Alexis Maitland-Hudson v Solicitors Regulation Authority
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Carr,Lord Justice Green |
| Judgment Date | 24 January 2019 |
| Neutral Citation | [2019] EWHC 67 (Admin) |
| Docket Number | Case No: CO/2720/2018 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 24 January 2019 |
[2019] EWHC 67 (Admin)
THE RIGHT HONOURABLE Lord Justice Green
THE HONOURABLE Mrs Justice Carr DBE
Case No: CO/2720/2018
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Jonathan Cohen QC (instructed by Russell-Cooke LLP) for the Appellant
Mr Mark Cunningham QC and Mr Edward Levey (instructed by Bevan Brittan LLP) for the Respondent
Hearing date: 27 November 2018
Approved Judgment
Introduction
This is the privately-funded appeal of the Appellant, Alexis Maitland-Hudson, who is now aged 70 years, brought as of right pursuant to s. 49 of the Solicitors Act 1974. He was admitted as a solicitor in England and Wales in 1975 and to the Paris Bar in 1988. He latterly practised as a senior partner at Maitland Hudson and Co LLP and as a sole practitioner avocat at Cabinet Maitland Hudson.
The Appellant appeals against findings of misconduct and dishonesty made against him by a constitution (“the Tribunal”) of the Solicitors Disciplinary Tribunal (“the SDT”) on 20 April 2018 (with reasons set out in a written judgment dated 20 June 2018). Pursuant to those findings, on 2 May 2018 the Appellant was struck off the Roll of Solicitors and ordered to pay the SRA's costs, including £300,000 by way of interim payment. The Tribunal found the Appellant to have been guilty of misconduct “at the highest level”, characterised as “deliberate, calculated and repeated… over a number of years”. It was aggravated by the Appellant's dishonesty and attempts to defend his conduct.
The appeal is based on grounds of alleged procedural unfairness, specifically that the Appellant, a litigant in person, was substantially impaired in his ability to defend himself, to the extent that he admitted himself to hospital. Despite the fact that consultant psychiatrist experts on both sides found that the Appellant was unable to represent himself, the Tribunal refused to dismiss the proceedings on the basis of “incurable unfairness” or even to stay or adjourn their remainder.
Procedural issues of some general importance are raised, in particular the extent to which, if at all, a court's personal assessment of a litigant's ability to participate effectively based on his/her performance in the proceedings may be relevant.
The court has had the benefit of thorough written and oral submissions from Mr Cohen QC for the Appellant and Mr Cunningham QC and Mr Levey for the Respondent.
Background facts
The factual allegations are not directly in issue on this appeal. The Appellant submits that conviction was not surprising, given the procedural unfairness that is alleged to have preceded it. However, an understanding of the nature of the allegations is relevant to considerations of fairness and in particular the question of whether or not the Appellant was able to participate effectively in them. The Appellant points to the fact that they were detailed, complex and related to historic events in 2010, 2011 and 2012.
The allegations were set out in a statement pursuant to Rule 5(2) of the Solicitors (Disciplinary Proceedings) Rules 2007 (“the Rules”) (“the Rule 5 statement) and a statement of additional allegations pursuant to Rule 7 of the Rules (“the Rule 7 statement”). The Rule 5 statement concerned the dealings between the Appellant and his former client, Mr Stephen Cosser (“the Cosser allegations”). The Appellant acted for Mr Cosser in relation to a series of loans made by Elite Partners Limited (“EPL”) to Mr Cosser and/or two companies owned by Mr Cosser (known as Sungate and Tranfeld) between 12 April 2010 and 26 January 2011. The Tribunal found the Appellant to have a “fundamental conflict [of interest]” in relation to those loans because, contrary to the Appellant's case, the Appellant had a beneficial interest in EPL and was actively involved in its management.
In May 2011, when the loans were not repaid as Mr Cosser had promised they would be, a dispute arose between Mr Cosser and the Appellant. The Appellant instructed a different firm of solicitors, Grosvenor Law, on behalf of EPL to take aggressive action against Mr Cosser even though, at least initially, Mr Cosser was still his client. Specifically, the Appellant instructed Grosvenor Law to enforce a judgment of the Tribunal de Grande Instance de Nanterre dated 8 October 2009, a judgment for in excess of €2.7 million (“the Nanterre Judgment”). The judgment debtor in respect of the Nanterre Judgment was the Appellant and the judgment creditor was Sungate (one of Mr Cosser's companies).
