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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
THE HONOURABLE MR JUSTICE JEREMY BAKER
|| DAVID ALAN WEBB
||- and -
||SOLICITORS REGULATION AUTHORITY
Mr Paul Stafford (instructed by Thomas Lindsey Brown) for the Claimant
Mr Edward Levey (instructed by Bevan Brittan) for the Defendant
Hearing dates: 27th June 2013
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Jeremy Baker :
- David Webb is 61 years of age and has been in practice as a solicitor for the last 35 years. He has worked as a sole practitioner for most of this time and is based in Essex. In 2002 he began to receive instructions to act for a client called Charles Wilkins. Over the ensuing years Mr Webb continued to be instructed by Mr Wilkins and developed what he accepted was a deep and close relationship with him. Throughout this time Mr Wilkins suffered from Dystonia, a neurological disorder which affects the muscles.
- Mr Webb knew a Mr Salmon as an accountant and as someone who provided financial advice to Mr Wilkins. On 7.4.09 Mr Webb received written instructions from Mr Salmon which, inter alia, apparently set out Mr Wilkins' instructions regarding the making of a new will. Mr Webb drew up a draft will largely in accordance with those instructions. The draft will provided, inter alia, for Mr Webb and Mr Salmon to be executors and trustees of the will, a bequest of £35 000.00 to Mr Salmon, the cancellation of outstanding debts owed to him by two individuals including Norma Barton, and the residue of the estate to be held on trust for the benefit of neurological research. No provision was made for Mr Wilkins' daughter on the basis that she had no need for such provision and had not had any contact with him for many years.
- Mr Webb has been in a personal relationship with Norma Barton for some years and she works with him. She also knew Mr Wilkins and at this time had an outstanding debt to him which she was repaying by instalments.
- There were a number of differences between the instructions Mr Webb had received from Mr Salmon and the terms of the draft will. However it is of note that the will was not dissimilar to an earlier one which Mr Wilkins had made in 2003. Mr Webb stated that when Mr Wilkins came in to see him on 28.4.09 he discussed certain aspects of the will with him and in any event Mr Wilkins had the opportunity of reading the will before he signed it.
- It would appear that Mr Wilkins was interested in minimising his tax liabilities and to this end had received advice from Mr Salmon that the freehold title of a commercial property which he owned should be transferred to a limited liability partnership, which was to hold that property on trust for Mr Wilkins. The property was known as 2A Armstrong Road, Manor Trading Estate, Benfleet in Essex and was stated to be valued at around £600 000.00.
- The partnership was incorporated on 8.5.09. It was known as Richardson Memorials Properties LLP and Mr Salmon was one of the partners. It would appear that Mr Webb was informed about this proposal by Mr Salmon, and on 3.6.09 Mr Webb wrote to Mr Wilkins enclosing a TR1 form for him to sign in order to provide for the transfer of the freehold title to the Benfleet property to the partnership. In that letter Mr Wilkins wrote, "Do not rely on me for any advice on the transfer." He was later to say in evidence that this was intended to mean that Mr Wilkins should not rely upon him for any financial advice upon the advisability of the transfer.
- On 8.6.09 Mr Wilkins wrote to Mr Webb suggesting that he had not fully understood the details of the proposed transfer. Moreover there were three letters sent by Mr Wilkins to Mr Salmon in June of 2009 which reflected upon the fact that Mr Webb had written to him stating that he shouldn't rely upon him for any advice in relation to the transfer. Mr Webb was to say in evidence that he was aware of these three letters at the time and understood them to mean that Mr Wilkins would not be giving him further instructions.
- However Mr Wilkins does appear to have signed the TR1 form and returned it to Mr Webb. It is unclear as to precisely when that form was returned to him. Mr Webb was to say in evidence that his recollection was that it was probably in about late February 2010. In any event it was not until 27.5.10 that Mr Webb submitted an AP1 form to the Land Registry in order to register the transfer of the property, which was duly signed by Mr Webb as the conveyancer. On 3.6.10 that form was returned by the Land Registry to Mr Webb as no land transaction return had been lodged with it.
- On the following day, 4.6.10 Mr Webb re-submitted the form AP1 to the Land Registry together with a letter, which he had personally typed, explaining that the absence of a land transaction return was due to there being no consideration for the transfer.
