Solicitors Regulation Authority v Mohammed Dar [2019] EWHC 2831 (Admin)

Solicitors Regulation Authority v Mohammed Dar [2019] EWHC 2831 (Admin) was a Divisional Court appeal and cross-appeal from decisions of the Solicitors Disciplinary Tribunal made on 27 February 2019, in which the Tribunal found Mr Dar had acted recklessly and without integrity but imposed a sanction combining a fine, restricted practice and a suspended suspension; the court dismissed Mr Dar’s appeal against the findings but allowed the SRA’s appeal in part, varying the suspension order.

Mr Dar, admitted in March 1990 and at the material time sole director and compliance officer of Dar & Co Solicitors Limited in Manchester, was instructed on 1 February 2017 to act for three named persons in the sale of a property in Clapham valued at £1.5 million and registered as an Islamic community centre held on charitable trust. He received purported identification certified by a solicitor at Oliver Fisher Solicitors. By email on 20 February 2017 the purported vendors informed Mr Dar they were ceasing the proposed sale to Axmo Limited and instead wished to transfer title to Shields & Co Limited, an estate agency, for no consideration. Mr Dar prepared and witnessed the transferee’s signature on the transfer document, allowing the transferor signatures to be obtained out of his presence. He submitted the signed transfer to the Land Registry on 13 March 2017. On 22 March 2017 another firm was instructed by the genuine Mr Tabatabai, who had not authorised the transfer. Messrs Mahdi and Aleloom had died years previously. The transaction was a fraud; the registered proprietors during the transaction had been imposters. The Land Registry entry was subsequently rectified.

The SRA brought disciplinary proceedings alleging that between 1 February and 21 March 2017 Mr Dar had facilitated a dubious transaction and failed to adhere to his firm’s anti-money laundering policy, breaching Principles 2, 6, 7 and 8 of the SRA Principles 2011. The Rule 5 Statement detailed fifteen unusual elements of the transaction including the transfer of a £1.5 million asset for no consideration, the unexplained abortion of the sale to Axmo, geographical anomalies concerning the purported parties’ addresses, and discrepancies concerning the registered office of Shields & Co. Recklessness was expressly alleged. Mr Dar admitted all allegations save those concerning lack of integrity and recklessness, contending that although his conduct might amount to incompetence he had not appreciated the unusual features at the time or recognised the risk of fraud.

The Tribunal rejected Mr Dar’s evidence as to his lack of appreciation of the unusual features. They found incredible his assertions concerning the change of instructions, the gratuitous transfer to an estate agency, the inaccuracies in the emails, the charitable trust issues and the peculiarities of the transfer arrangements. The Tribunal concluded that Mr Dar had been aware of numerous unusual features yet had facilitated the transaction without making further enquiries. Applying the test in R v G [2003] UKHL 50, they found Mr Dar had been reckless in that he was aware of and had deliberately closed his mind to significant risks intrinsic to the transaction which it was clearly unreasonable to take. They found this amounted to a want of integrity in breach of Principle 2. The Tribunal found Mr Dar highly culpable, noting the lack of integrity and recklessness fell far short of the standard expected of a solicitor. Aggravating factors included Mr Dar’s role as compliance officer. Mitigation included that Mr Dar was not the main instigator of the fraud, had made some admissions before the hearing, and had taken steps to reverse the transfer once its fraudulent nature was pointed out. The Tribunal imposed a fine of £20,000 at Level 4, a twelve month suspension from practice suspended for two years, and indefinite restrictions on practice prohibiting acceptance of any conveyancing or trusts instructions, together with costs of £23,228.

