England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		25 June 2009

1. LORD JUSTICE DYSON: This is an appeal pursuant to section 49(1)(b) of the Solicitor's Act 1974 as amended, against the decision of the Solicitors Disciplinary Tribunal (the SDT) made on 14 August 2008 whereby Mr Lim was struck off the Roll of Solicitors.

The facts.

2. Mr Lim was admitted as a solicitor in England and Wales in 2002. In December 2004 he joined DLA Piper International LLP (DLA) Solicitors in their Singapore office. In January 2006 he became a partner. It was Mr Lim's evidence before the SDT that at about that time he started negotiating with another firm of solicitors, Duane Morris (DM), to join that firm. On 6 December 2008, DM offered Mr Lim a post. He accepted the offer on 18 December. When DLA performed a check on Mr Lim's computer they found that he had created a false payroll slip on 14 November 2007. The false slip purported to show his gross monthly fixed share equity partner payment, for the period January to December 2006, as $65,000 plus a fixed profit share of $150,000. The correct monthly figure was $25,000 with no fixed profit share. The difference therefore was between a fictitious total figure for the year of $930,000 and the actual figure of $300,000. Mr Lim resigned from DLA on 6 December 2006. He actually joined DM in February 2007.
3. On 6 February 2007 DLA complained about Mr Lim to the Law Society. Mr Lim resigned from DM on 14 May 2007. On 7 November 2007 proceedings were issued against Mr Lim in the SDT. The allegation against him was that he had been guilty of conduct unbefitting a solicitor in that:

"He created a false payslip purporting to be issued by his current employer, and by delivering such a slip to his prospective employer for use in salary negotiations he dishonestly misrepresented the true position, and by such conduct impaired or compromised his good reputation, and that of the solicitors profession, in breach of Rules 1 and 3 of the Solicitors Overseas Practice Rules 1990 as amended".

4. By his counter notice, dated 7 March 2008, Mr Lim took a number of technical points which are no longer pursued. As regards the substance of the allegations made against him he said:

"It is respectfully submitted that the false pay slip created was not used in salary negotiations with Duane Morris LLP, and hence was not used as alleged by the applicant to secure a higher salary than what I might otherwise have expected to obtain. It is also respectfully submitted that:

"1) The false payslip was submitted to complete an administrative request from the Human Resources Department of Duane Morris LLP which occurred sometime after business case screening and salary negotiations processes by the senior management of Duane Morris had been concluded.

"2) The salary offered to me by Duane Morris LLP was based on an expectation that my performance would reasonably approximate the billings to my clients and billable hours that I had furnished and estimated to Duane Morris LLP, including billable hours at the annual rate of 1,900 hours, at an average billable rate of US$500 per hour, and collections for my clients at the annual rate of US$1.2 million. Each of these performance criteria was set out in Duane Morris' offer letter to me dated 6 December 2006; and.

"3) The salary offered to me by Duane Morris LLP was within the range of salaries being offered to other partners in Singapore."

5. The hearing took place on 18 March 2008, Mr Lim represented himself and gave evidence. Mr Roscoe represented the Solicitors Regulation Authority (the SRA). Much was not in dispute. In particular, Mr Lim accepted that he had created the false payslip which he had submitted to DM. He disputed however that the false payslip was created for use in salary negotiations. Mr Roscoe relied upon admissions contained in Mr Lim's letter to the SRA dated 24 July 2007 to support the allegation that the false payslip had been submitted to DM for use in salary negotiations. Those admissions were in these terms:

"Circumstances leading to my departure from DLA Piper and the alteration of my payroll statement.

"19. I felt that I was being treated unfairly and was exploited when I was a senior associate and subsequently a partner at DLA Piper. This coupled with a very difficult Singapore managing partner whose own practice and expectation of me were questionable and unreasonable had fuelled my desire to leave DLA Piper quickly.

"20. As I had been exploited at DLA Piper, this created a vicious cycle whereby I was not able to demand from a prospective employer a salary which I expect and believe would commensurate with what I could contribute. Any prospective employer would disregard what I could contribute and naturally would take advantage of my situation at DLA Piper in order to negotiate a less costly package with me. I was not willing to continue working at DLA Piper given the circumstances and, when an opportunity came from Duane Morris, my difficult circumstances led to an isolated lapse of judgment. What I had done was to get around having to explain to a prospective employer, Duane Morris. I had no intention to cheat Duane Morris because if I could not perform, I would have to leave Duane Morris eventually.

