England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		31/07/2018

Lord Justice Holroyde:

1. By a judgment dated 12^th January 2018 a panel of the Solicitors Disciplinary Tribunal ("SDT") found a number of allegations of professional misconduct proved against the appellant Mr Manak. The Tribunal made an order against him in the following terms:

"1. The Tribunal ordered that [Mr Manak], solicitor, be suspended from practice as a solicitor for a fixed period of two years to commence on 15 November 2017 and it further ordered that he do pay 85% of 75% of the costs of and incidental to case number 11165A-2013, such costs to be the subject of detailed assessment unless agreed between the parties.

2. Upon the expiry of the fixed term of suspension referred to above, [Mr Manak] shall be subject to conditions imposed by the Tribunal as follows for an indefinite period:

2.1 [Mr Manak] may not:

2.1.1 practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body;

2.1.2 be a partner or member of a Limited Liability Partnership (LLP), Legal Disciplinary Practice (LDP) or Alternative Business Structure (ABS) or other authorised or recognised body;

2.1.3 be a compliance officer for legal practice or a compliance officer for finance and administration;

2.1.4 hold client money;

2.1.5 be a signatory on any client account;

2.1.6 work as a solicitor other than in employment approved by the Solicitors Regulation Authority.

3. There be liberty to [Mr Manak] or [the Solicitors Regulation Authority] to apply to the Tribunal to vary the conditions set out in paragraph 2 above."

By a notice of appeal dated 1^st February 2018 Mr Manak appeals against that decision. This is the judgment of the court, to which we have both contributed.

2. For convenience we shall refer to the appellant as Mr Manak, and to the respondent Solicitors Regulation Authority as the SRA.
3. Mr Manak, who is now 51 years of age, was admitted to the Roll of Solicitors on 15^th February 1993. At all material times he was a partner in the firm of Heer Manak, solicitors in Coventry. He was responsible for the supervision of an assistant solicitor, Mr Chahal. He was also responsible for the supervision of Miss Rajbinder Dhillon ("Miss Dhillon"), who was initially a trainee and latterly an assistant solicitor. Miss Dhillon's parents, Mr R S Dhillon and Mrs K K Dhillon (to whom we shall refer as Mr and Mrs Dhillon) were clients of the firm.

The Solicitors' Code of Conduct and Accounts Rules:

4. The allegations against Mr Manak covered a period of about 5 years. The Solicitors' Practice Rules 1990 were in force at the start of that period, but were later replaced by the Solicitors' Code of Conduct 2007. The allegations therefore referred to relevant provisions of both the 1990 Rules and the 2007 Code. However, for the purposes of this appeal, nothing turns on the differences in wording between the two. We shall therefore, for convenience, refer to the allegations as if the 2007 Code of Conduct ("SCC 2007") was in force throughout. It is sufficient for present purposes to quote the following extract from the SCC 2007:

"Rule 1 Core Duties

…

1.02 Integrity

You must act with integrity

…

1.04 Best interest of clients

You must act in the best interest of each client.

…

1.06 Public confidence

You must not behave in a way that is likely to diminish the trust the public places in you or the profession."

5. The Solicitors' Accounts Rules 1998 ("SAR 1998") were in force throughout the relevant period. For present purposes, it is sufficient to quote the following provisions:

"Rule 15 – Use of a client account

(1) Client money and controlled trust money must without delay be paid into a client account, and must be held in a client account, except when the rules provide to the contrary (see rules 16 to 18).

…

Rule 22 – Withdrawals from a client account

(1) Client money may only be withdrawn from a client account when it is:

a. properly required for a payment to or on behalf of the client (or other person on whose behalf the money is being held);

…

e. withdrawn on the client's instructions, provided the instructions are for the client's convenience and are given in writing, or are given by other means and confirmed by the solicitor to the client in writing;

…

Rule 30 – Restrictions on transfers between clients

(1) A paper transfer of money held in a general client account from the ledger of one client to the ledger of another client may only be made if:

a. it would have been permissible to withdraw that sum from the account under rule 22(1); and

b. it would have been permissible to pay that sum into the account under rule 15 …"

6. As will be seen, these proceedings have a very long history, and the Tribunal heard evidence over a period of many days. For present purposes, however, we can summarise quite briefly the facts which gave rise to allegations against Mr Manak and also against Miss Dhillon.

The facts:

7. In summary, the allegations against Mr Manak related to three areas of his work as a solicitor. First, there were said to have been irregularities in a number of conveyancing transactions carried out by Mr Chahal. It was alleged against Mr Manak that he had failed adequately to supervise Mr Chahal, and that the irregularities could not and would not have occurred if Mr Manak had properly discharged his duties of supervision. Secondly, it was alleged that there was irregularity in relation to a conveyancing transaction which Mr Manak himself had carried out on behalf of Mr Chahal. Thirdly, and most importantly, there were allegations against both Mr Manak and Miss Dhillon of dishonesty, impropriety and misconduct in relation to a number of transactions in the names of Mr and Mrs Dhillon. The focus of this appeal has largely been on the findings in relation to that third area, and it is accordingly necessary for us to say a little about it.
8. In early 2007, Mr and Mrs Dhillon applied to re-mortgage their home in order to fund the purchase of a property in High Street, West Bromwich. They instructed Heer Manak to act for them in this regard. The mortgage offer required an undertaking by Mr and Mrs Dhillon to discharge any existing charges on their home, though it appears that none were in place at that time. On 23^rd February 2007 the mortgage advance, in the sum of £150,000, was received into the Heer Manak client account. The purchase of the property in West Bromwich was however delayed.
9. Between February 2007 and August 2009, seven payments were made from the mortgage advance. Transfers totalling over £27,000 were made to Mr Dhillon's bank account. £2,000 was transferred to Miss Dhillon's bank account. Other funds were used to make private loans, which were repaid. On 10^th August 2009, at a time when Heer Manak's bankers were pressing the firm to reduce its overdraft by about £60,000, a sum of £60,000 was transferred as a loan to Heer Manak. It was the case for the SRA that Mr and Mrs Dhillon did not know about these various transfers and loans, and did not authorise them. Mr Manak's case was that they had authorised the payments, or that at any rate he believed they had. He contended that it had for the most part been Miss Dhillon who handled her parents' affairs, and that he had never had any cause to suspect that she might be doing anything wrong. It was also Miss Dhillon's case that her parents had been aware of, and had authorised, the various transfers and loans. Both Mr Manak and Miss Dhillon relied on letters, said to have been signed by Mr and Mrs Dhillon, which retrospectively authorised some of the transfers and loans.
10. Mr Dhillon was given a document which purported to be an official copy of the Register issued by the Land Registry in respect of the High Street property. This document purported to show that with effect from 20^th September 2007, title absolute to the property was vested in Mr and Mrs Dhillon jointly. That was untrue: in fact, title was vested in the Secretary of State for Communities and Local Government. At the hearing before the Tribunal, it was common ground between the parties that the document was a forgery. There were issues as to who created it and who gave it to Mr Dhillon. Mr Dhillon said that he had received it from Mr Manak. Mr Manak denied that allegation. Examination of Miss Dhillon's work computer eventually provided evidence that the document had been created by her.
11. In 2007 or 2008, Mr and Mrs Dhillon entered into occupation of the High Street property. They did not at that stage own it. In December 2008 a representative of the Secretary of State attended the property and found Mr Dhillon in occupation. Mr Dhillon told the agent that he had bought the property. In the ensuring correspondence between solicitors, a sale of the property was provisionally agreed, and the vendor proposed, as an interim measure, that Mr Dhillon should enter into an Assured Shorthold Tenancy ("AST"). The AST was dated 25^th May 2010. It was signed by Miss Dhillon. Mr and Mrs Dhillon alleged that they were unaware of the AST, and had given no authority for it to be entered into on their behalf. More than a year later, when a representative of the vendor again attended the property, Mr Dhillon again said that he was the owner.
12. Eventually, completion of the purchase was scheduled to take place in September 2011. It did not however take place. Mr Dhillon's deposit of £32,000 was forfeited to the vendor.

The investigations:

13. The SRA began an investigation into the firm Heer Manak in September 2009. In the course of the investigation, both Mr Manak and Miss Dhillon were interviewed. The findings made in the investigation were set out in a Forensic Investigation Report dated 13^th July 2010 ("FIR 2010"). The report itself was 66 pages in length. It had 155 appendices amounting in total to well over 600 pages.
14. A second investigation was carried out by the SRA in 2011. Again, the investigation included an interview of Mr Manak. The findings of this investigation were set out in a report dated 15^th March 2012 ("FIR 2012"), which was 34 pages in length, with a further 147 pages of appendices.
15. In the light of these reports, the SRA commenced proceedings before the Tribunal.

The proceedings before the Tribunal:

16. Section 46 of the Solicitors Act 1974 established the Solicitors Disciplinary Tribunal to hear applications and complaints made under the provisions of the Act. Section 46(9)(b) gave the SDT a power to make rules about the practice and procedure to be followed in relation to the making, hearing and determination of such applications and complaints. That power has been exercised by the SDT in making the Solicitors (Disciplinary Proceedings) Rules 2007. By rule 5 of those Rules, any application to the SDT in respect of an allegation or complaint against a solicitor must be made in specified form and accompanied by a statement "setting out the allegations and the facts and matters supporting the application and each allegation contained in it".
17. The first rule 5 statement relevant to these proceedings was dated 8^th July 2013. It set out allegations against a number of respondents: the firm of Heer Manak; Mr Manak; Mr Manak's two partners in the firm; Miss Dhillon; and Mr Chahal.
18. Those respondents came before a panel of the SDT in November 2014. Submissions were made, and some of the evidence called, over some 9 days of hearing. The Tribunal then struck out the proceedings in their entirety as being an abuse of the process. The Tribunal concluded that it would be unfair to proceed against the respondents because the respondents were not able to determine, from the pleadings drafted by the SRA, precisely what case they had to answer. The Tribunal accepted submissions made on behalf of the respondents to the effect that the SRA had taken a scattergun approach, even in respect of serious allegations of dishonesty and breach of a solicitor's undertaking, and had missed apparently important evidence in the course of their investigation.
19. The SRA appealed against that decision. The appeal was heard by Thirlwall J (as she then was) over a period of 4 days. In her judgment handed down on 28^th July 2016, the learned judge concluded that the Tribunal had been wrong to strike out the allegations against Miss Dhillon and the majority of the allegations against Mr Manak. In relation to other allegations against Mr Manak, the judge concluded that the Tribunal had been entitled to reach the decision it did. Given that the Tribunal had not reached the stage of considering the allegations on their merits, she directed that the remaining parts of the case should be determined by a differently – constituted tribunal.
20. In the course of her judgment, Thirlwall J held that the allegations which should not have been struck out were sufficiently pleaded to enable Mr Manak and Miss Dhillon to know the case they had to meet. She accepted, however, that the SRA's pleading of the allegations was of a poor quality. In her judgment, [2016] EWHC 1914 (Admin), she referred to the decision of a Divisional Court in Thaker v Solicitors Regulation Authority [2011] EWHC 660 (Admin). The Court in that case was concerned with the provisions of rule 4 of the Solicitors (Disciplinary Proceedings) Rules 1994 which was the precursor to, and in materially the same terms as, the present rule 5. At paragraph 64 of his judgment in that case, Jackson LJ said:

"For the avoidance of doubt a properly drafted rule 4 statement will set out a summary of the facts relied upon. It would be helpful if those facts are set out precisely and in chronological order. The reader should not have to burrow through hundreds of pages of annexes in an attempt to piece together what acts are being alleged. It is the duty of the draftsmen (not the reader) of a pleading or a rule 4 statement to analyse the supporting evidence and to distil the relevant facts, discarding all irrelevances."

Thirlwall J emphasised the importance of that direction, as do we.

