Solicitors Regulation Authority v Mohammed Zahid Dar
| Jurisdiction | England & Wales |
| Judge | Lord Justice Hickinbottom,Mrs Justice May |
| Judgment Date | 25 October 2019 |
| Neutral Citation | [2019] EWHC 2831 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No CO/1578/2019 |
| Date | 25 October 2019 |
[2019] EWHC 2831 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Hickinbottom
and
Mrs Justice May DBE
Case No CO/1578/2019
Edward Levey (instructed by Solicitors Regulation Authority) for the Appellant
Richard Coleman QC (instructed by Dar & Co Solicitors) for the Respondent
Hearing date: 3 October 2019
Approved Judgment
Lord Justice Hickinbottom and
Introduction
In these proceedings the Solicitors Regulation Authority (“the SRA”) appeals, and the Respondent (“Mr Dar”) cross-appeals, against the order of a Solicitors Disciplinary Tribunal (“the Tribunal”) made on 27 February 2019 and their reasons given in a judgment dated 26 March 2019 (“the Decision”). Both appeals are brought as of right under section 49(2) of the Solicitors Act 1974.
Mr Dar challenges the Tribunal's findings of lack of integrity and recklessness made against him. The SRA challenges the sanction imposed by the Tribunal of a fine and restrictions on practice together with a suspended period of suspension, on the basis that the Tribunal's approach was wrong in law and the sanction imposed was excessively lenient and clearly inappropriate.
The Factual Background
The background facts, set out in the Decision, are not in dispute.
Mr Dar was admitted to the Roll in March 1990 and practised at the material time at a firm of which he was the sole director, Dar & Co Solicitors Limited, in Manchester. He was also the Compliance Officer for Legal Practice, Compliance Officer for Finance and Administration and the Money Laundering Reporting Officer for the firm.
On 1 February 2017, Mr Dar received an email from a Mohammed Ali Bahar Aleloom instructing him to act on behalf of three persons – Seyed Ebrahim Khalil Tabatabai, Mahdi Muhsin Mahdi and Mr Aleloom himself – in relation to the sale of a property in Clapham, London (“the Property”). The email informed Mr Dar that their personal assistant would be representing them and that a Memorandum of Sale would follow. Messrs Tabatabai, Mahdi and Aleloom were not existing clients, and were unknown to Mr Dar.
The Property was an Islamic community centre registered at HM Land Registry with Messrs Tabatabai, Mahdi and Aleloom as the registered proprietors. Mr Dar understood that they held the Property on a charitable trust. The registered address for each of them was a residential address in Paddington. Entries on the Land Register for the Property revealed a restriction against the registration of dispositions by a sole proprietor not being a trust corporation.
A Memorandum of Sale was forwarded to Mr Dar on 2 February 2017, naming the buyer as Axmo Limited (“Axmo”), the buyers' solicitors as Bude Nathan Iwanier Solicitors (“BNI”) and the sale price as £1,500,000.
By email the same day, Mr Dar asked Mr Aleloom for certified copy identification and proof of residence for all three registered proprietors/trustees. The following day, Messrs Tabatabai, Mahdi and Aleloom each provided Mr Dar with proof of identity in the form of a copy passport purportedly certified by “Joanne Shortlands” of Oliver Fisher Solicitors. Oliver Fisher was a genuine firm of solicitors; and, having conducted a search with the Law Society for the firm and the named solicitor, Mr Dar accepted these at the time as genuine certification. However, at the Tribunal hearing there was uncontested evidence in the form of a witness statement from Joanne Shortland (without an “s”) of Oliver Fisher that neither she nor anyone else at the firm had certified the documents. By way of proof of residence, Mr Tabatabai and Mr Mahdi also sent Mr Dar a joint bank statement having a shared address in Worsley, Manchester – about ten miles from Mr Dar's office – and Mr Aleloom sent a water bill.
Mr Dar corresponded with BNI concerning the sale of the Property to Axmo. Axmo initially insisted upon completion being conditional upon the approval of planning permission; but BNI later confirmed that Axmo was willing to exchange unconditionally, with the three-month period for completion to which the trustees, through Mr Dar, had earlier agreed.
On 4 February 2017, Mr Dar emailed Mr Tabatabai informing him that it would be preferable for the vendors to attend the office to sign the transfer, alternatively for it to be signed in the presence of an independent witness. He sent a client care letter to Mr Aleloom in respect of the sale on 6 February 2017.
