Solicitors Regulation Authority v Dar

Factual and Procedural Background

The Solicitors Regulation Authority ("the SRA") appealed, and the Respondent ("Mr Dar") cross-appealed, against an order made by a Solicitors Disciplinary Tribunal ("the Tribunal") on 27 February 2019 and its judgment dated 26 March 2019 ("the Decision"). The appeals arise under section 49(2) of the Solicitors Act 1974.

Mr Dar, admitted to the Roll in March 1990, practised at a firm of which he was sole director, acting also as Compliance Officer and Money Laundering Reporting Officer. In early 2017, Mr Dar was instructed to act in relation to the sale of a property ("the Property") registered as an Islamic community centre, held on charitable trust by three individuals unknown to him. The transaction initially involved a sale to a company ("Axmo Limited") for £1,500,000, but was later aborted, and the trustees purported to transfer the Property without consideration to another company ("Shields & Co Limited"), represented by an individual ("Mr Shafiq").

Mr Dar accepted instructions and facilitated the transfer to Shields & Co, despite unusual features such as discrepancies in addresses, uncertified identity documents, and the absence of signatures from the purported trustees. He also acted for both transferors and transferee without raising or obtaining consent for the conflict of interest. Subsequently, it emerged that the purported trustees had been imposters, some had died previously, and the transfer was fraudulent. The fraud was reported to the SRA, leading to disciplinary proceedings against Mr Dar.

The SRA alleged breaches of multiple principles of the SRA Principles 2011 and the Anti-Money Laundering policy, including recklessness and lack of integrity in facilitating a dubious transaction without proper enquiry. Mr Dar admitted most allegations except recklessness and lack of integrity. The Tribunal found against Mr Dar on those disputed issues, imposed a fine, a suspended suspension, and restrictions on practice, and ordered him to pay costs.

Legal Issues Presented

1. Whether the Tribunal erred in finding that Mr Dar acted recklessly and with a lack of integrity in relation to the transfer of the Property.
2. Whether the Tribunal erred in the sanction imposed on Mr Dar, including the appropriateness and approach to sanction.
3. Whether the Tribunal failed to properly consider evidence of Mr Dar's good character in assessing recklessness, integrity, and credibility.

Arguments of the Parties

Appellant's (Mr Dar's) Arguments

• The Tribunal conflated Mr Dar's appreciation of unusual features with appreciation of the risk of fraud, thus failing to address the correct question regarding recklessness.
• The Tribunal failed to provide adequate reasons for its findings of recklessness and lack of integrity, especially how it linked unusual features to risk of fraud.
• The Tribunal did not properly consider evidence of Mr Dar's good character, which was relevant both to his credibility and likelihood of reckless or lacking integrity conduct.

Appellee's (SRA's) Arguments

• The SRA's case was broader than a narrow risk of fraud and included any illegitimacy or illegality signaled by unusual features requiring further enquiry.
• Mr Dar was aware of unusual features indicating risks intrinsic to the transaction and deliberately closed his mind to them, amounting to recklessness and lack of integrity.
• The mitigating factors relied upon by Mr Dar were insufficient to undermine the Tribunal’s findings and did not warrant a lesser sanction.
• The sanction imposed by the Tribunal was too lenient; given the seriousness of the misconduct, striking off or immediate suspension was appropriate.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully reviewed the Tribunal’s findings, focusing on whether Mr Dar acted recklessly and lacked integrity in facilitating a dubious property transfer that was ultimately fraudulent. The Tribunal’s factual findings about the unusual features of the transaction and Mr Dar’s awareness of these were supported by evidence and credibility assessments that the appellate court found reasonable and justified.

The court rejected Mr Dar’s argument that the Tribunal conflated awareness of unusual features with awareness of risk of fraud. It held that the SRA’s case was broader than a narrow fraud risk and included any illegitimacy or illegality indicated by the unusual features. The Tribunal properly applied the legal test for recklessness from R v G, concluding that Mr Dar deliberately closed his mind to obvious risks.

Regarding the alleged failure to consider good character evidence, the court found that the limited reference to it and its lack of emphasis at the hearing justified the Tribunal’s minimal treatment of it. The court was satisfied that any omission was immaterial to the Tribunal’s conclusions on credibility and misconduct.

On sanction, the court accepted the Tribunal’s holistic approach, applying the relevant Guidance on Sanctions and the principles from Bolton. The Tribunal’s imposition of a fine, suspended suspension, and indefinite restrictions was within the range of reasonable outcomes. However, the court identified a technical error: the suspended suspension period was not aligned temporally with the indefinite restriction order as intended. The court corrected this by varying the suspension order to be suspended indefinitely, thus ensuring proper alignment.

The court declined to interfere with the Tribunal’s assessment of culpability and sanction severity, noting that the Tribunal was best placed to evaluate the evidence and the appropriate measures to protect the public and profession.

Holding and Implications

The court DISMISSED the cross-appeal by Mr Dar against the findings of recklessness and lack of integrity, affirming the Tribunal’s factual and legal conclusions.

The court ALLOWED the SRA’s appeal against sanction to the extent of varying the suspension order from one year suspended for two years to one year suspended indefinitely, aligning it with the indefinite restriction order. All other sanctions, including the fine and restrictions on practice, were upheld.

This decision confirms the strict standards expected of solicitors regarding integrity and due diligence in property transactions, especially where unusual or suspicious features arise. It affirms the deference appellate courts afford specialist disciplinary tribunals in evaluating credibility, facts, and sanctions, intervening only for legal error or unreasonableness. No new precedent was established beyond the application of existing principles to the facts.