"21. I believe that Duane Morris had not relied on my last drawn salary at DLA Piper when making me an offer of partnership. My actual drawn salary at Duane Morris was S$58,200 per month, lower than what I misrepresented. The salaries being offered to others, all of whom were not partners at their previous firms, who joined Duane Morris as partners around the same time as myself range from S$45,600 per month to S$51,000 per month, comparable to what I was receiving. I was a partner at my previous firm."

6. Mr Lim made submissions and gave oral evidence before the SDT as to the circumstances in which, and the purpose for which, the false slip was submitted to DM. At page 18 of the transcript he said:

"Turning to the matter as to whether or not the false payslip was created for salary negotiations, I respectfully submit that, again, Duane Morris, the managing partner at Duane Morris in Singapore has confirmed that they have not relied on it."

At page 19, he said:

"To cut a long story short, the focus was pretty much on salary, that is right, and the salary that I was paid did not commensurate with the efforts that I put in. It was one third of what I earned; I brought into firm, which is all right."

7. He then gave a detailed account of his grievances with DLA in relation to his remuneration. At page 23 he said that he submitted the false payslip in response to a standard questionnaire from DM. He said, "it was an exercise that was totally administrative." It was separated from the salary negotiations. He said that DM's first offer of $450,000 was made before he submitted the false payslip. The second offer of $485,000 was made by DM after he had submitted the payslip. He was asked by the tribunal why he submitted the payslip. His answer, at page 26, was this:

"I mean I was speculating, if they knew about my actual pay it was actually a question, speculative questions that never exist or questions that never come to bear. Its the questions that I myself fear because I was under very difficult circumstances that I wanted to leave, and for me to, you know -- obviously on hindsight I shouldn't have done that, it was wrong. But at that time I did not want that question to pop up, you know, if you were offered $450,000 at least and you were negotiating to $485,000 you don't want, as part of the, you know, HR (inaudible) requests, they start questioning why should I pay you so much then. I mean on hindsight I should have accepted the consequence or possible consequence of not getting the pay that I want, or not getting the job that I want, but you know, honestly, it was not created to mislead. There was no intention to cheat, you know, for me to be paid $485,000 and during the entire negotiations of positions and responsibility, and salary was not even negotiated until I got my first offer of $450,000."

8. A little later, at page 27, the following exchange took place:

"Miss Martineau: Mr Lim, sorry, can I just ask you something. I think I understood you to say that you created the false payslip because you did not want them to question, based on your real salary, why they should pay you so much, is my understanding correct?

"Mr Lim: that is right."

9. When it was put to him by the tribunal, at page 28 of the transcript, that the false slip was therefore created to mislead, Mr Lim agreed that it was. He insisted however that he had not intended to cheat. Mr Lim also relied on the fact that, as was made clear by their letter to him dated 7 March 2008, DM did not rely on the false payslip in deciding what salary to offer him.
10. At page 37 of the transcript the following exchange took place:

"Mr Fisher: Do you think it was dishonest to produce that false pay slip?

"Mr Lim: I misrepresented in order to avoid questions you know. To avoid questions that is playing on my mind, that don't exist, that didn't even come from Duane Morris. Dishonest in layman terms? Yes".

11. After a short adjournment at the end of the evidence and close of submissions, the chairman said, at page 42 of the transcript:

"However, I have to say that we are satisfied, and we are satisfied to the requisite standard, the criminal standard, beyond reasonable doubt, that the allegation is proved in all its respects, namely, the creation of a false payslip dishonestly misrepresenting a true position in the context of salary negotiations such as to impair and compromise the good reputation of the respondent and that of the profession, all of which is also found to be in breach of Rules 1 and 3 of the Solicitors' Overseas Practice Rules 1990 as amended. We also find, in relation to the dishonesty issue, that we are satisfied that the respondent acted dishonestly by the ordinary standards of reasonable and honest people, and that the respondent was aware that by those standards he was acting dishonestly."

12. I should have referred earlier in this judgment to Rule 3 of the 1990 Rules as amended, which is in these terms:

"A solicitor shall not do anything in the course of practising as a solicitor, or permit another person to do anything on his or her behalf which compromises or impairs or is likely to compromise or impair any of the following: a) the solicitors independence or integrity, d) the good repute of the solicitor or of the solicitor's profession".

