Anthony Gale v The Solicitors Regulation Authority

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeMr Justice Pepperall
Judgment Date07 February 2019
Neutral Citation[2019] EWHC 222 (Admin)
Date07 February 2019
Docket NumberCase No: CO/1932/2018

[2019] EWHC 222 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

THE HONOURABLE Mr Justice Pepperall

Case No: CO/1932/2018

Between:
Anthony Gale
Appellant
and
The Solicitors Regulation Authority
Respondent

The Appellant appeared in person

David Collins (of Capsticks Solicitors LLP) for the Respondent

Hearing date: 7 February 2019

Approved judgment

I direct that pursuant to CPR PD39A para. 6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Pepperall
1

Anthony Gale is an experienced and well-respected solicitor. He was admitted as a solicitor on 15 February 1990. He practises in residential conveyancing and was formerly a partner in the firm Maurice Smiths Solicitors. Between 1 March 2009 and 31 August 2015, he was that firm's Compliance Officer for Finance & Administration (“COFA”) and its Nominated Money-Laundering Officer (“MLRO”).

2

On 6 May 2015, the Solicitors Regulation Authority (the “SRA”) received complaints from two clients in respect of five conveyancing transactions between 2005 and 2014. Mr Gale was subsequently summoned to appear before the Solicitors Disciplinary Tribunal. The case was heard in March 2018. By its decision dated 23 April 2018, the tribunal found a number of allegations of misconduct to have been proved against Mr Gale. It ordered him to pay a fine of £10,000 together with the SRA's costs and imposed restrictions on his practising certificate.

3

Mr Gale now appeals against the sanction. He accepts the fine but argues that one of the restrictions imposed was unreasonable and disproportionate. He accepts that he should have been ordered to pay the SRA's costs but challenges the assessment of his costs liability.

MR GALE'S MISCONDUCT

4

There was no dispute before the tribunal as to the basic facts. Mr Gale had accepted instructions from C to act on behalf of C's then wife, B, and his daughter, A, in five property transactions between 2005 and 2014:

4.1 Mr Gale acted for both the lender and B in her purchase of properties 1 and 2 between June 2005 and January 2006. As to these transactions, Mr Gale failed:

a) to meet with B or obtain her instructions;

b) to obtain B's identity documents;

c) to seek any evidence as to the source of the purchase monies totalling £28,179.20 received by his firm; and

d) to notify the lender that its charge was not registered between January and December 2006.

4.2 Mr Gale acted for B in her re-mortgage of property 3 in May and June 2007. As to this transaction, he failed:

a) to meet with B or obtain her instructions;

b) to obtain properly verified identity documents from B;

c) to ensure that his correspondence (sent to a property at which he knew B did not live) had come to her attention; and

d) to confirm with B the account details to which, on C's instructions, he sent £59,612.16 being the proceeds of the re-mortgage.

4.3 Mr Gale acted for A in her joint purchase of property 4 between November 2012 and April 2013. As to this transaction, he failed:

a) to meet A or obtain her instructions;

b) to obtain A's identity documents; and

c) to seek any evidence as to the source of the funds totalling £39,500 received by his firm or the reason as to why £10,000 had been paid by a third party, AM.

4.4 Mr Gale acted in the transfer of property 5 by way of gift from B and F to A in 2014. As to this transaction, and despite knowing that the property was subject to a restriction under the Proceeds of Crime Act, he failed to obtain instructions from either A or B.

5

Upon these facts, the tribunal made three findings of misconduct:

5.1 First, Mr Gale had acted on the direction of a third party without obtaining or confirming his clients' instructions. His actions amounted to gross neglect and carelessness and breach of his duties to protect his clients, to act in their best interests, to maintain his independence, to provide a proper standard of work, not to compromise his good repute and to maintain the trust that the public places in the profession.

5.2 Secondly, Mr Gale had acted without conducting due diligence on his clients or the transactions funds. He thereby failed to comply with his legal obligations under the Money Laundering Regulations 2003 and the Money Laundering Regulations 2007. His actions amounted to breach of his duties to act with integrity, to achieve effective management or carry out his role in the law firm effectively or in accordance with proper governance and risk management principles, to provide a proper standard of work and to maintain the trust that the public places in the profession.