21. Having reflected upon Thirlwall J's decision, the SRA decided to proceed only against Mr Manak and Miss Dhillon. The proceedings against the other respondents remain stayed. An amended rule 5 statement was prepared dated 7^th October 2016. Against the background which we have just summarised, we are surprised and disappointed that the SRA felt it appropriate to set out their case in the manner in which they did. The amended rule 5 statement is some 25 pages in length, but it incorporates by reference both FIR 2010 and FIR 2012, and is in places cross-referenced to those reports. It follows that, in order to understand the allegations against Mr Manak, it is necessary to refer to documents which collectively amount to more than 900 pages.
22. Substituting the names of Mr Manak and Miss Dhillon for their respective titles of First Respondent and Second Respondent, the allegations pleaded in the amended rule 5 statement were in the following terms:

"1.1 Mr Manak has caused or permitted monies to be withdrawn from client account contrary to Rule 22 of the Solicitors' Accounts Rules 1998.

1.2 Mr Manak, on discovering a cash shortage, failed to remedy promptly the breach of Rule 22 contrary to Rule 7 Solicitors Accounts Rules 1998 by failing to replace the money improperly withdrawn from client account.

1.3 Mr Manak obtained a loan from a client without: insisting that the client take independent legal advice; providing any security, or preparing any legal documentation to confirm the loan contrary to … Rules 1.02, 1.04, 1.06 and 3.01 of SCC 2007. [We have omitted the reference to the provisions of the 1990 Rules].

1.4 Mr Manak has failed to comply with Rule 30 of the Solicitors' Accounts Rules 1998.

1.5 Mr Manak has failed to return promptly client monies to clients contrary to Rule 15 of the Solicitors' Accounts Rules 1998.

1.6 Mr Manak has acted in property transactions which bore the hallmarks of mortgage fraud contrary to … Rules 1.02, 1.04 and 1.06 of the SCC 2007.

1.7 Mr Manak has failed to comply with an undertaking contrary to Rule 10.05 of the SCC 2007.

1.8 Mr Manak failed to supervise adequately or at all the work undertaking by staff contrary to … Rule 5 of the SCC 2007.

1.9 Mr Manak and Miss Dhillon have constructed false documents and provided misleading information to third parties, to include clients and or the SRA, contrary to … Rules 1.02, 1.04 and 1.06 of SCC 2007.

1.10 Mr Manak has acted recklessly.

1.11 Mr Manak's and Miss Dhillon's actions were dishonest in accordance with the test for dishonesty accepted in Bultitude v Law Society [2004] EWCA Civ 1853… . The SRA alleges that Mr Manak and Miss Dhillon were dishonest in allegations 1.1 to 1.9 but it does not need to prove dishonesty in order to prove the allegations.

1.12 In respect of allegations 1.1, 1.2, 1.4 and 1.5, it is further alleged that Mr Manak has acted without integrity and in a way likely to diminish the trust the public placed in them and the legal profession contrary to … Rules 1.02 and 1.06 of SCC 2007."

23. Each of those allegations was particularised in later paragraphs in the rule 5 statement, to which Mr Manak responded in detail in his statement dated the 14^th November 2016.

The hearing before the SDT:

24. The hearing which is the subject of the present appeal began on 6^th April 2017. In all, it occupied some 18 days, spread over April, August and November 2017. Judgment was given, as we have indicated, on 12^th January 2018. We recognise the practical difficulties of assembling all relevant persons if a hearing has to be adjourned part heard, and we accept that there will have been compelling reasons why there were lengthy gaps between the sessions of hearing. We do however find it difficult to understand how the hearing of these allegations, serious as they are undoubtedly are, could have taken as long as it did. We understand that Mr Manak and Mr Dhillon were each cross examined for several days. Although it has not been necessary for us to inquire into this aspect of the matter, we are left with the clear feeling that the very unhelpful way in which the amended rule 5 statement was drafted set the scene for unnecessarily–protracted proceedings.
25. The hearing proceeded, for the most part, in the absence of Miss Dhillon. She was aware of the hearing, and was frequently contacted to ascertain her intentions, but attended on only one day. The Tribunal considered carefully whether to proceed in her absence, and concluded that it was in the interests of justice to do so.
26. At an early stage of the proceedings, the SRA applied for permission to withdraw allegation 1.6 on the ground that the case against Mr Manak and Miss Dhillon "did not include mortgage fraud". Unsurprisingly, the Tribunal granted that application. What is surprising, against the background we have summarised, is that such an application was necessary. The SRA had ample opportunity to consider, and reconsider, the evidence against Mr Manak and Miss Dhillon. It is difficult to understand why such a serious allegation was for so long pursued against Mr Manak, if it was no part of the SRA's case.
27. In the course of the hearing, Mr Manak made an unsuccessful application that there was no case for him to answer. In resisting that application, the SRA argued that there was a case to answer in relation to each of the allegations. Nonetheless, in closing submissions, the SRA indicated that it did not pursue allegation 1.7 and "that this had always been its position". The Tribunal found that approach to be "at odds with submissions made during the submission of no case to answer", but duly found that the allegation was not proved. Again, we are bound to say that we find it surprising that the SRA proceeded in that inconsistent way.
28. We can summarise the proceedings before the Tribunal as follows. Mr Dhillon was one of the witnesses called by the SRA. In cross examination, it was put to him that at the hearing in 2014, he had failed to appear on the day when he should have given his evidence, and – when he attended on the following day – had lied to the Tribunal about the reason for his non-appearance, by falsely claiming to have being unwell. On that occasion, when confronted with DVD footage showing him to have been working in his shop at the material time, Mr Dhillon accepted that he had lied. To the Tribunal in 2017, however, he denied that he had lied. He was further asked about the circumstances in which his daughter Miss Dhillon, who had been living in the family home for much of the period relevant to these allegations, had left home after she had formed a relationship of which her parents disapproved. It was put to Mr Dhillon that he blamed Mr Manak in part for the breakdown of his relationship with his daughter. The Tribunal recorded that Mr Dhillon "did not directly answer this question".
29. Mr Dhillon maintained that he had believed himself to be the owner of the property in High Street, West Bromwich, because Mr Manak had told him so. He denied knowledge of the various transfers and loans made from the mortgage funds. Mrs Dhillon did not give evidence.
30. Mr Manak gave evidence. In relation to the loan of £60,000 to Heer Manak, he agreed that a possible conflict of interest arose where a loan was advanced by a client. He said he did not pay close attention to that, because of the relationship between Mr Dhillon, Miss Dhillon and himself. He accepted it was "clearly a misjudgement" not to tell Mr Dhillon to take independent legal advice, but put forward the same explanation. He also accepted that there had been no legal security for the loan and no documentation setting out its terms, duration or rate of interest. He said that he did not believe that Mr Dhillon was exposed to any risk because of the standing of the partners in the firm. He said that he believed the loan had been approved, and that Mr Dhillon's evidence to the contrary was a lie.
31. Allegation 1.1 was admitted by Mr Manak, save that he did not accept that the relevant letters of authority had not been signed by Mr Dhillon or Mrs Dhillon. Mr Manak relied on expert evidence as to the handwriting of those signatures. This unchallenged evidence was to the effect that the witness could not exclude the possibility that the letters of authority had in fact been signed by Mr Dhillon and Mrs Dhillon. The witness was handicapped in reaching any conclusion because he did not have sufficient specimen signatures for the purposes of comparison.
32. As to his two subordinates, Mr Manak said that at the time, the possibility that Mr Dhillon was being duped by his own daughter had been "the furthest thing from my mind", though he now thought that was what had happened. He accepted that Mr Chahal had been working in a different office, which Mr Manak only attended once per week, and for that reason his supervision was "remote". He said however that Mr Chahal was experienced and very diligent, and that he (Mr Manak) had complete trust in him.
33. The Tribunal correctly directed itself that the burden lay on the SRA to prove the allegations beyond reasonable doubt. It regarded the amended rule 5 statement as "astonishingly poorly drafted", with the result that the work of the Tribunal in analysing the facts had been made more difficult than it needed to be. The Tribunal understood the criticisms which Mr Manak had made of the drafting of the case against him, but was satisfied that - notwithstanding the serious deficiencies - the amended rule 5 statement made the allegations sufficiently clear.
34. On the issue of dishonesty, the Tribunal (having invited submissions from the parties) adopted the test which had very recently been set out by the Supreme Court in Ivey v Genting Casino (UK) Limited [2017] UKSC 67, a decision which was published after the SRA had closed its case.
35. In view of Miss Dhillon's absence from the proceedings, and the fact that she had not given evidence, the Tribunal considered the status of a number of statements made by her or attributed to her. In particular, Mr Manak sought to rely upon a draft witness statement which he had prepared but which Miss Dhillon had not signed. He relied upon an email exchange between himself and Miss Dhillon on 8^th September 2016 in which he had sent Miss Dhillon what he described as "the final statement for consideration". In a reply later the same day, she had pointed at some very minor typographical corrections to paragraphs 3 and 8 of the draft (which comprised 18 paragraphs), and had explained that she was "not able to amend the document for some reason", but had not disputed or denied the contents of the draft statement. Mr Manak pointed to a subsequent series of text messages in which he had been asking Miss Dhillon to sign the draft statement but she had failed to do so. The Tribunal noted that it had the power to receive hearsay evidence and concluded that it was in the interests of justice to admit Miss Dhillon's evidence. Having admitted it, the Tribunal then considered what weight to attach to it, "having regard to fairness to all parties including [Miss Dhillon] herself". The Tribunal concluded that it should treat her evidence with caution. In particular, at paragraph 94 of the judgment, the Tribunal said that it was troubled by the draft witness statement:

"There was no direct evidence of a long conversation such that would produce such a detailed statement. [Mr Manak] had produced no contemporaneous note of the conversation despite the fact that the evidence it purported to provide would have been highly significant. The text message thread did not support the submission that her email of 8 September 2016 indicated agreement to the contents of the draft witness statement. The Tribunal treated that email with caution and having regard to the context in which the draft statement developed attached very little weight to its contents. The Tribunal rejected the submission that the email of 8 September 2016 and the text messages automatically lent credibility to [Miss Dhillon's] 'confessions'."