13. Written findings were produced by the tribunal on 14 August:

"36. The respondent had admitted the creation of a false payslip which he delivered to his prospective employer but denied that this was for use in salary negotiations, denied that he had acted dishonestly and denied that by his conduct he had breached Rules 1 and 3 of the Solicitors Overseas Practice Rules.

"37. The respondent had clearly admitted in his evidence that he had created the payslip to persuade his prospective employers that they would not be overpaying him. He had acted to prevent questions being put by his new employer which might have led to a reduction in his salary. The tribunal was satisfied that he had therefore been acting in the course of salary negotiations.

"38. The tribunal considered carefully Rules 1 and 3 of the Overseas Practice Rules 1990 as amended. The tribunal did not accept the respondent's submission that because these were matters relating to his employment he was not acting in the course of practising as a solicitor. He was a solicitor and his employers were solicitors and the tribunal was entirely satisfied that, despite the fact that clients were still seeking his advice, his conduct impaired or compromised his good reputation and that of the profession.

"39. The respondent had admitted that he had misrepresented the position to his prospective employers. He had said that he had not intended to mislead or cheat but had accepted that in layman's terms his conduct had been dishonest. The tribunal considered carefully the test set out in the case of Twinsectra Ltd v Yardley and others [2002] UKHL 12. The respondent had created a false payslip in order to ensure that he received the level of salary he wished from his prospective employers. The tribunal was entirely satisfied that his conduct had been dishonest by the standards of reasonable and honest people. The respondent himself had accepted that 'in layman's terms his conduct had been dishonest'. The respondent's act had been conscious and deliberate. Having heard and seen the respondent give evidence and heard his explanation for his conduct, and having heard his admission that what he had done was dishonest in layman's terms and that his intention had been to keep information from his prospective employers which might have led to a salary reduction, the tribunal was satisfied so that it was sure that the respondent knew at the time of his misconduct that what he was doing was dishonest by the standards of reasonable and honest people. The tribunal found the allegation substantiated in all respects to the required high standard.

"40. The tribunal had heard the respondent's explanation that he had been aggrieved at what he perceived as poor treatment by his previous employer and this had been an isolated lapse of judgement. The tribunal however regarded this as a very serious matter. The respondent, a solicitor, had behaved dishonestly towards his prospective employers who were also solicitors. The reputation of the profession required that the public felt able to have absolute confidence that any solicitor they instructed was a person of complete integrity. The tribunal had a duty to uphold the standards of the profession in the interests of the public. In all the circumstances it was right that the respondent be struck off the Roll of Solicitors and that he pay the applicant's agreed costs.

"41. The tribunal ordered that the respondent, Rudy Lim of 20b Duchess Road, #05-09 Duchess Manor, Singapore 269032, solicitor, be struck off the Roll of Solicitors and it further ordered that he do pay the costs of and incidental to this application and enquiry fixed in the sum of £3,700."

The grounds of appeal.

14. There are six grounds of appeal. Ground 1 is that the SDT erred in finding that Mr Lim falsely created a payslip for use in salary negotiations when there was no satisfactory evidence to support this finding. The overwhelming evidence was that the negotiations were concluded without reference to the payslip. Ground 2 is that the SDT erred in admitting controversial written evidence of an employee of DLA and/or in giving it undue weight. Ground 3 is that the SDT did not properly consider Mr Lim's case. Ground 4 is that they did not apply the correct burden and standard of proof, or the correct test for dishonesty. Ground 5 is that all the evidence pointed away from a finding that Mr Lim had acted dishonestly. Ground 6 is that if Mr Lim did act dishonestly, the penalty imposed was excessive.

Grounds 1 to 3.

15. The first three grounds can be taken together. Mr Lim no longer submits that the SDT did not understand the nature of his case, which was that the payslip was submitted pursuant to an "administrative request". But in all other respects he pursues grounds 1 to 3.
16. I shall start with the complaint in relation to the evidence of the employee of DLA, although it is fair to say that in his oral submissions Mr Marriott did not develop this complaint. This concerns paragraph 5 of a letter from the DLA to the SRA, dated 28 February 2007, which is in these terms:

"Mr Lim was questioned on 19 January over the telephone by Miss Kerrie Bowlen, the firm's Head of HR (Asia), following the discovery of the forged document on his F:\ drive. According to Ms Bowlen's contemporaneous notes of such conversation, Mr Lim told her: 'My guard was down and Duane Morris were pressurising for information. I needed this to obtain the salary I was told I could get. If I had been thinking more conservatively I would not have done this.'"