- On 6.6.10 Mr Wilkins wrote to Mr Webb informing him that he no longer wished Mr Webb to act for him in any capacity as he had instructed new solicitors, namely Messrs. Barnes Coleman & Co. He requested the return of all his files, including his will and informed Mr Webb that he had made a new one. Mr Wilkins also notified Mr Webb that, "… I wish to revoke my instructions to transfer the above property with immediate effect. Please take no further steps to effect the transfer and if it has been effected, you must rescind it immediately…" The property being referred to by Mr Wilkins was the one in Benfleet.
- On receipt of that letter, which appears to have been enclosed in one from Barnes Coleman & Co. dated 7.6.10, Mr Webb personally typed and faxed a letter to the Land Registry in which he asked them not to register the transfer of the property and to return the AP1 form to him. The Land Registry cancelled the application on 10.6.10.
- On 11.6.10 Barnes Coleman & Co faxed a letter to Mr Webb, referring to a conversation which the writer had had with Mr Webb on the previous day and enquiring, inter alia, as to the current situation in relation to the Benfleet property. On the same day Mr Webb personally typed and faxed his reply to that letter in which he wrote, "We can confirm that we will not be registering any transfer in respect of 2A Armstrong Road." Mr Webb was to say in evidence that it is apparent from the reference at the top of his letter that he filed it in one of the files relating to Mr Wilkins.
- On 17.6.10 Mr Wilkins died and by the 21.6.10 it became known to Mr Webb and others that the contents of his new will was significantly different to his former one, in that virtually the whole of his estate was bequeathed to his daughter. As a result of this Mr Salmon and Norma Barton have commenced proceedings seeking to challenge the validity of the new will on the grounds of lack of capacity. That litigation is being conducted by Mr Webb.
- On 7.7.10, apparently as a result of a request by Mr Salmon, Mr Webb again personally typed a letter to the Land Registry asking them to register the transfer of the Benfleet property. He did so in these terms, "We refer to our recent correspondence and do renew the Application for Registration. As explained before the fee is calculated on the value even though there was no cash consideration in the transfer." He also sent them an AP1 form dated 7.7.10.
- Mr Webb was to say in evidence that when he was dealing with this matter he had forgotten that he had previously provided the undertaking that he would not register the transfer, and stated that the only file he had consulted at this time was the RMP LLP one which did not contain the letter of undertaking. He went on to say in his oral evidence that he had also failed to recall that he had made previous applications for registration and had already cancelled one of them. However when he was referred to the wording of the most recent letter to the Land Registry, he eventually conceded that he must have remembered it at the time. The registration was completed by the Land Registry on 8.7.10.
- Correspondence ensued between Barnes Coleman & Co and Mr Webb in which, inter alia, the former raised the subject matter of the Benfleet property, to which Mr Webb did not respond. However on 23.2.11 Barnes Coleman & Co wrote to Mr Webb in the following terms, "We have obtained up to date office copy entries which we are astounded to see shows the property was registered on 8th July 2010, in the name of Richardson Memorials Properties LLP, despite assurance contained in your letter to us dated the 14th June 2010…." Mr Webb did not respond to this letter or one from a new firm of solicitors Messrs. Birkett Long LLP dated 17.3.11, who had been instructed as a result of possible conflict of interest, to act for the executors of the deceased's estate. Mr Webb was to say in evidence that he had read the letter from Barnes Coleman & Co with some horror, but the reason why he did not respond to their letter was that the correspondence had become a little acrimonious.
- On 13.4.11 the Solicitors Regulation Authority wrote to Mr Webb concerning a complaint which it had received concerning possible breaches of the Solicitors Code of Conduct, arising out of the preparation of a will for Mr Wilkins by which his partner Norma Barton was a beneficiary and the registration of the transfer of the Benfleet property following the provision of an undertaking not to do so.
- On 6.5.11 Mr Webb responded to the letter. In relation to the preparation of the will, he wrote that he had prepared the will in accordance with instructions which he had received from Mr Wilkins' accountant who had given him independent advice. In relation to the Benfleet property he pointed out that the transfer had been completed prior to 6.6.10 and that when he subsequently made the application to register the transfer, he had made an innocent mistake as he had forgotten that he had provided the previous undertaking not to do so.
- By notice dated 17.11.11 the SRA required Mr Webb to answer allegations arising out of his conduct in relation to the preparation of Mr Wilkins' will and the registration of the transfer of the Benfleet property. The allegations being that he:
"1. Acted in a position of conflict of interests, contrary to Rules 3.01 and 3.04 SCC;
2. Failed to act in the best interest of his client, contrary to Rule 1.04 SCC;
3. Breached an undertaking, contrary to Rule 10.05 SCC;
4. Failed to act with integrity and acted in a manner likely to diminish the trust the public places in the profession, contrary to Rules 1.02 and 1.06 SCC.
