Webb v Solicitors Regulation Authority

[2013] EWHC 2078 (Admin)

The Solicitors Disciplinary Tribunal had been entitled to find dishonesty, even where there was no evidence of benefit to the respondent or disadvantage to another.

A solicitor, Mr Webb, had been instructed by his client to register the transfer of title of a freehold property to a limited liability partnership (LLP). The client then revoked his instructions, and instructed different solicitors. Mr Webb gave an undertaking to the new solicitors that he would not effect the transfer. The client then died. Mr Webb nevertheless registered the transfer, and did not respond to the new solicitors when they asked for an explanation.

Mr Webb submitted to the tribunal that when he had made the application to register the transfer, he had forgotten the undertaking he had given not to register it.

In determining whether the solicitor had made the transfer dishonestly, the question for the high appeal court was whether the tribunal had had enough evidence to entitle it to reach the decision that the respondent’s actions were deliberate and dishonest: it had not been part of the tribunal’s role to establish a motive.

Background

The Solicitors Regulation Authority (SRA) made four allegations against Mr Webb regarding his dealings with the affairs of his former client, Mr Wilkins, with whom he had had a personal, as well as professional, relationship. The allegations concerned the making of a will and the transfer of property into an LLP for tax planning purposes. The SRA alleged dishonesty in relation to two of the allegations. Mr Webb admitted two allegations, but denied he had been dishonest.

Mr Webb admitted two allegations, but denied dishonesty. The tribunal found all the allegations proved, including dishonesty, and ordered that Mr Webb be struck off.

The appeal

There were three grounds of appeal.

Mr Webb appealed against one of the allegations and the findings of dishonesty. He sought to have the striking-off order set aside if his appeal in relation to dishonesty was upheld.

Ground 1

The test for dishonesty was the two-stage objective/subjective test found in Twinsectra Limited v Yardley and others [2002] UKHL 12. When the tribunal had considered the subjective part of the test, it had not asked itself what Mr Webb thought he was doing when he registered the transfer. He submitted that if the tribunal had considered this question, then it could only have concluded that there was no rational reason for him to have applied to register the transfer, as he received no benefit from doing so, and was certain to be discovered. He contended that his application to register the transfer could not therefore have been intentional, and could not have been dishonest.

Ground 2

Mr Webb identified what he said were three findings of fact made by the tribunal which were not correct and which undermined his credibility in the view of the tribunal and contributed to an unjustified finding of dishonesty.

Ground 3

Mr Webb said that the tribunal should not have drawn adverse inferences in relation to two matters: first that he had not made any attempt to correct the register when he had been asked why he had registered the transfer despite his previous undertaking; and second that the wording of his letter to the Land Registry which registered the transfer meant that he could not have forgotten his undertaking.

SRA submissions

The SRA submitted that the tribunal:

  • had not erred in its application of the Twinsectra test, and that the tribunal did not need to establish a motive in order to make a finding of dishonesty;
  • had made no wrong findings of fact that could vitiate their decision;
  • had been entitled to draw the inferences that they had.

The court’s decision

The court stated that the tribunal had been entitled to draw the inferences it had from Mr Webb’s actions in failing to respond to a letter from his former client’s new solicitors, and in his letter to the Land Registry.

The court found that it was significant that there was a period of only around three weeks between the giving of the undertaking by Mr Webb and its breach. In the context of the personal and professional relationship between Mr Webb and his client, the court said it was ‘almost inconceivable that Mr Webb was not fully aware that he was breaching his undertaking when he made the application to the Land Registry…’.

The court rejected Mr Webb’s claim that his registration of the transfer had been an innocent mistake.

The court said that despite the lack of discernable motive and the certainty of discovery, the tribunal’s finding was not one that was difficult to understand. The court noted that the tribunal’s decision had made clear that it had not been able to discern any motive for Mr Webb to act as he had. However, the court held that finding such a motive was not required in order to make a finding of dishonesty.