Sungate was the legal owner of one of Mr Cosser's properties in London situated at 115 Eaton Square, Belgravia. The Nanterre Judgment had been obtained in the context of Mr Cosser's divorce proceedings. Its purpose was to demonstrate that Mr Cosser had significant debts and was not as wealthy as had been suggested in the divorce proceedings.
As part of the loans made by EPL to Mr Cosser and his companies: (a) EPL had taken an assignment of the Nanterre Judgment and (b) Mr Cosser had transferred his beneficial interest in Sungate to EPL, with the result that — when Mr Cosser defaulted on his repayment obligations under the EPL loans — EPL was able to enforce the Nanterre Judgment against him.
Accordingly, the Appellant instructed Grosvenor Law to issue a writ of fieri facias against Mr Cosser and to instruct bailiffs to attend Mr Cosser's property at 115 Eaton Square to take walking possession of his goods. In the event, the bailiffs were stood down upon part payment of the loan by Mr Cosser.
Ultimately a settlement was reached between (amongst others) Mr Cosser, EPL and the Appellant. That settlement was described by the Tribunal as “totally unacceptable” and the circumstances in which it was entered into were “outrageous”. It included a “particularly egregious” term whereby Mr Cosser agreed to pay the sum of £500,000 to the Appellant, purportedly as damages for an allegedly defamatory comment made by one of Mr Cosser's “associates” about the Appellant. The allegedly defamatory remark was made orally during the course of a single conversation in Sierra Leone.
The Tribunal found (to the criminal standard) that the Appellant had acted when he had a conflict of interest, had used confidential information about Mr Cosser after Mr Cosser had ceased to be his client, had taken unfair advantage of Mr Cosser, and that his conduct was dishonest.
The allegations in the Rule 7 statement (“the Kagalovsky allegations”) arose out of the Appellant's involvement in an unlawful scheme carried out by his former client, Mr Kagalovsky, a Russian businessman. Mr Kagalovsky had been in business with another Russian businessman, Mr Gusinski. Through their respective companies, Mr Kagalovsky and Mr Gusinski had held equal interests in a partnership which owned a Ukrainian television network (“TVi”) worth tens of millions of dollars. By his unlawful conduct, Mr Kagalovsky deprived Mr Gusinski of his capital investment in the partnership. This was achieved by a scheme whereby 99% of the ownership interests in TVi were transferred from the partnership to Mr Kagalovsky's own trusts. The scheme also involved the transfer of trademarks owned by TVi to entities owned and controlled by Mr Kagalovsky.
Mr Gusinski sued Mr Kagalovsky in the Supreme Court of New York. A 24-day trial took place between December 2011 and April 2012 before the Honourable Justice Ramos. 13 witnesses testified, including Mr Kagalovsky and Mr Gusinski, and the Court received depositions from ten additional witnesses, including one from the Appellant. In a judgment dated 10 August 2012 (“the Ramos Judgment”), Judge Ramos found that Mr Kagalovsky had with the assistance from (amongst others) the Appellant, carried out the unlawful scheme. Mr Kagalovsky was ordered to pay damages in the sum of US$50 million, plus interest. Judge Ramos made an express finding that the Appellant had been “acting in multiple capacities” and that the Appellant “had helped plan and cause the dilution and the trademarks transfer”.
The allegations against the Appellant before the Tribunal were that the Appellant had provided advice and/or assistance to Mr Kagalovsky in relation to the unlawful scheme and that the Appellant had assisted Mr Kagalovsky in his efforts to conceal what he had done from Mr Gusinski and that this conduct was dishonest. The allegations (with one exception) were found proved by the Tribunal to the criminal standard of proof.
The course of the proceedings before the Tribunal
On 27 August 2014 a duly authorised officer of the Respondent, the Solicitors Regulation Authority (“the SRA”), commenced an investigation into the Appellant's conduct, leading to the production of a Forensic Investigation Report dated 21 December 2015. The SRA then commenced disciplinary proceedings on 30 November 2016. The Rule 5 Statement was made on the same day, with the Rule 7 Statement following on 20 March 2017.
In June 2017 the Appellant, represented by Mr Cohen and junior counsel, applied to strike out the Kagalovsky allegations on the basis that the Ramos Judgment was inadmissible and in any event that its admission would be “deeply unfair”. They were also said to be an abuse of process. Prosecutorial bad faith was alleged. The application was dismissed following a hearing on 26 and 27 July for reasons set out by the Tribunal in writing on 6 September 2017. The Appellant's statement of costs for the application hearing amounted to just over £68,000 with some £44,000 going towards leading counsel's fees. The Appellant appealed that decision, and sought leave to judicially review it. Leave to bring judicial review proceedings was refused and the appeal dismissed by...
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