Allegations (3) and (4) are made on the basis that the Respondent behaved dishonestly."
- In the response to the Rule 5(2) notice Mr Webb admitted allegations (1) and (3), whilst denying the remaining allegations including that of dishonesty. In relation to allegation (2) it was contended that even if Mr Wilkins had obtained independent legal advice Mr Webb believed that Mr Wilkins would have instructed him to make the will in the same terms.
- In the Rule 5(2) notice one of the matters which the SRA had relied upon in relation to the allegation of dishonesty was that the effect of the registration of the transfer was to deprive the deceased's estate of the property. However in the response to that notice it was pointed out on behalf of Mr Webb that this was incorrect as it was the signing of the TR1 by Mr Wilkins which had completed the transfer; such that the equitable title had already been conferred upon the partnership by the TR1, and the legal title conferred by the subsequent registration could be removed by rectification. Moreover as the property was held by the partnership on trust for Mr Wilkins, there would be no loss to the estate. During the course of the hearing, the SRA accepted that this was the legal position, such that although it maintained its allegations of dishonesty against Mr Webb, it made it clear to the Solicitors Disciplinary Tribunal that this matter was no longer relied upon.
- Mr Webb appeared before the tribunal on the 15.10.12 and 16.11.12. In addition to the documentary evidence, oral evidence was provided by Mr Webb and two of the three character witnesses called on his behalf. It also received submissions by Mr Levey on behalf of the SRA and Mr Stafford on behalf of Mr Webb. The tribunal's written decision was promulgated on 14.12.12. The tribunal found allegations (2) and (4) proved together with the allegations of dishonesty. It ordered Mr Webb to be struck off the Roll of Solicitors.
- Mr Webb now appeals as of right to this court, the striking off having been stayed by order of this court in the meantime. The appeal seeks to overturn the finding under allegation (4) and that of dishonesty in relation to allegations (3) and (4). In the event that the latter finding is overturned he seeks to set aside the striking off. In the event that the finding of dishonesty is upheld he does not seek to set aside the striking off. He does not appeal against the finding under allegation (2).
- Under ground 1 it was submitted that the test for dishonesty in these proceedings was that to be found in Twinsectra Limited v Yardley and others  UKHL 12 and that when the tribunal was considering the subjective limb of this test it had failed to ask itself what Mr Webb thought that he was doing when he registered the transfer. Furthermore that if the tribunal had asked itself this question it would have been bound to answer that there was no rational reason for having done so, on the basis of lack of benefit to him and the certainty of discovery of him, such that his application to register the transfer cannot have been as a result of a deliberate decision on his part and was therefore not dishonest. In the course of the hearing this argument was refined into a submission that in the absence of evidence of a motive involving a benefit either to himself or another and/or loss to another, of which there was none, the tribunal were precluded from making a finding of dishonesty against Mr Webb.
- Under ground 2 it was submitted that there were three errors of fact finding made by the tribunal, which wrongfully led the tribunal to find that Mr Webb was not a credible witness and that he had deliberately applied to register the transfer of the property. The first erroneous finding was that he had not put forward his defence of innocent mistake until the disciplinary proceedings, when he had put it forward in the letter to the SRA dated 6.5.11. The second erroneous finding was that there was no evidence that Mr Wilkins had signed the TR1 form, when it had been signed by him. The third erroneous finding was that Mr Webb would have been hurt by the abrupt termination of Mr Wilkins' instructions to him in his letter dated 6.6.10 and as a result have been unlikely to have overlooked such an event, whereas the termination had taken place in June of 2009.
- Under ground 3, which at the hearing Mr Stafford conceded was really an aspect of ground 1, it was submitted that the tribunal should not have drawn an adverse inference from two matters. Firstly that Mr Webb had made no application for rectification of the registration. Secondly that the word "renew" was contained in his letter to the Land Registry dated 7.7.10, in that it was only referable to the previous applications, and not to the undertaking.
- In relation to ground 1, the SRA accept that the appropriate test for dishonesty in this case was that provided in Twinsectra. In that regard it submits that the tribunal approached their task appropriately asking itself the twin questions in relation to objective and subjective dishonesty. It submitted that in reality this ground of appeal was an attempt to undermine the central finding of the tribunal that Mr Webb had deliberately breached his undertaking, as opposed to having made an innocent mistake in doing so, and that the evidence before the tribunal fully justified that finding. Furthermore, not only was the establishment of a motive not a pre-requisite to a finding of dishonesty, the tribunal had taken account of its absence but nevertheless, as it was entitled to do, found that Mr Webb had been dishonest when he registered the transfer.
