Kiani v Solicitors’ Regulation Authority [2015] EWHC 1981 (Admin)

An appeal against a striking off order by the Solicitors Disciplinary Tribunal on the ground (amongst others) that dishonesty had been found by the Tribunal but had not been adequately pleaded. Laing J allowed the appeal on this particular ground and remitted the case back before a freshly constituted SDT for consideration.

Facts

Mrs Kiani [“the Appellant”] was a registrant solicitor struck off the roll of solicitors by the Solicitors Disciplinary Tribunal [“SDT”] following a hearing on 8 and9 September 2014. The factual background to the hearing related to concerns raised in relation to two separate property transactions: (1) an assignment of a lease and (2) a sale.

The allegations which feature as part of the appeal were: allegation 1.5; a failure to act with integrity contrary to Rule 1.02 of the Solicitors Code of Conduct 2007, allegation 1.6; a failure to have sufficient regard to duties owed under the relevant money laundering regulations, allegation 1.7; allowing money to move in and out of the client account when not accompanied by a legitimate legal transaction and allegation 1.8; a failure to act in the best interest of the client. The SDT found that allegations 1.5 and 1.6 were proved. They found that allegation 1.7 was proved in part and that allegation 1.8 was not proved.

The grounds of appeal were as follows:

‘(1) The SDT had found that the Appellant had been dishonest despite no allegation of dishonesty and it should not have done so.

(2) The SDT was wrong to find allegation 1.5 (lack of integrity) proved.

(3) The sanction of striking off was wrong.

(4) The SDT’s order for costs was also wrong.’

Judgment

Handed down by Mrs Justice Laing.

Laing J firstly looked at the law surrounding integrity and dishonesty. It is accepted that a solicitor can be struck off for conduct less serious than dishonesty. The decision in Hoodless and Blackwell v SFA [2003] FSMT 0007 demonstrates this:
“…a person lacks integrity if he/she acts in a way which, although falling short of dishonesty, lacks moral soundness, rectitude and steady adherence to an ethical code. For this purpose a person may lack integrity even though it is not established that he/she has been dishonest.”

The test for dishonesty is accepted as laid out in Twinsectra v Yardley [2002] 2 AC 164 (at para 27):

“…before there can be a finding of dishonesty it must be established that the defendant’s conduct was dishonest by the ordinary standards of reasonable and honest people and that he himself realised that by those standards his conduct was dishonest.”

Laing J then looked at the decision in Singleton v Law Society [2005] EWHC 2915 (Admin) which gives guidance on pleading dishonesty in tribunal proceedings. Singleton found that a failure to particularise dishonesty before the hearing was a procedural flaw (at para 13):

“…we conclude that it is unacceptable for the Tribunal to make findings of dishonesty when there has been no documentary pleading of such an allegation in a clear and timeous way.”

In the subsequent case of Constantinides v The Law Society [2006] EWHC 725 (Admin) (at para 35 of the Judgement) it is made clear that any conduct relied on must be precisely identified and the r 5 Statement (pleadings from the SRA)”…must set out in relation to every aspect of the solicitor’s conduct which is said to support an allegation of dishonesty the respects in which it is said to be dishonest. The r 5 Statement must also specifically plead that the conduct was dishonest by ordinary standards and that the solicitor knew he was breaching those standards.”

In their decision, the SDT had concluded (at para 186.5) “…that the Respondent’s actions could not have been more deliberate. She had been intentionally economical with the truth so as to mislead the other firm of solicitors. This showed a lack of integrity on any test and certainly met the test in Hoodless and Blackwell v FSA referred to by the Applicant. It was objectively dishonest” and (at para 204) “Whilst there was no allegation before the tribunal of dishonesty, the tribunal regarded those allegations which had been proved as being extremely serious. The imposition of a fine or anything less in this case would be an inadequate measure to protect the public.”

The Appellant sought to argue that the r 5 statement was inadequately pleaded and that the SDT made an un-pleaded finding of dishonesty. Laing J did not accept that the r 5 was deficient as no objection as to the contents of this was raised by the Appellant during the proceedings. In light of this, Laing J could not accept that the decision of the SDT was unjust because of a serious procedural or other irregularity in its proceedings.

However, Laing J did concede that any “reasonable reader” of the SDT’s determination would conclude that they considered the point of dishonesty and found the Appellant dishonest on the objective limb. It was also common ground that dishonesty was not supposed to be up for consideration in this case. This meant that the SDT “…should have been extremely careful to avoid any suggestion that dishonesty played any part in its reasoning or findings”.

Laing J did not consider that the SDT’s findings in relation to the Appellant’s integrity were “…undermined by the SDT’s error in allowing itself to give vent to its own feelings about the solicitor’s conduct by describing it in terms which went further than the pleaded charges.” Nonetheless, in finding the SDT’s judgement as wrong, Laing J quashed the determination and appeal succeeded. After further submissions were made, Laing J remitted the matter back for consideration before the SDT.