On appeal, Mr Dar contended the Tribunal had failed to ask the correct question by conflating his appreciation of unusual features with appreciation of risk of fraud, that they failed to give adequate reasons for the findings of recklessness and lack of integrity, and that they failed to take into account evidence of his positive good character when assessing credibility and likelihood of reckless conduct. Lord Justice Hickinbottom and Mrs Justice May rejected each ground. They held that the SRA’s case was not restricted to a narrow definition of fraud but extended to a risk of some form of illegitimacy or illegality; the Tribunal had correctly identified and applied the R v G test for recklessness; and their reasoning was at least adequate to explain their rejection of Mr Dar’s assertions. On the evidence the Tribunal were clearly entitled to disbelieve Mr Dar on whether he had appreciated the unusual features and whether he appreciated from those features a risk that the transaction was fraudulent or otherwise illegitimate or illegal. As to good character, the single one-page reference from David Berkeley QC had not been relied upon in oral submissions below and its weight was very limited. The Tribunal recorded having considered it and there was nothing to suggest they failed to take it into account; in any event any such error would have been immaterial.

The SRA challenged the sanction as clearly inappropriate given the seriousness of findings of recklessness and lack of integrity. Mr Levey submitted the Tribunal had taken irrelevant matters into account as mitigation and had erred in “upgrading” a fine to a suspended suspension contrary to the Guidance Note on Sanctions (6th Edition, December 2018), which prescribed a staged approach from the lowest sanction upwards. He argued that a finding of lack of integrity ordinarily required striking off or an immediate suspension, relying on Bolton v The Law Society [1994] 1 WLR 512 and Solicitors Regulation Authority v Emeana [2013] EWHC 2130 (Admin).

The court held that the Tribunal had not erred in characterising the matters at paragraph 54 of the Decision as mitigation; they matched examples given in the Guidance and were matters impacting on culpability and harm. Weight was a matter for the Tribunal. Nor had the Tribunal failed to follow the Guidance by combining sanctions. Paragraph 2 expressly contemplated any combination of sanctions; paragraph 31 permitted a restriction order to be combined with any other sanction; and paragraph 41 specifically contemplated a restriction order in combination with a suspended suspension to back the restriction and assist with enforcement. Looked at as a whole the Tribunal had taken a holistic approach as the Guidance required. However, the Tribunal had erred in failing to align the duration of the suspended suspension order with the indefinite restriction order. The Tribunal had intended to impose an aligned suspended suspension in support of the restriction order but had ordered suspension of twelve months suspended for only two years, leaving the indefinite restriction order without corresponding support after that period. The combination of sanctions was not clearly inappropriate: the Tribunal had been in the best position to assess Mr Dar’s culpability and the measures necessary to protect the public and the profession, and had concluded that adequate protection could be achieved by a combination of fine, indefinite restrictions reinforced by a suspended suspension. The fact that a finding of serious misconduct involving lack of integrity had been made did not require striking off or immediate suspension, though no doubt that would be appropriate in most cases. No dishonesty had been alleged. The court varied the suspension order from a twelve month suspension suspended for two years to a twelve month suspension suspended indefinitely to align with the indefinite restriction order, leaving the other elements of the sanction in place.

In short, the Divisional Court dismissed Mr Dar’s appeal against findings of recklessness and lack of integrity in facilitating a fraudulent property transfer, but allowed the SRA’s appeal in part by varying the suspension order to align with the indefinite restriction order imposed to protect the public and the profession.

Solicitors Regulation Authority v Day & Ors [2018] EWHC 2726 (Admin)
Raymond Brownlee for Judicial Review (AP) (Northern Ireland) [2014] UKSC 4
Bawa-Garba v General Medical Council [2018] EWCA CIV 1879, [2019] 1 WLR 1929, [2019] 1 All ER 500
Solicitors Regulation Authority v James & Ors [2018] EWHC 3058 (Admin)
Bolton v The Law Society [1994] 1 WLR 512
G and Another [2003] UKHL 50, [2004] 1 AC 1034, [2003] 4 All ER 765, [2003] 3 WLR 1060, [2004] 1 CrAppR 21
Henderson v Foxworth [2014] UKSC 41, [2014] 1 WLR 2600
Wingate & Evans v Solicitors Regulation Agency [2018] EWCA Civ 366, [2018] 1 WLR 3969