Shuttari v The Law Society [2007] EWHC 1484 (Admin)

Case No CO/10417/2005[2007] EWHC 1484 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Venue Royal Courts of JusticeDate Friday, 8th June 2007
Strand
London WC2
B E F O R E:
LORD JUSTICE LAWS
MR JUSTICE MITTING
Between
FAWZIA AMTUL-HABIB SHUTTARIClaimant-v-
Between
THE LAW SOCIETYDefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
Mr Timothy Dutton QC (instructed by Messrs Shuttari-Paul and Co) appeared for ClaimantMr Geoffrey Williams QC (instructed by Messrs Drysdales Solicitors) appeared for Defendant
J U D G M E N T
[1]MR JUSTICE MITTING: The appellant, Fawzia Amtul-Habib Shuttari, appeals under section 49 of the Solicitors Act 1974 against an order of the Solicitors Disciplinary Tribunal of 8th December 2005 striking her off the Roll of Solicitors and requiring her to pay costs of £8,300. There is, as we understand it, no appeal against the order for costs, merely against the order striking her name off the Roll. The appeal is against the penalty only.[2]The background to the appeal, on any view, commands sympathy. The appellant is aged 49. She is a divorced mother of four children, now aged 13 to 19. Her marriage appears to have been problematic from the start in 1986. It ended formally in 1991 when she was pregnant with her third child but her relationship with her husband resumed in the mid-1990s and resulted in the conception of her fourth child. Her mother died in 1992. Throughout this time, she suffered from undiagnosed moderate depression. She was in financial difficulties, struggling to keep her mortgaged home and family afloat. More recently, she has been diagnosed as suffering from hypothyroidism.[3]She was admitted as a solicitor in 1984. Against the personal background described, it is perhaps remarkable that she has continuously practised as a solicitor ever since, for much of the time as a sole practitioner, under the name Shuttari-Paul and Co from offices in Southall, Middlesex. She has received, as was shown to the Tribunal and has been shown to us, fulsome testimonials as to both her honesty and conscientiousness by colleagues and clients.[4]There have, unfortunately, also been serious shortcomings in the conduct of her practice which have given rise to no fewer than five separate groups of disciplinary charges against her. Save in one respect, there was no dispute about the facts, which she has always, to her credit, admitted. In chronological order, the events which gave rise to the disciplinary proceedings are as follows:[5](1) On 7th May 1991, she accepted instructions from Tina Moonan and the National Home Loan Corporation Plc in the purchase of a house with the aid of a mortgage advance in Hanwell, London W7. The purchase price was £85,000; the sum to be advanced £77,980. The solicitor to the vendor, GC Properties Ltd, was the appellant's former partner David Paul, their partnership having terminated in July 1989. On 24th May 1991, the appellant completed and signed a Report on Title to the mortgagee, which stated that her firm had investigated the title to the property and certified that no matters affecting it should be brought to the mortgagee's attention. It, and she, had not done so. She was later to explain that she had relied on assurances given by David Paul. In fact, the transaction was suspect. At the date on which she signed the Report on Title, the house was owned by the Britannia Building Society. A deposit of £7,000 was said to have been paid by Ms Moonan direct. The full purchase price was never paid. The appellant's firm retained £1,400 out of the mortgage advance and that mortgage advance, plus the deposit claimed to have been paid, did not amount, even without that deduction, to the purchase price.[6]When, unsurprisingly, Ms Moonan defaulted on her mortgage covenant, the mortgagee sustained a loss which it sought to recover from the Solicitors Indemnity Fund. SIF refused to indemnify the appellant. On 13th May 1989 she elected to refer the dispute to arbitration. The Arbitrator, Mr Naughton QC, determined in his award, dated 26th November 2003, that she had been dishonest and incompetent and upheld SIF's refusal to indemnify her. In the event, the mortgagee's claim against her appears to have been resolved as part of a wider settlement between it and SIF and she has not been called upon to make any payment on account of its loss.[7]These events gave rise to the following disciplinary charges against her:(1) dishonest, improper or reckless conduct;(2) failing to act in the best interests of her client;(3) acting in a conveyancing transaction where there existed a conflict of interest;(4) accordingly, being guilty of conduct unbefitting a solicitor.