Controlling and Coercive Behaviour: Widening the Net
The High Court declined to quash the Solicitors Disciplinary Tribunal's Regulation decision that a solicitor had been dishonest in circumstances where no motive and or the certainty of discovery was apparent.
The claimant was a solicitor of 35 years’ experience, at the relevant time operating as a sole practitioner.
In 2002 he started to receive instructions from Mr Wilkins and it was accepted that a deep and close relationship developed with him. Mr Wilkins suffered from a neurological disorder affecting his muscles. Mr Wilkins was also advised by Mr Salmon, an accountant.
In April 2009, the claimant received instructions from Mr Salmon setting out Mr Wilkins’ instructions for a new will, providing for: the claimant and Mr Salmon to be co-executors and trustees of the will; a bequest of £35,000 to Mr Salmon, and the cancellation of outstanding debts owed to Mr Wilkins by two individuals. One of those individuals was Norma Barton, colleague of the claimant who was also in a “close personal relationship” with him. No provision was made for Mr Wilkins’ daughter with whom he had not had any contact for “many years”.
In order to minimise his tax liabilities, Mr Wilkins received advice from Mr Salmon to transfer the freehold title of a commercial property he owned to a limited liability partnership, which was to hold the property on trust for him. Mr Salmon was one of the partners of the incorporated partnership, known as Richardson Memorials Properties LLP (RMP).
On 3 June 2009 the claimant wrote to Mr Wilkins enclosing a TR1 to effect the transfer of title of the commercial property to RMP. Shortly after and within the month, Mr Webb became aware that Mr Wilkins was, in short form, dissatisfied with his services, with the effect that he understood he would not receive further instructions from him. Nevertheless, the TR1 form was returned, signed by Mr Wilkins to the claimant some time (approximately) in late February 2010.
On 27 May 2010, the claimant submitted an AP1 to the Land Registry in order to register the transfer of the property. This was returned by the Land Registry on account of there being no land transaction return lodged with it. On 4 June 2010 the claimant re-submitted the form, explaining the absence of the land transaction return on account of the fact that no consideration applied to the transfer.
On 6 June 2010 Mr Wilkins wrote to the claimant informing him that he no longer wished the claimant to act for him in any capacity, that he had instructed new solicitors Messrs Barnes Coleman & Co (Barnes Coleman) and specifically revoking his instructions for transfer of the commercial property to RMP. Where that transfer had taken place, he requested reversal of the transfer. The claimant duly wrote to the Land Registry on 7 June 2010 asking them not to register the transfer and to return the AP1. The Land Registry cancelled the application on 10 June 2010.
The claimant wrote to Barnes Coleman the following day confirming that no transfer would be registered (the undertaking).
On 17 June 2010 Mr Wilkins died. It became apparent that he had drafted a new will different to that drafted by the claimant in 2009 leaving the majority of his estate to his daughter. Mr Salmon and Norma Barton commenced proceedings to challenge the validity of the new will on the grounds of capacity. The claimant was instructed to conduct that litigation on their behalf.
Breach of undertaking
On 7 July 2010, the claimant wrote to the Land Registry asking them to register the transfer of the commercial property to RMP, referring to “recent correspondence” to “renew the Application for Registration”.
On receiving a complaint from Barnes Coleman, the Solicitors Regulation Authority (SRA) instigated proceedings against the claimant in November 2011. Of the four heads of the allegation, two of which were admitted, it was alleged that the claimant had breached an undertaking and that this was dishonest. W admitted the breach, but denied dishonesty on the basis of making an innocent mistake, namely that he had forgotten about his undertaking not to register the commercial property. In December 2012, the SRA panel found all of the allegations proven together with dishonesty and ordered the claimant to be struck off the Roll of Solicitors.
Amongst other things, the claimant appealed the finding of dishonesty in relation to breach of an undertaking.
His Honour Judge Baker, presiding over the appeal in the Administrative Court, considered and endorsed the test for dishonesty as set out in Twinsectra Limited v Yardley and Others (2002) UKHL 12. Submissions on behalf of W were that the original tribunal had failed to properly consider matters relevant to the second, objective limb of the test, that is, what the claimant thought he was doing when he registered the transfer. It was submitted that, had they done so, they would have found that there was no rational reason for the claimant to register the transfer dishonestly because a) no benefit would accrue and b) discovery was certain. It was argued that the application to register the transfer could not be said to be the result of a deliberate decision and was therefore not dishonest.
Although the SRA conceded that there was no loss to the deceased’s estate and that there was no evidence of a benefit to the claimant in the transfer of the property, it was submitted that the establishment of a motive was not a prerequisite to a finding of dishonesty.
In considering those competing submissions, HHJ Baker noted as follows (paragraph 47)
'[…] 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 [commercial] 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 the finding of dishonesty'.
The crucial question was not whether or not there was a discernible motive or benefit accruing to the claimant, rather the claimant’s credibility. The claimant had enjoyed a close personal relationship with Mr Wilkins prior to that relationship breaking down. The relevant chronology spread over just 6 weeks and the period between the provision of the undertaking and breach of the same, just 3 weeks. In the particular circumstances, the claimant’s explanation that he had forgotten about the undertaking was not deemed credible.
In relation to the risk or certainty of discovery, HHJ Baxter commented as follows (paragraph 53):
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 there 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.
This case offers a useful counterpoint to the case of Fish and General Medical Council, summarised by the E-Regulator on 11 June 2012. In that case, a GMC finding of deliberate and dishonest conduct had been overturned where no motive had been made out. Where a motive/benefit cannot be made out and/or the certainty of discovery appears to be present, whilst that will clearly be relevant for submissions and consideration, the particular facts of a case and fundamental credibility of a defendant’s account will be just as important in considering the subjective limb of the Twinsectra test.
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