17. This was read out by Mr Roscoe to the SDT at the hearing, and was apparently relied on by him as an admission. Having read out this passage Mr Roscoe did however tell the tribunal that Mr Lim denied having made this admissions to Ms Bowlen, and referred to paragraph 52 of Mr Lim's letter dated 24 July 2002 where this denial was made. The transcript records Mr Roscoe as saying, after referring to paragraph 52:

"Therefore paragraph 5 of DLA Piper's letter dated 28 February, which is the one I have exhibited on page 3 of my bundle, and the attendance note prepared by Kerrie Bowlen, were inaccurate. I mention that because, although I rely on that letter, it may well be that there is an issue taken by Mr Lim in respect of Ms Bowlen's assertion referred to by Mr Day in paragraph 5".

18. In his written submissions Mr Marriott makes much of the fact that paragraph 52 of the letter of 24 July 2007 was redacted in the copy produced by the SRA at the hearing. He points out that the alleged admission was referred to in paragraph 12 of the SDT's findings and submits that it is inconceivable that they did not take it into account. I reject this complaint. Paragraph 12 of the findings is in the section in which the SDT sets out their summary of Mr Lim's submissions. There is no reason to suppose the SDT were not aware of the fact that Mr Lim disputed having made the alleged admission. More fundamentally, however, there is nothing in the findings of the SDT to indicate that they relied on the alleged admission to Miss Bowlen in reaching their conclusion. They reached their conclusion on the basis of Mr Lim's oral evidence before them.
19. The other criticism of the SDT's findings is that there was no satisfactory evidence to support their finding that Mr Lim created the false payslip for use in the salary negotiations. In his oral submissions Mr Marriott argues that the SDT erred in stating at paragraph 21 of their findings, when summarising Mr Lim's evidence, that Mr Lim had said in evidence that the first offer was made by DM before, and the second offer was made after, the false payslip was submitted. Mr Marriott submits that Mr Lim's evidence was that his salary had already been agreed with DM and that the payslip was created in a speculative way in case DM attempted to reduce his salary if they found out what his true salary with DLA was. Mr Marriott puts it in this way at paragraph 29 of his written submissions:

"The overwhelming evidence was that negotiations had been concluded subject to the appellant signing on the dotted line, which he did after the document had been created, but in circumstances where the document was never used."

20. In my judgment this is a hopeless submission. Indeed when pressed by us during the course of the oral argument, Mr Marriott recognised its weakness. It is clear from the evidence that the negotiations had not been concluded when the false payslip was submitted. As I have already said, Mr Lim said in terms that the second offer was made after DM had seen the payslip. The evidence transcribed on page 26 to 27 of the transcript to which I have already referred also shows conclusively that the forged payslip was submitted by Mr Lim during the course of the negotiations, and for the purpose of advancing his position in those negotiations. That is sufficient to dispose of this point. The conclusion at paragraph 37 of the SDT's findings was the only conclusion which they could reasonably have reached on the evidence that was given by Mr Lim himself.

Grounds 4 and 5.

21. Mr Marriott, in his written submissions, argues that the SDT did not apply the correct test for dishonesty. He did not develop this in his oral submissions. I propose to deal with it quite shortly.
22. It is common ground the correct test is that stated in Twinsectra Ltd v Yardley and Others [2002] UKHL 12, [2002] 2AC 164. For a person to act dishonestly he must be shown to have acted dishonestly by the ordinary standards of reasonable and honest people (the objective element), and have been himself aware that by those standards he was acting dishonestly (the subjective element).
23. Mr Marriott submits that the SDT erred because they focussed only on the objective element, and did not consider whether the subjective element of the test was also satisfied. This submission flies in the face of what the SDT said at paragraph 39 of their findings. They referred to Twinsectra, they found the objective element made out, and not merely because, unsurprisingly, Mr Lim accepted in evidence that what he did was dishonest by the standards of reasonable and honest people. In my judgment it would have been perverse to reach any other conclusion. Having found that the objective element was made out, the SDT went on to address the subjective element. They gave clear and cogent reasons for finding, as a fact, that Mr Lim knew that his conduct was dishonest by the standards of reasonable and honest people. There is no conceivable basis for interfering with that finding.

Ground six.

24. At paragraph 31 of his written submissions Mr Marriott puts his case thus:

"The tribunal then, even though the appellant was not represented, plainly wanted to hear nothing more and imposed the ultimate penalty when mitigation may well have produced a lesser sanction, particularly as there was undisputed evidence that the new firm had not relied upon the document at all, and the other regulator had taken no action against the appellant."