[8]A medical report from Dr MJ Harris (a consultant psychiatrist of great experience), dated 25th October 2004, revealed for the first time that the appellant had been suffering moderate clinical depression at the time of the transaction, which occurred soon after the birth of her third child. This report led the Law Society to abandon the accusation of dishonesty before the Tribunal. It maintained, however, that she had acted recklessly. She admitted culpable negligence but disputed recklessness. She claimed that she had been duped by David Paul. The Tribunal found she had been guilty of reckless conduct in relation to the transaction. The remaining charges arising out of it were admitted.[9](2) In 1992 and 1993, the Law Society received complaints from the Bar Council that substantial fees owed to counsel by the appellant's firm were unpaid. She accepted that fees totalling £61,165.87 were unpaid. By a decision of 1st August 1995, the Tribunal found that this conduct amounted to conduct unbefitting a solicitor and fined her £1,000 and ordered her to pay costs to be taxed. The Tribunal warned her that continuing failure to pay the outstanding fees would be a continuing breach of her duty as a solicitor, which would render her liable to further disciplinary proceedings.[10](3) By 1999, significant sums remained unpaid: approximately £37,000, the subject of continuing claims by the Bar Council and a sum said to be £12,800-odd owed to a barrister who had ceased to practice. In addition, the appellant admitted to failing to reply expeditiously to correspondence from the Office for the Supervision of Solicitors and to pay the fees of a professional agent promptly. By a decision of 24th January 2000, the Tribunal found that she had been guilty of conduct unbefitting a solicitor in those respects and ordered that if she had, by 18th November 2000, discharged the outstanding fees she would be fined £10,000 but if she had not she would be suspended from practice indefinitely and that she would pay costs of £5,051. The Tribunal said that:
"This was one of the most serious cases of its kind to come before the Tribunal: it was apparent that [the appellant] had learned little or nothing from the earlier appearance before the Tribunal."
[11](4) On 16th July 1997, after proceedings resulting from a complaint of overcharging by a client, the Client Relations Casework Appeals Subcommittee of the OSS directed the appellant to issue an undertaking within 14 days to the Legal Aid Board that the total costs (private and legally aided) should be limited to £4,500 plus VAT. She did not do so and subsequently repeatedly failed to reply to correspondence about the matter addressed to her by the OSS and the LAB. She cited ill health as her reason for her failures. By a decision of 4th December 2000, the Tribunal directed that the direction of the OSS of 16th July 1997 be treated as an order of the High Court and recommended that she should not be permitted to practice other than in employment or partnership approved by the Law Society. It expressed its dismay that she had "apparently adopted an arrogant disregard for her duties and obligations as a solicitor".[12](5) From 1998 until 2002, in relation to four separate matters, the appellant repeatedly failed to respond to correspondence of clients, other solicitors and the OSS. In two of the cases she also failed to comply in a reasonable time with proper instructions from clients. By a decision dated 29th November 2002, the Tribunal ordered that the appellant be suspended from practice for six months. She appealed to this court and, by an order made by consent on October 2004, the order of the Tribunal was set aside and the matter remitted to it for rehearing. The reason for the Law Society's consent to this order was that allegations (1) and (5) should be considered together. In the event, both sets of allegations were admitted, save for the categorisation of the appellant's conduct in 1991 as reckless.[13]The burden of the appellant's mitigation was as follows.(1) The 1991 matter was very old and had occurred at a time of great difficulty and stress for her.(2) There was no finding of dishonesty.(3) Her health, poor then and for several years thereafter, had by the time of the hearing greatly improved.(4) She had since 2002 practised in partnership with Asif Yaqoob, a competent solicitor and administrator. In consequence, the problems which bedeviled her practice as a sole practitioner no longer occurred -- to the extent that the partnership had received ISO 9000 accreditation and accreditation as a provider of CPD training from the Law Society.(5) If she were to be struck off or suspended, the practice would collapse to the detriment not only to herself and her family but also of that of Mr Yaqoob and the staff of the partnership and many clients of the firm.