At 12.12hrs on 20 February 2017, Mr Dar received an email from Mr Aleloom in the following terms (as written):
“We the sellers have read your mails and threads pertaining to the intended sale and I can only conclude that in view of the circumstances herein whereas the buyer and associated parties have unfounded discrepancies and unorthodox methods of transacting including a direct breach, that we no longer wish to proceed with the bird view homes or subsidiaries or associated parties including solicitors etc.
We now wish to transfer our title to a community member namely Mohammed Shafiq of Shields and Co ltd, Lenton Road Manchester…”
That was followed at 13.04hrs by an email from Mr Mahdi, as follows:
“Further to an email from my partner [Mr Aleloom], I hereby cease and desist from any further dealings with previous buyers AXMO ltd and Birdview homes ltd henceforth.
Also I am instructing your firm to initiate the transfer of titles to SHIELDS & CO LTD…”
Then, at 13.17hrs, Mr Dar received this email from Mr Tabatabai:
“Just a quick note to inform you of our joint decision to refrain from further dealings with the aforementioned buyers bird view homes or AXMO ltd as they have breached contracts on several grounds.
Please transfer titles as advised by my co-owners, to SHIELDS & CO Ltd.”
Mr Dar accepted in his evidence before the Tribunal that, whatever views his clients seemed to take in these emails, Axmo had not in fact breached any contract. He also accepted that, despite the reference by Mr Aleloom in his email to “unfounded discrepancies and unorthodox methods” on the part of Axmo and other (unspecified) “associated parties”, Mr Aleloom did not explain what he meant, nor had Mr Dar asked him to. In his evidence, Mr Dar said that he understood the reference to “unfounded discrepancies” to be a reference to the fact that the trustees had lost interest in the sale. He did not know what Mr Aleloom had meant by his reference to “unorthodox methods”.
In any event, the emails indicated that, instead of selling the Property for £1.5m, the trustees now wished to transfer the Property without any consideration to Mr Shafiq, who they said was another community member and who was the owner and director of an estate agency, Shields & Co Limited (“Shields & Co”), said to be based in Manchester. In fact, as the documents which Mr Dar himself obtained from Companies House showed, Shields & Co was located in Nottingham, not Manchester. Mr Dar told the Tribunal that he had not noted that discrepancy at the time.
On 28 February 2017, Mohammed Shafiq attended Mr Dar's office and produced identification. He confirmed to Mr Dar that the Property was to be transferred to Shields & Co. Mr Dar prepared and witnessed Mr Shafiq's signature on a Transfer document transferring the Property to the estate agency. Mr Dar did not himself seek to obtain the signatures of the trustees; instead, he permitted Mr Shafiq to take the document away with him for the trustees to sign and return. Mr Dar confirmed his instructions and what he had done in an email to Mr Aleloom dated 7 March as follows:
“I write to confirm my new instructions from you that you and the co sellers now wish to transfer the property to one of your community members Mohammed Shafiq's company Shields & Co Ltd for a none [sic] monetary value.
I have drafted the transfer and obtained Mr Shafiq's signature. He has taken the original transfer document to bring to you and the other co-sellers for you to check and have signed and witnessed and returned to me…”
The transfer document was signed and returned to Mr Dar dated 9 March 2017, together with a copy of purported minutes of a meeting of the trustees. The minutes recorded that, because of their age and health, the trustees had decided that Mr Shafiq would be appointed as the sole trustee of the charity instead of them and that the Property would be transferred to his estate agency, which would sell the Property. The minutes further recorded that, once the Property had been sold, Mr Shafiq would use the sale proceeds to further their Islamic mission. However, during the course of the Tribunal hearing, Mr Dar was unable to explain why, to further these charitable ends, title to the Property needed to be transferred to Mr Shafiq, still less why it needed to be transferred to his estate agency, Shields & Co.
On 13 March 2017, Mr Dar submitted the signed transfer document to the Land Registry. Mr Shafiq attended at Mr Dar's firm again on 21 March 2017 to sign an application to remove the restriction on the Property which Mr Dar then also submitted. The Property was thereafter registered to Shields & Co with effect from 21 March 2017.
Mr Dar was not involved in the appointment of Mr Shafiq as a trustee of the charity: his evidence was that he did not know who was responsible for dealing with that aspect of the transaction. He did not ask to see any evidence that Mr Shafiq had been so appointed as the trustees had apparently agreed. In arranging the transfer of the Property, Mr Dar acted for both the transferors (Messrs Tabatabai, Mahdi and Aleloom) and the transferee (Shields & Co). Despite the apparent conflict of interest, Mr Dar did not raise the issue with...
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