing to satisfy two judgment debts was wholly unacceptable and amounted to unprofessional behaviour which would undermine public confidence in the profession of accountancy and ACCA members. Further, the Committee found that Mr Stephen s view that his conduct in this regard had no relevance to and would carry no implications for his professional status and practice as an accountant, and for the reputation of his profession, showed a remarkable lack of insight. 21. Accordingly the Committee concluded that a sanction was necessary in order to maintain public confidence in the profession and ACCA and to uphold proper standards of conduct and behaviour. 22. Having considered the available sanctions in ascending order of seriousness, the Committee determined that it was appropriate and proportionate to impose a reprimand together with a fine in the sum of 5,000. COSTS AND REASONS 23. ACCA applied for costs in the sum of 2, The Committee was provided with no information by Mr Stephen as to his ability or otherwise to pay the amount applied for. The Committee regarded the amount as reasonable and ordered that Mr Stephen pay costs in the sum of 2,

6 EFFECTIVE DATE OF ORDER 24. The Committee did not consider it necessary to make an immediate order. PUBLICITY 25. ACCA s regulations require ACCA to publish the Committee s findings and orders by way of a news release naming the relevant person, as soon as practicable. The Committee has discretion as to which publications the news release should be sent, and discretion in exceptional circumstances to direct that the relevant person is not named. No exceptional circumstances were advanced or identified. Accordingly the Committee ordered that a news release be issued to ACCA s website and to the local press referring to Mr Stephen by name. John Crawley Chairman 17 August 2015