- It submitted that there had been no erroneous findings of fact by the tribunal and certainly none which could vitiate their decision. The tribunal had been correct to find that Mr Webb had not provided his defence of innocent mistake until the disciplinary proceedings, in that it was only following the SRA's request for an explanation that Mr Webb first proffered it. His letter dated 6.5.11 having been clearly brought to the attention of the tribunal during the course of the hearing. Secondly, that part of the decision which related to the lack of evidence of Mr Wilkins' signature on the TR1 was not part of the tribunal's findings and had clearly originated from the SRA's rule 5(2) notice, which had been superseded by the undisputed evidence that Mr Wilkins had signed the form. Hence the concession by the SRA that there was no loss to the estate and the tribunal's express acknowledgement that there was no evidence of benefit to Mr Webb or anyone else. Thirdly, there was no clear evidence of any earlier termination of Mr Webb's retainer, as opposed to his own evidence that he was hurt as a result of the letter of the 6.6.10. Moreover it was the significance of Mr Webb's feelings which were of importance in being likely to have aided his memory of the provision of the undertaking by him
- In relation to the third ground the SRA submitted that the tribunal was entitled to take into account that following receipt of the letter of 23.2.11 Mr Webb had taken no steps to rectify the register, as he would have done had his defence of innocent mistake been true. Secondly the tribunal were entitled to take into account that the application for registration was expressed to be a renewal. In the light of Mr Webb's evidence at the hearing that in addition to having forgotten the earlier undertaking, he had also forgotten that he had made previous applications for registration. In circumstances where if, as the SRA contended, he had been aware of the previous applications he would inevitably have recalled the previous undertaking.
Scope of the appeal
- The Court was referred to a number of authorities relating to the proper approach which the Court should take in relation to its appellate jurisdiction. The Court was taken to the speech of Lord Mance in the case of Datec Electronics Limited & Others v United Parcels Service Limited  UKHL 23 where at paragraph 46 he said,
"As to the correct approach in an appellate court to findings and inferences of fact made by a judge at first instance after hearing evidence, there was no disagreement between counsel. In Assicurazioni Generali SpA v. Arab Insurance Group  1 WLR 577, Clarke LJ summarised the position, referring also to a passage in a judgment of my own:"
'14. The approach of the court to any particular case will depend upon the nature of the issues kind of case determined by the judge. This has been recognised recently in, for example, Todd v Adam (trading as Trelawney Fishing Co)  EWCA Civ 509, Lloyd's Rep 293 and Bessant v South Cone Incorporated  EWCA Civ 763. In some cases the trial judge will have reached conclusions of primary fact based almost entirely upon the view which he formed of the oral evidence of the witnesses. In most cases, however, the position is more complex. In many such cases the judge will have reached his conclusions of primary fact as a result partly of the view he formed of the oral evidence and partly from an analysis of the documents. In other such cases, the judge will have made findings of primary fact based entirely or almost entirely on the documents. Some findings of primary fact will be the result of direct evidence, whereas others will depend upon inference from direct evidence of such facts.
15. In appeals against conclusions of primary fact the approach of an appellate court will depend upon the weight to be attached to the findings of the judge and that weight will depend upon the extent to which, as the trial judge, the judge has an advantage over the appellate court; the greater that advantage the more reluctant the appellate court should be to interfere. As I see it, that was the approach of the Court of Appeal on a 'rehearing' under the Rules of the Supreme Court and should be its approach on a 'review' under the Civil Procedure Rules.
16. Some conclusions of fact are, however, not conclusions of primary fact of the kind to which I have just referred. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way.