(6) Her practice in recent years had attracted, as I noted at the beginning of this judgment, fulsome testimonials from colleagues and clients.[14]The Tribunal found that her signature on the Report on Title of 24th May 1981 was "improper and reckless in the extreme", that her failure to deal with the correspondence in 1999 to 2002 was not for a limited period of time and "raised serious professional concerns about [her] ability to practise". It was not satisfied that she had received training sufficient to make her competent to undertake, on her case, on an occasional basis, work of the kind which led to the 1991 incident (conveyancing). Its conclusion was that, for the protection of the public and the good reputation of the profession, the appropriate sanction was that her name be struck off the Roll of Solicitors.[15]Save in one respect, the reasoning of the Tribunal seems to me to be unimpeachable but that one respect is not unimportant. In paragraph 104 of its decision, it stated:
"The Tribunal had heard that the Respondent had been in partnership with Mr Y [Mr Yaqoob] since 2002. It has been told that since then the practice management had improved. No evidence had been produced to support this or as to what new procedures have been put in place."
It then went on to give the example about her lack of recent training in conveyancing. In fact, in amongst the voluminous documents in this case, there was clear and unchallenged evidence from Mr Yaqoob (int he form of a letter from him) about the new procedures put in place in her practice. The evidence was amplified, after the hearing, in a detailed witness statement, dated 16th December 2005. He set out what they were: that he had joined the practice with a first priority to introduce changes into the system which would reduce the workload, improve the profitability of the firm and protect the appellant and the firm from unscrupulous clients and also to instill in her an understanding that the practice had to be run as a commercial enterprise. He set out in detail how the workload would be shared, how assessment procedures were in place to ensure that she did not take on too much work. He noted, as I have already observed and as was explicitly very made clear to the Tribunal in submissions by Mr Dutton QC, that the practice had gained the ISO 9000 certificate and was an accredited CPD course provider. The testimonials from clients and colleagues demonstrated that radical improvements in the conduct of this practice were bearing fruit. On the material which it had before it, it is difficult to understand the Tribunal's statement that:
"No evidence had been produced to support this or as to what new procedures have been put in place."
On the additional material which we have, that conclusion is clearly wrong. The issue is of importance because the reason given by the Tribunal for deciding upon the sanction that it did was twofold: first, "for the protection of the public"; secondly for "the good reputation of the solicitors' profession".[16]Mr Williams QC has pointed out to us that in cases other than this the Tribunal has struck off solicitors who have not been held to be dishonest but who nonetheless have brought the reputation of the solicitors' profession into disrepute. If that had been the reasoning of this Tribunal then it may be that its reasoning would not be open to criticism but it was not the reasoning of the Tribunal. The Tribunal placed its decision squarely upon both grounds, one of which, for the reasons I have explained, is not made out.[17]We have been referred to additional material, which (like Mr Yaqoob's witness statement of 16th December 2006) we admit under CPR part 52.11(2). It supports the material put in before the Tribunal. It demonstrates that the good progress made in this practice, beginning since Mr Yaqoob's arrival in 1992, has been maintained and enhanced; in particular yet more testimonials have been put in from yet more clients and colleagues demonstrating the worth of the work done now by this firm. Accordingly, in my view, the Tribunal was wrong to say that there was no evidence of those matters. On the contrary, the evidence before the Tribunal suggested that they had been addressed and addressed successfully. The additional evidence confirms that it has been. It is not in my view necessary for the protection of the public that this appellant should have her name removed from the Roll of Solicitors. I do not regard this case as raising any new question of principle but as turning entirely upon its own facts. It is not necessary for me to set out the well-known passages from Bolton v the Law Society, in which the reasons for the taking of severe disciplinary steps are set out by Lord Bingham MR.