5.3 Thirdly, Mr Gale had failed either to register the lender's charges or inform the lender of such failure. Such failures amounted to breaches of his duties to act in the best interests of his client and to provide a proper standard of work.

SANCTIONS

6

The tribunal considered Mr Gale's culpability, the level of harm caused and then the aggravating and mitigating features of his case. As to culpability, the tribunal found that Mr Gale had been “sloppy, lazy and careless.” It added, at paragraph 33 of its decision:

“The breaches were not planned but reflected a poor way of working. [Mr Gale] had been entrusted with the roles of COFA and MLRO and had breached that trust by his misconduct. He was very experienced and had direct control of the circumstances in which the breaches occurred. He had not misled the regulator and he had indeed been co-operative with the investigation.”

7

The tribunal found that no harm had been caused to clients but observed that this was “fortunate” and that the potential for harm had been high. It added that the harm to the reputation of the profession was “significant” since the public would expect a solicitor to obtain and confirm proper instructions and to discharge his duties as COFA and MLRO.

8

The tribunal found that the misconduct was aggravated by the repeated breaches over 8 years, albeit in relation to one family's affairs. It found that Mr Gale knew or ought to have known that his failures were a material breach of his obligations. As to mitigation, the tribunal found that Mr Gale had a previously unblemished career and had assisted the regulator. It added, at paragraph 36:

“He had shown some genuine insight, though he had been naïve and his denials of many of the allegations showed his insight was still developing. He had been open and frank in his admissions to the factual basis of the allegations but had been slow to grasp the seriousness of the situation.”

9

The tribunal observed, at paragraph 39 of its decision:

“[Mr Gale] had made the mistake of accepting instructions from one member of a family and in doing so had lost sight of his obligations to individual clients.”

10

It therefore imposed a fine of £10,000 and restrictions preventing Mr Gale from practising as a sole practitioner (or sole manager or sole owner of an authorised or recognised body) and from acting as either a Compliance Officer for Legal Practice (“COLP”) or a COFA. It reasoned that such restrictions were “necessary for the protection of the public and to declare and maintain proper standards of conduct within the solicitors' profession.” It was, it said, necessary to make clear to the profession “just how unacceptable the careless manner in which [Mr Gale] had dealt with these five transactions was.”

11

In addition, the tribunal ordered that Mr Gale should pay the SRA's costs in the sum of £28,091.

GROUND 1: THE RESTRICTIONS

THE ARGUMENT ON THIS APPEAL

12

Mr Gale accepts the restriction preventing him from acting as either a COFA or a COLP. He argues that the further restriction preventing him from practising as a sole practitioner was both disproportionate and unnecessary.

13

Mr Gale submits that his failing was in not keeping proper records. While he accepts that he was lax and careless, he disputes that he acted flagrantly and argues that this was not a case of failing to consider matters correctly. Although the failings took place over a number of years, they involved one family that was very well known to him. Consequently, he argues that not only was no loss in fact suffered but the risk of loss had been minimal. Mr Gale argues that there is no future risk to the profession and relies on his long and hitherto unblemished career and the references that were provided to the tribunal.

14

Mr Collins, who appears on behalf of the SRA, submits that the court should afford the tribunal a wide ambit of discretion and should only interfere if satisfied that its decision was plainly wrong. He argues that the tribunal properly considered the Guidance Note on Sanctions in the Solicitors Disciplinary Tribunal issued in December 2016 assessing Mr Gale's culpability, harm and the aggravating and mitigating features of the case. He argues that the tribunal was not plainly wrong to consider that Mr Gale's conduct gave rise to a future risk to the public or to the reputation of the profession. He stresses that the misconduct in this case happened over a period of 8 years and that for some of that time Mr Gale had been both his firm's COFA and MLRO, These failings had occurred despite Mr Gale's awareness of the relevant guidance and the importance of complying with the Money Laundering Regulations. Further, he points to the fact that the tribunal had found that Mr Gale had acted without integrity and that he had failed to maintain public confidence in the solicitors' profession.

15

Mr Collins challenges Mr Gale's submission as to harm. The potential for harm in this case was, he submits, high, including harm to the reputation of the profession in view of Mr Gale's failure properly to discharge his duties as both COFA and MLRO. Finally, he points to the...

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