17. In Todd's case  2 Lloyd's Rep 293, where the question was whether a contract of service existed, Mance LJ drew a distinction between challenges to conclusions of primary fact or inferences from those facts and an evaluation of those facts, as follows, at pp 319-320, para 129:
'With regard to an appeal to this court (which would never have involved a complete rehearing in that sense), the language of "review" may be said to fit most easily into the context of an appeal against the exercise of a discretion, or an appeal where the court of appeal is essentially concerned with the correctness of an exercise of evaluation or judgment - such as a decision by a lower court whether, weighing all relevant factors, a contract of service existed. However, the references in rule 52. 11 (3) (4) to the power of an appellant court to allow an appeal where the decision below was "wrong" and to "draw any inference of fact which it considers justified on the evidence" indicate that there are other contexts in which the court of appeal must, as previously, make up its own mind as to the correctness or otherwise of a decision, even on matters of fact, by a lower court. Where the correctness of a finding of primary fact or of inference is in issue, it cannot be a matter of simple discretion how an appellant court approaches the matter. Once the appellant has shown a real prospect (justifying permission to appeal) that a finding or inference is wrong, the role of an appellate court is to determine whether or not this is so, giving full weight of course to the advantages enjoyed by any judge of first instance who has heard oral evidence. In the present case, therefore, I consider that (a) it is for us if necessary to make up our own mind about the correctness or otherwise of any findings of primary fact or inferences from primary fact that the judge made or drew and the claimants challenge, while (b) reminding ourselves that, so far as the appeal raises issues of judgment on unchallenged primary findings and inferences, this court ought not to interfere unless it is satisfied that the judge's conclusion lay outside the bounds within which reasonable disagreement is possible. In relation to (a) we must, as stated, bear in mind the important and well-recognised reluctance of this court to interfere with a trial judge on any finding of primary fact based on the credibility or reliability of oral evidence. In the present case, however, while there was oral evidence, its content was largely uncontentious.'
In the same case Neuberger J stressed, pp 305-306, paras 61 to 64, that the question whether there was a contract of service on the facts involved the weighing up of a series of factors. Thorpe LJ agreed with both judgments.
The judgment of Ward LJ in the Assicurazioni Generali case may be read as advocating a different test, which would equate the approach of an appellate court to findings of fact with its approach to decisions taken in the exercise of a discretion. As Waller LJ correctly pointed out in Manning v. Stylianou  EWCA Civ 1655, that is not the correct test, and it is the judgment of Clarke LJ in the paragraphs quoted above from his judgment that gives proper guidance as to the role of the Court of Appeal when faced with appeals on fact."
- Mr Stafford reminded the Court that in granting a stay of the Tribunal's order in this case on 28th January 2013 Mostyn J stated that he considered that Mr Webb had "…reasonable prospects of success". Moreover he took the Court to the judgment of Mostyn J in AA v NA (Appeal: Fact Finding)  EWHC 1282 (Fam) in which he said at paragraph 15,
"In my opinion an appellate court would only be able to say that a fact-finder has plainly got the wrong answer if:
i) His conclusion was demonstrably contrary to the weight of the evidence, or
ii) The decision making process can be identified as being plainly defective so that it can be said that the findings in question are unsafe…"
- Mr Levy referred the Court to the case of Samuel v Law Society  EWHC 875 (Admin) in which Richards LJ stated,
"14. The appellant has told us she was shocked at the finding that she was not a credible witness. She asserts vehemently that she is an honest person. She prays in aid the character references that were before the tribunal attesting to her honesty. She acknowledges that her judgment was clouded in relation to the transaction, but it went no further than that and the tribunal should have believed she was telling the truth.
15. Submissions of that kind face grave difficulty. Contrary to the approach adopted at times by the appellant, it is not for this court - the appeal court - to reach our own separate conclusions on issues of fact, including the issue of honesty or dishonesty. Our function is to review the findings of the tribunal. It is well established that an appeal court will be slow to interfere with findings of primary fact made by a first-instance court, especially where those findings are based, in part, on oral evidence and the tribunal or lower court therefore has had the advantage of having seen and heard the witness or witnesses give evidence.
16. In the present case I can see no basis whatsoever for interfering with the finding of dishonesty made by the tribunal on the basis of the evidence before it. Having regard to the undisputed facts, the appellant's reaction to the questions about them by the investigating officer and the explanation subsequently given by her, the tribunal was in my judgment amply justified in making an adverse credibility finding and, in the light of that finding, in going on to make a finding of dishonesty."
- In the light of these authorities Mr Stafford submits that this court should approach this appeal on the basis that it should determine whether the tribunal's findings or inferences were wrong, which he submits they were, in the light of its own views as to the facts and inferences to be drawn from them. Whereas Mr Levey submits that questions of fact were for the tribunal to decide, such that this court should not intervene unless they and/or the inferences which were drawn from them are shown to be plainly wrong.