[18]If I stand back now, in the light of the material before the Tribunal and before this court, and ask the question "is it necessary for the protection of the public that this appellant should have her name removed from the Roll", I answer, notwithstanding the deplorable disciplinary history, that it is not. If I ask whether it is necessary for the protection of the reputation of the solicitors' profession, whether it is necessary that her name should be removed from the Roll, my answer likewise, albeit not without hesitation, is that it should not. The one matter which clearly calls into question her trustworthiness and raises the question of professional reputation is the 1991 conveyancing transaction. The Tribunal were perfectly entitled to find that her conduct in that respect was improper and reckless in the extreme but it occurred 16 years ago. It occurred in a field of practice in which she would be unwise ever again to dabble. It occurred at a time for her of exceptional personal difficulty, which I have outlined in the earlier part of this judgment. Accordingly, and for those reasons, I would not hold that it was necessary for the protection of the reputation of the solicitors' profession that her name be removed from the Roll. I would quash the sanction imposed upon her by the Tribunal.[19]There remains to be determined what alternative sanction should be imposed. There can be no question but that suspension, and suspension for a significant period, would be justifiable on the material that I have described. However, suspension would have, save for so short a period that it would be regarded as no punishment at all, such a catastrophic effect on the fortunes of the firm, on the personal and family circumstances of the appellant and, although to a lesser less extent, on the affairs of the clients of the firm that it would have the same effect as striking her name off the Roll. I am satisfied that the imposition of strict conditions governing the practice of this appellant for the future would ensure the protection of the public and would not harm the reputation of the profession. Those conditions are that she should only practise in partnership with a solicitor of at least five years post-admission experience or in employment, that she should undertake no work in or in connection with conveyancing and that she should submit annually, at her own cost, in March of each year, a medical report upon her psychiatric condition and general health. Subject to those conditions, I am satisfied that she can safely be allowed to practise.

LORD JUSTICE LAWS:

[20]I agree. I regard this is an exceptional case. The conditions in which this appellant's practice has been carried on have effectively been transformed since Mr Yaqoob's arrival in 2002. The Tribunal at the end of 2005 did not, as it seems to me, acknowledge the true position and I echo what my Lord has said concerning paragraph 104 of the determination. The position has continued to improve over the last 18 months. In these special circumstances I consider that this appeal may properly be allowed without injury to the public interest urged by Mr Williams; that is to say the protection of the public and the good reputation of the solicitors' profession.[21]Accordingly, I would allow the appeal and make the order proposed by my Lord.[22]MR DUTTON: My Lord, may I deal shortly with two matters. Firstly, I am expressly instructed not to ask for costs and I do not but the second is that in a passage in Mr Justice Mitting's judgment my Lord said, with reference to the material which was before the Tribunal -- I do not have an exact note of it -- amongst the voluminous materials were documents and then my Lord referred to Mr Yaqoob's evidence. My Lord then went on to refer to the witness statement of 16th December 2005. That comes a week after the hearing and the application for the stay. The material before the Tribunal is at A, tab 2, page 45, which was his letter. The statement confirms but amplifies the letter. Core, tab 2, page 45, I took my Lord to the letter, and then to the statement, the statement of 16th September, supporting the application for a stay. The fact remains, my Lord, that the letter was before the Tribunal, as was the ISO 9000 point and the various other references, but I am not sure whether my Lord had the sequence.[23]MR JUSTICE MITTING: I had the sequence wrong. I am grateful for your correction.[24]MR DUTTON: It may well be that my Lord will want to see a transcript if it is of any interest to the parties but I felt that ought to be -- the only other thing was there was a tiny slip of the tongue, 1992 instead of 2002, it will pick up in the transcript, for the arrival of Mr Yaqoob.

MR JUSTICE MITTING: Thank you.

LORD JUSTICE LAWS: Thank you very much.

Cited in 5 later judgments