Peter Rhys Williams v Solicitors Regulation Authority [2017] EWHC 1478 (Admin)

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Summary

The appellant appealed against a decision of the Solicitors Disciplinary Tribunal (SDT) made on 9 December 2016 to strike him off the Register and to pay a fine of £195,000.  The appeal raised a number of issues but interestingly shone the spotlight on how allegations of dishonesty and integrity are to be pleaded and/or proved. 

Facts

The case against the appellant alleged that whilst acting for a client in bankruptcy proceedings he had devised and sought to implement a scheme to defraud his client's creditors. In order to give effect to the scheme he had further misled, or caused his client to mislead, various third parties.   The alleged "scheme" involved the sale of a property at an undervalue.

The SDT dismissed a number of the allegations brought against the appellant in relation to the structure of the transaction and the attempt to defraud the creditors.   The pertinent focus of the appeal, however, was the SDT's positive findings made in relation to two allegations:

Firstly, it was found that false representations had been made by the appellant during negotiations with the bank whereby he had stated that his client was attempting to secure an offer of more than £2.2 million, but that he was concerned that the offer would be reduced, rather than increased, due to market conditions.  The SDT found that no such negotiations had taken place and it was in his client's interests for the property to be sold at a lower price; they concluded that the statement had been made with a lack of integrity.  Dishonesty was not found in relation to the statement as following the appellant's evidence, the SDT found a lack of the subjective element.

Secondly, the appellant made a statement to the trustee in bankruptcy that the property in question was not able to achieve a valuation of £3.9 million in the knowledge that his client had received an offer, albeit from a "family friend", at this price.   The SDT found that the appellant had acted dishonestly and without integrity in relation to the £3.9 million valuation. 

The appeal argued that the above matters which had led to an adverse finding against the appellant had not been properly pleaded, nor had they been put to the appellant during cross-examination and nor were they referred to in either parties' closing statements. In light of this, the SDT findings were wrong and procedurally irregular. 

Irrespective of the recent conclusions of Mostyn J in Malins v SRA [2017] EWHC 835 (Admin) that dishonesty and integrity were tantamount to the same thing, counsel for the appellant made no explicit submissions in relation to this and did not invite the Court to accept the principle as correct.

An ancillary ground of appeal relating to the suspected "plagiarism" of the SDT's determination was also raised.

Judgment

Mrs Justice Carr J looked at dishonesty and the want of integrity and acknowledged that they had long been treated as two separate concepts. She stated that "one can lack integrity without being dishonest" and made reference to: Bolton v Law Society [1994] 1 WLR 512; Hoodless and Blackwell v Financial Services Authority [2003] UKFTT FSM007; SRA v Wingate and Evans [2016] EWHC 3455; and Newell-Austin v SRA [2017] EWHC 411 (Admin).  She then went on to look at Mostyn J's finding in Malins v SRA that the two concepts are in fact synonymous (see para 36 of Mostyn J's judgement: "In my judgment, you cannot circumvent this obligation by pleading the same fact and matters as want of integrity. We do not have in our system in the first degree and dishonesty in the second degree.")

Although it was acknowledged that the appellant's counsel had not sought to rely upon Malins, Carr J made it clear that she was proceeding on the basis that, both on the authorities, and as a matter of principle, in the field of solicitors' regulation, the concepts of dishonesty and want of integrity are indeed separate and distinct findings; Carr J stated: "Want of integrity arises when, objectively judged, a solicitor fails to meet the high professional standards to be expected of a solicitor.  It does not require … conscious wrongdoing". [54]

Carr J further clarified that "motive is not a necessary ingredient of dishonesty (or want of integrity)" [62]. Although she acknowledged that the presence of a motive can be of some importance, this is largely fact-specific.  

In this particular case the SDT had found the appellant to be dishonest (or acting with a want of integrity) irrespective of lengthy and detailed submissions made on his behalf in relation to his lack of motive and she noted that the SRA had made no submissions relating to motive.  Carr J therefore dismissed this line of complaint within the appellant's grounds and concluded that motive had not been incorrectly considered by the SDT and/or had not manifestly impacted on their determination. 

Carr J concluded that the SRA had failed to properly plead dishonesty in this case and that the matter had not been fairly put to the appellant during cross-examination.  She reminded the court that matters of dishonesty must be "fairly and squarely pleaded" [70], reference made to: HMRC v Hempster [2008] EWHC 63.

Carr J went on to find that all but one of the findings of a lack of integrity was sustainable. The appellant had made submissions that in the absence of dishonesty and a lack of integrity, the entire determination should fall away and Carr J disagreed with this, noting that the SDT had made discreet findings on both dishonesty and integrity.

Finally, the appeal ground relating to plagiarism was dismissed on the basis that professional panels will often use template documents when drafting determinations.

Sir Brian Leveson added an obiter conclusive paragraph at the end of the judgment which concurred with Carr J's findings. President Leveson summarised his position on the dishonesty versus integrity point fervently:

"I ought to make it clear that, in the absence of compelling justification, I would reject Mostyn J's description of the concept of want of integrity as second degree dishonesty. Honesty, ie a lack of dishonesty, is a base standard which society requires everyone to meet. Professional standards, however, rightly impose on those who aspire to them a higher obligation to demonstrate integrity in all of their work. There is a real difference between them."

Commentary

This case represents the next instalment, albeit via obiter, in the ongoing discussions surrounding the concepts of dishonesty and integrity within regulatory proceedings (with a particular focus on the field of solicitors' regulation). The Judgment in Williams undermines Mostyn J's findings in Malins and opens the door again for further debate.

We await the SRA's ongoing proposed appeal proceedings in relation to Wingate and/or Malins so that we may get a final determination on the legal positon in relation to dishonesty versus want of integrity. 

Meanwhile, both on the authorities and as a matter of principle, in the field of solicitors’ regulation, the concepts of dishonesty and want of integrity are seemingly to be treated as separate entities.  A want of integrity is appropriate where a solicitor fails to meet the high professional standards to be expected of a solicitor (objective test), but it does not require the subjective element of conscious wrongdoing which is required for a finding of dishonesty.