- As Clarke LJ pointed out in the Assicurazioni case, the approach of the appellate court to any particular case will depend upon the nature of the issues determined by the lower court. It will also of course depend upon the nature of the evidence upon which the lower court made its decisions. In the present case although much of the evidence was documentary in nature, it seems to me that when it came to the tribunal's central findings as to the issues surrounding the nature of the application for registration, namely deliberate, dishonest, mistaken, innocent, in addition to inferences to be drawn from the documents and its legal implications, crucial to these issues was the tribunal's own evaluation of Mr Webb's evidence. Thus although it will be appropriate to anxiously scrutinise the evidence in this case, the advantage which the tribunal had in receiving oral evidence will have to be borne in mind.
- It will be convenient to consider the matters raised on behalf of Mr Webb under grounds (2) and (3), before turning to the central matter in ground (1).
- The scheme of the written decision by the tribunal was initially to set out the SRA's allegations, together with the nature of the documentary evidence which it had considered. Thereafter a "factual background" was provided, followed by a review of the oral evidence it had heard, a resume of the opposing submissions and finally the tribunal's findings. It is apparent from a comparison of the SRA's Rule 5(2) notice and that part of the tribunal's decision dealing with the factual background that the latter was largely taken from the former. There can be no complaint about this where the matters which it contains are not in dispute. However when a tribunal decides to adopt this course of action, it is necessary that it ascertains with care that this is the case.
- It is apparent that there is an error within this part of the narrative, which is the subject matter of justified complaint by Mr Webb. Namely that at paragraph 21 the tribunal have retained the inclusion of that part of the Rule 5(2) notice which suggested that there was no evidence that Mr Wilkins had signed the TR1 form. In the light of subsequent events it is apparent that this was not the position taken on behalf of the SRA at the hearing. This is clear from the cross-examination of Mr Webb at line 5 of page 128 of tab 1 of the 3rd Appeal bundle and from the SRA's submissions at line 11 of page 18 of tab 2 of that bundle.
- The significance of Mr Wilkins having signed the TR1 form was of course that it provided for the transfer of the freehold title to the Benfleet property to the partnership, which was subsequently registered by Mr Webb. Clearly if Mr Webb had not signed the TR1 form, this would have remained a central plank of the case against Mr Webb as it would no doubt have been part of its original allegation that the effect of the registration was to deprive the deceased's estate of the property. In this regard it is of note that there is no repetition of this error within the tribunal's findings. Although the tribunal state that it has taken into account the "chronology of events," if this matter had been part of its findings, it is inconceivable, given its potential significance, that this would not have been highlighted in terms within those findings. Not only is this matter not mentioned in those findings, but the tribunal expressly acknowledged that there was no evidence of benefit either to Mr Webb or anyone else. In these circumstances although the retention of this error within the "factual background" is evidence of a lack of care by the tribunal, it is my judgement clear that it is an error of form rather than one of substance. Such that I am satisfied that it is not one which amounts to an error of fact finding by the tribunal.
- As to the submission that the tribunal's use of the word "proceedings" in relation to the point at which Mr Webb first put forward his explanation of innocent mistake discloses a further error of fact on the part of the tribunal, it is correct that the first time that he put forward this explanation was in his letter to the SRA dated 6.5.11. However it is equally clear that Mr Webb said nothing about this prior to that date, despite the matter having been raised in terms in the letter from Barnes Coleman & Co dated 23.2.11.
- These matters were exhaustively rehearsed in front of the tribunal. Not only was the letter dated 6.5.11 set out in full within the Rule 5(2) notice and repeated at paragraph 20 of the tribunal's written decision, but it is apparent from line 23 and 6 of tab 1 of the 3rd Appeal bundle that the tribunal had read that letter. Indeed that part of the cross-examination of Mr Webb relating to this issue, at pages 167 – 169 of tab 1 of the 3rd Appeal bundle, was set out at paragraphs 58 – 61 of the tribunal's written decision. In my judgement although it might have been preferable for the tribunal to have made express reference to Mr Webb's letter dated 6.5.11 in the course of their findings, there is no reason to believe that the tribunal did not have that document well in mind and used the expression "proceedings" as indicating that Mr Webb had not sought to provide his explanation prior to the formal involvement of the SRA. In these circumstances I do not consider that this discloses an error of fact finding by the tribunal.
- One of the matters upon which the tribunal relied when rejecting Mr Webb's explanation of innocent mistake was the hurt caused to him by the abrupt termination of his instructions by Mr Wilkins in his letter dated 6.6.10. It was submitted on behalf of Mr Webb that the tribunal was not entitled to make such a finding in the light of the fact that his instructions had effectively been terminated at an earlier point in time.