25. He also submits that, in the particular circumstances of this case, there were other sanctions which could and should have been imposed. He refers to a number of cases heard by the SDT where dishonesty was found and yet the solicitor in question was not struck off. In so far as the allegation is maintained that the SDT did not give Mr Lim an opportunity to make submissions in mitigation, that criticism is wholly unjustified in my view. At page 43 of the transcript, after the passage to which I have already referred, the chairman said:

"We will be elaborating on that finding in our detailed findings so I think, having reached the conclusion, we ask you Mr Lim, is there anything else you want to say? Because you have actually addressed us to some extent on mitigation have you not? Is there anything else you want to say to us?

"Mr Lim: I don't think so your Excellency."

26. How it can be said, in the light of that exchange, that Mr Lim was not given an opportunity to make submissions and mitigation I find puzzling to say the least.
27. It is now well established that where dishonesty is proved, a solicitor will be struck off unless there are exceptional circumstances, see Bolton v the Law Society [1994] 1WLR 518 B-D, and Salsbury v the Law Society [2008] EWCA Civ 1285 2009 1WLR 1286. I should refer to two short passages from the judgment of Jackson LJ in the Salsbury case. At paragraph 30 he said:

"It is now an overstatement to say that 'a very strong case' is required before the court will interfere with the sentence imposed by the Solicitors Disciplinary Tribunal. The correct analysis is that the Solicitors Disciplinary Tribunal comprises an expert and informed tribunal which is particularly well placed in any case to assess what measures are required to deal with defaulting solicitors and to protect the public interest. Absent any error of law, the High Court must pay considerable respect to the sentencing decisions of the tribunal, nevertheless, if the High Court, despite paying such respect, is satisfied that the sentencing decision is clearly inappropriate, then the court will interfere."

28. At paragraph 38 he said:

"However, even if the case were regarded as being on the borderline, the Divisional Court would not be entitled to interfere with the sentence imposed. The court ought to have paid proper respect to the decision of the tribunal which was an expert and informed body, particularly well placed to assess what measures were required to deal with Mr Salsbury and to protect the public interest".

29. When pressed by the court to identify the exceptional circumstances present in this case which justify departing from the usual course, Mr Marriott identified as the principal exceptional circumstance the fact that the false payslip was not relied on by DM. He also suggested that a further exceptional circumstance was that Mr Lim was under pressure at the time that he created the false payslip because he was having great difficulties with DLA. In Mr Marriott's written submissions he also relies on the fact that the other regulator has not taken action, and that this was a single incident. In my judgment, none of these facts, either individually or cumulatively, make this an exceptional case. The fact that the other regulator has taken no action, in my view is irrelevant. Whatever the reason for that may be, at its highest it does no more than reflect the view of the other regulator of the seriousness of Mr Lim's conduct. The SDT were entitled, and indeed right, to take the view that this was a very serious matter.
30. The fact that DM did not rely on the payslip, in my judgment, is also irrelevant to the seriousness of the dishonesty. If they had relied upon it that would not have affected the gravity of the dishonesty. Mr Lim clearly intended that they should rely upon the payslip. If that intention was thwarted, that can not redound to his advantage in an assessment of the gravity of the dishonesty. Nor can the fact that this was a single incident amount to a exceptional circumstance. Many of the complaints of dishonesty against solicitors relate to one off incidents.
31. Even if I had thought, which I do not, that this was a borderline case, mindful of what was said by this court in Salsbury, I would not have thought it right to interfere with the decision of the SDT. In my judgment, however, this case comes nowhere near being one where this court should be satisfied that the decision reached by the SDT was clearly inappropriate. On the contrary, in my judgment, it was clearly appropriate.
32. I conclude therefore that, in my view, this was a hopeless appeal which should never have been brought, and for the reasons that I have given I would dismiss it.
33. MRS JUSTICE RAFFERTY: I agree.
34. MR WILLIAMS: My Lord, my Lady, I apply for an order for costs on behalf of the respondent. My friend Mr Marriott has indicated that Mr Lim will submit to an order in the fixed sum of £7,500, and I seek such an order from the court.
35. MR MARRIOTT: That is agreed, my Lord.
36. LORD JUSTICE DYSON: So be it. We will dismiss the appeal, the appellant to pay costs assessed at £7,500.
37. MR WILLIAMS: Much obliged.