36. In relation to allegation 1.1, the Tribunal noted that Mr Dhillon had lied to the Tribunal during the early proceedings, which inevitably undermined his credibility. It found his answers in this hearing to have been evasive and inconsistent, and rejected aspects of his evidence as incapable of belief. In view of the expert handwriting evidence, the Tribunal could not be satisfied beyond reasonable doubt that the authority letters had been forged, as it could not exclude the possibility that the signatures were genuine. However, even if the authority letters were not forgeries, it was necessary to consider whether they were capable of providing sufficient written authority for the transfers to be made. The Tribunal concluded that they could not: the letters of authority were plainly not contemporaneous, and (contrary to the requirements of SAR rule 22) they were not confirmed in writing by the solicitors to the client. In the light of the evidence given by a witness who dealt with the accounts of the firm Heer Manak, the Tribunal could not be sure that the letter authorising the loan of £60,000 to the firm had not been available when the transfer of those funds took place. The Tribunal concluded that this allegation was not proved in respect of the loan to the firm and two of the money transfers, but was proved in relation to other transfers from the mortgage funds.
37. Mr Manak accepted that if Rule 22 had been breached, it necessarily followed that Rule 7 of the SAR 1998 had also been breached. On that basis, the Tribunal found allegation 1.2 proved to the extent of the breaches which had been proved in allegation 1.1.
38. As to allegation 1.3, the Tribunal noted that Mr Manak had admitted the factual basis of that allegation, and had admitted a breach of rule 3.01 by not paying sufficient attention to the risks of a conflict of interest. The Tribunal went on to find in relation to this loan to the firm that Mr Manak had lacked integrity, and so had breached rule 1.02; had not acted in the best interest of his client, and so had breached rule 1.04; and had acted in a cavalier manner which had the effect of diminishing the trust which the public placed in the profession, and so had breached rule 1.06. In coming to those conclusions, the Tribunal applied the test of a lack of integrity stated in Hoodless and Blackwell v FSA [2003] UKFSM 007 ("moral soundness, rectitude and steady adherence to an ethical code") and in Williams v SRA [2017] EWHC 1478 (Admin) by Carr J ("want of integrity arises when, objectively judged, a solicitor fails to meet the high professional standards to be expected of a solicitor").
39. Allegation 1.4 was admitted by Mr Manak, save in respect of the letters of authority. The Tribunal found the allegation proved to the extent admitted. Allegation 1.5 was similarly admitted to the extent that allegation 1.1 had been admitted, and so was found proved to that extent.
40. As to allegation 1.8, the Tribunal noted that it related to the supervision of both Mr Chahal and Miss Dhillon. As to Mr Chahal, the Tribunal noted that it was not alleged that any of Mr Chahal's transactions had gone wrong. It accepted that, even if there had been a breach of the SAR, it did not automatically follow that there had been a lack of adequate supervision. It further accepted that Mr Chahal was an experience conveyancer. However, this allegation was found to be proved, the Tribunal noting that Mr Manak had taken "an unjustifiably casual approach to compliance". As to Miss Dhillon, the Tribunal noted that she had been newly qualified at the relevant time. It observed that where Miss Dhillon was conducting work on behalf of her parents, there was a potential for corners to be cut "in a desire to please due to the family relationship", and those were circumstances which "called for the closest form of supervision". The Tribunal found that Mr Manak's supervision of Miss Dhillon had been "woeful and totally inadequate", and noted that in evidence Mr Manak had accepted, with the benefit of hindsight, that it had been woeful. Allegation 1.8 was accordingly found to have been proved in full.
41. Allegation 1.9 related to two distinct types of misconduct: the creation of false documents; and the provision of misleading information to third parties, including the SRA's investigators. As to the false documents, there being no doubt to their falsehood, it was clear the only persons who could have fabricated them were Mr Manak, Miss Dhillon or both. In view of the handwriting evidence to which we have referred, the Tribunal could not be satisfied that the authority letters were false or the signatures on them forged. The office copy entry of the Land Registry's register to which we have referred was an obvious forgery, and it had been created on Miss Dhillon's computer at a time when Mr Manak was out of the country. The was no evidence to suggest that Mr Manak had directed that the documents be created. The Tribunal had found his evidence to be credible and concluded that he was a witness of truth on this issue. It was therefore satisfied that it was Miss Dhillon who was responsible for creating the forged office copy entries. It was further satisfied that it had been Miss Dhillon who had forged her father's signature on the AST. Allegation 1.9 in respect to false documents was accordingly proved against Miss Dhillon but not against Mr Manak. Nor was the allegation proved against Mr Manak in relation to the provision of misleading information.
42. As to the allegation of recklessness in allegation 1.10, the Tribunal was satisfied (contrary to Mr Manak's submissions) that this issue had been sufficiently pleaded. The Tribunal applied the test of recklessness set out in R v G [2003] UKHL 50 to these matters which it had found proved in relation to allegations 1.1, 1.2, 1.3, 1.4 and 1.5. At paragraph 106.6 of its judgment, the Tribunal said:

"There was a clear risk of loss in each of these instances. The Tribunal had found [Mr Manak's] supervision to be inadequate and that he had lacked integrity in relation to the loan to the firm. [Mr Manak] had accepted that he had knowledge of the payments. He further knew, in the case of the deposit by way of example, that he did not have written authority for the transfer. The Tribunal was satisfied beyond reasonable doubt that he knew there was a risk that the SAR would be breached and client monies lost if he did not ensure that the SAR was fully complied with and written authorities obtained. [Mr Manak] had nevertheless proceeded to permit the monies to be withdrawn and had failed to rectify the breaches or promptly return the monies."

The Tribunal was satisfied that Mr Manak's conduct in the knowledge of that risk was not reasonable, and met the test for recklessness set out in R v G. The Tribunal accordingly found the allegation proved.

43. In relation to allegation 1.11 the Tribunal, applying the approach stated in Ivey, found the allegation of dishonesty proved against Miss Dhillon, but not against Mr Manak.
44. Finally, in relation to allegation 1.12, the Tribunal referred to its earlier findings of breaches of the rules, and recklessness, and at paragraph 108.4 said:

"The Tribunal noted that it was of the utmost importance that solicitors complied scrupulously with rules put in place to safeguard client money, which was sacrosanct. A solicitor of integrity would not recklessly disregard those rules and the tribunal was satisfied that [Mr Manak], in behaving in this way, had not acted in an ethical manner".

Lack of integrity was therefore proved, and it followed as a matter of irresistible logic that a solicitor who had acted recklessly and with lack of integrity in handling client monies had undermined the trust which the public placed in the profession.

45. In relation to sanction, it was submitted on behalf of Mr Manak that the appropriate sanction was a fixed term suspension. The Tribunal agreed. Adopting the approach indicated in the SDT's Guidance Note on Sanctions (December 2016) it assessed the seriousness of the misconduct by considering Mr Manak's culpability, and the level of harm caused, together with aggravating and mitigating factors. It found his motivation for the misconduct relating to the loan to the firm to have been the urgent need for an injection of funds into the business. It concluded that the misconduct in relation to the breaches of the SAR resulted from Mr Manak having had misplaced beliefs in the acceptability of practices in his local community, and allowing those misplaced beliefs to override his professional duty under the SAR. It regarded his failure to supervise as arising from a careless disregard of the importance of supervision. The taking of the loan had been opportunistic rather than planned. The other breaches of the SAR involved a wilful blindness on the part of Mr Manak to the potential consequences, and an element of a breach of trust where client monies were involved. The sums of money involved were considerable, and the reputation of the profession was undermined by woeful supervision and a cavalier attitude to the SAR. The fact that misconduct had persisted over a number of years, with a number of withdrawals from the client account without written authority, was an aggravating feature. Mitigation was to be found in the previously unblemished career of Mr Manak, and the fact that he had made efforts to involve the police when false documents were discovered. It was further mitigation that Miss Dhillon had committed forgery. The Tribunal also noted that the firm had been closed in December 2013, and Mr Manak had not worked as a solicitor since that time. As to insight, the Tribunal found that Mr Manak's insight into his wrong doing was "retrospective reflection rather than genuine insight" (a phrase which we are bound to say we have found difficult to understand).
46. Having explained why a reprimand or a fine would not reflect the gravity of the matters, and would not sufficiently reassure and protect the public, the Tribunal expressed their conclusions as to sanction in the following terms, which we will quote in full:

"113.9 The Tribunal was satisfied that it was necessary to impose restrictions on [Mr Manak's] practice but that the public also required immediate protection from [Mr Manak]. Taking into account the extent of his lack of insight and all the circumstances of the misconduct the public would be offended if a lesser sanction than a suspension was imposed. The Tribunal did not feel that the matter required [Mr Manak] to be struck off. The Tribunal had found [Mr Manak] to be an honest witness and recognised that he had closed his firm in an orderly manner.

113.10 The Tribunal agreed with the submissions made on behalf of [Mr Manak] that a fixed term of suspension was appropriate and taking all matters into account including the mitigation presented on behalf of [Mr Manak] the appropriate term of suspension was two years. In light of the fact that the Tribunal had found that [Mr Manak] should be immediately removed from practice there was no justification for suspending the period of suspension.

113.11 The Tribunal determined that at the expiry of the period of suspension [Mr Manak] should remain subject to restrictions for an indefinite period as set out in the terms of the Order below".

The Tribunal then went on to make the Order which we have recited at the start of this judgment. We are told by Mr Cunningham QC on behalf of the SRA, and of course accept from him, that to the best of his recollection the Tribunal had not raised the possibility of restrictions on practice before adjourning to consider its decision, and had not invited any submission on that possibility.

The appeal:

47. This appeal is brought pursuant to section 49 of the Solicitors Act 1974. By section 49(4), this court has the power to make such order on the appeal as it may think fit. It has, for this purpose, all the powers of the SDT. Part 52 of the Civil Procedure Rules applies, with the result that this appeal is a review. In accordance with CPR 52.21(3), this court will allow the appeal if the decision of the Tribunal was (a) wrong, or (b) unjust because of serious procedural or other irregularity in the proceedings below.
48. In his written grounds of appeal, Mr Manak advanced four grounds. First, that the Tribunal was wrong to find proved allegations 1.1, 1.2, 1.3, 1.4, 1.5, 1.8, 1.10 and 1.12. Secondly, that the submission of no case to answer should have succeeded. Thirdly, that the sanction of suspension for two years was disproportionate, or should have been "deemed to have been served". Fourthly, that the order for costs was excessive and unjustified.
49. Skeleton arguments relating to the findings against Mr Manak and the decision as to sanction had been drafted by counsel. At the hearing of the appeal, however, counsel did not appear, and Mr Manak represented himself. He did so with considerable skill.
50. In relation to his first ground of appeal, Mr Manak focused on matters relating to Mr Dhillon. Although the Tribunal had been critical of Mr Dhillon's credibility in a number of aspects, Mr Manak argued that its findings did not go far enough: the Tribunal should have found that Mr Dhillon had been fully aware of all the matters of which he denied knowledge, and should not have made any finding in Mr Dhillon's favour. Mr Manak submitted that Mr Dhillon's evidence was contradicted both by other evidence and by common sense, and that no independent support could be found for any of it. In support of this argument he took us to a number of aspects of the evidence, including for example correspondence which he relied on to show that Mr Dhillon had given untruthful evidence on the issue of his knowledge that rent was being paid for the High Street property. He submitted that the Tribunal had failed to view Mr Dhillon's evidence with the necessary objectivity: had they done so, they would not have accepted any of Mr Dhillon's evidence on important points.
51. Mr Manak went on to argue that the Tribunal should have given much greater weight to the draft witness statement which had not been signed by Miss Dhillon. He took us through the email and text message exchanges surrounding this, which he submitted should have caused the Tribunal to give more weight to the admissions made in the draft statement. He placed understandable emphasis on his submission that if the draft statement as a whole had been untrue, Miss Dhillon would hardly have limited her comments on it to the need to correct some minor typographical errors. He pointed to the very difficult position in which Miss Dhillon found herself, having become estranged from her family as a result of the relationship which she had formed against their wishes, and he referred to evidence that Miss Dhillon had been in fear of violence at the hands of her father. He acknowledged that it was not possible to say why she might have changed her mind after initially seeming to accept the draft witness statement as accurate, but contended it should nonetheless have been accepted by the Tribunal as accurate.
52. Mr Manak further submitted that it was illogical for the Tribunal to have concluded that Mr Dhillon had been aware of some of the loans made from the mortgage advance, but not of others. He contended that the Tribunal should have found that Mr Dhillon was fully aware of all the transfers made from the mortgage monies. He had always accepted that it had been an error of judgement on his part to accept the loan of £60,000 to the firm, but challenged the finding of a lack of integrity. In the alternative, he submitted, the period of suspension was excessive even if the finding of a lack of integrity were properly made. Mr Manak emphasised that the allegations against him were principally concerned with matters relating to Mr and Mrs Dhillon, in respect of whom the circumstances were very unusual: they were the parents of a solicitor employed by the firm, and she - against all expectations - had acted dishonourably in relation to their monies. Mr Manak submitted that neither he nor anybody else at the firm suspected, or could have reasonably been expected to suspect, that Miss Dhillon was resorting to forgery.
53. No specific submissions were made as to the second ground of appeal, though submissions made in support of the first ground were of course relevant in this regard also.
54. As to sanction, Mr Manak submitted that the restrictions on practice, taking effect after the period of suspension and continuing indefinitely, were unduly onerous and restrictive. He acknowledged that the Tribunal had been in error to say that he had no previous blemish on his professional character: he had in fact been reprimanded on two previous occasions. In this regard, Mr Cunningham very fairly took the attitude that, those reprimands not having been brought to the Tribunal's attention, it would be wrong now to rely upon them in support of the sanctions imposed: he mentioned them only in order to correct the error into which the Tribunal had fallen. Mr Manak submitted that the continuing restrictions would limit him to work as an assistant solicitor, and would affect his prospects of employment because they implied that he had been involved in misappropriation of funds, when no such allegation had been proved against him.
55. Finally, Mr Manak challenged the order in respect of costs, pointing to the long duration of the proceedings and to the admissions and concessions which he had made.
56. On behalf of the SRA, Mr Cunningham pointed out that in relation to the forgeries, the findings of the Tribunal had been favourable to Mr Manak and unfavourable to Miss Dhillon. He submitted that the various points relied upon by Mr Manak, in respect of the credibility of Mr Dhillon, were for the most part related to issues on which the Tribunal had reached conclusions which were favourable to Mr Manak. The attack on Mr Dhillon's credibility therefore did not assist Mr Manak in respect for the findings which had been made against him. As to the unsigned witness statement, Mr Cunningham made a similar point: it was not clear to what adverse finding by the Tribunal this point was relevant. He noted that Mr Manak and Miss Dhillon had in effect advanced cut-throat defences, and that the Tribunal had resolved important issues against Miss Dhillon and in favour of Mr Manak. In any event, Mr Cunningham submitted, the Tribunal had been clearly correct to take a very cautious approach to the hearsay evidence of what Miss Dhillon had said or was recorded as saying.
57. As to the finding of lack of integrity, Mr Cunningham pointed out that this was put on the specific basis of a cavalier disregard of the SAR (an allegation which Mr Manak, in his submissions in reply, continued to deny). He submitted that the Tribunal were justified in concluding that the cavalier treatment by Mr Manak of the loan to the firm was not merely a breach of the SAR but also reckless and showed a lack of integrity. The combination of the taking of that loan, the breaches of the SAR and the woeful supervision of subordinates made this a case of serious misconduct.
58. As to questions of sanction generally, Mr Cunningham reminded us of the familiar principles stated by Sir Thomas Bingham MR in Bolton v Law Society [1994] 1WLR 512, which include the following: first, that where a solicitor has not been shown to have acted dishonestly but has nonetheless fallen below the required standards of integrity, probity and trustworthiness, it is a serious lapse in a member of the profession whose reputation depends upon trust, and might result in an order for striking off; and secondly, that the sanction imposed by the professional tribunal aims to maintain the reputation of the profession as a whole, and matters of personal mitigation will therefore carry less weight than they might in a criminal case. Mr Cunningham relies upon these principles to submit that if the order for suspension is otherwise correct, the fact that it has harsh consequences for Mr Manak is not a reason to quash it. He cited passages in paragraphs 100 and 103 of the judgment of Rupert Jackson LJ in Wingate v SRA [2018] EWCA Civ 366:

"100. Integrity connotes adherence to the ethical standards of one's own profession. That involves more than mere honesty. …

103. … A professional disciplinary tribunal has specialist knowledge of the profession to which the respondent belongs and of the ethical standards of that profession. Accordingly such a body is well placed to identify want of integrity. The decisions of such a body must be respected, unless it has erred in law."

Mr Cunningham further relies on the decision of a Divisional Court in SRA v Anderson Solicitors [2013] EWHC 4021 (Admin), in which it was said that, in the absence of legal error, this court should pay considerable respect to the sentencing decisions of the Tribunal and should only interfere if satisfied that a decision was "clearly inappropriate". That, submitted Mr Cunningham, sets a high hurdle which has not been surmounted in this serious case. Mr Cunningham accepted that, if the finding of a lack of integrity had been wrongly made, that might have well had an impact on this court's decision as to the sanction. But, he submitted, the finding was properly made.

Discussion:

59. We agree with the Tribunal that, notwithstanding the deficiencies in the drafting of the amended rule 5 statement, the case against Mr Manak was sufficiently clear. We have referred above to the unsatisfactory way in which two of the allegations were pursued but then abandoned. That feature does not, however, impact upon the findings made in respect of those allegations that were pursued. The Tribunal considered the very lengthy evidence given on both sides, and in our judgment they were entitled to make the findings they did. True it is that there were grounds for challenging the credibility of Mr Dhillon, and true it is that adverse findings were made against Miss Dhillon. That does not mean, however, that the Tribunal was not entitled to reach its adverse decisions against Mr Manak. Nor does it mean that the Tribunal was bound to reject everything Mr Dhillon said: it was open to the Tribunal to accept parts of his evidence notwithstanding the issues as to his credibility which were clearly raised and, equally clearly, considered by the Tribunal. After all, the Tribunal did have the opportunity to see and hear both Mr Manak and Mr Dhillon giving evidence over a period of days, and they were entitled to form their own assessment of which evidence they accepted and which they did not. In an appeal of this nature, this court does not embark upon a rehearing of all the evidence. The written and oral submissions by Mr Manak, which focused upon specific points and sought to extrapolate from them a general conclusion as to Mr Dhillon's overall credibility and reliability, do not persuade us that the Tribunal made any wrong finding against him. Mr Manak argued his case well, and made some attractive points, but in our judgment he was unable to do more than express his reasons for disagreeing with aspects of the Tribunal's decision; he was not able to show that it was wrong.
60. We have considered, with particular care, the finding of a lack of integrity. We have quoted, at paragraphs 42 and 44 above, passages in which the Tribunal put forward their reasons for their findings in this regard. Having regard to the definitions of integrity given in previous cases, which we have quoted at paragraphs 38 and 58 above, those reasons are in our judgment compelling, and we can see no basis on which they can be said to be wrong.
61. The sanction of a fixed term suspension was the sanction for which Mr Manak's counsel realistically and sensibly argued at the conclusion of the hearing. We have no doubt that it was the appropriate sanction, and we can see no basis for arguing that the term of two years was manifestly excessive. We take into account Mr Manak's plea that he has not worked as a solicitor since late 2013, but in our judgment there are two reasons why it cannot assist him in this regard. First, the sanction of suspension would not be effective in the circumstances of this case if the period of time when Mr Manak was not working, because of these proceedings, were regarded as sufficient. Secondly, whilst the unduly complicated way in which the SRA pleaded and presented its case certainly added to the length and complexity of the proceedings, it was always open to Mr Manak to admit the misconduct which was ultimately found proved against him. Far from doing so, he contested the matters at length, taking every possible point. He was entitled to do so; but having done so, he cannot complain that the overall result is that he had been unable to practise for a substantial period of time before his suspension came into effect.
62. We are however persuaded that the order imposing continuing restrictions on practice can properly be challenged. A number of features of that order trouble us. First, the Tribunal gave no reason for its decision that some continuing restrictions on practice were necessary and appropriate, and no reason for its decision that these particular restrictions were necessary and appropriate. Mr Cunningham submits that there is a clear inference to be drawn that the necessity arose from the totality of the matters covered by the Tribunal's judgment. That point has some force to it, but it fails to recognise that factors leading to an adverse adjudication in respect of past events do not necessarily, and without more, justify the imposition of a continuing restriction in the future. There must be some basis for concluding that a defaulting solicitor, having paid the appropriate penalty by way of reprimand, fine or suspension, must be subject to restrictions