- It is correct that in Mr Webb's response to the Rule 5(2) notice 3 letters were set out which had been sent by Mr Wilkins to Mr Salmon in June 2009 which suggested that not only did Mr Wilkins not wish to receive advice in relation to the property transfer from Mr Webb, but at one point suggested that he didn't wish to have any further contact with him. A matter which was noted by the tribunal at paragraphs 74.56 – 74.59 of their written decision. It was stated that at some point thereafter Mr Webb had been shown these letters by Mr Salmon and that since that time Mr Webb had not had contact with Mr Wilkins.
- However it is equally clear that this was the subject matter of cross-examination at pages 139 – 140 of tab 1 of the 3rd Appeal bundle and the following is to be found:
"Q. …….Can we be clear. You had no contact with Chas from June 2009 until this letter (6.6.10) but as far as you were aware you had been on good and amicable terms with him, yes?"
"Q. There had been no falling out?"
"A. Not that I know of, no."
"Q. And although nothing had happened you, as far as you were concerned, remained his solicitor and indeed his friend, yes?"
"Q. Let me ask you this, was there any warning before this letter that you were about to be disinstructed?"
and further on,
"Q. This letter must have come as a bolt out of the blue to you, did it not?"
"Q. Yes. You must have been shocked by it?"
"A. Certainly surprised. Shocked, yes."
"Q. And I suggest you were upset by it?"
"Q. Yes, and your feelings were, can I suggest, a little hurt?"
"A. Yes, I think that would be fair to say."
"Q. And you took it rather personally that you should be so unceremoniously, put it this way, sacked after all these years of good service. You were hurt by that, were you not?"
"A. Yes, I would accept that."
This aspect of Mr Webb's evidence was noted by the tribunal at paragraph 44 of the tribunal's written decision.
- It is clear from Mr Webb's own evidence that he considered that the letter from Mr Wilkins dated 6.6.10 amounted to a termination of his instructions, in circumstances in which although he had not been in contact with Mr Wilkins for a period of time, he believed that they remained on good terms. Moreover, that this caused him to be both upset and hurt as a result of the manner of the termination and the terms in which it was expressed. In these circumstances the tribunal had ample grounds for making the findings which it did in relation to this issue, such that in my judgement no error of fact finding has been made by the tribunal.
- In so far as any adverse inference that the tribunal drew from Mr Webb's failure to take any action to rectify the registration, I consider that it was entitled to do so. If the registration had been an innocent mistake one would have anticipated Mr Webb to have at least taken some steps to seek to rectify the position, or at the very least to have notified Barnes Coleman & Co why he could not do so, in response to their letter of 23.2.11 which specifically requested him to do so. The explanation which Mr Webb provided as to his failure to reply to this firm either in relation to this issue or indeed to provide his explanation for making the application to register the transfer, in itself lacks credibility in that one would not expect a solicitor even in the situation which Mr Webb contends pertained in this case, to have declined to enter into correspondence with another firm of solicitors so as to provide such an explanation.
- In relation to the tribunal's drawing of an adverse inference from Mr Webb's use of the word "renew" in his letter dated 7.7.10, once again I consider that it was entitled to do so. Undoubtedly the renewal referred only to the previous applications for registration of the transfer, as opposed to the provision of the undertaking. A matter which was made clear in the course of cross-examination at pages 156 – 159 of tab 1 of the 3rd Appeal bundle and which eventually evoked a concession by Mr Webb that he "…must have remembered it." However the significance of this has to be considered in the light of the fact that the undertaking had been provided only 10 days after the previous renewal of the application for registration on 4.6.10 and his subsequent application to cancel that registration was made a week before the undertaking was provided by him. In these circumstances the tribunal were entitled to consider the likelihood or otherwise of Mr Webb having forgotten that he had provided the undertaking, when he had had such recent involvement with this property.
- Turning then to the determination of the central issue which was before the tribunal, Mr Webb undoubtedly had a powerful argument to deploy, namely the absence of a motive involving a benefit either to himself or another, and or loss to another, arising out of his application to register the transfer of the Benfleet property. It is apparent that this argument was sought to be deployed with effect by Mr Stafford on his behalf before the tribunal, just as it has been at the hearing of this appeal. However, it is clear that it is no part of the task of the SRA to establish such a motive in these proceedings, nor is it a prerequisite to an adverse finding being made by the tribunal in relation to the question of dishonesty. The fact that no such motive could be discerned was made clear by the tribunal in their findings, just as the lack of such a finding was not a bar to a finding of dishonesty.