on his or her practice in the future. Secondly, we have no hesitation in saying that a Tribunal contemplating the imposition of continuing restrictions should hear submissions about it from the solicitor concerned or his representative. As we have indicated, Mr Cunningham tells us that that did not happen in this case. Thirdly, we note that the six restrictions imposed represent all six of the examples given in the SDT's Guidance Note on Sanctions as types of restriction which may be imposed. The Tribunal gave no reason why they were all regarded as necessary and appropriate. Lastly, if restrictions were regarded as necessary and appropriate, the Tribunal had to determine whether they must be indefinite or be limited in time. No explanation has been given for the decision reached in this regard. Mr Cunningham points out, rightly, that the SRA has power to impose restrictions on practice in a wide variety of circumstances, and that the order specifically provides for liberty to apply to vary or lift the restrictions in the future. In our view, however, the first of those points does not remove the need for the Tribunal to explain the reasons for its decision when misconduct has been proved; and the second point actually illustrates the need for a Tribunal which imposes restrictions on practice to explain its reasons. If no explanation is given of why a restriction is necessary or appropriate, there is no yardstick against which anyone considering a future application to vary or lift the restriction can measure the subsequent conduct of the solicitor. With respect to the Tribunal, it seems to us that Mr Manak cannot view with any optimism his prospects of seeking a variation or removal of the restrictions in the near future: he would not be able to demonstrate any relevant change in his position since the restrictions were imposed, because he would not be able to identify the basis on which the restrictions were made.
63. We bear in mind that the restrictions were imposed by a very experienced Tribunal, and we are very conscious of the need for this court to respect the experience and expertise of a professional disciplinary body. We nonetheless conclude that this combination of restrictions, continuing indefinitely unless and until a successful application to vary is made by Mr Manak, will impose a disproportionate restriction upon his ability to earn his living. We conclude that the Tribunal were wrong in law to impose such substantial restrictions without either inviting submissions or giving any reasons. We can well accept that the circumstances set out in the judgment of the Tribunal justify the imposition of restrictions which, in effect, prevent Mr Manak from being the proprietor of, or a partner in, a firm of solicitors. In the absence of any reasoned judgment on this point, however, we conclude that it was disproportionate to impose restrictions which will make it very difficult for Mr Manak to obtain employment as an assistant solicitor. In this regard, we accept his submission that the terms of the restrictions – in particular those in paragraphs 2.1.4, 2.1.5 and 2.1.6 of the order - are likely to be regarded by prospective employers as implying some form of misappropriation of funds. Those restrictions in our judgment went beyond what was necessary and appropriate in the circumstances of this case, and should be lifted. If that is done, it seems to us that the remaining restrictions on practice can properly continue to be of indefinite duration, with any variation being a matter for future consideration if and when Mr Manak makes an appropriate application. In the light of our decision, both he and those who may have to consider any such application will be able to have regard to his post-suspension work as a solicitor.
64. Finally, we have considered the arguments which Mr Manak has advanced against the order for costs. As is apparent from the terms of paragraph 1 of the order, the Tribunal determined the proportion of the SRA's costs which should be paid, and the apportionment of those costs as between Mr Manak and Miss Dhillon. The Tribunal in paragraph 128 of the judgment again criticised the unhelpful state of the pleadings, and noted that the SRA had been unsuccessful in some of its allegations against Mr Manak; but the case had been properly brought, and allegations had been proved which – as the decision as to sanction showed – were in themselves very serious. The Tribunal concluded:

"129. In all the circumstances taking into account the additional and unnecessary work created by the poor drafting of the amended rule 5 statement and the fact that some of the allegations against [Mr Manak] had not succeeded, the appropriate order was that the [SRA] received 75% of its costs.

130. [Mr Manak] had actively contested the case and the way in which that had been done had undoubtedly been at greater length than [Miss Dhillon], whose participation had been limited. [Mr Manak] had also faced a larger number of allegations. The Tribunal was also mindful of the fact that there had been a very lengthy submission of no case to answer which had been unsuccessful."

The Tribunal then made the order which we have quoted, stating that they had taken into account Mr Manak's submissions as to his limited means.

65. In our judgment, that was an entirely proper exercise of the Tribunal's discretion as to costs. There is no basis on which it can be challenged.
66. We therefore allow the appeal to this very limited extent: we quash the restrictions set out in paragraphs 2.1.4, 2.1.5 and 2.1.6 of the order. In all other respects, we affirm the decision and order of the Tribunal.