- The real question is whether, on the evidence before it, the tribunal were entitled to reach its decision that Mr Webb's actions had been both deliberate and dishonest. And crucial to this question was in my judgement the issue of Mr Webb's credibility. In regard to this issue it was apparent that Mr Webb had not only a professional relationship with Mr Wilkins, but a personal one as well, such that he was likely to have taken a more personal interest in his affairs than might be the case with an ordinary professional client. Indeed in relation to the will which he assisted in Mr Wilkins making in June 2009 he was a co-executor together with Mr Salmon. It is in this context that Mr Webb's explanation that on 7.7.10 he forgot that he had provided a written undertaking less than a month earlier had to be considered.
- In this regard the chronology of the dealings which Mr Webb had had with the Benfleet property was of course of particular significance. The first of the applications which Mr Webb had submitted to the Land Registry was on 27.5.10. This was the one which was returned to him because no land transaction return had been lodged with it. Thus it was that on 4.6.10 Mr Webb submitted his second application to the Land Registry explaining the reason for the lack of a land transaction return; a letter which he had personally typed, rather than getting his secretary to do so. A couple of days later he received the letter from Mr Wilkins dated 6.6.10 terminating all of his instructions including the revocation of the transfer of the property to the partnership. This was followed by a letter from Barnes Coleman & Co enclosing Mr Wilkins' letter of authority which included these words in manuscript, "I do mean ALL paperwork." A letter which Mr Webb acknowledged caused him to be upset and hurt and as a result of which Mr Webb wrote to the Land Registry on 14.6.10 cancelling the renewed application for registration; again a letter personally typed by him rather than his secretary. A few days later on 11.6.10, following a personal conversation with and the receipt of a letter from those new solicitors, he again personally typed a letter to them in which he provided the undertaking. It was on 17.6.10 that Mr Wilkins died and, within a short period of time, Mr Webb learnt that before his death Mr Wilkins had made a new will in significantly different terms from the one which he had drafted. It was then on the 7.7.10 that, apparently at Mr Salmon's behest, Mr Webb personally wrote to the Land Registry for the third time in order to "renew" his previous application for registration in which he wrote, "As explained before the fee is calculated on the value even though there was no cash consideration in the transfer."
- It is apparent from this chronology that all of Mr Webb's dealings with the Land Registry concerning the Benfleet property occurred within a period of about 6 weeks from beginning to end. And the period which lapsed between the provision of the undertaking and its breach was a period of just over 3 weeks. Whilst giving all reasonable latitude for the business of a sole practitioner, the fact that the undertaking was contained within the last paragraph of a letter referring to other matters and the filing of that undertaking in Mr Wilkins file which Mr Webb did not consult when he came to re-apply for the registration of the transfer, it is almost inconceivable that Mr Webb would not have been fully aware that he was breaching his undertaking when he made the application to the Land Registry on 7.7.10.
- Thereafter despite being specifically requested to provide an explanation for these events by Barnes Coleman & Co in their letter of 23.2.11, Mr Webb failed to reply to this and other letters until the SRA became involved on 13.4.11.
- In these circumstances it is not difficult to understand how, in the absence of any other explanation save for loss of memory and despite the lack of discernable motive and the evidence relating to Mr Webb's character, the tribunal came to its clear conclusion in this case that when on 7.7.10 Mr Webb sought to register the transfer of the Benfleet property in breach of his earlier undertaking, he was doing so deliberately and dishonestly, as opposed to mistakenly and innocently. In doing so the tribunal provided reasons which reflect those set out in this judgement and after asking itself the two questions required of it to satisfy the test set out in Twinsectra.
- Although the risk or certainty of discovery was not at the forefront of the issues raised on behalf of Mr Webb at the tribunal, it is a matter raised in the course of this appeal. It is not one which the tribunal was obliged to answer in terms in the course of its findings, it being implicit that it rejected its potency as overcoming their finding of dishonesty. However having considered the matter for the purposes of this appeal, it has to be borne in mind that the reality of the situation is that not infrequently courts are required to consider allegations of dishonesty based upon decisions made and actions taken which run the risk or indeed certainty of discovery. Therefore although this is a matter of relevance, it is not one in my judgement which is of such significance that it can be said to weigh so heavily in the balance that it overcomes the findings of the tribunal in relation to the issue of dishonesty in this case.
- In these circumstances and having given anxious scrutiny to the evidence in this case, in my judgement the tribunal was entitled to reach their decision in relation both to allegation (4) and that of dishonesty in relation to allegations (3) and (4). These decisions are supported by the evidence which it heard, such that the appeal on these issues does not succeed.
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